I was very pleasantly surprised to learn that of our 100 employees at Peppercomm, some 41 percent have been with the company for five or more years. And 16 percent have been with my 19-year-old firm for a decade or longer.
I can't speak for your industry, but those employee retention rates are positively staggering in mine. PR is like a revolving door when it comes to talent churn and burn and, in my opinion, the larger the business, the higher the churn.
I wanted to dig deeper and learn how the best and brightest startups and other companies attract the best and brightest--and manage to keep them fully engaged year after year.
And, so, I picked the brain of David Mandell, co-founder and CEO of Boulder, Colorado-based PivotDesk, a business that finds the right space for other businesses and assists other entrepreneurs to manage, market, or monetize their excess space.
I also asked for help from Stephen Sheinbaum, president and chief executive officer of Merchant Cash and Capital, a business-financing leader that's provided in excess than $680 million to more than 13,000 businesses.
Finally, I turned inward to Sara Jane Whitman Ramos, my firm's culture czar, to ask her how we'd become so successful at attracting stars and hanging onto them.
All three executives spoke of the power of the network.
Mandell says there's been a dramatic change in attracting and retaining talent: "Recruiters are disappearing. I'm seeing the rise of a network that people use to either find us, or vice versa. Our employees take it upon themselves to find like-minded individuals who they feel will excel at PivotDesk."
Sheinbaum takes it a step further: "At MCC, we incentivize our teams to find and hire people they think will strengthen their group, whether that group is in underwriting, sales, or some other area." And Sheinbaum says it works like a charm because, "Who wants to work with a dog of a hire? Our people know what qualities and abilities their team needs to succeed. It's in their best interests to hire like-minded individuals."
Peppercomm has a similar incentive program for existing employees. If one of our people recruits someone for a key position, we pay a $1,000 finder's fee if the new employee is still working with us 18 months later.
Making an impact
Mandell, Whitman, and Sheinbaum all agreed that, while money and perks are important to finding and keeping great people, both pale in contrast to the impact real responsibility has on an employee's satisfaction.
"Our mid- and senior-level managers know we expect them to not only suggest changes but continue to grow, make a lot more money themselves, and take on a lot more responsibility along the way. We want them to wear multiple hats, learn every aspect of the business, and embrace our belief that real change begins at the bottom," said Sheinbaum.
Mandell agreed, adding: "All of our people know we expect them to make a very real impact on the business. They buy into the fact the each and every new day is a challenge to move us closer to achieving our strategic vision. They're less interested in money and perks and more about being the catalyst to growing our business."
At Peppercomm, we can point to countless people who have created new service lines, perfected or updated outmoded approaches, and built new offices. "We've always tailored our career paths, knowing that a one-size-fits-all approach simply doesn't work in an entrepreneurial setting," said Whitman. "And, we listen long and hard to the wants and needs of our most gifted employees. We have ongoing conversations in which we ask: 'What's going right?' 'What could be better?' 'Are you being challenged?' and 'If you could have your dream assignment, what would it be?'"
The Weitz way
Sheinbaum goes beyond asking employees what their dream assignment might be. He's actually help set up some of his most talented employees in their own businesses.
"Jared Weitz is a great example. He was great on the phone, had great people skills, and took the time to learn the more analytical underwriting part of our business. First we had him set up in our sales office. Then, Jared took it a step further and opened up his own sales office called United Capital Source. Now, he's a big customer of ours!" Oh, and by the way, Jared has accomplished all of this at the ripe old age of 31.
The dark side
Lest Inc. readers think attracting and retaining the best and brightest is a walk in the park, Whitman and Sheinbaum cited examples of horror-show hires.
"I hired someone to run business development for me who came from one of the really big consulting shops. And it failed in large part because I didn't really understand how much staff support and infrastructure people coming from really, really large Corporate America organizations are used to having."
To which I reply, "Amen." I cannot tell you how many flame-outs we've experienced after hiring "stars" from Burson-Marstellar, Hill & Knowlton, or Edelman. These stars simply cannot, or will not, roll up their sleeves to do the work themselves. I remember one high-profile, large agency hire who called my line on her third or fourth day. "Steve, where is the research department located?" She asked me. After pausing to reflect, I answered, "You've just reached it. How can I help?" Puzzled by my response, the new hire asked me how I had time to lead a business and run a research department. "Easy," I responded, "each of us does everything." She was gone within a month.
But, the big agency type wasn't our worst hire. According to Whitman, that distinction is reserved for another woman.
"We once hired a woman the day we interviewed her. She was a referral, had all the technical skills we needed and seemed a good fit culturally. Boy, were we wrong. In the time she was with us, she systematically bullied her way through the organization. Her skill set was right, but the culture fit was off by a million miles. She's no longer with the firm, but we're still dealing with the repercussions," admitted Whitman.
The right stuff
Whitman reinforced the reality that, even when one's own people manage the talent acquisition, misfires can, and will, occur. So, what qualities and abilities do Sheinbaum, Mandell and Whitman look for in new hires? There was quite a bit of overlap. They need to be:
- Tech savvy & analytical;
- Intellectually curious and a self-motivator;
- A visionary who can impact the firm's vision & possess an entrepreneurial spirit;
- A great writer who respects his peers.
Ah, but how do you compete for talent against the Microsofts, Googles, and GEs of your industry? It's a piece of cake, according to the three experts:
"Large organizations can't match the speed of change and constant challenges of a startup," said Mandell.
Whitman agreed, and added: "There aren't any boxes at a startup. You can learn the business from the bottom-up, left to right. Your career is what you make it and unlike many large organizations, we won't pigeon-hole you."
Sheinbaum summed it: "It's pretty easy to compete for talent against the big guys. Startups provide the opportunity to grow something from a seed into a full-blown plant. You're going to get exposed to so many different elements in a business as it's growing. Or you have the opportunity to see and do many more things than if you get compartmentalized in a big organization."
I'd add one other point: Smaller, leaner organizations are usually a whole lot more fun to work in. I've worked at global holding companies and other, entrepreneurial ones in addition to my own. I've always hated the stultifying red tape of the former and thrived in the wide-open "we're all in this together" esprit de corps of the startup.
So, don't worry about finding the best and brightest employees in your field (or holding onto them, for that matter). As Mandell said, they'll find you. And, if like Weitz, you help would-be entrepreneurs realize their own personal passions, you'll be beating off truly talented individuals with sticks.