SAN MATEO (03/20/2000) - When your organization finds the right people, the business can run like the finely tuned precision machine it is intended to be.
But getting the right people together at the right time is easier said than done. The urgency to staff can create particular chaos inside small companies where often the human resources person is also the network systems manager or even the CEO. Hiring decisions and salaries are routinely determined by the random logic of the moment.
Consider Lumeria, a relatively quiet pre-IPO startup in Berkeley, Calif. The Linux-based company develops products such as Book Mark City and SafeDisk, which Mark Nemeth, vice president of Web technology, calls "word preferences on steroids."
With slightly more than 30 employees, Nemeth, without having any prior HR experience, has hired all of the Lumeria engineering staff.
"I use the knowledge I have of the industry to figure out salary," Nemeth says.
"I know the basic range for most employees. The wrong attitude to take is to say, 'We're going to offer this amount and that's it.' As a start-up, you have to be flexible. When you find a great candidate, you want to nab them. But you must assess everything. There's no scientific way to do it."
Recently, Lumeria Inc. needed a new lead systems engineer, a job that entailed about 75 percent back-end IT and 25 percent product development, according to Nemeth.
"It may have been a smaller position than many qualified applicants were looking for," Nemeth says. "We wanted the person we hired to take part in its development, so initially we looked for a lower skill level, but in our haste for this key position, we hired a low-cost person who was essentially tech support, but not the lead systems engineer we were looking for, and found, with our newest addition, Hugh Caley."
The small-company experience
"I interviewed one person before Hugh Caley," Nemeth recalls. "But he was looking for something more administrative; he wanted an office."
"With Hugh, we spoke on the phone first, and it seemed like we should get together and talk. It was hard for him to make it at the time, so I told him I would come meet him," Nemeth says.
"I was in luck," Caley says and laughs. "The CEO for Lumeria is the brother of a friend of mine. I looked at their site and sent an e-mail to Mark Nemeth. We had a meeting in San Francisco and hit it off pretty well."
Once more, the old adage, "It's who you know, not what you know," holds true.
"Nothing beats knowing someone inside," says Dr. Pat Morreale, director of the Advanced Telecommunications Institute at the Stevens Institute of Technology, in Hoboken, N.J. "It's a two-way fit. The candidate gets a really good assessment from the insider and comes in with a more realistic impression of what working there is like. Plus, the individual doing the recommending doesn't want a bad fit, as they have their reputation on the line. In a case like this, everyone has a stake in the outcome, so the outcome is more realistic."
At the same time, the process also tends to become more informal. "It was a rainy Friday, and we were meeting for coffee in the city," Nemeth recalls. "I was rushed, a bit late, so I called Hugh from my cell phone as I was approaching where we were to meet. He looked a lot different than the picture he placed on his resume. He had longer hair in the picture. I wouldn't recommend attaching a photo to any resume."
"I wasn't terribly nervous," Caley says of his first meeting with Nemeth.
"People who do what I do are in such demand right now, and this wasn't the only company I was talking to. I was talking to several, and I knew I would find work if I wanted it."
"I didn't know what to expect before I met Mark," Caley says. "When I saw him, he was a lot younger than I imagined and very enthusiastic, something I really didn't get over the phone. Our meeting lasted about 30 minutes. Mostly introductory stuff."
"Hugh was a good listener," Nemeth says. "I gave my line first. I wanted to sell the company to him, then let Hugh sell himself to me. What we're doing with our company is all about controlling information, which I think attracts engineers, very intelligent people. I told him I thought he might be the man and that he'd need to speak with our technical people, although I was taking sort of a technical read of him myself."
"We had three interviews," Nemeth recalls. "The first with me, the second with most of our engineers, then the third with our chief security officer, Patrick.
Everybody liked Hugh at the second interview, so even though we didn't tell him, he was all but hired. Everything was a go. Our products are somewhat security based, so meeting Pat was part of the process. After that it was just [a matter of] checking references."
"When I first went on-site," Caley says of his arrival at Lumeria, "it was this group of really young guys really into their jobs. After the interview, I was helpful right away. They were having a technical problem with an NT install at one of their clients. I walked by and overheard the guys working on the problem and just jumped in," Caley says.
Different strokes for different companiesBut it's not always as easy as in the case with Caley and Lumeria. Contrary to Caley's experience, larger companies don't always adopt such a casual hiring policy, which may end up hurting the companies as well as the candidates.
One recently hired network administrator at a Midwestern division of IBM Corp.
Global services, who preferred to use the name Jordan, knows those hiring stereotypes all too well.
"I faxed in a resume to IBM and got a call within three days, but the experience took a nosedive from there," Jordan recalls. "The first interview with IBM was about an hour, and it included some technical talk, but not very much as I could tell the HR person didn't know much about what I was being hired for. It seems to me that what IBM is more interested in is your team spirit.
"I was under the assumption that IT people would get treated like gold, but it really wasn't the case at IBM," Jordan says.
"Instead of [fostering] a feeling of community, my first interview closed with IBM literally saying 'Don't call us, we'll call you.' Then a couple of days later I got a call back with an offer, then a few days later I got a FedEx package with the hard copy of the offer, and then it was off to my drug test," Jordan says.
"Looking around here, other IBMers tell me they keep you in the same position for a long time," Jordan says. IBM's still acting like a 20th-century company.
Granted, they seem to be catching on slowly. They've begun building a company recreation center here, but too late for me, I'm already looking for something else."
Despite Jordan's discontent, IBM reports about half the attrition rate of the rest of the IT industry.
"IBM makes every effort to provide ongoing development and opportunities for its employees," says Glen Brandow, a spokesman for workforce issues at IBM headquarters, in Armonk, N.Y. "IBM assists employees who need to work at home or who need to reduce the number of hours they work a week," he says. For example, IBM's LifeWorks program helps employees with quality-of-life issues, and Brandow says it is an important component of attracting and retaining valuable employees.
"It's inevitable that a larger company requires more bureaucracy; you can't be big without it," says Jamie King, associate director of graduate career services at the University of Texas, in Austin. "IBM and Compaq were recently recruiting here, and none of the students were interested. They felt the large companies were dinosaurs. And even though large companies see this and work at reform, no matter what, when you belong to a big company, you're more than just a piece of the machine."
How to find talent
Lumeria does utilize Web-based job postings, but with a great deal of reservation.
"We're part of some of the job boards," says Lumeria's Nemeth. "But we didn't use them in the case of Hugh Caley, as he had an inside contact."
As a general rule, Nemeth says, "I don't want to use recruiters as they're too expensive. The ones I've spoken with want up to 30 percent of the salary of the employee, and you can just do the math on that. Besides, the recruiters don't really know the people they send you."
Thus the traditional search is still far more effective than the high-tech route, King says.
"The Web is a fantastic job search tool, but ironically enough, only for the more traditional jobs," King says. "Web recruiting has not fully come into its own yet. It will develop, but the personal touch is still the best way to go.
If the economy slows down, Web recruiting may move to the forefront, but at the pace business is moving right now you have to evaluate if the skills are there and you can't really tell until you've met someone."
Stevens Institute's Morreale agrees with King. "Web job posting are like fishnets," Morreale says.
"What I find works best are personal recommendations," Morreale says. "I tell applicants to study the company they're interested in. Try to meet or have a drink with key people inside the company. It works the same way for employers who ask their own people 'Do you know someone who can work for us?' ""Sometimes you find a gem through recruiters, but it's important to remember that recruiters are hired to pass the flesh, so they are only as good as the info they are given," Morreale says. "Recruiters are usually not too technical, so you have to give the recruiter all the information there is to know about the job, which also makes security-minded employers uncomfortable."
Successful hiring and a good relationship between manager and employee, no matter how long it lasts, always returns to the human aspect.
"Very good managers care a lot about the type of people they put together," Morreal says. "If you go into several interviews, you'll begin to see which hirer really cares. The first requirement is that they know the technology. But everybody looks for nuances that tell what the person is really all about."
Placing advertisements for open positions is an art form, as well. "When I place an ad, it's weird," says Lumeria's Nemeth.
"When I write something funny in the ad, I always get a better response. When I write more along the corporate mentality, more a of a serious approach, I get less of a response," Nemeth says. "I think people are looking more at environment than they are at the technical nature of the job, for the most part."
A new era of recruiting
It's an age-old dilemma: sticking with the tried and true, or venturing off into the unknown, higher-risk environment.
"This whole brave new world [of recruiting] is not for everyone," Morreale says. "If you want high risk, terrific, go for it. But if you have specific personal goals, like kids or extracurricular activities, I think you're going to prefer a structured environment to an unstructured environment. And the truth is, most of us find that regimented work is easier than working wild and burning out."
"The best news is [that] there are enough IT jobs around for everyone who's trained," University of Texas' King says. "How long this high will last, who knows. My one concern is that [not] enough of the mainstream IT jobs are perceived as fun, and I don't think we're reaching out to historically underrepresented populations to educate more IT talent. The cool, fun companies have begun doing it. But the IBMs and Compaqs of the world are still reaching.
Not every company can be a funky toy maker."
Over time, companies will learn to better tap their resources in order to attract qualified IT talent. In essence, they must change in that respect, King says.
"I think companies are getting more personalized, even the big guys. With the advent of the Web, we're getting personalized health plans: "my benefits" if you want to call it that. But no matter what your company size or pace, you still need to make everyone feel they are still important to the company," King says. "Getting a message from management that your contributions are vital is paramount. It's core identification. It's pride."
Keeping the attrition rate down in a market that encourages downright mercenary career moves is a growing problem for all organizations that rely on skilled IT professionals.
"Loyalty to one company is not praised like it used to be. It's valuable but not as key as the ability to react quickly," says Jamie King, associate director of graduate career services at the University of Texas, in Austin.
It ends up hurting both companies and recruits. "Companies should be paying recruits for long-term performance, not just for signing up," says Dr. Pat Morreale, director of the Advanced Telecommunications Institute at the Stevens Institute of Technology, in Hoboken, N.J. "More often than not, the perk people won't be with you for long enough," Morreale says.
King sides with the majority of experts who agree that resumes reflecting loyalty are no longer valued.
But that's only to be expected in a market economy, King says. "When companies pay what the market will bear, or when they get overly creative with their compensation, it hurts not only the companies, but also the recruits in many ways. If you want to start a family and plan for a future, it's stressful when your company values perks like stock options over cash, because that's still only potential income."
King blames the pace of the IT hiring process for this erosion of stability.
"Everyone's moving at an extremely fast pace, very last-minute. And the hiring is getting done just in the nick of time," King says. "After a while companies will start cannibalizing themselves."
But companies have to plan for their futures too, Morreale says. "You need to have additional incentives down the line, like the ability to change positions with the same company, or real perks like child care."