SAN MATEO (07/24/2000) - The IT playing field has changed. Recruiting the hottest talent isn't just a lofty idea; it's now crucial to your bottom-line functions. "Companies must realize that they are now competing in two markets: a product or service market and a talent market," says Bill Curtis, co-founder and chief scientist at TeraQuest, an Austin, Texas-based consulting firm focusing on software process improvement. "Human resources people must start thinking of this as a market-driven process, not unlike professional sports. We are moving into something like a free-agent market."
This free-agent market is brought on by the huge shortage of experienced IT professionals. A recent study by the Information Technology Association of America predicts a demand for approximately 1.6 million new workers over the next year and reports that hiring managers foresee a shortfall of almost 850,000 appropriately skilled IT workers.
Apply a big demand to a small pool and you get recruitment gimmicks and out-of-this-world salaries, with some companies paying top Java programmers US$175,000 a year. Earlier this year, Sunnyvale, Calif.-based Interwoven Inc. upped the recruitment ante by offering BMW Z3 roadsters to the first 20 new software engineering hires (see "The Keys to Recruiting Success," www.infoworld.com/printlinks). Although such ploys capture attention, recruiters say candidates are much more likely to go to work for -- and stay with -- a company that has a solid business plan and can offer an employee a clear and steady career path.
However, cut-and-dried recruiting doesn't cut it anymore, especially for companies hiring hundreds of IT employees a year.
"You should take risks in recruiting. Do something crazy like advertise in movie theaters. Make sure it's in line with a recruiting or marketing strategy," says Michael McNeal, vice president of business development at Scotts Valley, Calif.-based recruiting software vendor, Intralect Solutions, and former director of corporate staffing at Cisco Systems Inc. "People can tell you how many people they need to hire, but most can't tell you what their workforce strategy is and how it ties in to the business plan."
The following innovative programs other IT managers and recruiters have tried can help you sharpen your own strategy.
1. Make every employee a recruiter
Most companies with large IT staffs have tried using referral programs to reward employees for bringing friends or acquaintances into the fold. But Brampton, Ontario-based Nortel Networks took the concept to a new level. Nortel launched its GoHire program in early June, which will dole out more than $1 million in cash and prizes to employees who recruit new workers.
"We have to hire 20,000 people this year and the situation will be the same for the next two years," says Mark Minichiello, director of North American recruiting at Nortel Networks Corp. "We felt we needed to revamp our employee referral program to build a culture in which everybody in the company is a recruiter. We wanted to give it more bounce, more legs -- develop a sense of urgency."
Forget the usual referral bonus of a few hundred dollars. Nortel's 80,000 employees worldwide can earn some serious cash. Employees get at least $2,000 for every referral hired. Referral dollars add up quickly with employees able to earn a $10,000 bonus for recruiting three new hires and $20,000 for five.
Getting senior management to sign off on the award money was no problem, "not when you consider how much it costs to hire 20,000 people," Minichiello says, who oversees a staff of 160 internal recruiters.
In just its first two weeks, the GoHire program generated more than 1,500 resumes, Minichiello says. And they're solid resumes, he adds, because the people who work at Nortel have good, technically skilled contacts in the industry.
Although a $2,000 bonus may seem like a great deal of money, that figure is below the nationwide average industry cost per hire for exempt, salaried employees of $10,057, as reported by the Employment Management Association, an affiliate of the Society of Human Resource Management. Satisfied and motivated employees are often the best salespeople for the company.
2. Shake up the recruiting team
Two years ago, Scott Raskin was not a happy camper. As director of sales and marketing at Nexgenix, an Irvine, Calif.-based supplier of e-business services, he felt his company was not recruiting talent fast enough to keep up with the business his team was generating.
"I was the guy jumping up and down and yelling the loudest because I thought our recruiters couldn't deliver our value proposition clearly enough,"Raskin recalls.
The company's senior management decided to put Raskin in charge of its recruitment process as vice president of corporate development even though he lacked recruitment experience. "Then I realized I would just be selling the company I work for," he says.
That realization led to a radical approach to Nexgenix's recruitment staffing.
Raskin hired a recruitment team comprised of salespeople and aggressive executive recruiters.
Raskin believes most corporate IT recruiting schemes are too passive, competing for the same pool of active job-seekers. His tactic is to act more like a headhunter, targeting competitors' employees before they begin a job search and attempting to build relationships with them. Nexgenix has added more than 400 employees in the last year.
A marketing executive leading the recruitment staff may step on a few HR and technical recruiting toes. But, Raskin says, no one knows better than skilled, aggressive salespeople how to describe a company's competitive advantages.
3. Make on-the-spot offers
Stephanie Beard spent her first few months as the new director of recruiting at Austin, Texas-based Vignette educating managers about the need for speed in hiring.
"That was half the battle, getting everyone in the company involved in the recruitment process," says Beard, who has helped the e-business software developer grow from 100 to more than 1,600 employees in less than two years.
To automate the recruiting process, Beard and Vignette programmers developed a database to filter and forward resumes to the correct decision-making department. Vignette's "speed-hiring" process shortens the recruiting cycle by channeling resumes or career Web site queries directly to recruiters, who respond immediately. Managers will often extend a job offer to a candidate on interview day. Beard says several candidates have commented on the speed with which the company moves as a deciding factor for joining.
Corporate executives have to understand the importance of moving quickly on IT hires, Beard says. If they are losing good candidates to other companies while they decide whether or not to make offers, managers must find ways to cut through the internal red tape.
4. Hire aggressive headhunters
Headhunters are the bane of every in-house recruiter's existence --and the saving grace, too. Low unemployment rates have pushed placement service fees to all-time highs, yet the competition among headhunters is intense.
To place a candidate, some independent recruiters, such as David Perry, managing partner at Ottawa-based executive search firm Perry-Martel International, will try just about anything. Perry recalls the time three years ago that he sought to recruit an individual from a local high-tech company but didn't know his name.
So Perry went undercover and emerged as "Canteen Man." He paid $500 to the owner of the canteen truck that serviced that target company's employees on break. "I assumed his run for a week in an attempt to learn the person's identity. Basically I sold coffee and doughnuts and gathered information," he says. "It's amazing what people will tell you when they assume you know nothing."
After four days as Canteen Man, Perry discovered the person's identity. He called the target and eventually convinced him to leave the company. Although he won't disclose the names of these companies, Perry says the employee's old company is now out of business and the new one has gone from revenue of $40 million a year to more than $100 million -- in large part due to that employee's ideas.
Although there's no doubt they can be effective, headhunters are seen as a necessary evil by many corporate HR departments. But companies facing hundreds of open positions must use every tool available, so avoiding independent recruiters would be a mistake. Because headhunters represent your company, it's best to lay down ground rules about tactics and professional conduct.
5. Beef up Web-based recruiting
"If a company has a crappy Web site, job-seekers are likely to be discouraged from wanting to work there, if only on a subconscious level," one undergraduate told San Francisco-based market research firm WetFeet.com, which consults with companies on improving Web recruiting.
These comments get plenty of attention because many young people hit a company's Web site to uncover the corporate culture. Ninety-four percent of students recently surveyed by WetFeet.com used corporate Web sites during job searches, but 26 percent nixed any notion of working for a company after visiting a company's site.
Boston Consulting Group (BCG), an international consulting company hiring large numbers of undergraduates and recent MBAs, has made its Web site a major part of its recruiting strategy. In WetFeet.com's student survey, BCG drew praise for its clean presentation, simple navigation, and depth of information.
"We've tried to make the site more personal and user-friendly," says Kathy Maiorana, director of BCG's North American IT recruiting. "We've automated the application process and added case studies, as well as tips on recruiting and interviewing."
"People can use our site to find out about the firm, and also to find people like them who work here," says Nan Morrison, a vice president in BCG's information technology practice area.
6. Pile on the benefits
Peter Noce was determined not to repeat the mistakes of his former employer, a Big Six accounting firm. That firm provided great service to its clients, but didn't always treat employees as well, Noce says, who is now CEO of Vienna, Va.-based Etensity, an Internet consulting company with a 95 percent retention rate.
"From day one, we wanted to build a workplace that was employee-centric, that had great, great benefits, challenging assignments, and solid training," Noce says. "We're building future IT leaders. We want them to ask, 'Why would I want to leave?' "Etensity lures job candidates, who are mostly in their mid-20s, with its "Raise the Roof" program, which awards employees $10,000 toward the closing costs of a new home, and through its "Hot Wheels" program, which gives employees $400 each month toward the lease payment on a new car. Employee-run committees help set company policies on the 401k program, corporate volunteerism, and office perks, such as on-site concierge or masseuse. Etensity, which is hiring 50 employees a month, now has 400 employees in six offices worldwide.
"This is not just a gimmick to get people in the door," Noce says. "You've made all this investment to hire people, but if you don't treat them well, you'll have attrition and all that investment will accrue to somebody else."
7. Don't forget the bread and butter
Every hiring manager will tell you that the current IT worker shortage dramatically affects the bottom line. Even so, some companies are reluctant or unable to pile on the benefits or participate in the bidding wars. When you can't put down top dollar for tech talent, get creative with the money budgeted for recruitment and sell, sell, sell your company as a great place to work.
"In our experience, people who come for money or gimmicks leave for the same," says Lisa Lauer, a recruiter at Catalyst Resources, a San Mateo, Calif., e-business consulting firm. "We offer our employees stability, a good living, friendly co-workers, mental stimulation, and a balance between work and home life."
David Raths (email@example.com) is a Kailua, Hawaii-based free-lance writer.