As Sandra Hand's story at BodyLogix.com attests, top executives' eyes widen at the thought of working for dot.com companies. That's partly because there's always the chance they might earn more money than a Saudi oil sheik when the company goes public and partly because of the thrilling idea of riding in the front car of the fastest roller coaster around. The combination of cash and cachet can't be undersold. After all, there's a little Las Vegas in everyone.
"It's so easy to get caught up in the Web initial public offering craze," notes Ethan Winning, a Walnut Creek, California, expert on business growth trends and the author of the self-published book Labor Pains: Employer and Employee Rights and Obligations. "Everyone wants to work for the company that's going to become the next Yahoo!. That's fine if you're an owner of a small e-commerce business--trump that side of the mix all you want when you're recruiting.
"If you're running a non-technical company, you're not competing against the dot.com companies. Let them fight it out for themselves with the big signing bonuses and fat financial packages. You don't have to play that game." Even though the media plays up successful tech IPOs, most Internet stock IPOs never pan out. After all, more Internet start-ups fail than succeed. Non-Internet companies can compete with options like extended flextime and generous vacation packages.
Signing bonuses can do more harm than good in small companies, says Winning. Information in small businesses flows like beer at a frat party, and resentments can grow if too much of a company's money is targeted toward one individual. "Adding signing bonuses to the package is bad business," Winning explains. "If you give bonuses out, then you're going to have some disgruntled employees stewing about who didn't receive such a bonus. I tell the business owners I talk to, `Decide how much you can afford to pay in salary and stock options, and then walk away if a candidate wants all that and a bonus, too.' "
Another advantage an established small business has over start-up dot.coms is a track record. Management candidates can ask around and get a feel for your company. That's a big advantage when dealing with talented executives who don't like surprises. "One of the most important considerations for hiring top talent is your company's image," says Winning. "And more often than not, that image is conveyed by your current employees. If your employees speak highly of your company, and the management is involved with their employees' happiness and success, you have a better shot at landing a big recruit."
Workplace culture manifests itself in many forms. At Incentive Systems, an $8 million enterprise incentive compensation management firm based in Burlington, Massachusetts, the company's founder and CEO, Elizabeth Cobb, has bagged her share of top managers. On one day alone, Cobb landed a new CFO and a sales-and-strategic-alliances director. Her company's chief architect and co-founder was a lead developer of Lotus 1-2-3 and her new CTO developed the PowerSite Web software package at Powersoft. "In such a short time, we've succeeded in building a formidable team," explains the 46-year-old Cobb, who rolled out her company in June 1997.
Cobb, the first woman to run Honeywell's advanced engineering training program back in the 1970s, when female engineering directors were about as rare as Rush Limbaugh sightings at a hemp rally, credits her recruitment success to her company's motivation-based management techniques. "Recruiting top talent is at the heart of good business," she explains. "And getting good help is the same as getting new customers: You've got to motivate them."
Cobb believes the carrot-and-stick approach is the best way to attract new managers. But don't just dangle the carrot in front of their noses, she adds--let them grab it, taste it and ask for more.
But you're also trying to get job candidates to do the same things you want customers to do--buy into your company mission, Cobb says. "You've got to bend a lot to fit people's lifestyles into your system, but if they buy into what you're doing, the rest comes naturally."