How Embarrassing!

Highly publicized dry spells are poor recruitment tools. Will anybody decent ever want to work for you again?
From the August 2002 issue of Entrepreneur

You've bitten the bullet and made some tough changes during the past year. Maybe you've downsized, shuffled your deck of senior managers, shifted your business model, shut down a satellite office--and read all about it in the local newspaper. But you've survived, and your company is getting stronger every day. You can even afford to fill a key position again, and you have someone stellar in mind. So what's the problem?

This person isn't sold on working for you, that's what. Hiring after a major reshuffling can be a Catch-22 for companies. You need the best people you can get your hands on to rebuild your business, but these rainmakers are uneasy because your company looks about as stable as a kite twisting in the wind. You have to get this person past your company's past. But how?

"A lot of times an organization finds itself in a situation where it's restructured or downsized, and the whole public knows," says Tricia Nickel, president of Chicago headhunting firm Padigent. "How do they get people to come help them and be excited about it?"

Michael Beirne, founder and CEO of McLean, Virginia-based Novaforge, was in a similar position of having to prove himself when he changed his company from business incubator to corporate espionage and terrorism security firm after September 11. It was "a 100 percent change of direction," says Beirne, 30. "We're trying to grow something new."

In the process, Beirne eliminated two positions from Novaforge's staff of four and wanted to hire a general manager. But the high-caliber person he was eyeing for the position was turned off-and turned Beirne down. "This person wasn't too comfortable with the change [to our business model]," he says. "They said they need to hold off for a while and see if this thing actually takes root."

Coming Clean

To attract talented people, Nickel says, you've got to have confidence and be honest. She has worked with entrepreneurs who were so embarrassed by the past, they couldn't effectively push the company's new direction. To sell a rainmaker on your company, you have to make peace with the past. When asked the tough questions, the worst thing you can do is gloss over your company's history. Be upfront about problems you've had in the past, and then sell the opportunities. Your message has to be: Join us now because we've learned from our mistakes and we're going places. The rainmaker who is right for your company will see your problems as a welcome challenge, not as a huge drawback.

But in the process, don't neglect to mention the challenges you still face. If you laid off two-thirds of your work force last year and morale is as low as it can go, you'd better say so.

"You need to lay out what all the challenges are, what the issues are, and say through your interview process, 'Here's one of the major issues we're facing. How would you tackle this?'" Nickel says. "You have to be prepared to put it all on the table." If you don't, your new rainmaker could be headed out the door when he or she realizes you provided only half the picture.

Beirne lays out all the risks of his new venture while he's interviewing. While he says such openness about the company might have cost him the general manager he ideally wanted, it's kept this person checking in often to see how things are going-an opportunity for Beirne to keep courting him. He hasn't been unsuccessful in his talent quest, either. He's hired a great product manager since last September. Novaforge has now expanded to seven employees and is projecting $3.5 million in sales this year.

Change Is Good

If you've made major changes and are recruiting again, now is the time to start an aggressive employee referral program that rewards your employees for recommending great people. Follow up all leads within 24 hours. "It has to be a formal program," Nickel says.

In fact, your staff is critical to recruiting on the rebound. One of the first things high-caliber people do is look around to see with whom they'll be working. Boasting a great board of directors or at least one professional manager can make the difference in landing talented people, says Larry Wizel, a partner with Deloitte and Touche's Tri-State Technology, Media and Telecommunications Group in New York City, which helps young technology companies fill management-level positions.

Beirne doesn't see big change as a bad thing. It's all in how you sell it. "Every good company is always changing. Look at what you've done in the past with all the variables and risks. If you've done it once, you can do it again," he says. "You'll find good rainmakers out there."

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