WHITEPER Relationship Based Recruiting
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The document discusses relationship-based recruiting as an effective hiring strategy for startups. It describes relationship-based recruiting as utilizing a recruiter's existing relationships with both employers and candidates to find the right matches, rather than sorting through large numbers of resumes. This targeted approach saves companies time compared to traditional hiring methods, while also giving access to a pool of top talent specifically suited for innovative technology companies. The document advocates that relationship-based recruiting through a professional recruiter can provide major financial and time advantages that are critical for startups.
WHITEPER Relationship Based Recruiting
- 1. ! R E L A T I O N S H I P - B A S E D R E C R U I T I N G BUILT to WIN!! Fadi Bishara - techVenture, Inc. Creating a successful high tech company, in today's competitive marketplace, can happen in a fraction of the time that it took just a few years ago. The catalyst has been the exponential growth of the Internet, the resulting transformation of personal communications and industrial commerce. In fact, the demand for Internet savvy professionals has doubled in the past three years and is expected to double again by the year 2002.
- 2. This boom has given birth to an increasingly competitive hiring environment for high- tech firms. Moreover, it has given employees more choices as to where, when and how they apply their talents for the creation of technological success and monetary wealth. A visible indicator of the difficulty in attracting talent is the use of stock options by every company, not just startups and pre-public companies. Another factor, beyond basic supply and demand, is the overwhelming cost of hiring software and Internet savvy talent. The cost factor has escalated the stakes when hiring key employees for early stage companies. ! "Finding the right people is everything. Intellectual Capital has surpassed financial capital as the only sustainable competitive advantage for a technology startup." Ann Winblad (Hummer Winblad Venture Partners) "In the world today there's plenty of technology, plenty of entrepreneurs, plenty of money, plenty of venture capital. What is in short supply are great teams." John Doerr (Kleiner Perkins Caulfield and Byers) ! For established companies, a hiring decision (whether ultimately good or bad) is rarely devastating. However, for a small, high-tech company where growth and survival depend on flexibility coupled with speedy execution, key people - as noted by leading venture capitalists - are the most important ingredient for success. The cost of a team that is not functioning at peak levels is immediately obvious in a startup environment. Execution mistakes result in much higher costs with virtually no recovery time. A startup that discovers a flaw in product design or in resource allocation after securing a commitment from a large customer is in deep trouble. The architecture of the product and the quality of implementation needs to be on target from the white board forward. In not, the company may miss a vital (and perhaps the only) opportunity to grow to the next level or even remain in business. Clearly any company should be prepared to invest in its people, this especially true for high-tech companies that are in the process of developing products and providing services. Unfortunately, for the startup that investment comes at the cost of managers juggling developing product with the search process. An enormous amount of engineering time spent on assessing the critical criteria for each prospective candidate rather then towards to company’s efforts to develop products. So, beyond offering stock options and sufficient benefits, how can a young company, with limited personnel resources, increase its chance of attracting talent and making the right hiring choices? To optimize the process, techVenture has developed the following techniques to help young companies be more effective in their search for talent. ▪ U T I L I Z I N G P E R S O N A L R E F E R A L S ▪ E V A L U A T I O N C R I T E R I A A N D T E C H N I Q U E S ▪ R E L A T I O N S H I P - B A S E D R E C R U I T I N G ! U T I L I Z I N G P E R S O N A L R E F E R A L S
- 3. Gathering all of the personal referrals available is an invaluable hiring tool. Referrals provide inside information about performance from people who have been able to observe the candidates over a long period of time. Your employees and your board of directors should be encouraged to scour their past for promising candidates, even if they are currently employed. No interview, no matter how thorough, can replace direct personal experience with someone. The downside of this approach, as anyone in Silicon Valley can tell you, is that there simply are not enough personal referrals to fill key technical positions such as software designers and architects. ! E V A L U A T I O N C R I T E R I A A N D T E C H N I Q U E S The use of the following evaluation metrics can provide surprisingly honest answers, and when measured against corporate goals and company vision can help you winnow a good fit from the bad fit. Insure that the potential candidate has: • Demonstrated success and extensive design and development expertise in a field that is similar to your companies. • Maturity, competence and emotional intellect to fit the company's culture. • Dedicated work ethics, discipline and integrity, which qualify them to "own" a portion of your company and deliver quality results on schedule. • Commitment to long-term goals and alignment with your vision. • Loyalty and protection of your company intellectual property. • The ability to hang in there when the going gets tough. ! R E L A T I O N S H I P - B A S E D R E C R U I T I N G Traditionally, there are three ways to locate key employees. You can depend on your own in-house employee referrals, work with an outside employment firm (resume recruiters) that handles a high volume of resumes garnered from a wide variety of sources, or pay a premiums up front as required by retainer-based recruiters. Relationship-Based Recruiting is a relatively new concept. It is perhaps the best approach for startups who may not yet have a large enough in-house staff to garnish referrals form, the time to spend wading thru hundreds of generic resumes, or the money to commit up front required by retainer based firms. Relationship-based recruiting is designed to merge the advantages of in-house efforts with the expanded resources of a professional recruiter who will spend more effort in qualifying a candidate that a high volume recruiter and will be more practical than the retainer based firms. The concept, as developed by techVenture, depends on a three-way relationship between employer, potential employees and the recruiter. This method is articulated best by the old adage “know your people." Thus, the search for the right person no longer depends of culling through hundreds of anonymous resumes, or committing up front to a firm that has more time than your business does. Rather, the search is narrowed to a pool of specifically targeted individuals, men and women from both the employer and the candidate sides who are well known to the essential middleman, the professional recruiter. It is the middleman who creates the match. !
- 4. The essence of our success is in creating a pool of employers and employees who are at the top of their fields and in knowing them well enough to make a fit from personal knowledge. This demands selectivity, forcing the recruiter to turn away both companies and candidates as business philosophies and technical factors conflict. Only the companies with the newest, most innovative technology and the kind of candidates who would thrive in that arena are chosen as clients. Other recruiters choose a more mass-market approach and often flood companies with resumes. It is important for the corporate client to work with a recruiter whose pool of potential key people or 'high stakes hires' closely matches his or her corporate environment. ! As the importance of filling a key functional role with the right talent goes up on the organization's priority list, so does the importance of really knowing both the company and the candidate. A single 'high stakes hire' may be vital to that one big opportunity to hit it big in the fast-moving high tech market. A hiring mistake at a critical juncture could deep-six a project or entire company. Unfortunately, the kind of venture most in need of the "perfect" team is also, by its nature the least able to spend the countless hours that search, interview, and the evaluation processes demand. techVenture's answer is to first create a search process that is systematically organized to fit the needs of a specific functional area, thus maintaining a controlled burn instead of a burnout of the present team members. The following table gives a breakdown of suggested BEST hiring methods for different employee functions, as divided by criticality. The tables not only compare employee values, but they illustrate the amount of time and effort an ambitious new company must put into hiring key members of their design and engineering team. ! A closer look at the table shows that few young company’s can begin to meet the financial advantage provided by a professional relationship-based recruiter. Time saved by accessing a targeted data base of potential 'high stakes hires' more than makes up
- 5. for the recruiter's fee. A long term relationship between recruiter and corporation where numerous high stakes hires are made more than double this advantage. ! techVenture, Inc 3000 Sand Hill Road Building One, Suite 105 Menlo Park, Ca 94025 www.techVenture.com Copyright © 2000 by techVenture. All rights reserved.