Hiring a Somebody When You’re a Nobody

You believe in your startup and you believe in your idea but how to you get top talent to believe in it as well?  In a recent Hireku podcast Don and I discussed how to identify top talent that fits the startup mold.  We also discussed how to creatively use a combination of salary, bonuses, and equity to prepare an offer that will entice top talent to your startup.

Entrepreneurs know that just because you’ve secured funding it does not mean you are cash flow positive.  You have a runway to either become cash flow positive or get additional funding.  What many entrepreneurs do not realize is that they should share this information with their new employees and set the expectation and urgency of the situation.  They should also tie compensation to the success of the endeavor.

Entrepreneurs should realize that they need to find people who understand that going to work for a startup is a risk but the rewards can be great.  Particularly in the case of your first hires you need to ensure that you are talking to the right people.  If you are hiring a Developer or Designer  for example there are a lot of people out there – especially in the job market of the past 2 years – who have gone out and started their own web application or site they intended to monetize.  These people understand what it takes to be an entrepreneur, understand funding issues, and understand (even if they were not successful) what it takes to get a startup off the ground.  The point of change for them may have been that they created a great product or site but couldn’t get to the point of monetizing it or making it profitable enough to create an income for themselves.  Their level of success in their endeavor is not as important as the fact that they went out there and gave it a shot.  To me these people could potentially be a great fit for your startup – and there are a lot of them out there.

The candidate coming from a large company environment such as Microsoft or Google, while they may have great technical skills, are in my opinion not going to be the right fit for your startup.  There may be a situation where someone from one of these larger companies bring a set of skills or something else to the table that you won’t find out of another startup environment but if you decide to go this way you need to proceed with caution.  Most likely these people will not be a good cultural fit, will not have the same level of commitment in your startup that you do, and it may be tough for them to see the upside.  Most of time these people are more interested in the immediate salary and benefits offered rather than the long term growth potential.

So how do you determine who is the right for your startup and once you find them how do you attract them.  First you need to figure out their motivation.  Is it immediate salary and benefits or longer term equity and growth potential.   We are all money motivated and we all have basic needs but is the motivation of the person you are talking to an immediate six figure income or the upside that their small piece of equity could be huge if the startup is successful?  It’s important to flush this out early.  If you are talking to a Developer who needs a $120k salary, 401k, and full medical benefits you’d better point them to Microsoft!   You need to make sure the candidate you are talking to is not only looking at your startup because we happen to be in a bad job market.  It doesn’t need to be said that they will jump as soon as another opportunity presents itself.

If however you are talking to someone who believes in you, believes in your idea, believes in you, and is motivated to see the upside you might be talking to the right candidate.   There are a lot of creative ways you can put an offer together to reward the new employee should your startup take off but save you on salary and benefits on the front end.  Recently I put together an offer for a client that included some upfront equity as well as longevity rewards in both cash bonuses and equity.  We also allowed the candidate to “buy” upfront equity in the startup via decreases in the new employee’s first year salary.  The employee’s salary went back to the agreed upon number in year two but year one he was allowed to gain upfront equity in the company via a salary decrease.  This allowed the entrepreneur to secure senior level talent at an affordable price and the new employee will have a nice piece of equity that should this company be successful can be worth much more than what he gave up in upfront salary and benefits.  A win/win for both parties.

These types of arrangements to take some upfront planning.  As an entrepreneur you need to ask yourself who are the people I need at the front-end of this startup and how much am I going to put into the equity pool.  You then need to do some headcount planning and decide how much equity you are going to give to your first hires.  Once you make those decisions stick to it and remember if you negotiate with one employee for more equity that’s less you will have for other employees or you’ll have to redo your equity pool.  Also, be sure that you document everything to satisfy the concerns of potential future investors.  Take into account future rounds of funding and dilution issues.  Ensure that employees with equity understand all of these issues up front.

Another creative recruiting technique of many startups are remote workforces.  For the startup it allows the entrepreneur to save money on salaries and offices expenses while allowing the opportunity to recruit top talent without restricting the candidate pool to local talent.  With today’s online collaboration tools many startups find setting up a remote workforce easy and effective.  It’s sometimes more work managing a remote workforce and rolling out a corporate culture but successfully deployed a startup can set up a great team and find employees with the right skill sets, mentality, and cultural fitness rather than employees who happen to be in the right geographic area.  For your new employee this type of arrangement can be very attractive giving them flexibility and the ability to work for your startup without having to relocate.

Is Employment Branding a Part of your Company’s Recruitment Strategy?

One of the most important aspects of your organization’s overall recruitment strategy is developing and managing your employment brand. Candidates rate an organization’s employment brand the 2nd most influential factor when considering employment opportunities. Google is the world’s most recognized employment brand. Google’s employment brand was built in a short period of time and exclusively through viral marketing. Google’s employment brand has been written about in every major business publication and as a result of its branding Goggle receives over 3,000 resumes per day. Other organizations such as Southwest Airlines, IBM, GE, Disney and HP have implemented similar employment branding techniques and are finding similar results.

While smaller organizations should not set out to compete with Goggle’s employment brand they can strive to become the number one brand in their vertical. A viral based approach to employment branding will result in the ability of the organization to attract top candidates. If you have to pay to get your message out it will not be credible. A successful employment branding strategy must be viral and must excite potential candidates to take action.

Successful employment branding emphasizes stories about an organization, an organization’s recruitment process and what it’s like to work in an organization which can easily be spread by employees and candidates. Employment branding has been called the #1 strategic way to increase application traffic yet on average companies spend less than 5% of their recruitment budget on employment branding.

The goal of any organization’s employment branding should be to build the organization’s reputation as a top place to work in order to attract top talent. Your employment brand should be credible, believable, and concentrate on the spreading of positive stories about the organization, being talked about in the media, and winning awards. Some of the components of your employment branding initiative should include:

• A well developed and implemented employee referral program.

• Development an execution of a “Recruitment Culture”

• Utilization of social networking (LinkedIn, Facebook, Twitter, etc.).

• Viral Marketing.

• Recruitment Video.

• Career site SEO

• Award programs.

• Articles in targeted business publications.

• Presentations at conferences

An organization’s employment branding should lead potential candidates to a strong career site. Candidates will visit the career site to confirm if what they’ve heard about the organization is true and read detailed information about the organization. The career site should clearly identify the organization’s culture, values, vision, current job openings and benefit programs. The site should reflect an organization’s brand and strengthen a candidate’s desire to consider employment with the organization. Included on the site should be testimonials from employees and video showing employees doing engaging work. Video should definitely be a part of employment branding as it can excite candidates and allow them to see feel and hear the passion and excitement of an organization’s employees. Google’s recruitment video “An inside look at Goggle” has been viewed over 500,000 times on the Internet.

Positive employment branding will result in a significant increase in the volume of unsolicited resumes, higher quality candidates, higher offer acceptance rates, an increased number of employee referrals, improved employee retention rates and an overall increase in the success rates of an organization’s recruitment programs. Remember that your employment branding is only as good as your candidate experience ratings.

Fantastic Ways to Get Sued!

On a recent episode of Hireku Don and I discussed a few examples of how you can ask interview questions a bit differently to ensure that you are compiling with the law.   Too many entrepreneurs get themselves into potentially actionable territory by not learning what they can and cannot ask in an interview.  Just as importantly they have team members interview candidates without providing interview training and ensuring that those employees know what they can and cannot ask.  The following are a few common interview questions that can be asked a little differently to ensure that you are complying with the law.  Please note that I am not an attorney and am not giving legal advice.  I ask that you take this discussion as informational not necessarily actionable and consult an Employment Law Attorney when it come to these types of matters.

“Are you a U.S. Citizen?”.  Remember that there are various work authorizations that will allow a non-U.S. citizen to work in the United States.   The correct questions is “Are you authorized to work in the U.S. without sponsorship?”

For the purposes of a background check many potential employers may innocently ask “What is your maiden name”.  You cannot ask a potential candidate about their marital status or family situation.  The proper way to ask the question is “Have you ever worked or earned a degree under another name”.

Many times if a position requires travel or overtime a potential employer may innocently ask a candidate (and I’ve had this happen!) “Do you have children or plan to have children?”.  Even if a candidate brings up their children in the interview process it is a good idea to avoid the topic all together.  The proper way to handle this situation is “This position requires 50% travel and potential overtime.  Are you able to meet the requirements of the position?”.    Remember, you have no idea if the candidate you are talking to has full time help or a stay at home spouse – and it’s none of your business!  If the candidate can meet the requirements of the position as it is described to them they are potentially qualified for the role.  If not you’ve determined them not qualified without getting into the danger of discrimination.

With the cost of health insurance coverage these days an entrepreneur may be tempted to ask a candidate “Do you smoke or drink?”.  While this may be a valid concern in the mind of the entrepreneur it is a question you cannot ask.  You can however ask “Have you ever been disciplined for violating company policies relating to the use of alcohol or tobacco products?

Many times an interviewer may ask “Have you ever been arrested?”.  Remember that it is illegal to use an arrest against a potential candidate in a hiring decision.  You can only use a criminal conviction in a hiring decision.  For a position that requires a candidate to drive an interviewer may ask “Have you ever received a traffic ticket?”.   Again you can only use a conviction not a ticket in a hiring decision.  The proper way to ask the question is “Have you ever been convicted of a felony or traffic offense?”.

An interviewer may innocently ask the question “Do you take drugs?”.  This question may be interpreted in the mind of the candidate as the interviewer asking if they take prescription drugs and trying to gain personal information about their health or any medical conditions they may have.   The proper way to ask the question is “Do you take illegal drugs?”.

An interviewer may also innocently ask the question “How many sick days did you take last year?”.  Again this may be interpreted in the mind of the candidate as the interviewing asking about their personal health or any medical conditions they may have.  If the interviewer can simply ask the question “How many days of work did you miss last year?”.

You cannot ask the question “Do you have any disabilities?”.  Even if the person you are interviewing has an obvious disability you cannot bring it up or discuss it.  You can however ask the question “Are you able to perform the specific duties of the position?”.

The bottom line is an entrepreneur should not be afraid of the interview process but should ensure that he/she and everyone involved in the hiring process is properly trained, knows what the law is, knows what they can and cannot ask, uses common sense, and acts appropriately.

Is your Company Ensuring a Positive Candidate Experience?

Anyone who knows me professionally knows that I believe one of the most important aspects of any recruitment program is a positive candidate experience. For over 17 years I’ve watched both corporate and agency Recruiters act dismissive and even disrespectful towards candidates who may not be a fit for the open position sitting in front of them despite the fact that the candidate who they do not move forward with can be their best branding and networking resource. While recruiting can be a transaction based profession it is also a relationship driven profession. The long term success of any recruiting program is going to be based on the relationships built and the experience an organization provides candidates.

A positive candidate experience goes far beyond an effective recruiting and on-boarding process. Candidates need to be kept informed of their status, given timely and valid feedback and treated with respect at each step in the process. At Human Capital Consultant our process is designed to ensure that regardless if a candidate is hired or not that candidate is left with a positive impression of Human Capital Consultants and feels encouraged to refer top talent.

This starts at the beginning of the recruiting process. The number one complaint candidates will have about an organization’s recruiting process is not receiving a response to their resume submission. Candidates often complain that they feel like their resume went into a black hole and they do not know if it was even received. If a Recruiter is going to take a couple of moments to review a resume why not take a couple more moments to e-mail the candidate, thank them for their interest and if they are not a fit give them a brief explanation why? While the candidate may be disappointed that they are not being considered for the position this will differentiate the Recruiter and the organization from the many others who did not respond at all.

Many Recruiters forget that even in an employer driven job market the “sell” is two way. While the candidate is selling his or her experiences and successes to the Recruiter the Recruiter should be selling the company, culture, opportunity and growth potential to the candidate. In fact here at Human Capital Consultant our process is to sell the organization we are representing before we talk to the candidate about the position, their background and experience.  Our goal is to get potential candidates excited about our client even before we determine if a candidate is a fit for the role we are recruiting. This approach has resulted in a consistent flow of referrals and a positive brand.  We feel strongly that even if the candidate is not a fit for the role that candidate should leave the conversation excited about the opportunity and want to tell others. This is basic viral based branding!

Another valid complaint from candidates is lack of communication and response from Recruiters. Once a candidate has spoken to a Recruiter they will often find that they have no idea what their status is and cannot reach the Recruiter to find out. Often times if a candidate is not a fit for the role the Recruiter is working to fill – either determined by the Recruiter or the Hiring Manager – the Recruiter becomes dismissive to the candidate and will not communicate that information. Recruiters need to be communicative and responsive to candidates. If at some point in the process a candidate is determined to not be a fit that candidate must receive timely feedback if you are going to ensure a positive experience. Not only can that feedback help a candidate better prepare for their next potential opportunity but the Recruiter will differentiate him/herself from the Recruiter who is not providing feedback and help ensure a positive candidate experience.

We all know that a candidate who has a negative experience will tell as many people as they can but did you ever consider that a candidate who has a positive experience – even if they didn’t get the job – will tell just as many people? Did you ever consider that your greatest referral source can be candidates who did not get hired?

I suggest that organizations implement a program to measure and improve candidate experience ratings. By knowing what candidates are thinking as they leave your recruiting process organization can work to improve the candidate experience. I guarantee the results will be worth the effort!

Remembering that we will again move back to a candidate driven job market today is the perfect time for organizations to evaluate and make improvements to the candidate experience.

Is your Recruiting Team Ready for Tomorrow?

Many Recruiters and Recruitment Managers do not see that the recruiting profession is changing. The skills that made Recruiters successful in the past will not bring organizations to the front of the war for talent in the future and the Recruiters of tomorrow will not find success using the same techniques that make them successful today. The Recruiter of tomorrow will embrace online social networking and viral marketing techniques. The ability to build social networks, build online relationships, build and manage internal referral programs, and build an organizations employment brand are skills that will make Recruiters successful in the future. It is projected that up to 50% of candidate referrals will come through online communities in the future. Is your organization’s Recruiting Team ready?

Most Recruiters and Recruitment Managers are not trained to think strategically. Recruiters are taught to fill an immediate need and most of their duties are operational and tactical. Future success depends on Recruiters and Recruitment Managers thinking strategic and long term. The goal of an organization’s recruitment function should be to move from a transaction driven function to a relationship driven ambassador of the organizations vision and brand.

Executives with responsibility for Recruiting should ask themselves:

• How is the organization measuring the success of the recruitment function?

• What is the organizations employment brand? Is the organization’s employment brand visible to the potential candidate pool?

• Is the organization’s employee referral program producing the intended results? What is being done to increase referrals?

• Is the organization encouraging non-recruiting employees to get involved in the recruiting process by leveraging social media/viral marketing techniques, individual networks, and other means to refer candidates?

• Is the organization tracking candidate experience ratings? What is being done to increase these ratings?

• Is the organization’s recruitment team going beyond just having memberships on social networking sites such as LinkedIn and Twitter and truly working those networks for candidate referrals?

This is only a start. We will again move to a candidate driven market and organizations must be proactive today and embrace tomorrow’s strategies to win the war for talent.

Welcome to my Blog!

I always wonder about the validity of the information I read on blogs when I have no idea who the person writing the blog is, what their qualifications are, and what the mission of the blog is.  In the interest of getting this blog off on the right foot I’d like to introduce myself and give readers a glimpse into my background.  I hope that by sharing my experiences and the knowledge I’ve gained through the ups and downs in business I can help others to be successful.

My name is Mike Astringer and I am the founder (I do not call myself CEO) of Human Capital Consultants, Inc.   My firm provides outsourced Recruitment and Human Resources services and consulting to start-up, mid-market, and industry leading organizations across the United States.  I have had the great honor of helping some great entrepreneurs get their startups off the ground over the years by helping them recruit great people and establish their recruitment and HR strategies.  While we have successfully served clients of all sizes and verticals my real passion is working with entrepreneurs to help them grow their companies.

My father was an entrepreneur and I established my first business at the age of 20.  At the time I was working in the Marketing Department at an Atlantic City casino.  One of my co-workers was passionate about tropical fish.  Together we started “Aquatic Environments”.  Our  business was built around installing and maintaining aquariums in offices and businesses throughout Southern New Jersey.   I handled sales and marketing while my partner handled installations and maintenance.  When we closed a deal with a local aquarium store to handle their installations and maintenance our business grew to handle both commercial and residential installation and maintenance of fresh and salt water aquariums.  Ultimately while the business was growing our partnership was not successful and I left the business.  While running Aquatic Environments I learned a lot about establishing and growing a business and working with a partner.  These were lessons that I would take with me in my future endeavors.

In the early 90’s I relocated from Southern New Jersey to Las Vegas.  At the time I thought I’d spend my career in Casino Gaming and decided that if I were to work in the Casino Industry I’d do it in the gaming capital of the world.  The way it played out I often laugh that I am the only person who ever moved to Las Vegas and got OUT Casino Gaming.  One day while looking at the newspaper classifieds (this was before the days of Monster.com) I read an ad for a Recruiter.  The ad caught my attention, seemed interesting and I mailed my resume.  Before I knew it I was a Recruiter working an IT desk with a national firm.  This position paid less than half of my salary working in Gaming (quite a struggle with a wife and two small children at home) but I understood that I was starting over and had to pay my dues.

I loved recruiting from the start and knew that this is how I’d spend my career.  Fundamentally I felt I was doing good by helping people find work and advance in their careers.  I was working in a startup office of a national firm and we didn’t have many reqs to work on at the time.  My primary frustration was that I wasn’t helping enough people find work because we had more candidates than reqs.  This frustration caused me to leave this company after about 2 years and move into a business development role with another national firm.  Being young and driven (but not having an especially accurate view of the world) I felt that I could help even more people find work if I were out there bringing in reqs.

In the late 90’s my company was acquired by another national firm.  This was not a positive experience for my co-workers and I.  The people I was working with and had grown to admire were leaving and I decided it was time to go.  Entrepreneurship was again calling me and I decided to start my own firm.  I had been successful as a Recruiter and successful as a Business Development manager so I figured I could put those two skills together and build a successful recruiting firm.  In late 1997 I started Information Technology Associates.  We provided contingency search and technology consultants to leading firms both in Las Vegas and across the United States.  We counted several of the Big Six (at the time) and some of the world’s leading technology companies as clients.  As an entrepreneur and a father I was taking a huge risk with my family’s future and stability.  By now I was divorced and a single parent to my two children.  I knew however that this was something that I needed to do and felt that if I could build a successful business I’d give my children a life that I could not otherwise provide.

Information Technology Associates was quickly successful and I was proud of the work we were doing.  The late 90’s were a boom time in the technology world and unfortunately many people got into the Recruiting Industry to make a quick buck.  A used car salesman mentality took hold in the industry and clients and candidates were quickly becoming mistrustful of Recruiters.  I always believed that we had to do good business and rise above the used car salesman mentality.  Doing ethical business was more than just a tag line for us.

Unfortunately Information Technology Associates did not survive the downturn of the tech market and recession of 2000/2001 and I found myself looking for my next opportunity.  That opportunity came in mid 2001 in the form of a Director level role managing regional operations in Nevada and Arizona for another national recruitment and staffing organization.   In this role I managed sales and recruiting in predominately IT, Engineering, and Accounting/Finance practices in a territory that had operated in the red for several years.  While I was disappointed that my company did not survive the downturn I found myself in a great professional situation.  I was given the freedom to run my region the way I saw fit so it was like running my own company again.  With the help of the great team I assembled we were able to grow regional revenue by 250% in just a two year period.  Our innovations caught the attention of the company’s corporate leaders who often visited our region to discuss the things we were doing.  Many of our ideas were rolled out nationally.

In mid 2003 I decided to relocate back to New Jersey so my children could be closer to family.  Initially I accepted a role managing the New York and Philadelphia markets for a regional staffing provider.  It didn’t take long to realize that the position and company were not a fit for me culturally and would not provide me the opportunity to realize my own career goals.  I found that entrepreneurship was again calling.  I decided to start another company but after evaluating the very competitive east coast landscape decided against starting another “traditional” recruiting and staffing company.  I did a lot of research on market trends and tried to figure out the future of our business.  In January of 2005 I founded Human Capital Consultants as a Recruitment Process Outsourcing firm.  Over the past few years Human Capital Consultants has grown into a full service professional consulting firm.  While we still provide Recruitment Process Outsourcing as well as Contract and Project Recruitment services we also provide full service Human Resources Outsourcing and Consulting as well as Recruitment Strategy and Operations consulting.  Our real sweet spot is developing and implementing recruitment strategies for growing entrepreneurial companies.   I am proud that Human Capital Consultants successfully survived the 2009/2010 recession and see us coming out of this downturn a stronger company with even better service offerings and delivery capabilities.

I believe that as an Entrepreneur, Recruiter, Husband (I have been remarried for the past 5 years), and Father I never stop learning.  I am a constant reader of business publications and blogs and I listen to as many Podcasts as possible ( I really enjoy “This Week in Startups”).  I enjoy sharing the knowledge and experience I’ve gained over the years.  The following are some of the areas where those interested can read/hear my thoughts;

• Hireku (www.hireku.com).  Along with co-host Don Charlton (Founder of www.theresumator.com and @Dontrepreneur on Twitter).    Hireku is a series of Podcasts for entrepreneurs facing recruitment challenges while growing their companies.

• Career Radio Podcast (www.careerradiopodcast.com).  Launching November 2010.  Career Radio Podcast will share strategies for job seekers and professionals growing their careers.

• @MikeAstringer on Twitter.   I try to provide interesting and informative content on Twitter.   I Tweet about entrepreneurial, human resources,  and recruitment topics.

• @HCCRecruits on Twitter.  I Tweet employment opportunities offered by Human Capital Consultants as well as content of interest to job seekers and professionals growing their careers.

• My blog (www.mikeastringer.com).  This blog will be active starting in October 2010.  I will blog on a wide arrange of topics from entrepreneurialism, recruiting, human resources, job searching, career management, and other things I’ve pick up along my 17 years in the recruiting field and my years as an entrepreneur.

Personally I live in the Philadelphia suburbs with my wife Kimberly, son Steve, and daughter Michelle.  I am passionate about boating and spend most summer weekends on our boat “Bello Viaggio” (Beautiful Journey).  Kim and I also enjoy travel to beach and waterfront destinations.   I believe strongly in giving back and have spent many years in volunteer and board positions for such organizations as United Way and Junior achievement as well as a variety of local business organizations.

I thank you allowing me to introduce myself.  I hope that this blog will become a lively exchange of conversation and content from both my posts and your comments.  If you enjoy something I post or find it useful and informative please share it with your Twitter network.   I encourage you to comment on anything I bring up here.  We all learn and grow through the exchange of information.  If you’d like to contact me offline I can be reached by e-mail mike@mikeastringer.com or telephone 800-378-0847 X701.