Thursday, May 10, 2007
By Scott Valentine, Red Canary
Smart people are the fuel that emerging tech runs on. But in a tight labour market, finding and keeping technical employees can be a tough task.
Red Canary asked Tim Jackson, COO of Tech Capital Partners, to share his secrets on building human capital.
Why is it so tough to recruit and keep good techies?
TJ: Technically skilled people have always been a hot commodity.
"The thing to keep in mind is that techies go to jobs where they are excited by the technologies."
You can do all you want in terms of building the company and work environment in an employee-friendly way, but it really comes down to what's new and novel.
What's the best way to find good people in today's market?
TJ: Word of mouth is absolutely the best way. Usually good technical people have a peer group whose skills and work interests they know very well. I think it's important to build a community, so if we attract someone from Toronto, for example, the first thing we ask is 'Do you know anyone else who can bring something to the table?'
It's also important to have some kind of employee referral bonus program. If you don't do that, you're really not mining your own people for opportunity.
Do you have to pay a techie more than other staff at a comparable level?
TJ: You want to make sure people are excited about coming to work and not just because you're overpaying them. Otherwise, you get people jumping ship every nine months for a few grand more. It's important to point out that none of our companies are the top-payers in the region but we've been successful at finding and keeping great staff.
When does it make sense to hire interns or contractors rather than full-time staff?
TJ: I think it makes sense to bring in contractors to work on specific projects with defined timelines where you need some excess skill capacity, or in the case where you need a specific technical skill. There are some extremely skilled folks out there that cost an arm and a leg and it probably wouldn't make sense to bring them on full-time, but they're perfectly happy working on four or five month contracts. If those projects end up rolling in to a key product, then it makes sense to look at making a job offer.
Turnover rates for techies are about 15-20 per cent annually - higher in some competitive sectors and regions. What kind of tools do you use to mitigate churn?
TJ: Focus on sharing the wealth. Every company I've ever been involved with has had some sort of employee equity program in terms of either stock or options. I think that's critical.
"You want everyone from the receptionist to the CTO celebrating success and understanding how what they do contributes to both the company's net worth and their own."
The other big thing is communication. No one has ever complained that they were over communicated to.
How does employee recognition factor into a winning retention strategy?
TJ: It's easy to recognize the sales guys for a big contract signing or the operations team for hitting a certain production level. It's important when you do that to also recognize other things too: the software team that works overnight so firmware can do their thing in the morning for example. At Pixstream, we had a special pool of stock that employees gave to one another to recognize great work. It didn't really cost much and I don't think I've ever seen a more effective tool.
What's your strategy when an employee comes to you and says it's time for them to move on?
TJ: There's no point fighting people if their mind is made up, otherwise you're right back in the same position in a few months' time. We try to understand why someone is leaving and learn from that. Maybe the employee wants to work with a really sharp person elsewhere. If that's the case, we ask ourselves if that someone could fit in to our own company and then try to go out and get them.
The thing about losing staff is, tech people are real savvy . . . they know when things aren't going well. So if you find yourself losing a lot of staff you need to look in-house and ask yourself if there's something stagnant or missing about the culture of your own company.