HR101 Recruiting & Staffing

Doug Merritt, CEO of Icarian, leans forward in his chair as he focuses intensely on the team’s ideas. Abundantly energetic, he smiles and launches passionately into the business opportunities ahead, into the central role of the people who work at his company.

He should know. Having started in 1998 with its first worker, Icarian now has 200-plus employees. These individuals, and the new ones to come, are constantly on Merritt’s mind. He is keenly aware that the growth, the very survival of his company, which creates workforce management software and service solutions, depends on its employees. He also knows that it takes creativity and dedication to staff an organization today.

While it almost requires wizardry to create a work environment that attracts and retains workers in this high-tech mecca of Sunnyvale, California, Merritt’s challenges are the same ones faced by virtually all HR professionals confronted with a 4 percent unemployment rate.

“An organization can have all the right ideas and capital in the world, but without the right people to make things happen, it will fail,” states the Icarian Web site, broadcasting Merritt’s viewpoint to the world. But talk is cheap. And even the best talk these days is not nearly enough to garner and keep good talent. Best-of-class companies are moving beyond gimmicks and fast fixes to longer-term practices that require constant innovation and attention in order to staff their organizations.

Use inspired, easy-to-use recruiting methods

Ask Craig Collins, director of recruiting at New York-based DoubleClick, a rapid-growth global Internet advertising firm, how he handles the company’s enormous needs. He’ll tell you that DoubleClick’s largest source of new hires is its own employee base. Ranging around 30 percent in 1999, the company’s internal referrals were up to 43 percent in the first quarter of 2000.

“We set up a way for people who want to refer someone to go to the Web site and submit the referral right there. The resume gets captured, is sent to an administrator who looks at it and is able to distribute it to the appropriate recruiters,” says Collins. The capture system also records the employee’s name because whoever has the most referrals hired wins a prize. There are East Coast, West Coast, and international quarterly winners, and an annual winner who receives a Harley-Davidson motorcycle. Two motorcycles are displayed in the reception areas, with the words “Wanted: internal referrals — win prizes.”

Moreover, DoubleClick, known for its fast-paced, innovative corporate culture, streamlines the more traditional recruiting methods as well. The firm posts all jobs on the company’s intranet, as well as on Internet job boards.

The company also has a mechanism that allows a recruiter to click a button and access the vendor manager, who sends the posting to contingency search firms and other places, depending on the recruiter’s desires. The job description is posted on a recruiter management system that triggers a slew of postings, according to where the recruiter wants the listing to appear. For example, click the box that indicates Web site or intranet or vendor manager, and the postings are automatically relayed to the target location.

Think this is only for Web-savvy firms like DoubleClick? Not at all. While specific customizations may be in order, this service is offered by a variety of Internet referral companies that provide products to aid recruiters at their desktops.

Charles Schwab & Co., Inc., one of Fortune Magazine’s 100 Best Companies to Work For and recipient of the 2000 Catalyst Award, also boasts a 30 percent employee referral rate. Headquartered in San Francisco but located in various full-employment cities around the world, the company pays serious attention to being connected and recruiting from the local communities.

One event that the company promotes is a “Suitcase Social,” where workers bring in friends and introduce them to recruiters. There are raffles in which people win trips, thus the name. This event not only is an effective activity but also provides a chance to widely publicize the internal referral program throughout the organization.

The company also attracts intellectual capital through Workforce Development Programs. High school students who are interested in careers in the financial world can work at Schwab during the school year, not just during the summer. In addition, the firm has intern programs for high schoolers, undergrads, and graduate students.

“Think of it as a ladder, where we start out at high school and have programs that hit every level,” says Ruth Ross, vice president of human resources, policies, and practices. “It is a wonderful feeder pool for us, a great way for these kids to really learn a lot about business, and a great way to get them attracted and retained with Schwab, and we give them economic incentives to continue to come back and work for us.”

These incentives come in the form of bonuses and stocks, depending on the level and program. For example, there is one summer program in which people receive stock that vests if the individuals come back to work.

“We clearly have a goal of being a “best place to work,'” says Ross, “and our culture defines who we are and what makes Schwab such a great place to work.”

True enough. You can recruit all you like, but you have to have a place where people want to be. “A lot of times, you win or lose on the recruiting front based on the product you are selling,” says DoubleClick’s Collins. “In my case, I am fortunate enough to run a recruiting team that is selling a tremendous product. You have to take advantage of that fact.”

Create a corporate culture that sells itself

Knowing what’s important to workers is what sells them and keeps them. To some, it’s on-site child care or fitness centers; to others, it’s sabbaticals, flexible work arrangements, or training. To all, it is the collection of compensation, programs, and benefits that demonstrate that employees are valued. Again, these aren’t quick-and-dirty solutions.

“Given that human capital is our scarcest resource right now, making sure that you spend on people for their care and feeding makes a lot of sense,” says Merritt. “We are trying to build a good wholesome, well-balanced holistic corporate culture and still be highly successful in the business world.”

This philosophy underwrites the snacks, the drinks, the weekly masseuse and chiropractor available for employees; it generates the corporate culture that supports alternative work arrangements so that individuals who face grueling two- and three-hour commutes have the same kind of flexibility as people who need time for their families. It breeds innovation.

Employees receive “Icarian dollars” with each paycheck. Ranging from $50 to $200, this money can be used for anything that will enhance a feeling of personal responsibility to and connection with Icarian. The concept was initiated by senior management’s desire to empower individuals and to promote collaboration across departments. Employees have pooled dollars and spent their money for activities ranging from pool and skiing to funding charity events such as cancer marathons.

“The whole concept is that you have a personal responsibility to make this the kind of place where you want to work,” says Gretchen Allarcon, Icarian’s workforce operations manager (i.e., director of HR). “We want people to pool or save their money and spend it on whatever would make this place feel like a good place to be.”

The idea is taking hold. In June, some interns who were working at the company and staying in a hotel were robbed. In three days, employees raised almost $3,000 Icarian dollars to help replace their lost items and find them a better place to live. When a flood ravaged the hometown of an employee from India, Icarian workers sent money to help with reconstruction.

Another innovation is Web-based 360-degree performance reviews and feedback mechanisms. This format offers a collection of devices for continual review of people from above, around, and below. Instead of huge annual reviews, there will be more frequent (possibly monthly) reviews. This creates an ongoing dialogue, but with enough structure so that the information can be captured, sorted, and analyzed. Then, in this collaborative mode, management can also react to it more effectively. There are monthly “Dinners with Doug,” to which anyone is invited, as well as monthly group meetings with other company leaders.

Charles Schwab, which has a turnover rate of 12 percent (non-bank financial industry average is 15 percent and high tech is 19 percent), believes that one crucial aspect of continuing a healthy, productive corporate culture is to listen to employees. Annual surveys and frequent “pulse” polls offer management feedback about employee attitudes.

“When you open yourself up to listening to what people have to say, you’re really showing them that they have a voice in the company,” says Ross. Case in point: The firm was considering a subsidy program to offset the costs of transportation. There were two different ways to allow employees to end up with more money in their pockets.

One was to offer cash reimbursements; the other was a governmental program to put aside money on a pre-tax basis to offset transit costs for employees. The latter is far less costly to the company but gives employees a little less cash. Schwab took a vote of the employees. They voted for the pre-tax program. Why? Because, they said, they would still receive a benefit, but it was also better for the company.

Effective cultures engender retention

A corporate culture that sells itself also retains its talent. The best companies know that retention is what counts.

“In the final analysis, attracting good talent is insufficient,” says Jim Wall, national managing partner of human resources for Deloitte & Touche, LLC. What really counts is retaining people, he says.

Wall knows what he’s talking about. Boasting one of the first Optimas Awards, as well as the 1995 Catalyst Award, and top slots on the Fortune and Working Mother magazine “Best Places to Work” lists, Deloitte & Touche is renowned for its friendliness to women and dedication to retention.

“Retention is an outcome,” says Wall. “You get to retain the best people by providing the most challenging environment and the most supportive, compatible culture.” At Deloitte & Touche, training and compensation play a big role in demonstrating the value they place on individuals. “You actually get to keep your very best people by preparing them to leave you,” he says.

This paradox, he explains, goes directly to investing more money, time, and effort into career enhancement, mentoring, access to information, formal and informal learning programs, and all types of training to the very best people.

Creating a learning culture and an environment where people are intellectually stimulated is crucial when you are in a business that vies for intellect. “You’ve got to build the intellect and show the value of that intellect,” Wall says.

It requires compensating people well, and sometimes in creative ways. Deloitte & Touche is a partnership, not a publicly traded firm. Consequently, it cannot offer stock options. The firm will begin a new program in which certain employees (about 15,000 of the 25,000 workers) receive units they can invest in the stock market. While certain rules will prevail because of legal limitations in dealing with clients, the company will publish a list of funds that will be appropriate for portfolios.

For example, one employee might receive 10,000 units in 2000. In 2003, those units, which were invested, will have appreciated or not, and the employee will be vested. It allows individuals to participate in the firm’s success and gives them incentive to stay.

Staffing is one of the toughest, most complicated aspects of HR’s job today. Encompassing the full cycle of employee life, it goes to the heart of a company and determines the success — or failure — of the business.

“HR folks can’t do everything overnight, and expectations are very high,”warns Schwab’s Ross. “You want to plant seeds and watch them grow. In other words, it is about listening to your employees and responding to that. Are they satisfied? Is productivity going up? Do we have repeat business? Those are the kinds of really important messages we’ve learned.”