Groupon says its focus is on the bottom line, rather than top-line growth.
Jumping ship is nothing new in the dot-com world. A few months ago, workers were jumping ship to get into pre-IPO companies and hoping to strike it rich. Today, many are fleeing from sagging stock prices and impending dot-com death. But companies with strong backing or a history of stability in the-gasp!-real world, may find that retaining talented technology employees is easier today than it was earlier this year.
Unsolicited resumes from experienced e-commerce professionals arriving at the San Francisco headquarters of BlueLight.com, the online arm of K mart Corp., for instance, have more than doubled since February.
E-commerce professionals are more likely today than they were in the past to leave companies at the first sign of trouble. This is putting more pressure on retention. “Some b2c’s have taken a huge hit and there are some startups that have scared people off,” says Marc Salvati, director of recruiting for Atlanta-based Pencom Systems, an IT recruiting firm.
But even with more people in the market, recruiters and human resources staff for e-commerce companies are still having a problem finding software engineers, especially ones that know Java.
Java software developers are demanding a high price. With as little as one year of experience Java developers can demand as much as $50,000 while management positions go up to $200,000-and this doesn’t include perks. Stock options and a lease on a BMW Z3 are just some of the perks e-commerce companies throw out.
And the market shows no signs of cooling off. Even with recent industry layoffs, the U.S. Department of Labor is standing by its forecast that information technology jobs will double from 1.5 million in 1999 to 3 million in 2004. The Department of Labor does not differentiate between information technology jobs in traditional settings and such jobs in the e-commerce environment. But many experts believe it’s a safe bet that most of those jobs are developing in the e-commerce arena.
Look for the blue light
Nevertheless, the reality at the moment is that many companies are laying people off. And companies like Bluelight.com are picking them up. BlueLight.com recently hired people from Petstore.com, Reel.com and Homewarehouse.com, and BlueLight’s hiring activity and the availability of experienced engineers don’t look to let up. The number of resumes BlueLight is receiving has increased from 20 a week in February to 50 a week now-and much of the additional resumes are coming from staffers at failed or failing dot-coms.
BlueLight plans to take full advantage of recruiting these people because they have e-commerce experience, says a spokesman. BlueLight is hoping to grow its ranks from 110 to more than 140 by the end of the year including senior Java programmers, Oracle applications engineers and data operations engineers, among others.
While some companies are scavenging the remains of deceased dot-coms, others are getting creative with retention programs and are realizing it’s not always the big bucks-or the prospect of riches from an IPO-that attract someone to a company. The culture, work environment and technology are more important to many people. This is also the reason internal referrals have become the most important way of recruiting.
At Chicago-based Inforte Corp., an e-commerce consulting firm, 70% of hires are from referrals. The company offers bonuses from $500 to $5,500. “These are people on all levels,” says Suzanne Gang, director of recruiting for Inforte. “We have junior people referring senior people they have worked with at other companies. And these are strong performers with a proven track record.” Along with the bonuses, the employee who has the most referrals at the end of the year receives a trip.
When people have the choice of working in Silicon Valley, New York and Boston, it might seem difficult to attract e-commerce specialists to Dodgeville, Wis. But Lands’ End has also had great success with its referral program. Offering a $2,000 bonus for information technology referrals has been the clothing retailer’s best way of attracting people. “We recruit through some of the more traditional methods, but referrals have been really effective,” says Thomas Gloudeman, director of recruitment and development for Lands’ End.
The German shepherd factor
The increase in referrals for a company can translate into lower turnover. The people coming in know the company’s reputation and its culture, so there is usually a good fit.
Sporting goods retailer Fogdog doesn’t pay the most money or have the best perks, but it attracts people through its reputation, says Andy Chen, vice president of special products and executive producer at Fogdog. “We don’t spend a lot of time talking about perks and benefits, just the value of the business model,” says Chen. That model is for Fogdog to achieve profitability quickly-thus creating a solid company in which to build a career. “We want to attract people who really believe in the business and not because they believe in the perks and benefits,” he says.
Getting along in a company’s culture has an impact on a person’s ability to stay at the company. “We started five years ago as a really small, tight group of people,” says Chen, adding that the company has grown from 30 people to 170. “We have a very unique culture and a close bond with all the people. People who want to just work from 9 to 5 tend not to like this environment.”
Austin, Texas-based Garden.com also believes people have to fit into the culture. Shorts, T-shirts, bare feet and a German shepherd sitting along with his master are common sights at Garden.com. Before hiring anyone, the company wants to make sure people fit in. “We emphasize the culture,” says David Zahn, business architect for Garden.com. “We want to make sure people understand what’s going on and if there’s the smell of a prima donna we’ll go somewhere else.” Garden.com requires applicants to sit through interviews with up to seven people so both sides get a feel for what each other is about.