Private investment firm Comvest Partners acquires the financially troubled e-retailer, which filed for Chapter 11 bankruptcy protection in March.
Wine, cheese, good press and top pay are all part of attracting the elusive technical worker.
Christian Bradley was attracted by the intelligent, creative people who interviewed him for a job at GSI Commerce Inc. And he likes that the company is flexible, but not so loosely managed that it has the frat-house feel of start-ups he’s worked at.
Chris Upham joined Onlineshoes.com because it gave him the chance to start a department from the ground up while working with bright co-workers in an attractive downtown Seattle setting. Oh, yeah, the 40% pay raise didn’t hurt.
What makes jobs appealing to Bradley and Upham is important to online retailers because it’s increasingly difficult to find technical professionals like them with online experience who can help design web sites and keep them running.
Not quite 1999 …
It’s not quite as bad as the heady days of the Internet investment boom, but many e-commerce recruiters would salivate over someone like Bradley, a 26-year-old web developer who started programming in Basic at age 8, or Upham, 30, who had six years of direct-to-consumer experience at retailer Sur La Table Inc. before joining Onlineshoes.com this year as head of its project management office.
“I would characterize it as very close to 1999 in terms of salary escalation, recruits demanding to do things like bring their dog to work, large signing bonuses,” says Jeff Housenbold, CEO of online photo-sharing service Shutterfly Inc., which has doubled its employee headcount to 400 this year.
The competition is especially intense in Silicon Valley, Shutterfly’s home turf, but it’s tough all over. A midyear survey of IT employers for online job site CareerBuilder.com found 46% of companies had positions open for which they could not find qualified talent.
That means Internet merchants have to get creative in how they recruit, which means everything from raising the company’s profile in the media to discreetly headhunting at trade shows. And they must work hard to keep the people they recruit: rigid office hours are out; perks, flexibility and good corporate image are all in.
Good times for techies
Signs abound that technical personnel are in demand-despite some softening of late as the economy wobbled. The Yoh Index of Technology Wages was up 4.12% in June over the previous year-it had been up 4.29% in April before economic uncertainty began to impact hiring.
Tech salaries in retail, including e-commerce, rose by 14.2% from 2005 to 2006, the fastest rate among nine industries surveyed by Dice Holdings Inc., which operates the Dice.com technical job site. But the average tech salary in retail and e-commerce was only $63,830, well below the national tech average of $73,308.
Salaries are substantially higher for certain jobs vital for e-commerce. The average total compensation for Java developers in the Philadelphia area was about $105,000 this fall, up 13% from a year ago, and web architects were commanding $120,000 to $150,000, up 10%, according to GSI Commerce. GSI hosts e-commerce sites for more than 80 companies and has some 350 technology workers among its 3,300 employees.
One reason for the demand for web-savvy workers is that many companies of all types implemented the complex software systems known as Enterprise Resource Planning in the late 1990s and now are enhancing those ERP systems with Internet components, says Peter Koutroubis, director of operations at Yoh Services LLC, a temporary personnel agency. Online retailers now “are competing with everybody,” Koutroubis says. “There are a lot more people looking for the types of folks that would be involved in web design, development and maintenance.”
To compete for technical workers in this environment, e-commerce recruiters have to use old tools more intelligently and devise new ones.
“The best way to find people, by far and away, is through employee referrals,” says Housenbold of Shutterfly. Echoing that sentiment is Jim Flanagan, executive vice president of human resources at GSI, who says GSI employees recommend 40% of new hires.
While Housenbold and Flanagan like to think employees refer friends in large part because they’re excited by their work, Shutterfly and GSI also offer sizable cash incentives.
Shutterfly, which competes for employees with the giants of Silicon Valley, offers a $5,000 bonus for a successful employee referral and recently handed out an additional $20,000 apiece to two employees who had referred three people within the last quarter.
GSI, in the less heated market of Philadelphia, offers an incentive of $1,000 to $3,000 depending on the level of the hire. Online retailer AbeBooks Inc., based in Victoria, British Columbia, gives employees $1,000 and an iPod for a referral, and Boston-based e-commerce platform provider Art Technology Group Inc. pays out $3,000 to $5,000.
Another common practice is to post job openings on the company’s web site, as well as on career sites like Monster.com, CareerBuilder.com and Craigslist.com, and on such specialized technology job sites as ITJobs.com and Dice.com.
One way to use those jobs board to find candidates with prior e-commerce experience in a given locality is to search for resumes that include the names of large online retailers in the area, says Bill Zujewski, vice president of product marketing at ATG. That can uncover workers who left e-commerce a few years back and may be ready to return.
“The good news is that e-commerce seems to be hot again, and people view it as a good long-term investment in their resume and skill sets,” Zujewski says.
Network, network, network
Everybody knows somebody, and recruiters are working harder at getting to know the kinds of people likely to know technical specialists.
Trade shows are good places to meet potential recruits, or people who might know them. GSI has started sending human resources managers to trade shows with that in mind.
“We don’t do in-the-face recruiting,” says Flanagan. “We encourage people to build relationships with people, whether that person is a potential hire or knows somebody.”
Debbie Faulkner, vice president of human resources at Onlineshoes.com, says she makes sure company executives attending trade shows knows what positions the company has open so they can keep an eye out for good candidates. The e-retailer also views user group meetings sponsored by software vendors as opportunities to look for technical personnel. “When you’re there, you’re pretty qualified,” Faulkner says.