SubscribeIt’s a common dilemma in the IT industry: small company, big ideas and big ambitions.
One way smart young companies can increase their chances of turning their ambitions into reality is to employ some clever recruitment tactics that will help them compete with the big players right away.
Rather than retaining an executive search firm and commencing the lengthy process of headhunting a senior executive, fast-moving technology companies are increasingly turning to executives who can be employed, and deployed, far more rapidly.
Interim managers, once used primarily as a way to plug a temporary gap, are increasingly being seen as a way to quickly tap into specialised skills and experience. They can be a particularly powerful tool for start-ups trying to secure a competitive advantage. What’s more, they can then become permanent employees who retain an entrepreneurial outlook and a focus on quick delivery of results – attributes that pay big dividends for small companies.
The case of NASDAQ listed Information Edge illustrates the typical scenario.
The groundbreaking Information Edge software offers a new approach to business intelligence that transforms the way organisations make financial decisions, consolidate information, simplify reporting and impact business change. Among its clients it already counts top blue chips, including a prestigious financial company, as well as the UK Government Treasury.
The winning formula attracted the interest of NASDAQ listed international technology holding company, Broaden Software inc, which invested venture capital to the tune of £1.8 million in November last year. The vast bulk, 80%, of the funding was to be directed at sales and marketing in the UK, building on Information Edge’s excellent track record in both the public and private sector.
Which meant that CEO Vilosh Brito needed to find a high calibre sales and marketing director, and quickly, if he was to allow the company to take full advantage of rapid expansion opportunities.
Simon Chadwick, Chief Technology Officer of Broaden Software, believed Information Edge’s size worked to their advantage, giving them the versatility they needed to respond to client needs rapidly - yet it would undoubtedly pose recruitment problems.
It was the archetypal tough call – great product and great-track record but small company - with twelve staff currently employed in the UK division - no market awareness, and no infrastructure. So the typical high flyer, with a background in majors and multinationals wouldn’t be right. Yet Information Edge needed someone of that calibre.
A recent survey, Executive Talent 2006*, highlights this predicament, revealing that smaller companies feel senior executive recruitment problems/issues more acutely than their larger counterparts and are faced with particular problems.
As many as 69% of small companies which took part in the survey said it was difficult to find people with the right experience, or with enough experience (62%). Small companies are also likely to report that candidates backed out at a late stage. (21% said this, compared with 14% in medium-sized companies and only 5% in large companies.)
Smaller companies undoubtedly face a greater struggle to find good executive talent and good people-managers because their size makes them less attractive to potential employees. Perhaps senior executives are worried about having the “right company names” on their CV and this may inhibit them from taking up positions with smaller, less well-known companies. This reservation may also result in their being more likely to back out if a better job opportunity comes along during the selection process.
Cultural fit considerations may also be at play here. On paper a company may look good and offer the right career opportunities, but perhaps as the potential recruits get deeper into the interview process they realize that they will not fit comfortably with the personality of the organisation. Smaller companies wear their culture on their sleeve. A single personality in a small
company may be proportionately more able to influence a candidate’s decision than in a large company where complex structure and a multitude of people may obscure it.
What makes it particularly hard for smaller companies is that they are less likely to have the “management slack” that would allow them to cope with a gap in the management team for an extended period. They therefore need to find people quickly and are keenly aware if the recruitment process becomes unduly protracted.
Vilosh Brito did a search on Google for recruitment consultants, which led him to Executives Online, the UK’s fastest growing interim recruitment agency, which specialises in fast track executive resourcing and is able to identify high quality candidates at very short notice. Though he was ultimately looking to make a permanent placement, what attracted him to Executives Online was the fact that they also place interims – he believed anyone good enough and confident enough to succeed in short term projects, and constantly sell themselves into new roles, must have top class skills.
Indeed interims can often be a stepping-stone to permanent recruitment. While some interims are committed to working independently, a proportion of interims will take a permanent position if the right job comes along and may stay on in what began as an interim position if the chemistry is right.
Conversely, if things do not work out, they can be removed just as swiftly as they came, which is a bonus for smaller companies that are more vulnerable to recruitment mistakes. As many as half of all executive hires result in the candidate being out of the role in under 18 months. Another factor that makes interims ideal for smaller companies is that they hit the ground running and are very results orientated.
The same interim resource pool that companies of all sizes leverage in fixed-term assignments is proving attractive to small, dynamic companies seeking to hire permanently. Over half of Executives Online’s permanent placements have been into SMEs (defined has having under £25 million turnover), and among these, IT/technology is the most strongly represented sector.
Vilosh Brito was presented with a list of three candidates that was narrowed down to two, either of whom could have done the job and it took just three weeks from initial contact to an offer letter being dispatched. Although Vilosh originally envisioned the role as interim to permanent, he was so impressed by the strongest candidate that a permanent offer was extended, and accepted, immediately.
It is due to such swift and spot-on recruitment that Information Edge is positioned to fulfil the business plan and bring in £18 million pounds of additional funding from a planned listing or second round of fund raising.
Business Intelligence indeed - all those small IT companies with big designs take note!
*The independent study involved interviews with 102 HR managers and senior managers all of whom recruit senior personnel. They work for UK organisations across a range of industries and with turnover in excess of £25 million. To request a copy of Executive Talent 2006 or to find out more about Executives Online’s services contact 01962 829 705 or visit www.ExecutivesOnline.co.uk