OpenView's Winter Mixer 2012

If you follow our OpenView blog, you’ve probably heard many of us mention our quarterly “mixer” events and forums which are hosted for our portfolio companies and the greater Boston entrepreneurial community.  At our last mixer, we were introduced to Telamon Insurance and Financial Network and their Benefits and HR Division.  Telamon works with clients ranging from startups to more mature organizations with a focus on providing human capital consulting services to growing organizations across the US, and our conversation quickly shifted to the nuances of implementing a human resources and recruiting function within expansion stage companies.

This week, I sat down with Telamon team members Lauren Brenner (President, HR Division), John Snyder (President, Benefits Division) and Chris Donovan (Director, Business Development) to catch up and discuss best practices and interviewing techniques for high-growth companies.

Jessica:   Hi Lauren, John and Chris!  It’s great to have an opportunity to connect with you again.  During our last conversation, you explained that Telamon often has an opportunity to support organizations going through rapid growth.  What is the most common human capital challenge you find facing these organizations?

Chris Donovan: One of the greatest challenges facing the companies in high-growth mode that we work with include finding the right talent and then developing the strategies to retain those employees.  Beyond this, companies often struggle with how to handle difficult employee relations situations while being advised of the federal and state laws to be legally compliant in their business (e.g., wage & hour, recruitment, termination).

 

Jessica:  We often find that interviewing is very new for many hiring managers or members of these companies.  What advice do you typically offer to these organizations who are new to the interview process?

 

Lauren Brenner: Document, document, document!   It’s important to develop a set of standard interview questions to ask every candidate before the interview process begins, and then once interviewing, write down each response to every question.  It’s also essential to conduct and document reference checks before making a hire, requesting that 1-2 of these references are the candidate’s former managers.

 

Jessica: That’s great advice!  It can be very easy when interviewing 2 or 3 people for the same position to get details crossed or to forget an important question, particularly when the conversation flows easily.  What about the difficult interviewing situations?  How do you coach an interviewer on how to handle vague responses, dodging questions or when details don’t line up?

 

Lauren: One of the more difficult interviewing techniques to master is to become comfortable with silence when waiting for a candidate to respond to your question.  If a candidate is thinking of his/her response, do not answer for them or provide lead in responses to the question to make them less uncomfortable or to help them out.  Allow them the time to think about the question or to recall a particular situation.  The interview should be 80% candidate and 20% interviewer talking.  One other recommendation we often coach interviewers with is to ask questions that will help you to obtain a balanced view of the candidate.  If you ask a question which lends the response to be positive or negative, ask the question in a way to obtain the other type of response.  For example, “Tell me about a time where you were able to change a disgruntled customer to a positive customer.”  Followed with, “Tell me about a time where you were not able to successfully assist a customer and what you learned from that experience.”

 

Jessica:  So best-case scenario, an interview goes really well and the candidate is hired!  What are some of the ways Telamon is able to partner with growing companies in the on-boarding process?

 

John Snyder:  Telamon will develop a new hire packet customized to each client and overnight the kit to the prospective hire so they can begin the on-boarding process before their first day.  This ensures a great first impression and reduces the fear of a delay in health and welfare benefits coverage.  We also develop on-line content for on-boarding that our clients use with new employees.

Jessica:  That great first impression is essential to getting the newest employees up to speed quickly and confidently.  From a benefits perspective, what have you found to be one of the most essential aspects in developing a comprehensive benefits package within a start-up or expansion stage company? 

 

John: Developing a company philosophy on employee benefit offerings is the starting point for any company.  Critical questions to discuss are as follows:

• What kinds of benefits are offered by other companies in our industry that have similar demographics?
• Do we want our benefit offerings to match or exceed our competition’s?
• How do we project costs?
• What is our budget?
• How much do we contribute toward the cost of premiums vs. our employees?
• Where are we recruiting our staff from?  What will be their expectation of benefits?
• What is going to drive retention — culture, salary, stock options, benefits, wellness programs, developmental opportunities etc.?

Once these questions are answered and a philosophy is developed a company can work with their benefits adviser to tailor a plan that is sustainable and will meet their short and long term objectives.

 
 Jessica:   Keeping those short- and long-term objectives in mind throughout the hiring process (from interviewing through on-boarding) is so important.  Lauren, John, and Chris, thank you so much for taking the time to chat and share this great advice with us and OpenView blog readers.

For more information on Telamon Insurance and Financial Network or to learn about the HR Bootcamps they regularly host on these topics, please visit their site at www.telamonins.com. 

The first order of business is of course to create the job description.  Discuss the role internally and with the key stakeholders.  The best person to create the job description is not necessarily Human Resources!  You’ll want to involve the direct manager of this person, who is generally also the hiring manager, and those who have held this role themselves.  Be sure to take the time to ask yourself and others: “Why are we making this hire?”

You’ll also want to understand the compensation range that aligns with your own organization.  It’s ideal to use external compensation analysis tools (we use Payscale at OpenView) to understand market rates, but it’s also important to conduct ongoing data points as you begin your search.  As you interview, what are you seeing in the marketplace?   What did candidates earn in previous positions?  You’ll want to get everyone on the same page.  Who will approve this offer?  Make sure that they are aware of this data and you get their approval for the range you hope to offer before you begin discussing it with potential hires.

Define your target list.  Who are your competitors?  What are the complimentary solutions?  If you are reaching a stage in the growth of your organization where you would like to reach new market segments, it could be an opportune time to begin hiring employees who have diverse backgrounds in the segments you are seeking to expand into. Of course, I’ve also written a blog in the past which argued that you shouldn’t necessarily focus on recruiting from your competitors.  So, you should also consider researching and recruiting from “like” industries.

You’ll need to consider your geographic constraints (or on an optimistic note, your opportunities!).  Are you able to relocate someone for this position?  If so, what type of package could you offer?  If relocation is not possible, consider the potential of having this person in a remote location.  At the expansion stage, you can’t afford to make the mistake of a wrong hire.  Weigh the pros and cons of hiring the best talent in a location outside of your company headquarters.

Finally, review your recruiting resources.  Where will you post this position?  Are there posting sites that are specific to your industry or the role?  For example, if you are looking for a software developer, you’ll want to look at Dice, StackOverflow, and User Groups.  Beyond the job posting, you’ll want to engage in an active search and headhunt candidates.  Will you use LinkedIn (most likely!)?  Who in your network may have some leads?  Review your target list once more and consider what resources will allow you to truly reach these candidates.

Of course, once you’re here, you’re ready to start searching and screening candidates.  Create a set list of interview questions, develop a scorecard, and determine your interview team.

Do you have a process in place within your own organization for setting a recruitment strategy?  What has been the greatest challenge to getting started?

IMAGE SOURCE: Stuart Miles / FreeDigitalPhotos.net

In the realm of hiring, there is nothing worse than reaching the offer stage only to discover that a critical component, a key factor in the acceptance and extension, has been missed which renders the opportunity moot.  In many cases, I’ve found that these challenging and mutually disappointing situations are cases that could have been answered in the first initial phone conversation. 

Without further ado, in my experience, here are the five essential questions that you must ask up front, or they could burn you and waste much of your time in the end.

Non-Competes

Question:  Have you signed a non-compete agreement, with your current company or an employer in the past?

This is a particularly important question to ask when hiring for sales or technical positions.  This is the most simple question that unfortunately, can also become the most complicated and overwhelming situation if taken too far.  In non-compete agreements, there is a lot of “grey area,” even when interpreted by a lawyer.  Typically, these agreements expire after a certain amount of time after the employee departs from the organization (within 6 months to several years); however, if handled improperly, your organization (and new employee) could be in a very difficult situation.

On the same token, you should be sure that, as the hiring manager or company, you do not have a non-solicit, non-hire or non-compete agreement which could make it an impossible situation for you to hire someone from their particular organization.  You’ll typically find that these agreements have been signed with strategic partners, customers, or with your former organization.

Location

      Question:  Our company, and this position, is located [insert your specific location].  Is this a commuting distance that you can realistically consider?

While it may seem obvious, multiple locations, unclear job postings, and unrealistic expectations of the commuting time pose a potential risk to your hiring effort.  Can your office be reached via public transportation?  If not, the candidate may need to purchase a car or find an alternate mode of transportation which could make the opportunity unrealistic for them at the time.

Of particular concern may be a situation where relocation is required.  It’s important to establish this in the very first conversation, and often times, may make the most sense to discuss in the first 5 minutes of your call.  Have you been seriously considering relocation?  Are there any important considerations that would impact your timeline (i.e. if you own a home)?  As the hiring manager, you also need to consider how this could impact your hiring timeline. 

Time Frame

      Question: If we were to move forward, what would be a realistic time frame for you to join our company? 

This question could be of particular concern if you need to make an immediate hire and/or are expecting that a two-week notice from point of offer.  In some circumstances, candidates may be on a contract that they are obligated through a certain date.  If you are recruiting a passive candidate, there may be a particular implementation, project or scenario that they would ultimately like to respect their involvement and have an opportunity to wrap-up before joining you.  This is of course very respectable, but if your organization cannot wait the additional four weeks to make this hire, it may disqualify this candidate.

 Work Authorization

      Question: Are you authorized to work in the United States?  Would you now, or at any time in the future, require employer sponsorship? 

[Please note that legally, this is the only way you can ask this question.  Asking specifics regarding the candidate’s situation (i.e. Are you a US Citizen?) is considered non-permissible.]

I won’t go in to too many details here, as it’s a fairly obvious one.  However, if your organization is unable to provide sponsorship, please make sure that you ask this question up front to avoid any confusion in the long run. 

 Job Search

      Question: At this point in your job search, do you have any offers or foresee any potential offers from other companies?

It’s an important question that should be asked when a candidate is fairly active in their job search, or even if they’re just putting their feelers out.  This could help you to gain realistic insight to how quickly you may need to move in the interview process with this candidate, and if, unfortunately, the timeline is too unrealistic for you to seriously consider. 

If the candidate has a job offer in hand and needs to make a decision by the end of the week, will it really be possible for you to interview without the rush?  For some situations, this might make sense, in others, it might just be better to end the call and ask the candidate to please stay in touch.  In addition, this insight could potentially gain you greater understanding if you are competing against another company, preparing you for the opportunity to extend the most competitive offer.

In interviewing, what are your “must ask” questions?  Has there been a situation in which you haven’t asked one of these only to be disappointed at the very end?

Image Provided By: vichie81 / FreeDigitalPhotos.net

Last year, more than 85% of the placements OpenView made for our portfolio were a direct result of our efforts to target, source and recruit passive candidates.  From LinkedIn to utilizing our network for referrals, we were successful in focusing the majority of recruiting efforts on reaching out to the candidates who, although they may have not been looking, had profiles that met our target, year over year success and status as an top-performer in their field.  These were not candidates who applied or reached out to us.  They were “prospects” who were generally satisfied and happy with their current company and role.

As a recruiting mentor once taught me, “the happiest employees are the best candidates.”  Happy employees are typically happy because they are successful and as a result, their organizations are focusing their efforts to retain these top-performers.  (Of course, some organizations fall short on their retention strategy, and at some point, these top-performers will begin to feel that they are underutilized and undervalued…and you then find you’ve come across a fairly active candidate.)

When we begin a new search at OpenView, we start with a specific and individualized recruitment strategy.  For many of our portfolio companies, they are seeking candidates who have experience not only with a high-growth, expansion stage software or technology company, but ideally, who are truly specialized in a target industry or segment, like Life Sciences, Higher-Education, or E-Commerce.  Our recruiting efforts become very focused on several specific candidate profiles within their territory or market that we want to connect with for the search.  It could be a list of 5 to 20 candidates and, on average (8 times out of 10); these candidates are generally happy or not looking.

The initial contact with these candidates is important, and there are many techniques that can be used to convince someone that spending 5 minutes on the phone with you would be mutually beneficial.  I’m not going to get in to those strategies here, but I’d love to hear from you if you feel you have a winning message or technique that will get someone on the phone right away.  But what do you do when your strategy doesn’t get you on the phone with the candidate after your initial touch point?  It’s this critical point with a passive candidate that I have found companies (recruiters and hiring managers alike) often drop the ball.  If you really want to get a candidate on the phone with you, FOLLOW-UP! 

In many cases, I think people operate with fear of being seen as annoying, or unfortunately, in some cases, companies have a superiority complex (“this person should be dying to talk to me”).  If done properly, reaching out to a candidate who is passive, happy and too busy to reply, a follow-up message may be taken as a form of flattery and really open up the dialog.  If I don’t hear from a candidate after two days, I will reach out again via the same method.  If by email or LinkedIn, I like to use the title “Follow-up to my previous message” and include just a few lines about why I wanted to talk to them specifically.  If I left a voicemail, I’ll also use an e-mail, LinkedIn or other method to reach out.  I can’t even begin to tell you how many times I receive a reply saying, “Persistence pays off!” or “I’ve been so busy but meant to reply!” I find that my effort and time to source a candidate that I know I want to talk to much more beneficial than shooting in the dark and reaching out to a sea of candidates that might be a good fit.

When recruiting, or as many say “headhunting,” a passive candidate, what measures do you take to get them on the phone?  Do you regularly follow-up and if so, what message is the most effective?

Image provided by: Ambro / FreeDigitalPhotos.net

It could be the enrollment of several new employees to OpenView’s health plan, or perhaps the January gym rush.  It may have even been the sneezing passenger I sat next to on the train yesterday.  Whatever caused it, I’ve been thinking a lot about health and wellness and the role of employee benefits lately.

It’s no secret that the cost of health care in the United States is constantly evolving, particularly given major changes in health care reform legislation in the last year.  Together with an uncertain economy, the majority of employers are feeling less and less confident in their ability to maintain their offering of an affordable employer-sponsored plan over the next ten years.

In their annual report, Towers Watson, a national consulting firm, surveyed more than 600 employers on the challenges that stand in the way of them being confident in maintaining affordable benefit coverage.  The biggest challenge?  Employees’ poor health habits.   Yikes!  As the employer, you are as much on the line for the poor health habits of your employees as they are when they face the doc at their annual (hopefully) check-up. The health and wellness of your employees is a costly issue.  So, as an employer, what can you do to maintain your status over the long-run as a company with an awesome total rewards portfolio?

Enter a wildly popular and emerging trend known as the health and wellness program.  Taking on a variety of forms, a workplace wellness program is designed to positively impact the healthy behaviors of your employees through educational, organizational or environmental activities.  Examples could include discounted gym memberships, a smoking cessation program, and even on-site access to a nutritionist.

However, implementing a creative program that relies on very few resources can be just as successful too, as evidenced by an article in Inc. magazine which highlights how the CEO of an 18 person organization made a big impact with simple changes to the workplace environment.  For small companies with limited resources, creativity can often be the key to the most effective program with a big ROI.  In fact, studies have shown that for every $1 contributed toward a successful wellness program, an employer can expect somewhere from $2 to $6 in return!  Simply by influencing the healthy behaviors of your own employees!

Has your organization implemented a wellness program?   What type of an ROI do you expect?  I’d love to hear what you’ve found works well and what types of programs you’d like to implement in the future.