Optical Recruitment Gets Real
Once upon a time, typical job candidates could expect signing bonuses, large equity stakes in the company, and relocation packages. Some top candidates even demanded sports cars and trips to the Caribbean as incentives (see Recruitment Packages Balloon). But those days are long gone, say recruiters and human resource executives.
“People were really getting silly things,” says Craig Millard, president of The Millard Group, an executive search firm. “All it took was for a few companies to offer something outlandish and then that became expected. But those things just aren’t happening anymore.”
Clearly the market is tough for job seekers. In the Light Work poll, The Job Hunt, 93 percent of the 440 people responding say that it is harder to find a job now than it was six months ago.
Companies looking to beef up mid-level staffers have reaped the biggest rewards in this shakeout. Last August Novalux Inc., a privately held optical component startup, was lucky to find two qualified candidates per position, says Donna Ferris, director of human resources. Today, she says, a typical job opening will attract 10 to 20 qualified candidates.
“Things are significantly different now than they were a year ago,” she says. “We’re finding a lot of really good, qualified people for almost every position.”
Tellium Inc. (Nasdaq: TELM), which makes an optical switch, says it’s also seen a twofold increase in the number of resumes it now receives. The influx has allowed the company to be much more selective in the people it hires.
“I’m pretty much hand-picking candidates now,” says Darlene Corrubia, director of staffing at Tellium. “We’re able to find people with the exact requirements we need."
And as the number of qualified candidates increases, their expectations have decreased. Specifically, bonuses and relocation packages have decreased dramatically, say human resource representatives. Tellium's Corrubia says candidates are less likely to ask for large signing bonuses and are instead more interested in the stability of the company. And Novalux’s Ferris says that she no longer has to go outside of Silicon Valley to find qualified candidates, greatly reducing the need for her company to pay high relocation costs.
Attitudes about signing bonuses and other perks aren’t the only things that have changed. Instead of demanding a 10 to 15 percent increase in salary, people are more likely to accept an offer for the same amount that they are currently making, says Corrubia. Their attitudes surrounding options have also changed. Job candidates are looking for salary and fewer options in their packages.
According to research collected by Christian & Timbers, a recruiting firm that specializes in executive-level searches, CEOs going to a typical startup might ask for about $250,000 to $325,000 in salary, a 50 percent cash bonus, and a 3 percent to 7 percent stake in the company. When the market was at its height, CEOs were taking $200,000 a year in salary with an equity stake of as much as 9 percent.
“There is definitely a de-emphasis on the overall value of equity and a re-emphasis on reasonable cash compensation,” says Paul Unger, managing director of telecom and technology practice for Christian & Timbers. "It was an unrealistic bubble that many people got caught up in. Anytime someone tells you the old rules don’t apply in the new economy, run.”
While companies have regained some negotiating control, there are still key positions that are difficult to fill. Engineers specializing in hardware or packaging processes are still key. And at the executive level, companies are much more focused on finding a chief operating officer who can bring the company to profitability.
“Eighteen months ago the focus was on finding a big name CEO to raise capital and take the company public,” says Unger. “Today, companies are looking for a COO that can implement a plan, bring a product to market and get the company to profitability.”
- Marguerite Reardon, Senior Editor, Light Reading