How Can Small IT Firms Compete with Big Companies to Attract Top Talent?

Hello Friends,

We are an organization with a total of 250 employees, out of which 120 are in Hyderabad. Currently, we are recruiting IT Professionals in J2EE technologies and Business Analysts. We extended offers, but most of them declined as they chose to join other big IT companies.

Please suggest the best strategy to attract talent in such crisis situations.

Regards,
Priya
[Website: www.valuemomentum.com]

Hi,

I am an HR manager of a similar organization and I too face the same problem. A few strategies which might work are:

1. Approach candidates working in smaller companies.
2. Approach candidates who are outsourced by big companies. That is on the payroll of placement consultancies & others but working for big companies.
3. Take in freshers on a stipend if you have a good training system.
4. Offer a slightly higher CTC than bigger companies, however, try to keep the bulk of the salary as a year-end bonus. This will ensure that the employee stays for at least a year.
5. Avoid experienced people with B.E/B.Tech; instead, take in MCA/BCA and others who have experience.

Hope this helps.

Kornika

I just wish to add on to what Kornika has already recommended.

JRD Tata faced a similar circumstance while pitching his tiny airline Tata Airways (Air India) against industry majors like BOAC/KLM, etc. He neither had huge funds, latest planes, infrastructure, etc. He was passionate about customer service, and Tata Airways went on to win the Best Airlines award for many years to come.

Similarly, pitch the unique, discerning factors that your organization has. Competition on simple economies of scale, which is not your stronghold, will not work.

Suryavrat

Kornika has come out with some really good and meaningful suggestions. To add to them, the following may be considered:

1. Cultural bind: The binding factor in small companies is larger.

2. Career Progression: Faster vertical movement of a career in a small, fast-paced environment could be promised. Their longevity of tenure would be 2 years, max, on average, which may be good enough for the moment.

3. Sell future products, exposure, and business plans in a dynamically moving business environment.

4. Higher responsibilities and job enrichment in a shorter time span compared to large, branded organizations.

5. Strategically niched higher take-home salary. Most of the time, larger setups are more inflexible in their compensation and benefits structure.

6. Flexi-working: Flexible office timings, telecommuting, etc.

7. Retention pay: Some larger components of pay may be paid after a fixed tenure (6-12 months).

8. Co-ownership: Dilutable fixed-term ESOP/Sweat equity/stocks, etc., for higher levels with limited liability options.

9. Family binder plans: Involvement of the family in official furtherment.

10. Commuting, medical, educational, and flexi-policy subjects could be interspersed, suitably, based on the size of the pocket to enhance the attractiveness index.

11. Exposure to global markets, international exposure, multi-projects/language exposure, etc.

All these, plus more, could be sold to new prospects, and the joining rate should improve.

Hope these help.

Rahul Kumar

09968270580

I have seen a technique employed in one company that worked. The company, after finalizing the annual compensation, proposed to the candidate a unilateral 10% markup provided the candidate accepted their monthly increment offer. Under this offer, the payment would start at 60% of the agreed monthly pay and increase by 5% every month until the end of the year. Any differences were rectified at the end of the year. The test of the employee's commitment comes at the beginning of every new year when he/she receives a reduced salary. The company closed down its operations for other reasons, but this scheme helped it retain its workforce until the end. If anyone is interested, I could ask for permission for a portion of their agreement to be posted on this forum.

Another point to consider is that I strongly suggest that small companies refrain from implementing any internal referral schemes. In my experience, such schemes are more likely to entice existing employees away from small organizations.

Furthermore, I also strongly recommend that small companies collaborate with others like them to establish a common recruitment process. While not easy, we have been successful in doing so for campus recruitment.

I don't really find the 1st idea feasible. With the attrition rate touching an all-time high, especially for IT sectors, most experienced candidates find it easy to get job offers. If the salary is paid at an increment of 10% per month, then I don't think many will be interested. Of course, this is strictly my own opinion and may work well for others.

The other suggestions are good. If smaller companies can unite for recruitment, then there will be a lot of time and money saved. Furthermore, a candidate who is not suitable for a company may be found desirable by another.

Thanks

Hi,

I agree with most of what is said above and would like to add the following:

1. You always have employees who want to add value to their careers. Tap into people who are looking for new challenges at work. Convince them that your company offers fast growth and challenging projects.

2. During the interview, have senior employees like project managers talk to important candidates. It is important that a prospective employee understands why people senior to them are working in your company and not in any other major IT company; this can be very valuable.

3. Change the designation patterns in your company. Give attractive and unique designations so that new employees feel they are going to be someone different from their peers who have joined major IT companies.

4. Target employees who want to work in a specific domain. For example, if you have projects in the financial domain, target people who are eager to work in this area. Highlight the domain, project, and client to make them feel that the brand is not the only important factor.

5. A purely marketing tactic would be to emphasize the freedom and flexibility that a small company can offer, aspects that may be lacking in major IT firms.

6. You can also persuade them by emphasizing that in a small company, there are many opportunities for multitasking, which will enhance their profile. In a large company, you may only need to follow instructions without the freedom to think independently.

I hope this helps.

Regards,

Rakhi

Thank you very much for those wonderful suggestions. I have a concern since my role is restricted to scheduling interviews and finding it very difficult to handle creating a backup in anticipation that the offered candidate might drop. We recruit people with specific skills. I have explored various options to attract the suitable fit but have not yet succeeded in attracting the right fit.

Could you suggest other alternatives for recruiting apart from posting on job portals, Orkut, Yahoo & Google groups, blogs, and outsourcing to RPO providers, etc.? I appreciate each one who contributed their inputs and would certainly help me to present them to my manager-HR for a better packaged offer.

Regards,
Priya

Who has the luxury or foresight to plan for 45 days? HR bosses are busy planning for beyond two years, and the juniors are worrying about tomorrow. Besides, with the volumes required in IT, who cares about minds, best or otherwise? Good looks get you into HR's good books. Add communication skills, and the job is yours!

We need machines for our multimillion-dollar IT maintenance projects (Mr. Deve Gowda might not agree that it is IT), and we need them tomorrow. Why don't they merge the HR and facilities departments?

A R Eclexys

Hi Priya,

In today's world, recruitment is not just about selling. Recruitment is more about consultative needs analysis rather than transactional selling. For the candidate, accepting an offer is a long-term strategic career decision based on opportunity, not a short-term tactical decision based solely on compensation. So, don't rush it.

Recruiting and closing are not solely about compensation; they are about opportunity. If your job is no different from the competition, then all you have left to attract top talent is the compensation. Therefore, if you want to hire more top people, consider making the job more appealing rather than just increasing the compensation.

You need to create a strong brand in the employee market and review your recruitment process - as you have not mentioned how your recruitment process is structured. I also face similar problems to what you have described, and Hyderabad Software Engineers are known for their competitiveness.

Regards,
Vinay
9866254387 (Hyderabad)
[Click here](http://finance.groups.yahoo.com/group/HumanResourceOnLine)

Hi Folks,

It's been a wonderful idea generation by all! I may just add the following:

Experienced/skilled people join a smaller, often a non-descript company for:

1. A higher take-home pay/flexi-pay (not necessarily higher CTC)
2. Higher designation/role
3. Higher recognition and care
4. Faster promotion/growth
5. Multi-tasking/broader exposure
6. Projects/function of choice/multi-functional exposure
7. Participation in ownership
8. Quick bucks in case of a business spin-off
9. Telecommuting/flexi-working
10. Brand building exposure
11. Global travel/deputation/placement (if possible)

Corporate culture binding a close, well-coordinated team, providing loads of appreciation and individual/group recognition, work well. The challenge is to keep them conforming to HR policies and guidelines and yet accord flexibility and speed in operations and decision-making. Provide these by innovative ways, and they will be attracted and will stay on.

Rahul Kumar
09968270580
coordial@yahoo.co.in

Dear All,

Those were really wonderful and well-framed thoughts. Sorry for the late response as I was completely tied up. Not an excuse, but I apologize. :)

The process that we follow is as follows:

1. Receiving an RRF, i.e., Resource Request Form from the concerned head of the department that clearly mentions the position, desired skill set, job description, number required, and the date by which the candidate has to be on board.

2. Approval from the MD has to be taken to proceed further.

3. Once approved, sourcing begins, and most of these happen simultaneously:

3.1) Searching from the internal Database

3.2) Soliciting Employee Referrals

3.3) Posting on Groups, Blogs, Networking Websites

3.4) Sourcing from the existing job portal [we always have access to only one portal at a time]

If nothing falls in place within two days, I post an ad on the existing job portal. My management never approved a paper ad, so that option is closed.

4. From the received responses/sourced profiles, we will screen the candidates against the requirements mentioned in RRF.

5. If the screened prospects meet our requirements (skill/cost/time), then coordinate with the department heads for technical interviewing. (This is the most time-consuming process apart from joining)

6. After selecting the right fit, it will be sent to our Manager-HR for the final HR round.

7. An offer is made if selected, or steps 3-6 continue.

8. Prospects' acceptance of the offer followed by joining. 90% of them decline the offer, and the problem has never been addressed except working on one position for long.

Hmmmmm... so that is our process.

Expert suggestions, please?

Regards,

Priya

Hi Priya,

I am also working in a smaller setup, and I understand what you are facing as I am also experiencing the same problem. The suggestions given by other members are really helpful, but utilize them according to the requirements and situation. Each requirement has different roles, responsibilities, experience levels, etc., so you have to think accordingly and work it out.

Regards,
Ajitha

Campus recruitment can be the best way to start the process of acquiring the right kind of talent for you, especially if you are willing to invest in time and training. The key benefit is that it also helps in branding yourself in the long run. Campus recruitment year over year (YOY) ensures a steady flow of talent and puts you in a position to effectively manage talent shortages. However, it is essential to ensure proper planning while considering business development opportunities, market conditions, and the current scenario.

Asst Manager, Campus Reach
Sajith@spectrumconsultants.com