Talent, Recruiting and Retaining

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The novel business practices, environments, and structuresnot to mention the new range of desired skillsthat characterize e-commerce have created a range of challenges and concerns for companies in their attempts to recruit and retain talented employees. To attract and retain the best available workers, professionals, and executives, firms need to pinpoint the appropriate combination of attractive salaries, enticing financial and other incentives, challenging and engaging projects, a healthy and inviting atmosphere, and meshing of personalities.

The challenge of drawing and maintaining quality talent extends to all levels of the e-commerce organization, from technical employees to chief financial officers. Since, for all such personnel, the novelty of e-commerce presents many risksalongside potentially dramatic rewardscompanies worked to devise strategies designed to highlight the opportunities and benefits of their way of doing business. According to InfoWorld, most businesses looking for e-commerce and information technology (IT) talent focus on three primary groups: technical professionals, creative professionals, and business strategists. Technical professionals, for instance, are most likely to be skilled in architectural issues like supply-chain management systems or user interfaces. Creative professionals are those who specialize in innovative technological and commercial strategies and applications. Business strategists tend to concentrate on turning the creative possibilities and technical capabilities into a practical and profitable business strategy.

E-commerce firms have a number of methods for seeking out talented individuals, including Web-based employment sites, local newspapers, applications, internal employee referrals, college-campus recruitment efforts, and others. Moreover, firms may choose to maintain their own recruitment staff, sending out employees with the specific task of locating and attracting skilled workers, or they may choose to outsource such responsibilities to recruitment specialists.

Companies seek out personnel with a range of knowledge and skills in such areas as Web-site development, information-technology architecture, electronic customer-management applications and customer-relations systems, supply-chain management systems, intranets and extranets, and much more. Since the work of skilled e-commerce and IT workers and managers often coincides with that of management and IT consultants, many e-commerce companies partner with consulting firms, particularly in the initial phases of the businessthe startup and seed periods, for instance. This gives e-businesses a leg up in devising their e-commerce strategies with experienced personnel to help guide the development process. In addition, it provides companies with an idea of what kind of skills to look for when embarking on their own recruitment ventures.

Recruiters in the 1990s and early 2000s had to contend with the tightest job market in decades, and thus competition for talent was heavy. Even as the economy slowed in the early 2000s, positions were abundant for skilled workers who could help companies stake a claim to the still-emerging global e-commerce market.

But the practices of recruitment and retention were fraught with difficulties. Particularly after the dot-com bust of the early 2000s, companies, executives, and employees were far more wary of e-commerce firmsparticularly pure-playsthat seemed too good to be true. In the late 1990s, as e-commerce soared and dot-coms' stock valuations went through the roof, e-commerce firms had a relatively easy time of attracting hot talent by such means as highlighting the novel and relaxed work environment, the opportunity to be at the forefront of the dominant new business and technological trends, and the lure of stock options, which often carried as much weight as basic salary in the stock-market boom of the day. By the early 2000s, however, talent was far more likely to be skeptical and attempt to separate the wheat from the chaff. Suddenly, once-hip and attractive business models were deemed questionable and suspect, forcing e-commerce companies to alter their recruitment and retention strategies to suit their new, more difficult environment.

Even the image a company projects is an important consideration in any recruitment strategy. Firms need to ask themselves what kind of talent they hope to attract, and then consider what kind of company image will be likely to draw such candidates. Does the firm promote its fun atmosphere or its placement at the cutting-edge of technological development? Is it a serious, business-like environment? Is it internally competitive or collaborative, or some mixture of the two? These are among the features an employee will try to identify, and the image a company projects can greatly influence the type of employees that are drawn to it. Thus, while it's important to project an image that will give a company a competitive edge in the recruitment wars, it's also paramount that they not stray too far from the truth, or the talent may prove a poor fit.

The qualities that companies seek out, particularly in their senior management, altered as well as the Internet economy matured. Whereas in the late 1990s boom younger personnel with fantastic unorthodox ideas were all the rage, by the early 2000s companies were once again seeking out seasoned management teams; experience, rather than novelty and excessive optimism, were again in vogue. In a recession-oriented business environment, companies increasingly sought out managers with a knack for focusing on the bottom line and delivering a firm to profitability, whereas in the boom days there was little such concern, and companies saw growth possibilities as virtually without limit.

Demographic considerations were also expected to play a prominent role in companies' recruitment and retention strategies. While, in the early 2000s, the World War II generation of leadership was mostly retired and the baby boomers assumed the responsibility of spearheading corporate America, it was increasingly clear that, as the economy expands well into the 21st century, there simply weren't enough members of Generation X to take the place of the baby boomers. Analysts hold that this will intensify cross-border competition, as companies seek out the top talent from around the globe to help the firms succeed in an increasingly integrated international economy.

According to the InternetWeek's, "Transformation of The Enterprise" survey, about 76 percent of 300 information-technology managers insisted that e-commerce and other Internet-related endeavors increased their workload, and, while 44 percent reported increasing their IT staff to accommodate such projects, nearly two-thirds nonetheless still felt they were short on skilled IT talent. Forrester Research, meanwhile, reported that 58 percent of polled business executives rate the recruitment of skilled IT staff as the primary obstacle to implementing e-commerce strategies.

This combination of skills shortage and heightened demand for e-commerce know-how resulted in dramatically escalating payrolls, according to the survey; the mean salary increase reported by the 300 IT managers was a hefty 17.2 percent. RHI Consulting's 2000 Salary Guide listed average salaries for various e-commerce specialists, reporting that Web developers could expect to earn an annual salary between $48,750 and $71,250; an Internet programmer earned from $50,000 to $72,250; and e-commerce specialists raked in between $53,000 and $82,500. And, as InfoWorld pointed out, chief executives that signed on with pre-initial public offering (IPO) firms could potentially earn far in excess of these figures, even before stock options. Thus, companies looked to make their recruitment and retention strategies as efficient as possible to minimize costs and avoid turnover. With such substantial investments at stake, firms could ill-afford haphazard or outdated strategies for drawing and keeping talent within their ranks.

Recruitment, of course, was only one part of the problem. Once companies collar the best IT talent they can get, the challenge was to keep them. The late-1990s dot-com frenzy was marked by rapid employment turnover, as hotshot IT workers jumped ship to follow the latest recruitment offersand often the greatest prospects for stock options. Companies resort to all manner of activities to keep employees happy, including financial incentives; lenient policies on work hours, dress code, and other traditional business standards; office lunch parties and casual Fridays; flexibility related to workers' family and personal needs; and so on. Retention strategies frequently also include company-sponsored training programs to keep IT workers on top of the latest technological developments pertinent to their positions. This serves not only to keep the company in step with its competition, but provides the employees with continuing challenges and the opportunity to expand their range of skills.


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Fisher, Susan E. "Scoping for Hot Talent." InfoWorld, April 3, 2000.

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Gallagher, Terry. "The War for E-commerce Talent." Consulting to Management, May, 2000.

Howle, Amber. "IT Skills Shortage Leads to Creative Recruitment Ideas." Computer Reseller News, December 6, 1999.

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SEE ALSO: Workforce, E-commerce

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