TECHNOCATION - Recruiting and retaining small-biz talent

May 15, 2002
By PATTY RIPPIN,
Special to the Daily Record

Once a month, Patty Rippin, UMBC Technology Center director of business advisory services, interviews high-tech incubator companies and entrepreneurs about the lessons they've learned in managing and growing their business. This week we focus on strategies to help emerging companies recruit and retain talent with Paul Silber, founder, president and CEO of In Vitro Technologies Inc. (IVT, www.invitrotech.com) and president and chief executive officer of StelSys LLC (www.stelsysllc.com).

IVT is a successful graduate of the UMBC Tech Center incubator program and its strategy for managing human resources is an admirable role model. Paul Silber started his first company, IVT, in 1991 as an alternative to animal testing for the chemical and pharmaceutical R&D markets, and things took off from there. IVT employs 70 people, has doubled in size over the past two years and just enjoyed a record first quarter for 2002.

Silber's second company, StelSys LLC, is a joint venture with Fisk Ventures Inc. to develop applications of NASA bioreactor technology. StelSys has filed three patents, generated funding sources, and has an experiment scheduled to go up with the next shuttle launch for placement aboard the International Space Station.

Silber has been named Maryland's “high-tech” entrepreneur of the year for 1993, one of Baltimore's “top 40 under 40” business leaders in 1995, and one of Washington TechWay's “Great Bosses” for 2001.

PR: So how have your recruiting strategies changed as you've grown?

PS: We've outsourced HR from day one through a PEO (professional employment organization) called Human Resources Inc. For years, I've been advising small business people to execute this type of HR strategy. You have to ask yourself, “What is my best and highest use to the organization?” My best use is not checking I-9 forms, preparing payroll or even phone screening potential new hires.

Since the company has grown significantly, we now have two full-time, internal HR staff. They do all the recruiting and initial screening but occasionally I'm involved in some interviews specifically for senior level positions. Other strategic changes are that we are now seeking candidates from a broad geographic area, outside Maryland, and we're also actively using headhunters and recruiters.

PR: People are your assets. What type of individuals are you seeking?

PS: We look for three different things, all of which you either have or you don't. One is smarts/aptitude. Second is work ethic. A really smart, but lazy person is not going to cut it here. The third thing we look for is a team player. If they're hard-working and they have a Nobel Prize, but they're not a team player, then we're not going to hire them, and if we make the mistake of hiring them, they're not going to last long with us.

PR: How do you measure work ethic?

PS: We do very extensive interviewing and reference checking. But wherever possible, we take a “try before you buy” approach to hiring. That means that we'll use a temporary employment agency like a Kelly Scientific or a Lab Support and we'll do what's known as a temp-to-hire arrangement for a three-month probationary period.

That way we have a much better assessment of the prospective employee, and they also get an extended period to evaluate our company. We pay a premium for this privilege, but you know, as much as someone can have a sterling resumé, references and do well in an interview, they can't fool us for three months.

PR: Has the economic downturn increased the pool of qualified job seekers in the region?

PS: Most nonmanagerial and entry-level workers come to us locally, either from downsizing, the university base or just luring them away from their current local employer. Many of the people that we recruit for more senior positions come from outside Maryland, and we get about 50 percent of these from recruiters and headhunters.

There have been an increased number of mergers and acquisitions over the past five years in our industry and the result is always some layoffs in the merged company. When that happens, we're often able to find great candidates.

PR: How have potential employees' expectations changed?

PS: I think three years ago every college grad thought they were going to get a million dollars in stock options in their first job. The “dot-coms” going to “not-coms” caused an attitude “correction” across the board, so now expectations are more grounded in reality.

People are less likely to think they can get guaranteed employment anywhere, and people are holding onto jobs. This is happening in all organizations, not just IT. Also, people are recognizing that in many ways they are more secure in a smaller company than in a behemoth organization.

PR: Given the Montgomery County/DC biotech corridor, how do you attract talented people here in the first place?

PS: Our compensation packages compete effectively with employers in the 270 corridor, and they have to, since someone in Howard or Montgomery County can really go to either location. Generally though, it's easier to get to our location (right off I-95), and people wisely value the time saving and decreased frustration that they experience with a shorter commute.

We also offer very attractive benefits. We have a bonus plan based on profits. We offer a very aggressive vacation plan, with much more paid time off than is standard for most local companies. We offer excellent health care and the company picks up almost 70 percent of the premium. We're introducing a new dental insurance plan, and we have a 401(k) plan with a 25 percent match. We're starting a program to give qualified employees $5,000 per year toward advancing their education. We also contribute a variable amount toward closing costs of buying a home, with the amount depending on length of employment. Plus we take time for fun functions like Orioles bullpen parties, company picnics and a monthly happy hour.

PR: In return for these great benefits, what are your performance standards?

PS: Most employees work on a team, and each has set of functions to perform and objectives to meet. If they're not meeting those standards, then we'll intervene rather aggressively to try to correct the problem. Those standards include everything from being to work on time to being on call for weekends — we have people scheduled seven days a week. We give our associates the benefit of the doubt, and we work to improve weaknesses, but only to a point. If all else fails we may have to “dehire” a few in order to maintain a strong team, but it rarely comes to that. Overall I am very proud of the people that we have here and that I have the privilege to work with every day.