The hardest job in recruiting

(Story by Jake Bullinger originally appeared in 425 Business)

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Limeade touts its health-focused office culture when recruiting. Photo by Rachel Coward.

A whirlwind of names coming and going faster than one can imagine. A handshake here, a LinkedIn message there. Endless emails, phone calls, and sales pitches. Sasha Martin’s company is growing quickly, and as a recruiter, she is tasked with bringing in candidates to sustain that growth. Martin’s not the conductor, but she’s the one shoveling coal into the locomotive.

When Martin began recruiting for Bellevue-based Smartsheet in June, the cloud-software company was already experiencing torrid growth. Its revenue had grown more than 85 percent in each of the past four years, and the company expects to double its workforce of 165 in 2015. Martin is the 9-year-old company’s first staff recruiter, hired because growth had reached a point where recruiting needed to be a full-time inside job.

So Martin talks to a lot of folks about working at Smartsheet: 25 a day, she estimates. And she’s responsible only for finding software developers, the most in-demand worker at Smartsheet and nearly every other tech company. It’s rational to think Martin and her managers must move quickly and snatch up developers as soon as they walk in the wood-and- glass doors to keep the company humming along at the current pace of growth.

So why, when Smartsheet began the search for a new development team leader in October, did the search take two-and-a-half months? Why were 15 candidates interviewed before an offer was made? The pace is poky; competitors in the cloud landscape can one-up a company over that span. But by taking the time to vet, interview, and dismiss multiple candidates, Martin’s team is confident it avoided what can be a pitfall for a growing midsize company: using the firm’s growth to justify an inferior hire.

Smartsheet’s situation is not uncommon. Midsize companies across the Eastside find themselves in the exhilarating but logistically challenging state of rapid growth. Recruiters like Martin and the hiring managers above them face an integral challenge: They must hire fast enough to keep pace with growth, but not settle for inferior employees who could cost the company dearly.

Every company approaches hiring differently, but there are commonalities successful midsize companies must embrace to hire in a fashion that doesn’t inhibit expansion.

Look everywhere that makes sense
As Americans’ palates have evolved, SaltWorks’ revenue has grown. The Woodinville vendor sells high-end salts originating everywhere from the Himalayas to the Mediterranean. The company’s 2010 revenue was $9.5 million, and its yearly haul has since more than doubled to $20 million.

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SaltWorks CEO Naomi Novotny. Photo by Rachel Coward.

The company’s rise has kept its president, Naomi Novotny, busy. Novotny oversaw the hiring of 14 employees in 2014. With the company headcount now at 70, Novotny still plays a role in most hires and participates in most interviews. But before Novotny can question a candidate, she must find folks worthy of questioning.

To accomplish this, SaltWorks casts a wide net. It employs social media, and has a trusted relationship with a couple recruiting firms. But methods that today seem elementary also have yielded valuable employees.

“We have a hiring sign out on the street for people who are driving by, which actually has been one of the best ways to find people,” Novotny says. The sign proclaims, “Your career starts here,” and many have viewed themselves as its addressee. “We are inundated with résumés every time we post a position,” Novotny says. “When we’re already short-staffed, having the resources to go through those and set up interviews … is definitely a challenge.”

To weed through the glut of résumés, recruiters and managers at fast-growth companies have to search for employees in the right places from the get-go. The sign outside SaltWorks, for example, might be a worthwhile tool to solicit applications for a warehouse position, but Novotny probably wouldn’t entertain an executive applicant who responds to a roadside placard. Selecting the right recruiting channels saves time and resources while sourcing the best possible candidates.

Recruiting budgets at midsize companies are usually thin. Martin, Smartsheet’s recruiter, is in similar company around the Eastside — most firms have few recruiters on staff, if any. These companies can’t devote the same manpower or funds to recruiting that larger corporations can, so the search has to be smart from beginning to end.

During her recent hunt for a lead developer, Martin began at a common place: LinkedIn. The online professional network has more than 300 million users categorized by location, employer, skill set, and who they know. By searching for new candidates and reaching out to existing connections, both those of the company and of employees, Martin was able to gauge the interest of some targets as well as seed a connection with new candidates.

“LinkedIn is huge,” says Jason Ter- Avest, Smartsheet’s human resources manager. “(You can) leverage the digital network, which is a lot farther-reaching than any person’s physical network.”

Social media is a great starting place, but its effectiveness wanes after the initial phases of a search. To match human personalities with the Internet profiles, Martin is constantly networking at industry gatherings, Meetup events, and trade shows to increase awareness of Smartsheet and form a closer connection with candidates  she’s already been in touch with electronically.

Social media and email allow recruiters to tap an unprecedented amount of candidates, and networking events foster more in-depth communication, but real-life referrals remain the golden arrow in the quiver of recruiting tools.

Midsize companies have no choice but to enlist their employees as recruiters. Workers act as company representatives in both the physical and online worlds, and a referral from a top-notch employee can save the recruiter work. “A reference from an employee is the highest possible criteria,” Martin says. “That person knows what our environment is. They know our values. They know who can be successful in that position.”

Let culture dictate recruiting and hiring
Amy Patton is the perfect cheerleader for Limeade’s new Bellevue office. As director of culture and well-being — human resources to the rest of us — Patton spreads the Limeade gospel as part of her job, and she has an unceasing smile that reflects the office’s airy, bright décor. Startup hallmarks such as standing desks, whiteboards, and game tables are everywhere at Limeade, and conference rooms have playful twists on their monikers. The Powder Room is adorned with snow-sports décor. The Court Room, the largest conference room in the office, will soon have a hardwood floor, a la a basketball court, nullifying the menacing aspect of its name.

Limeade’s growing staff necessitated the new office, and its growing revenue ensures it will be able to pay the rent. Sales of Limeade’s health-engagement platform have skyrocketed in the past five years, and revenue is up more than 6,800 percent, enough of a jump to put Limeade atop all other Washington companies on Deloitte’s Fast 500 list and No. 25 overall.

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Amy Patton, Limeade’s director of culture and well-being. Photo by Rachel Coward.

It’s easy to see why Patton “drinks the Limeade,” company-speak for touting an office culture that is Limeade’s greatest recruiting tool. The company’s software-as-a-service platform is meant to improve the health of clients’ employees, so Limeade naturally focuses on its own employees’ health through wellness initiatives and challenges.

“Having that philosophy” — the mandatory chugging of the Limeade — “allows us to normalize our values,” Patton says. “We have a common language of what we’re looking for.”

Limeade’s company-culture zeal might be extreme, but that fervor keeps it from committing growth suicide by hiring too quickly. A surplus of average employees can meet short-term needs, but only excellent employees can sustain growth long-term. Keeping pace with yearly triple-digit revenue spikes can be daunting, but hustling through the hiring process can send those sales numbers in the other direction.

Patton isn’t projecting any slowdown in Limeade’s expansion. Limeade hired 55 employees in 2014, growing the workforce to 115. She plans to facilitate the hiring of 110 more people in 2015, including 40 in the first quarter.

“Identifying the talent, we’re pretty good at that,” Patton says. “It’s the volume of interviewing in a very short amount of time, and in an environment where we’re all running at 100 miles an hour all the time, that’s challenging.”

Patton says time constraints have led Limeade hiring managers to want to concede and hastily hire employees. But adhering to strict cultural norms prevents hiring out of desperation. Cultural fit is a premier recruiting tool for midsize companies. As successful as Limeade has been, it still can’t match the salaries offered by larger employers. That, Patton says, is the main reason Limeade loses recruits. So she touts the company’s health-focused atmosphere and its mission to “improve well-being in the world.” If Patton’s going to lure top-dollar talent to Limeade for a little less money, she has to tug on the heart strings a bit. Or find employees who really like perks such as high-five contests.

A focus on culture also can help a company beyond the obvious stages of recruiting. One way to make recruiting easier is to funnel existing employees up the management chain.

This is a realization taking place at HydroPeptide, a skin-product vendor in Issaquah. At 30 employees, HydroPeptide is creeping into the realm of midsize companies. It hired only four workers in 2014. “We are able to be a bit more deliberate at this point,” says CMO and cofounder Chris Pachuilo.

Headcount is growing slowly at HydroPeptide, but revenue has grown fivefold in the last four years. Pachuilo, who handles hiring on the sales team, says there’s a divide in his company’s inner machinations: It’s relying on young workers for entry-level jobs, but not providing much of an avenue for them to grow.

“I think the gap is a little bit too big between what we ask entry-level people to do and what we expect from our inside sales executives,” Pachuilo says. “We could definitely do a better job of putting in place some internal training to help get those people to that point.”

Pachuilo says such an adjustment would allow entry-level workers to stay with the company longer and help solidify workplace culture. But once that infrastructure is in place for employees to remain in the company for a long time, it makes the actual hiring decision more consequential.

Instinct is key
Were Smartsheet a larger company, one aspect of Martin’s job would be easier. She either would have been hunting for the most talented developer out there, regardless, or she would have sought a manager whose job was devoted to leading a team. Instead, because Smartsheet doesn’t have the resources to take developer managers off the line, she was tasked with finding someone who could do both.

“When organizations get larger, it’s a little bit easier to slot in a people manager who can operate a group of very talented contributors, but they themselves don’t have to be at the skill level of their contributors,” TerAvest says. “When you’re smaller and growing as we are, you need folks who can both manage and be very strong individual contributors.”

At SaltWorks, finding entry-level employees is hardest. Novotny says warehouse workers are often seeking part-time work, aiming to grab summer construction jobs rather than work year-round with SaltWorks, even though the company offers benefits and pays all employees above minimum wage.

“We always want people who are looking for a career and not just a temporary position,” she says. “All of our positions take a lot of training. … Even though we have 70 people now, we still run like a 10-person company. So personality and dependability come into play.”

Shoddy hires can have a ripple effect years down the line. So when growing companies are in a pinch, it’s important to keep the organization’s needs and goals in mind to prevent hiring an employee who won’t push the company forward; hiring for tomorrow’s position is more important than hiring for today’s vacancy.

“If it’s that business-critical, we will absolutely get someone to help in the interim,” Patton says. “One wrong hire can have a huge impact on the culture, and it’s costly. We’ve had people say, ‘Well they’re good enough,’ but that’s not good enough for us here.”

Never stop hiring

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SaltWorks lists open positions online, but sometimes its sign catches the attention of the best applicants. Photo by Rachel Coward

“There are two types of job seekers,” TerAvest explains. First you have the active job seekers — those who are dissatisfied with their current situation or are unemployed. These are the ones who want to move quickly and will readily fill voids. “Then there’s the passive job seeker,” he says. “These are the ones who are willing to move but aren’t looking. These are the ones we want.”

If a company hires only when vacancies arise, it will almost exclusively receive applications from active job seekers. But in good economic times, good employees are typically employed, so the heavy hunting can’t be done at the unemployment line.

Luring passive job seekers requires a mix of luck and skill. Recruiters still must convince passive seekers that their company is the right fit, but there also has to be a place for that person in the organization.

“We continually have open positions,” Novotny says. “If we found the right people, we could hire 10 to 20 people right now. … You don’t always hire to fill an open position.”

This style of hiring is a no-brainer in divisions where demand outstrips supply. Both Limeade and Smartsheet can’t get enough developers, so if they come across talent, they scoop it up. For HydroPeptide, it’s all about filling a unique niche. “We want skincare specialists, not just salespeople,” says Pachuilo. “There’s not a ton to choose from.”

Maybe it’s sales, maybe it’s engineering. But even if a certain skill set isn’t in high demand, growing companies have to be looking for those rare workers who, even if they don’t fit in the current picture, can lead to future success for the company.

That’s who recruiters like Martin are always looking for. Finding the new developer was an exhaustive process, one that Martin will be asked to replicate time and again. So she took a short break after the hire, and then it was back to the grind, hoping to find another perfect candidate for a position that doesn’t yet exist.