Female Entrepreneur Forges New Model to Recruit Tech Talent

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    The competition for great tech talent may be intense, but should your company really have to pay a search firm 20 percent or 30 percent of a techie’s base salary just for the privilege of hiring him? “Some people think that’s absolutely ridiculous,” one recruiter says, “And I couldn’t agree with them more.”

    That recruiter is Michelle Joseph, founder and CEO of PeopleFoundry, a Chicago-based recruitment firm that focuses on the technology and digital sectors. PeopleFoundry is less than two years old, but it’s already generating a lot of buzz in the Midwest, not to mention a rapidly expanding client list. I had the opportunity to speak with Joseph last week, and I began the conversation by asking her for a quick backgrounder on how PeopleFoundry came to be. She said it grew out of what she saw as a flawed recruitment agency model:

    I started the business in January of 2013. The reason I started it was I did several years on the agency side of recruitment, then I went internal with a startup [TradingPartners,  a reverse e-auction platform business] that grew very quickly. I was exposed to all facets of the business—not just from a recruitment and HR standpoint, but from the standpoint of strategy, sales, finance, etc., and saw what was really important to build a successful business from the ground up. I saw that when you’re working with outside agencies, they’re just set up as sales agencies rather than partners that can actually grow with the organizations that they’re trying to put talent in. And I saw that there’s more to it than just finding the talent—it’s helping the companies set up a process and a culture that can attract and retain the right talent. So I came up with the business model that we have.

    Joseph went on to explain that model this way:

    Our model is one where we’re basically paid for our time—it’s more of a consulting model than anything else. We work on a monthly basis—there is a ceiling and a floor in every one of our contracts, and it’s dependent on the amount of resources we deploy within that relationship that we have with the client, so that we can scale up or down with their needs. Our shortest contract is three months, and our longest is five years. If we’re not delivering, our clients have a time period to execute an out clause—so it’s not based on a guarantee of  days the person has worked, or their salary. It’s more for our time, so we can align what’s going on in the marketplace with the organizations as they grow.

    As for why PeopleFoundry has started out with a focus on the technology and digital sectors, Joseph indicated that that’s where the low-hanging fruit was:

    In 2011 and 2012, in the Chicago marketplace and globally, a lot was picking up in the technology and digital sectors, with new businesses developing, and people seeming to reach out more and more, asking how to hire the right talent, because it was becoming less and less available. I just thought it would be a good place to focus, because the people who were getting funding, and the people who were serial entrepreneurs, weren’t as HR-focused, with the processes and procedures in place [to recruit and retain talent]. So they saw the need for the model as an alternative to paying anywhere from 20 percent to 30 percent of somebody’s base salary. Some people think that’s absolutely ridiculous, and I couldn’t agree with them more, in that I had previously been with a technology startup.

    Joseph went on to say that the skills that are in greatest demand right now are development and SaaS skills, and she noted that in Chicago in particular, she’s seeing a growing demand for Ruby and Python. But she said IT skills across the board are hot:

    With any IT team that we’re working with, the competition [for talent] is fierce in the Midwest right now, just as it is in the Bay Area. I think it’s the same everywhere you go. One of the reasons that we have a strong network of IT professionals is because we don’t cross-pollinate for the roles that we have—meaning, if we’re meeting with you, we’re just showing you an opportunity with one of our clients, rather than saying, ‘Here are five jobs we’re working on with five different companies. Which one fits your skill set best?’ We take the time to get to know the candidates, to find out what they want, what they’re looking for, not only skill set-wise, but from a company perspective. We match them up that way, and they go all the way through the process. A lot of these people are getting hit by recruiters just throwing job descriptions at them and saying, ‘We can get you $150,000,’ rather than explaining the entire opportunity to them.

    Joseph also shared some fascinating insights on the advantages and disadvantages of being a female entrepreneur, and on the influence that a company’s culture has on its business. I’ll cover that in a forthcoming post.

    A contributing writer on IT management and career topics with IT Business Edge since 2009, Don Tennant began his technology journalism career in 1990 in Hong Kong, where he served as editor of the Hong Kong edition of Computerworld. After returning to the U.S. in 2000, he became Editor in Chief of the U.S. edition of Computerworld, and later assumed the editorial directorship of Computerworld and InfoWorld. Don was presented with the 2007 Timothy White Award for Editorial Integrity by American Business Media, and he is a recipient of the Jesse H. Neal National Business Journalism Award for editorial excellence in news coverage. Follow him on Twitter @dontennant.

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