Finding Good People to Work for Less Money
Sep 7th, 2007 by jared
On a bootstrapped budget, it’s difficult to hire quality people. The irony is that you need quality people to succeed. By quality, I am not talking about someone who is seasoned and has been doing the same thing for 20 years. A quality person could be someone who is just starting out but is determined to be successful. He or she is willing to work hard and do whatever it takes to get the job done. These people usually do not receive as large of a salary as the seasoned vet, but they almost always get hired, and for usually more than you can afford.
So how do you sweep them off their feet and convince them to join your organization so that together you can dominate the world? A combination of things have to come together. The first thing (and this is something I can not really help you with) is that they have to like you and get a sense of trust fairly quickly. Remember, you need to sell yourself; you are not Google getting 10,000 applicants a day or someone who has billions in the bank. Gaining their trust and respect at least gets them in the door so you can have a conversation with them. I am just going to assume you are trustworthy and likable and we will move on to discuss other things you can do to win them over.
The second thing you need to do is sell your dream. You will not convince great people to work for you for less, unless they have something they can strive for. If all you want to do is build a company around your lifestyle, then there really is no dream to sell and as a result you probably will not attract key talent. If you believe 100% that you are going to become successful and you want everyone around you to become successful, then make sure the first thing you talk about is what you believe in, and what is in your heart. Explain to them about your current success as well as the big things on the horizon. Talk about your goal to one day sell or go public, or provide profit sharing for everyone involved. You need to look at your potential employee as an investor who is going to invest his time to help you succeed. If you are raising money, you need to show investors your exit strategy. The same goes for your potential employees. Show them your exit, and give them a piece of it.
This leads me to the third thing you should do–offer stock options. You can create a stock option plan with your attorney for a small amount of money and, believe me, it will go a long way. Options give people a partnership in the exit strategy. I know the dot bomb made people skeptical about stock options, but if you have a great exit strategy and you know in your heart you are going to make it, offering options is not a pipe dream. Who doesn’t want to walk away with a few hundred thousand dollars for a few years worth of work, while having earned a salary and gained great experience for the entire ride? Let’s face it, everyone wants to make a bunch of money, work fewer hours, and vacation frequently.
The fourth thing you need to sell is flexibility. This is one of the benefits of coming to a small company. I am the type of person who likes to go places. If I had a boss that gave me time off when I needed it, allowed me to come in and leave at decent hours, and was not always looking over my shoulder, I would take that job versus making $20,000 more per year at another. I wouldn’t even hesitate. If you do not love what you do and you are miserable, it does not matter how much you make. Have a generous vacation and sick-day package, and try not to give your employees grief if they need to leave early for a doctor’s appointment.
If you get into a negotiation and your potential employee wants to work with you but he or she really needs that extra 5k or 10k per year and you really can’t afford it, the fifth thing I like to do is offer “soft dollars,” and, no, I don’t mean strip club money. Offering to pay monthly for any of the following really goes a long way:
• Cell phone
• Home phone
• Home Internet
• Office parking
• Gasoline
• Gym membership
• Lunches
Paying for these things gives you a write-off and, at the same time, saves you on payroll taxes because you are not paying them as much. A cell phone bill could run $1,200 to $1,500 for the year; that’s 25% of the way there if they really need that additional 5k per year.
Last but not least, is the work environment. Your company does not have to be in the best and most expensive building, but do your best to find the right building. If there is not the right vibe when people walk in, chances are they will not be able to see themselves working there for very long. A little paint and some ingenuity go a long way. I contracted my friend, Erinn Valencich (www.omniartedesign.com), an interior designer, to really make my office stand out and for a reasonable price. She was able to find very cool pieces of art, rugs, and fake plants that really gave the office a great look and feel. Furniture also plays a big part, and it doesn’t need to cost a fortune. Check out my uncle’s new company www.rezon8living.com. They offer high-end furniture at affordable prices. You can also find used furniture online at places like craigslist.com. Make sure to lease an office with some space or at least one common area that everyone can retreat to. If people feel too crammed in, they may have a harder time being productive. If you really take the time and look, you can put together an office that everyone will feel proud to come to on a daily basis.
Finding great people to work for you within your budget is not easy, but it is possible if you listen to their needs and use some of these ideas. And, oh yea, most of the people I hire I find on craigslist.com–it’s truly a rich resource of talented people! Good luck hunting….
The “soft” dollars are a great idea and something that hadnt occured to me.
I would also echo the sentiment about craigslist being a good source for new hires. Although you really need to carefully craft the message you post and expect to have to invest some time in filtering the responses cos some of them will be crazy!
After the first Bubble, people aren’t so likely to believe they’ll one day reap the benefits of working for a small, money-strapped startup that sucks all their life energy–unless the company truely provides the kind of perks or work satisfaction that a larger employer does not. A startup can make all these great promises like you mentioned, but it also must be committed to carrying them out. Otherwise, staff will bail quicker than rats on a sinking ship–and that’s even if the company isn’t sinking.
Pumper. I agree with your comment on craigslist. You need to be very detailed, there are bikers trying to get positions to be nuns. I also like to say “do not attach your resume”, just to see how close attention they pay to what you wrote. (Thanks for the trick Steve).
Eydie I agree, this goes along with building life credit. You need to say what you mean and mean what you say. However sometimes its possible to forget a promise. If I forget to carry something out it’s because I forgot, not because I am malicious about it. That’s why I have people around me who can always remind me.
Years ago as a wee tike of 17-18 yrs old. I went to work for a man at what is now an Old Fashion Auto parts Store. We did full service parts sales and he hired me as a driver/trainee. The money was $30 a week less than I was making at a hot, nasty whse.
But I jumped at the chance to have more fun. I worked more hours for less money. BUT…he gave me a pick up truck to drive that I could take home, he paid all the gas. Plus I worked during lunch if needed as he would buy lunch everyday. But yet when I had something to do he was always willing to let me off. Those soft money items where worth more to me than anything else. Later he and I became partners in 5 stores and did very well till Auto Zone moved to town…another story
Today I use the same ideals. My better/longer term drivers get a car to drive home with gas paid plus a free cell. I figure that an older car cost me 3K to buy and 600 a yr in up keep. Put some fuel in it and I am still looking at that car costing me 2500-3000 a year for three years life of the car. But yet it allows me to save on payroll taxes, and be able to hire good drivers for 2/3 the money of the other people. Plus in my world I can call an off duty driver and have them rolling sooner because there work car is in there driveway and not at my lot.
ALAN
Alan isnt that great how that works? And not just for the employer but the employee as well. Everyone benefits. There is always a way to do a deal with someone. Every client is different why shouldnt every employee be? Each deal should be customized to each individual. If I find someone I really like, I do everything I can to get them aboard and within my budget.
I was curious how you could manage to hire me and keep me working for you while I was getting/refusing a few real big offers from larger companies during all this time…
The things you mentioned in your article are quite wise but they’re not what really hooked me up. I mean that still wouldn’t be enough for me.
Here is why I work for you:
- I RESPECT the person I am working for - I see your devotion to the company and your attitude to people and I will never betray this kind of man;
- I feel very comfortable with what I am doing and I love my job;
- I was given greatest working conditions anyone cold ever dream of;
- You encourage my creativity, you never ignore any of my endless crazy ideas and initiatives on the job;
- I have your TRUST (never mind, that’s my mentality thing - I just need it as air).
What else to say?
Go mobileStorm!
Shav, you are true blue my friend. It is hard to find such talented loyal people but you prove to me that they are out there and encourage me to never stop looking. It is people like you who will make mobileStorm a powerhouse, nobody can do it alone. Keep up the hard work!
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Thanks bootstrap! Hey would you exchange a blog roll with me? I just checked out your site and we definitely cover the same principles. Let me know.