Marketing talent hard to get, keep options sink, other recruiting tactics rise

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With the Nasdaq's nose dive, the practice of issuing company stock options to recruit and retain top marketing employees has lost much of its magic.

In response, b-to-b companies are scrambling to develop new ways of finding and keeping talented workers.

Leading b-to-b players such as Broadvision Inc., and PeopleSoft have introduced programs, ranging from overseas stints to jumbo recruiting fairs at IMAX theaters. The subtext to these innovations is that these companies' share prices, like those of many Nasdaq dwellers, have been whipsawed in recent months, undermining their use of stock options as a way to woo workers.

Ernst & Young L.L.P. partner Kevin Gregson questioned some companies' wanton use of stock options in a recent report, ''Do Stock Options Really Work?''

''Options appear to be the ideal tool to align interests and motivate proper behaviors,'' he wrote. ''[But] they are also a blunt instrument and as such are imperfect and are certainly not a panacea.''

Options have made many companies lazy in developing substantial retention programs, Gregson told BtoB. ''Stock options have become an inexpensive substitute,'' he said, ''for good compensation policy.''

A better technique, he said, is to give key marketers and technologists room to jump from project to project, allowing them to exercise their creativity.

''You need to allow them to retain their personal objectives,'' said Gregson, who heads up Ernst & Young's Global Rewards Practice. ''This goes well beyond making them rich.''

Hot marketer market

The market for top b-to-b marketers has never been as hot, especially for individuals with technology backgrounds.

''I've saved all my calls from headhunters over the past four months,'' said Frederic Bonnard, iPlanet E-commerce Solutions' director of product marketing. ''There were 75 of them. And I'm not the only one with this experience.''

iPlanet, which launched last year as a partnership between America Online Inc. and Sun Microsystems Inc., produces server software for businesses. Bonnard, who works out of iPlanet's Paris office, has nine years of experience in hybrid tech-marketing jobs.

On the other side, companies looking to hire people like Bonnard are being stretched thin.

When asked how much time she spends on searches for marketing personnel, Korn/Ferry International headhunter Tierney Remick sighs. ''At least 70% of my work is now for [chief marketing officers],'' she said. ''I liken it to competition for chief technology officers a year ago.'' Remick is managing director of North American consumer practices for Korn/Ferry, the world's biggest search firm, where she recruits top marketers from consumer goods companies for b-to-b corporations and start-ups.

Jon Burke has a dual perspective on the marketer wars, as both a platoon leader and an infantry grunt.

As co-founder of San Francisco-based eTranslate, he is overseeing its recent expansion into cities including New York, Berlin, Paris and Tokyo. As director of marketing, however, he is leading eTranslate's search for about 15 additional salespeople and marketers--the company already has 30--over the next year.

''I've been getting calls from recruiters trying to pull me away,'' Burke said. ''But I'm a founder, so I've got golden handcuffs.''

Indeed, eTranslate, which helps b-to-b companies translate Web sites into multiple languages, is planning an IPO. Despite the Nasdaq's jitters, an IPO event, with its downstream prospect of a financial windfall for employees with stock options, is still a big draw in recruiting top marketers, said Burke.

Nevertheless, eTranslate is increasingly using other carrots in its recruiting efforts. For instance, it touts its 100-strong client base, $53 million in venture capital backing and multicultural atmosphere.

Innovative approaches

Earlier this month some 3,000 people swarmed an IMAX theater in Dublin, Calif., to watch "Gladiator," the new Russell Crowe epic. It wasn't the film's opening night; instead, it was part of a PeopleSoft recruiting scheme intended to attract some 40 new marketing hires.

The IMAX event, which began with an in-theater recruiting fair, is part of a broad recruiting crusade launched by PeopleSoft in April. It includes ads on San Francisco buses that trumpet PeopleSoft as a good place to work.

''We're putting $200 million into the marketing of PeopleSoft this year,'' said Steve Swasey, director of corporate relations. He declined to say what portion of this budget was aimed at prospective employees.

PeopleSoft's campaign is supposed to poach dot-com refugees whose options have been dashed. ''The options at a lot of the dot-coms are under water,'' Swasey said. ''A lot of companies offered tremendous options packages that are now not worth anything.'' About 70 boomerang marketers and technologists have recently come back to PeopleSoft after leaving for dot-coms in the past year or so, he said.

According to Swasey, the recruiting mantra for marketers at PeopleSoft goes like this: ''We can offer you options. But we can offer you a whole lot more.''

For example, PeopleSoft is liberal in allowing employees to work from home, and it has begun offering $5,000 finder fees--structured so they are tax free--to employees who refer marketing managers.

Once marketing managers join PeopleSoft, there are other perks. Carlos Santana played at a recent sales retreat on Maui; two BMWs sit in PeopleSoft's cafeteria, bonuses for employees who refer recruits who stay on for at least half a year.

BroadVision Inc. execs have realized that it needs to overcome start-up connotations and present itself as a big, solid place to work, said Sandra Vaughan, VP-corporate marketing.

''We need to start acting like a billion-dollar company,'' Vaughan said. ''A lot of the smaller companies are just focused on stock options. Plus, we can't compete against pre-IPO companies, so we need to balance that with other things.''

BroadVision shares were trading May 26 as low as $31.50, way off its 52-week high of $93, but a lot better than last summer, when it was in the single-digits.

One of BroadVision's most successful marketing-employee retention programs has involved sending its people on overseas stints. ''We encourage moving people around,'' Vaughan said. For example, the company recently sent its top salesman, Jim Hickman, to open the company's Australian marketing region.

''I love it here. It's a huge challenge. It keeps me up until 2 a.m.,'' said Hickman, from his Sydney office. ''Why go to anywhere else? It's not an option.'' He said he expected to stay in Oz for at least two years.

About the company's lowered share price, Hickman argued, almost convincingly, that it is a positive development, since it permits him and his BroadVision colleagues to buy company shares at a discount., a New York-based interactive marketing company, has split its recruiting division into two units--one that looks for talent outside and another that keeps people from leaving, said Kyle Shannon, co-founder. And the company has begun putting its managers through training courses to help them keep employees.'s stock price, meanwhile, has plummeted. It was trading as low as $12 3/8 on May 26, off a 52-week high of $98. Indeed, Shannon said the dip has lessened options worth as a retention tool. But like BroadVision's Hickman--or any dot-com zealot--he said some good has come from the Nasdaq's drop. ''If the stock price has room to expand,'' he said, ''that's a good thing.''

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