Medical Device Link.

Originally Published September 1999

FINANCE

Getting the Best People

Here's what it takes to attract and retain the best and brightest talent in today's competitive marketplace.

Flo Nixon

Attracting and retaining talent has always been a challenge for medical device companies, and today's surging economy and tight labor force raise the stakes. With the national unemployment rate at a 24-year low of 4.3%, and employers offering more technical jobs than there are workers available, professionals increasingly are able to craft their own special perks and benefit packages.

The good news for employers is that the generous, creative benefits they provide can translate into good workers who stay with the company and produce at maximum efficiency. And, surprisingly, quite a few popular perks that can attract great employees will cost your company's bottom line very little.

Employers can also save substantial sums of money by keeping employees happy. Experts estimate that the average cost to replace an employee is between three and six months of the position's pay — not to mention the cost to productivity as other workers scramble to cover the departed employee's workload in addition to their normal duties.

But with hundreds of companies vying for the same skilled professionals, how can you tip the scales in favor of your firm when that top-notch talent is choosing between your company and your competitor's firm?

Getting to "Yes"

To entice talent to join your organization, consider offering the following items:

Competitive Compensation and Benefits Plans. The first steps in ensuring that professionals will want to be part of your company is being sure that you're paying competitive salaries and offering the basic benefits that employees have come to expect. To make sure your salary ranges are appropriate, review industry salary surveys (such as the one published in Medical Device & Diagnostic Industry each year) and talk to industry trade associations and recruiters. After all, people who are interviewing to work for your company have already done this themselves. And keep in mind that in today's market you may have to pay new employees more than what you're paying current workers in the same position.

Your benefit plan should include the following basics: medical, dental, disability, and life insurance; vacation and sick pay (at least 16 days' total); and a 401(k) plan, preferably with immediate vesting.

Additional benefits that may convince an all-star to join your team:

"Cafeteria" or Flexible-Benefit Plans. These plans let employees use pretax dollars to pay for an array of benefits that best suit their personal situation. For example, an employee who does not need medical or dental plans may use dollars that are normally allocated to those costs to instead fund additional 401(k) contributions or to purchase more vacation time.

On-Site or Nearby Day-Care Centers. Some companies are providing subsidies covering as much as 50% of their workers' child-care costs, often in an on-site or nearby center so parents can visit their children during the day. This benefit is especially valuable to employees who are starting families.

Sabbaticals. An increasingly popular perk is the paid sabbatical, in which employees get extended paid leave after a specified number of years of service. Most programs offer four to eight weeks of time off after employees have worked for the company for four to seven years. Some companies that have had great success in using these programs to recruit staff are Genentech (San Francisco) and Acuson (Mountain View, CA).

An Opportunity to Work with Well-Known Talent. Potential employees can also be convinced to join your company if they know they'll be working with world-class scientists. Many professionals believe that "if that PhD is with that organization, the company must be good and I can learn a lot."

An Opportunity to Use Current Skills in New Ways or in a Different Environment. When recruiting for Syntex Corp. (now Roche Bioscience; Palo Alto, CA), we offered MDs and PhDs the opportunity to be therapeutic program leaders with accountability for leading a cross-functional team composed of regulatory, manufacturing, commercial, clinical, and basic research personnel. This opportunity was exciting for medical personnel who previously had been involved in either pure research or clinical trials. We were able to find attractive candidates since the job would give them the chance to do something different and tackle a new challenge. You can use this same philosophy in attracting professionals to your company.

An Opportunity to Develop or Refine Cutting-Edge Technology. Top talent wants to work on dynamic and breakthrough products or processes—a fact that can make small start-up organizations appealing. If your company is known as a breakthrough technology leader, it is likely go-getters will approach you for work.

A Strong Corporate Vision. Companies that can clearly articulate their mission and direction for the future are attractive to employees who want to belong to an organization where they can believe in and be committed to its mission and projects.

A Feeling that Employees Are Valued. Show potential (and current) employees that you care, that you want them. Recruitment is a bit of a courtship. The company that demonstrates that the candidate is important and that it is doing everything possible to win the candidate will most likely succeed in gaining itself a new employee.

To show that you care during the interview process, first communicate regularly and ensure all arrangements are made properly (flight reservations, limousine pickup, hotel, schedule for the day, greeters who know the schedule and can ensure that the candidate is smoothly shepherded between interviews and to meals, etc.). Attention to detail demonstrates respect for the candidate and shows that you value his or her time.

During the interview, ask interesting, provocative questions such as: How did you improve your skills this past year? What was the most difficult problem you've faced in the past few years, and how did you handle it? What did you learn from that situation? What is the best work environment for you? What elements are key, and how will you recognize them in an organization? These thoughtful, probing questions demonstrate that you have thought in advance about the work, the candidate, and how the candidate will fit into your company. At the end of the interview, let the candidate know the next steps in the hiring process and when he or she can expect to hear from you. Then make sure you follow up.

Stock Options and Signing Bonuses. It used to be that only established blue-chip companies granted stock options and only at the very senior executive level. Today most start-up companies, especially in the biotechnology and high-technology industries, use options as an enticement. The number of options granted depends on the job level and on whether the company is privately held or a public company. Oftentimes, start-ups will use large grants of shares in place of annual bonuses. Companies may also offer signing bonuses ranging from $3000 to $25,000 or more.

Staying Power

Once you've attracted talented people into your company, how can you make them impervious to the wiles of your competitors?

In a national survey of 3400 employees conducted by the Families and Work Institute, the three most frequently cited reasons for employees deciding to take their current jobs were:

• Open communications (65%).
  
• Opportunity to balance life (60%).
  
• Meaningful work (59%).

Following is a look at what your company can do in each of these areas to keep employees happy.

Open Communications. The most important factor in taking a job, open communications, relates to the fact that employees want to be listened to and heard. Employees who believe they are heard feel respected and valued. If you think about it, companies spend lots of time recruiting talent into the organization, but these same companies tend not to ask for employees' opinions or ideas (the very things that made the employees so attractive in the first place).

Employees also need to understand what's expected of them and receive frequent, clear feedback to perform their best. Most employees want to feel they are making a difference. If there's a disconnect between employee and manager, resources are wasted, the employee feels neglected, and projects probably are not of the highest quality.

Opportunity to Balance Life. Balance may soon be the most-sought-after employee benefit. Companies are now asking employees to work many more hours than ever before (50 hours per week seems to be the average now), but according to a Coopers & Lybrand survey, young job seekers rate life balance as a much higher priority than money.

While giving employees more time off may not be viable from a business perspective, offering work-scheduling options may achieve the same goal. Gateway 2000, a computer manufacturer, shows concern for both families and the community by offering flexible schedules, part-time options, job sharing, and telecommuting. Although flexible scheduling may not be doable for all positions, companies that demonstrate a willingness to accommodate the needs of valuable employees go a long way toward demonstrating respect and concern while still meeting business needs.

Meaningful Work. One of the keys to retaining employees is providing meaningful and challenging work. Hiring top talent and then giving them dull tasks is one of the fastest ways to build your competitor's staff. To keep employees challenged, give them special projects, especially those with high visibility, and rotate employees through different positions (ask a human resources specialist to help design the program so that it's well ordered and logical for both employees and your business).

Finally, one last thing you should do: Reward employees for doing the right thing. Altera (San Jose), a supplier of programmable logic devices, gives employees cash awards if they refer an applicant who is ultimately hired. The cash awards vary between $500 and $5000 depending on the position, and at the end of the year, all employees who have made referrals are entered into a drawing for a single cash bonus of $10,000.

Spot awards are another great way to reward employees for a job well done and to give them unexpected recognition. With these programs, top managers walk throughout the facility, greeting employees and then stopping at predetermined employees' work-stations. The managers congratulate the employees on the results of a specific job and then give them a cash award ranging from $100 to $500. These rewards are doubly effective since in addition to a cash bonus, employees are recognized publicly for their efforts.

Your Greatest Asset/Cost

Given the very low unemployment rate and resulting scarcity of talent, it's imperative for employers to be able to both attract and retain high-caliber employees. Many methods for ensuring workers will hire on and stay with your company cost little in dollars, but can prove invaluable in building your greatest asset: your on-staff talent.

Even after you've convinced that great potential employee to join your team, continue to treat him or her as well as you would any other asset. For when top talent leaves your company, not only do you have to rehire for the position and redistribute the workload in the interim, but even worse, you're sending great talent to your competition. And, in the end, that could turn out to be your company's greatest cost.

Flo Nixon owns the Park Avenue Group (San Francisco), a human resources consulting firm.

Illustration by Jean-Francois Allaux

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