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Start-up proliferation gives employees upper hand

Blame it on the glut of recent mergers and acquisitions.

Blame it on the abundance and promise of working at a start-up company.

But for these reasons and more, recruiters and human resource managers throughout the wireless industry are coming to realize the dynamic job market is making their duties more difficult than ever.

“My recruiting needs are across the board,” said Frank Levesque, human resources manager for Industrial Communications Inc. in Marshfield, Mass.

More than ever, employees-not employers-are in the driver’s seat and have the power to pick and choose where they want to work, for how much and for how long.

“Companies are being forced to really examine their retention efforts. Employers are really having to direct their retention efforts toward increased wages and more lucrative benefits. Employees definitely have some leverage now,” said Levesque.

Lucrative stock options, exponential salaries and creative freedom are luring workers with all levels of experience in to the world of start-ups, and are making the structure and uniformity of many corporations look less appealing.

Jeff Kohler, chief executive officer of Reason Wireless Ware, a Denver-based online retailer of wireless communications products, made the leap from corporate to start-up last year when he left his position as area manager for indirect sales at AT&T Wireless Services Inc. to launch Reasonware.

“It was recognizing the opportunity in the industry … I knew I had the knowledge to affect change in the industry. I can do that when I’m on my own in a start-up better than I can in a large company. In a company like AT&T, literally you are cog in a big machine,” Kohler said.

He joined a growing list of corporate employees, many of whom are top executives, taking their experience and determination and starting over with a new venture.

Dan Hesse, former president of AT&T Wireless, now is the CEO of start-up Terabeam Networks. George Schmitt, former president of Omnipoint Communications Inc., joined e.spire Communications Inc. in early April as its president and CEO. Top executives at Cisco Systems Inc., Telcordia Technologies and Lucent Technologies Inc. also recently have moved on to smaller, newer companies.

“A lot more people from the manager level up have golden handcuffs, more than they ever have. At the same time you have companies that I don’t think have been as savvy as they could have been in retaining their executives, most notably AT&T. The other one is Sprint (Corp.), where all of their executives just vested recently,” said Rob Sweetser, a partner with recruiting firm Warren, Morris & Madison Ltd. in San Diego.

At Kohler’s company, all 12 of his employees came from larger corporations, among them AT&T, Sprint and Level 3 Communications Inc.

“And we have tons of people contacting us, wanting to work here. There is already word of mouth,” Kohler said.

Bob White, president and CEO of Pennington Consulting, a recruiting firm in Pennington, N.J., thinks the recent and rampant merger and acquisition activity within the wireless industry bears much of the responsibility for executives jumping ship.

“With the megamergers that have been taking place, that has been forcing people out. I see people falling out of AirTouch for just this reason. It’s like a fever. Your executives are the ones who many times are affected the most. Jobs like theirs aren’t plentiful in established companies,” White said.

White said his firm lost 12 clients last year due to mergers and acquisitions, and consequently he now is focusing on the technical software area of the industry, which he said is in constant need of qualified people.

Technical positions seemingly have always been in strong supply, but the booming job market is creating an abundance of sales, marketing and managerial positions as well, said Sweetser.

“Because you have this proliferation of new companies, the demand for good sales and marketing executives is at least as high as technical people these days. You have a lot of dot-com companies that need savvy sales people,” Sweetser said.

This proliferation also means most employees perpetually have several alternative job offers, a reality that is forcing companies to come up with new and better retainment practices.

Levesque at Industrial Communications said flexibility is key. Keeping employees challenged by teaching them new skills and working with managers to make sure they are communicating also are good ways to prevent turnover.

“We are trying to create more incentives and opportunities for growth, whether it’s extrinsic or intrinsic,” Levesque said. “It’s not always about money.”

Kohler concurred. “I would suggest that if you could enable your people to affect change as much as possible in the organization, you’re on the right track.”

The job market is so tight, companies also are looking to their competitors for qualified people.

“Companies are getting more aggressive in finding passive candidates. In other words, they’re stealing from each other,” Levesque said. “Companies seem to be finding these people and luring them away at almost any cost. It’s almost creating a nomadic work force.”

The fluidity of the work force combined with the surplus of new companies, many of which will inevitably fall by the wayside, holds hope for those corporations losing top talent as fast as they can replace it.

“I think what we’re seeing is employees are shopping more than ever and … that has raised the consciousness of a company that they have to be ready to pull the trigger,” Sweetser said.

Those who dared to strike out on their own are very appealing to large corporations, which are beginning to recognize smaller companies as the new competition.

“Success or failure, you learn an immense amount,” said Kohler. “I understand that these corporations are seeking talent that has been out there heading start-ups.”

Either way, in the near future, “it will continue to be an employee’s marketplace,” Sweetser said.

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