Hanging Your Net Shingle, Part 5: Employees


Tim J. Smith, PhD
Founder and CEO, Wiglaf Pricing

Published March 12, 2002

Corporate web sites are communication tools that can influence decisions and encourage positive actions. In this fifth in a series discussing the content of new venture web sites, we will explore a number of sites in discussing the issues of the final audience prospective employees. Tomorrow, I will provide the concluding chapter – Driving Action.

Prospective employees can ask questions along three different lines. Obviously, there is the “Do they have an opening?” question. Secondary interest is “Will they be good to work?” for questions. But for serious talent, the prospective employee may also ask “Should I invest my career in this firm?”

On the “Do they have an opening?” question, IBM (www.ibm.com) has an excellent site. People can search for jobs according to a number of criteria or no criteria at all, select it into a shopping cart, and then apply for all the positions at once. This is useful considering a powerhouse firm like IBM is bound to have numerous positions available for good talent. Yet new ventures don’t start out at the IBM level, they start at the Sarvega level (www.sarvega.com). Sarvega get the basics done with a single web page posting the available positions followed by a contact email address.

To address the question of will they be good to work for, employers seem to begin with statements like Sarvega’s competitive edge is its people, or Expand Beyond “We believe employees to be our greatest asset” (www.xb.com). Even if talent management and talent based competitive advantage is a stock statement, firms need to say this. Leadership is about caring more about the people you lead than about yourself. If a new venture is in survival mode where managers instinct is to protect themselves first and their employees second, stating that the firm cares about your employees will provide a beacon of hope when the going get tough (or a rallying cry of betrayal). Other issues of will they be good to work for are handled by a number of sites in the manner of NavTech (www.navtech.com), where a set of pages describe career profiles and the basic benefits.

Finally, the employee investment question. Prospective employees are major investors in any new venture. When they take their drive, talent, and intellectual acumen and deploy it in championing the cause of a new venture with questionable future, they are taking a high-risk investment in their most valuable asset their career. Sometimes the investment is even more direct through stock vesting plans and stock-option grants. If the prospective employee is fortunate, firms will place a brief outline of the reason to invest a career with a firm right on the employment page. The more typical means of gathering this information though is to go through the management profiles, customer lists, and product statements to conduct a full 4Cs-4Ps analysis as discussed in “Hanging Your Net Shingle Part 2 – Investors.”

And what is the goal of all this communication to prospective employees? Firms want to hire good employees, of course. Research has shown that fewer than 1.6% of firms actually interview based upon soliciting resumes from Monster (www.monster.com) and similar job boards. Furthermore, when a firm does solicit a resume from Monster, they end up with 400 to 500 responses in a single day. For a job seeker, do the math: 10 interviewees out of 400 responses with only a 1.6% shot yields a return rate of less than a 1/2%. Even an average direct mail job campaign can lend itself to a 2% return. Contrasting the direct mail and job boards with highly directed job seeking on corporate sites, and the intelligent prospective employee will search corporate sites with more vigor than the purchasing agent of most customers.

A second issue on a new ventures communication with prospective employees is the huge informational imbalance. Firms hiring talent are making a large investment (2X salary for every new employee in training, benefits, and other costs included) of a frequently purchased good (15% turnover of 30 employees is still 4 or 5 people per year.) Prospective employees are also making a huge investment (their career and future lifetime earnings potential), but of an infrequently purchased good (average worker only has 4 to 10 jobs in their lifetime, making the average time between job searches on the order of 5 years). Providing some guidance to the employment process and the new relationship into which a firm is enticing prospective employees is simply smart business.

The May Report, TECH BUSINESS BRIEFS, March 12, 2002

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About The Author

Tim J. Smith, PhD, is the founder and CEO of Wiglaf Pricing, an Adjunct Professor of Marketing and Economics at DePaul University, and the author of Pricing Done Right (Wiley 2016) and Pricing Strategy (Cengage 2012). At Wiglaf Pricing, Tim leads client engagements. Smith’s popular business book, Pricing Done Right: The Pricing Framework Proven Successful by the World’s Most Profitable Companies, was noted by Dennis Stone, CEO of Overhead Door Corp, as "Essential reading… While many books cover the concepts of pricing, Pricing Done Right goes the additional step of applying the concepts in the real world." Tim’s textbook, Pricing Strategy: Setting Price Levels, Managing Price Discounts, & Establishing Price Structures, has been described by independent reviewers as “the most comprehensive pricing strategy book” on the market. As well as serving as the Academic Advisor to the Professional Pricing Society’s Certified Pricing Professional program, Tim is a member of the American Marketing Association and American Physical Society. He holds a BS in Physics and Chemistry from Southern Methodist University, a BA in Mathematics from Southern Methodist University, a PhD in Physical Chemistry from the University of Chicago, and an MBA with high honors in Strategy and Marketing from the University of Chicago GSB.