Downdraft In The Market
Collins is not alone. The downdraft in the market is causing more people to move from the new economy to more stable companies, said Rick A. Smith, a headhunter at Spencer Stuart in Atlanta. And Internet companies are becoming more selective in hiring executives, he said.
"The type of talent companies are looking for is a mix of new-world and old-world experience," Smith said.
The type of executives Spencer Stuart is recruiting has changed from people in their late 20s with three or four years of experience to candidates in their 30s or 40s with 10 or more years of work experience, Smith said.
"In general, there has been a dramatic maturation in the marketplace," Smith said.
The cappuccinos and microbrews may still be flowing freely at many dot-coms, but some are adopting more corporate-like structures to ensure too much fun doesn't come at the expense of profits and growth.
Take Dash, a fast-growing Internet advertising company in New York. It raised US$50 million in venture capital. But even during the high times, it didn't spend its millions on Super Bowl ads or company parties, said 31-year-old Daniel Kaufman, one of the company's founders.
Dash has been run more like a corporation because the four founders have all had other Internet companies and they felt they needed some structure to succeed, Kaufman said. The company has a relaxed environment. There's no dress code, and dogs are allowed to roam freely. But it doesn't have on-site manicurists or massage therapists.
What sets this dot-com apart from many other Internet start-ups is that it has always had a human resources manager, a corporate attorney and policies regarding standards of conduct. And every employee gets a handbook that spells out corporate policy. "It's a pretty serious place and people work pretty hard," Kaufman said. "We're not throwing keg parties on Friday, but we still go out and have a lot of fun."
At ELetter, an Internet sales and marketing company in San Jose, lavish and kooky perks are out and old-style benefits are back in vogue, said Manish Mehta, the company's 32-year-old president and chief executive.
"These days it's not the perks that will get you the people and keep them," Mehta said. "Employees want to know that the company has a solid business plan and that it makes money."
ELetter still offers employees on-site massages and caters lunch every couple of weeks. But it has done away with extravagant off-site parties, Mehta said. Now, the 40-employee company rewards people for their hard work with money and time off, he said.
Less than 3 percent of all Internet companies spend money lavishly on parties and other perks, said Tom Kippola, managing director at marketing strategy firm The Chasm Group in San Mateo, and a venture partner at Voyager Capital.
"Most companies are responsible about their spending," he said, emphasising that a little fun is OK.
But one person's fun is another person's headache.
