Top Notch Looking for top-level employees for your start-up? Here's what you'll have to offer.
Opinions expressed by Entrepreneur contributors are their own.
If you're looking to bring in a highlevel executive, beprepared for a high-level price tag-an estimated 20 percent morethan you would have paid about a year ago. Want to beef up sales?Hire a sales VP for $165,000 a year. Ready to bring in a new CEO?Expect to pay $200,000 or more. According to venture capital firmVentureOne Corp., that's the kind of money (including bonusesand options) being paid by start-ups nationwide and across industrylines.
VentureOne recently surveyed 800 privately held U.S. companiesthat have received venture capital. Increased salaries reflect thetightest employment market in a quarter century as well asunprecedented rewards that dotcom and high-tech start-ups use tolure managers.
The average new business "just can't compete withventure-funded start-ups for top-level people," suggests LoisMarshall, whose Carmel, California-based The Marshall Group is anexecutive search firm. "The cream of the crop is going wherethe money is." If your business demands high-calibermanagement, "you must stretch to give them stock, stockoptions, phantom stock or something," she advises, or you risklosing even existing employees.
Companies offering nothing beyond salaries often must settle forless experienced managers. "Your business may never achieveits potential. It's literally that cut-and-dried; there is nomiddle ground," says Marshall, whose firm serves high-techfirms, traditional corporations and start-ups. Her clients"provide any kind of equity participation they can on almostevery deal."
If your executive search produces the right candidate but at thewrong price and you simply cannot offer equity, don't despair.You have options. Determine how much the individual wants and howmuch you can afford. Keep in mind that other candidates may beequally qualified and less costly. If you can't agree on astarting salary, suggest incentive pay raises or attractive bonusestied to performance. For additional leverage, offer a reducedworkload to the candidate in return for accepting a lower salary.Conversely, consider expanding his or her responsibilities, whichcan cut costs elsewhere; the savings could help meet thecandidate's salary demands. Finally, consider offing additionalbenefits in lieu of higher pay, such as more vacation time, ashorter work week or a company car.
Paul DeCeglie (MrWritePDC@aol.com) is a formerstaff reporter for Journal of Commerce and AmericanBanker.
Contact Sources
The Marshall Group, (831) 620-1144, www.the-marshall-group.com
VentureOne Corp., (800) 677-2082, corpcomm@ventureone.com.
