Norm Worthington is a serial entrepreneur and owner of one of the nation’s fastest-growing companies, Star2Star Communications, which develops and delivers business-focused Internet telephone systems and services. Founded in 2006, the Sarasota company employs about 100 people and was named in December to the Forbes list of “America’s Most Promising Companies.” But its success has not been without pain, specifically in the area of recruiting and retaining skilled workers. Worthington has made hiring one of his top priorities.
How did you come to Sarasota?
My grandfather lived here and, as a kid, I was close to him. I attended New College and, after graduating, I ended up working in Silicon Valley and starting companies there. That is the orientation I brought with me when our family moved back and I started Star2Star.
But trying to run a high-technology company in Sarasota is a challenge. The key element is recruiting and retaining very specialized people as well as building out the rest of the company.
How have you handled the recruiting part?
You have to have a foundation to recruit and retain good people: a great strategy, the proper culture, a clear vision and a mission. The challenge is to find super talented people but also people who fit into the culture of the company.
I have found that if you do a good job recruiting and interviewing, you tend to get people who stick, which is a huge advantage for a technology company because so much of the value of the company is in the brains of those people.
Where do you look?
We subscribe to resources like CareerBuilder and Dice. These are relatively expensive, but we make them available to our key department heads, and we work with these department heads to do job postings. We also pay a bounty to an employee who recommends another person who joins us and is with us for a certain period of time.
How many Star2Star people get to weigh in on the decision?
After passing a gatekeeper interview, the candidate is passed around to talk to maybe a dozen people. That is a test to get everyone here to agree on whether this applicant would match with the sociology at Star2Star, which is closer to the high-pressure, super-energized Silicon Valley culture than to Sarasota, which tends to operate on island time.
Tell us more about your culture.
We are on a mission to change the world, and our company is populated at all levels by assertive people. You have to be prepared to be passionate, to defend your point of view and to expect to get that same behavior from others.
This is not a company with people with thin skins, who are not highly verbal and who don’t really care. So we might hire people we thought were terrific but who run screaming in a couple of weeks because they think we are being mean to them. In fact, if you put some heat on the subject, you end up with something good.
Does our region have any advantages over Silicon Valley?
In Sarasota, I rarely find myself losing a key employee based on compensation issues. This is unlike Silicon Valley, where important employees will go down the street to sign with a new company to get a pay increase. In Sarasota, the job hopping doesn’t happen because there aren’t as many opportunities to work at a cutting-edge company like Star2Star.
What do you find lacking in the Sarasota labor pool?
It’s the work ethic and orientation, not necessarily the skills. You have to find people who are ready to jump in and do whatever is necessary. In Silicon Valley everyone understands the expectations. Here they have to be constantly reminded. They come thinking they are here just for the job; and if that is their attitude, we either don’t want them or we have to change them.
What do you do to retain good employees?
We have bonuses based on success sharing, except for sales staff, who have a sales bonus system. We have an all-hands quarterly meeting to talk about our goals for the subsequent quarter.
We set aside an amount equivalent to about 10 percent of everyone’s salary, and if we meet our goals, we take that 10 percent and put it into a pool. Then, based on a number of factors, including tenure but also how well a person has performed here, the person gets a substantial part of the success pool.
If the company hasn’t met its goals, the success pool declines. This is a great way to share with all the people at Star2Star how well we are doing, and it goes a long way toward building morale. This year we also are introducing some more traditional kinds of perks, a 401K plan and an improved medical plan.
What other differences do you see here in employee attitude?
Let’s say I have an employee who has performed well. I have three items in my tool kit to reward that person: promotion and some mix of salary and stock options. People in Silicon Valley are looking for the opportunity to sign with a company that will grow quickly and generate high value, and they want stock options because that’s the route for a big payoff.
But people here don’t get that. So when I asked the Sarasota employee I wanted to reward if she wanted cash [in the form of a bigger salary] or stock options, she said cash. Yes, there is risk in taking stock options, but the willingness to accept them shows that person is saying he or she wants to build something big here.
If you see yourself as part of a mission to create something, you want compensation that would allow you to participate in our success. It’s unusual to find that orientation in someone walking in the door in Sarasota, but it’s part of the culture of Silicon Valley and the technology centers in Boston and Austin.
What do you do when the new hire doesn’t live up to your expectations?
I think you have to be relentless about eliminating people who aren’t a cultural or temperamental fit. This doesn’t mean this is a bad employee or that the person isn’t talented or hard-working; the chemistry just doesn’t work. Sometimes you can solve this with counseling or moving the person to a different role. But sadly, you sometimes have to ask the person to leave. It’s wrenching, but eventually he/she may be happier in another company.
Has your recruiting system been successful?
I’m not sure I feel successful. It bothers me that this much time and energy are required. But over the course of nine companies I have never found a better way.
Worthington’s tips for recruiting and retaining employees.
Don’t compartmentalize the process. Involve your department heads in the selection.
Have large numbers of people in the organization meet and engage with the recruit. Make sure the applicant understands what the company is about. But be careful. You are taking people who might be producing revenue and telling them to go spend time with applicants. So you need ways to shorten the process if the applicant is a clunker.
Use nontraditional methods for finding prospects. Star2Star pays a bounty to any employee who recommends another person to join the company and then remains a certain period of time.
Establish internal programs that provide clear messages on the company’s goals, purposes and meaning. This helps build a culture and sends the message to recruits that they may be talented, but they may not fit the company temperamentally.
Create success-sharing opportunities for employees based on the company meeting its goals and other factors, such as employee tenure and performance.
Offer a range of benefits, such as stock options and 401K plans, to make people want to stay.
Be relentless if you hire the wrong person. First counsel the person or move him/her to another place in the company. But be prepared to ask the person to leave when all else fails.