Magazine Article | October 17, 2016

Recruit, Hire, And Compensate With The Best

By John Oncea, Digital Editorial Director

Established managed services providers walk you through the hiring process: from finding candidates, to selecting the right one, to properly compensating them.

You’re providing the right service, for the right price, in the correct market, but your business is stagnating. Or maybe you’re starting out and need to surround yourself with the right people to make sure your business will thrive. Whatever the reason, you’re going to have to hire the right sales people and support staff. Hiring is not a task to be taken lightly; people are the most important part of your business, supplying the talents, skills, knowledge, and experience needed to achieve your business objectives. But don’t fear; Business Solutions assembled a quartet of successful managed services providers (MSPs) — Tom Clancy, president of New York-based Valiant Technologies; MJ Shoer, CTO of Internet and Telephone LLC located in Boston; Todd Molloy, director of sales and marketing at Portland, ME-based Systems Engineering; and Dave DelVecchio, president of Innovative Business Systems in East Hampton, MA — who shared their hiring best practices and opinions as to which compensation models work best. The information these four MSPs share will help you conduct a better interview, find the right candidates, and determine the right compensation for a new hire.

So, Where Do I Even Find A Candidate?
In many ways, finding candidates can be more difficult than conducting an interview, so Clancy uses LinkedIn Recruiter, a tool professional recruiters use themselves. “It’s a dirty little secret,” Clancy notes. “Instead of giving recruiters 20 percent, sign up for LinkedIn Recruiter and find your own candidates. You do the searching and can find talented people who are currently employed and not actively applying for jobs. You find people working for your competitors with titles that match what you’re looking for and send them a note.”

DelVecchio suggests talking with current employees when looking to hire. “If you’re actively looking to fill a position, start with your employee base first,” he said. “It’s amazing how many people they know, especially in an MSP model.” DelVecchio has also brought in people who’ve worked in internal IT departments. “I would encourage you to keep a short list of people you may have come across who you think might be able to work as a services provider,” said DelVecchio. “There are people who get frustrated with the silos in internal IT departments and want to put their hands on different technology.”

Shoer chooses to use recruiters, noting he has developed good relationships with a couple of them because he took the time to get to know them. “We brought them in to get to know us so they can really be out there, operating well on our behalf,” Shoer said. “They know what we’re looking for.”

“Another strategy we’ve had success with is working with career counselors at colleges, community colleges, and universities. We’ll oftentimes bring students in for an internship as early as their freshman year. We may have them as an intern for three or four years and make them an offer in their senior year. We’ve had great luck with that.”

What To Ask During An Interview
How do you uncover character traits you value in a candidate? Do you need a standard set of questions? Should you use personality tests? What does it take to make sure you’re not only hiring the right people but also that you’re putting them in the right positions?

For starters, you’ve got to be willing to invest the time. “I’m famous for the two- to three-hour interview,” said DelVecchio. “You learn a lot in the second hour of an interview. It’s funny, a couple of times I’ve been tapped by clients to help them hire, and I’m intrigued why they give people a 15-minute window.

“I love scheduling late-afternoon interviews; we’ll be the last ones out of the office at the end of the day. I’ll give the candidate a time to talk and cut it a bit short if needed, but you’ll find people volunteer information in the second hour much more freely than they did in the first.”

Viewing the interview as a conversation, thereby allowing the candidate to relax, results in better insights into what makes them tick, what’s worked for them in other positions, and what they are looking for as a potential employer. “That clues me in on how well they would fit in culturally and in what sort of role within the organization,” DelVecchio said.

“If you’re actively looking to fill a position, start with your employee base first.”

Dave DelVecchio, president, Innovative Business Systems

Introducing employees performing the same tasks the prospective hire will be doing is important, too. “I’ll have a couple of my more successful sales guys take the candidate to lunch to expose him or her to the work,” said Molloy. “I want to scare them a little bit with how hard it’s going to be to be successful. If they keep coming back, then I’ll turn the sales jets up a bit to know that they’re serious about it.”

Shoer shares a similar approach, bringing prospective hires in and asking that they spend time in whatever part of the company they’re being considered for. For example, a technical hire will spend time in the network operations center (NOC) where current employees can determine if the candidate is a fit or not.

“We very much look at attitude over aptitude,” Shoer said. “We can train the aptitude — we’ve got a very good system for that. The times that we’ve looked at aptitude over attitude, those are typically the hires that didn’t work out as we had hoped.”

An additional suggestion offered by DelVecchio is leveraging StrengthsFinder 2.0, a book by Tom Rath that helps people uncover their talents and learn strategies for applying their strengths as determined by tests in the book. “If I have a candidate I’m interested in, I’ll give them a copy of the book during the second interview. When they send me their test results, I send them mine.”

Whatever techniques you choose, you should have a must-ask question. For example, Clancy asks every candidate to share a time when he or she “blew it” and how they dealt with it. “It’s an unexpected question, one that always makes people think,” Clancy said. “I think it’s very telling how confessional they become. We’ve all blown it at various levels — professionally, personally, and otherwise — but finding out how someone deals with failure is important.”

Shoer always asks a candidate what he or she does for fun, as well as what gets on their nerves and what they do that they think gets on other people’s nerves. He has found “That generates a pretty interesting conversation that really helps you understand just how self-aware the candidate is and how they’ll fit based on the role that you’re considering them for.”

Molloy also asks candidates what they do for fun, as it tends to relax people, but also ferrets out risks that might not otherwise be seen. “I always try to ask them, after they’ve spent some time in our business, to identify what they see as the biggest risk to our business to determine how much of a student they’ve been. I’ll ask them, ‘What would your biggest critics say about you and why?’”

Lastly, it’s important not to overlook the candidate’s resume. “When reviewing the resume in the initial interview, I ask the candidate to walk me through their work history,” said DelVecchio. “I’m looking at specific experiences, like in a restaurant, potato field, or construction. Construction folks tend to get it because they follow processes. There’s a certain order in which things have to happen to make the whole project, process, or service go smoothly, and that transitions into technology very well. I want to know if a prospective hire has the work history and ability to prioritize and get things done in a proper process.”

Show Them The Money
Once you’ve hired your employee, you obviously have to compensate him or her. DelVecchio offers his sales staff a base salary and additional compensation based on sales performance and meeting quotas. “Account management has a variable component based upon things like service and gross margin as well because, ultimately, what an account manager needs to do is make sure we are doing what we say we’re going to do so the client feels we’re providing value,” said DelVecchio. “We are generating value out of the relationship with the client and, ultimately, any deal is only a good deal if it’s good for both parties.”

For his part, Molloy employs a hunter-farmer structure and pays exponentially more for bringing in new business. “It’s really about being a virtual CIO, making sure the customer feels they’ve got value for the money they’re spending,” Molloy said. “Taking care of customers tends to make for a pretty stable, well-paying job.”

Shoer suggests the same strategy — hire at level one at a set salary with an incentive plan based on a certification matrix. “We work with each individual to define their career path and, as they get different certifications, they get raises,” Shoer said. “People can get themselves as much as a $10,000-a-year raise if they’re hungry enough.”

“The times that we’ve looked at aptitude over attitude, those are typically the hires that didn’t work out as we hoped.”

MJ Shoer, CTO of Internet and Telephone LLC

Clancy pays his engineers a salary, though they are exempt from overtime because “They don’t really need to burn the midnight oil.” Account managers are salaried as well and are not actually paid a commission because Clancy doesn’t want them to be perceived as box pushers.

“The team has a sales goal they’re obligated to pay attention to, but, if they’re a bit under the threshold one month, I know full well they’re going to be a bit over the threshold another month,” said Clancy. “That’s the way things have always worked for us, so we continue to work that way although we’re open to and exploring the idea of adding some sort of kicker for blowing the target out of the water.

“On the sales side, the straight, out-in-the field hunting, it’s base salary plus 10 percent of any recurring revenue for one year. My service director does get a piece of profit out of the business as well — a base piece plus profit.”

Filling The as-a-Service Position
Do you need to hire a different kind of person when transitioning to the as-a-Service model — both in terms of sales and technical people? Maybe, maybe not. But what is important is making sure the job description is correct and the people in your employ are agile and interested enough in the as-a-Service transitional field, as well as accepting of the job role and job function.

“On the sales side, I think it simplifies a little bit the knowledge somebody needs to go to market,” said Clancy. “You don’t need to know Cisco’s full portfolio and HP’s full portfolio and all their pricing and promotional aspects. We have resources to help with that, but we’re not selling speeds and feeds; we’re selling business solutions, and I look for people on the sales side that customers will take business and technical advice from because you have to do both.”

A good hire needs to know the technology and be able to speak in a circumstance where a very technical salesperson may be casting doubt on a solution. “It’s made the ability to scale a sales force a little bit easier than having to put years and years of product development into it,” Clancy said. DelVecchio added, “What we found was that technicians used to doing field services just did not have the same phone skills for customer service as they did when they were in front of a client. As a result, we put people transitioning to as-a-Service in roles where they’ll succeed.

“There are some people who do an excellent job in turning tickets out of a NOC and can provide good customer service over the phone who might be intimidated when they’re put in front of a client. Stick them in a NOC; put them in a position to succeed and try and staff those positions accordingly.”

Have No Fear … Underdog Is Here!
Regina Hartley, the HR manager at UPS, gave a TED Talk that’s become very popular among hiring managers and some business owners. In it, she says she prefers to hire underdogs, or what she calls “scrappers.” These are people who have grit and determination versus someone with the perfect resume. That raises the question: Which is a better hire — a scrapper or a candidate with overwhelming credentials?

DelVecchio notes, for the most part, MSPs are looking for someone to join the team who can fulfill core values, then add to the value proposition of the company. “You can learn the technology, you can invest in them a little bit — hiring a scrapper is a great option,” DelVecchio said.

Molloy agreed, adding, “You can’t teach somebody to be hungry, and I’ve had good success with scrappers.” Shoer echoed those sentiments, saying he’d “bet on the scrapper all day long” and “There’s a domino effect to having those types of people around.”