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HR Magazine - November 2000: Are You Suited for a Dot-Com?

By Lin Grensing-Pophal  11/1/2000
 
HR Magazine, 
July 2000 Vol. 45, No. 9

Considering a move to a dot-com company? You may face high turnover and a lack of HR resoucrces, but you may find more flexibility and plenty of career challenges.

A dot-com company recruited Beth Skrzyniarz away from the traditional “bricks and mortar” business world. She relocated for the HR job, but the position didn’t last long. The company wasn’t able to maintain its financial viability and Skrzyniarz soon found herself pounding the pavement.

In spite of that initial bad experience with a dot-com HR job, Skrzyniarz tried another dot-com—with success. She currently is vice president of HR for NetFolio Inc., an Internet-based investment advisory firm. This time, she says, she asked the right questions about the company’s viability. And despite being burned before, she says she finds the dot-com HR experience to be infinitely more challenging, flexible and rewarding than her prior work in the broadcasting industry.

Skrzyniarz’s experiences are typical of what HR professionals say they are finding as they take on dot-com jobs. Some have found that dot-coms aren’t necessarily the pot of gold at the end of the rainbow that they may have seemed and that there are plenty of challenges.

Employees, right up to chief executive officers, may be so young that they have little other workplace experience. Hiring and firing take place quickly, and turnover can be high. No formal HR structure may be in place yet. The company might be establishing an HR department as a reaction to a problem, such as a sexual harassment charge.

And, along with the challenges, many professionals enjoy the excitement, flexibility and freedom of being part of this entrepreneurial world. HR professionals who thrive in dot-com environments are likely to be those who consider it a challenge, not a problem, to take over where there may have been little or no professional HR previously.

HR’s Many Hats

Dot-coms are very different from traditional corporate environments, says Howard Leifman, chief people officer for Vault.com, a business and career information site. For one, the fast pace means that decisions you make get implemented as soon as you make them.

HR professionals at dot-coms frequently find themselves wearing a variety of hats. “It’s not unusual for one person to be doing two or three jobs at the same time—and the dot-coms never see that as a problem,” says Ray Brizendine, principal in the San Francisco offices of The Alexander Group, an executive recruiting and management search firm.

“Dot-com HR positions require more hands-on interaction than traditional companies because resources may not be as plentiful,” adds Susan Goldenberg, a recruiter for Influence LLC, an e-business solutions provider in St. Louis. The result is that HR professionals may find themselves performing administrative tasks, pitching in wherever a need exists.

“Developing and keeping the big picture in mind remains critical,” says Daryle Hulme, vice president of HR for HotJobs.com, an online career service. “But driving execution takes priority in a dot-com. We all wear many hats and pitch in where needed.”

Perhaps the comment heard most frequently from HR professionals who feel they have found their niche in the dot-com world is, “You’re not a number anymore.”

“No one would have missed me if I took off a day at my previous job. That’s certainly not the case here at Multex,” says Jessica Keim, HR manager for online financial services firm Multex.com.

That sense of being needed translates into personal recognition of individual impact on the success of the organization. Because many dot-coms are small, the whole company feels that impact. “The faster I fill a position, the faster the organization is able to function as a whole,” Keim says. “I really do have an impact on how the organization does.”

Erisa Ojimba, a compensation consultant with Salary.com, an online compensation information service, notes that the small size of dot-coms can give HR a direct line to the top. “If you want something in my company, you speak to people that you know can either help you or direct you in getting those resources, or you go knock on the door and speak to our CEO,” she says.

Skrzyniarz adds that—for all its many hats and occasional administrative tasks—dot-com HR often plays a strategic role: “You’re invited to sit at the table a lot more,” she says. “you are heard a lot more than you would be in a big organization.”

“There is no question that dot-coms offer a dynamic, compelling, involved environment,” says Neil Fox, CIO of Management Recruiters International Inc., in Findlay, Ohio. “There are some people who thrive in that arena.”

But there also are drawbacks. Today, dot-coms can be risky business—HR professionals like Skrzyniarz may find themselves out of a job or, at a minimum, involved in the stressful task of working through a downsizing or corporate restructuring. But, says Ojimba, “I could be working in a traditional corporate environment and still get laid off. You always have that uncertainty. I’m indifferent to that.”

HR from the Ground Up

HR professionals cannot afford to be indifferent to other risks. They often are the first people to try to impose regulatory and legal strictures on what can be freewheeling workplaces.

Mary Jane Range is president of retained executive search firm BTS Executive Search & Services LLC in Stamford, Conn. “Unfortunately, in many dot-coms, they don’t hire an HR person immediately,” she says. “This can create some real issues. The culture in some of these places is like the wild, wild West. So, HR professionals going into some of these companies have an incredible task ahead.”

Being an HR professional in a dot-com environment requires that you maintain a balance between accommodating the unique needs of what tends to be a very young, unstructured and creative staff and enforcing the policies and procedures that need to be in place, says Melody MacNamara, who left a printing and direct marketing firm to become HR director for Hecklers Entertainment Inc., a humor and entertainment web site.

“You’re going from a standard, corporate, 8-to-5, ‘These are the rules’ environment to one where schedules could be anything, dress code is definitely beyond business casual and you face difficulties in enforcing policies and procedures simply because your average [employee’s] age is typically mid-20s,” explains MacNamara.

In Range’s experience with dot-coms, she has found that HR professionals are hired precisely because they understand the importance of policies, procedures and standards. Yet, she points out, “These companies are typically built on a foundation where none of that exists. So, the HR professional’s immediate challenge is to begin to institute those processes in an environment that is totally unaccustomed to that.”

"A lot of the things we do are preventive,” says Skrzyniarz. “When you’re building a company it’s important to really educate the staff on why this is important and how it can help in the long run.” á

Cleaning Up Files, Counseling Managers

It also can be challenging to enter an unstructured environment as a lone ranger responsible for ensuring compliance with many legal requirements. Keim says it’s not unusual to find personnel folders that are woefully incomplete, lacking employee addresses or employee reviews, or to discover that employees were terminated without any documentation of when or why.

Some dot-com situations can be even uglier. Some HR professionals have found themselves called in only after the company finds itself faced with serious legal issues. For example, sexual harassment is a problem in some firms, as one recruiter points out. “In some of these companies the young management has sort of moved the fraternity room into the business, and we’re seeing some really unpleasant things happening,” says the recruiter, who asked not to be identified.

Youthful, relatively inexperienced managers also create other issues that may have fewer legal implications but probably generate more day-to-day work for HR.

“You may end up working for people far younger than you are that have never paid attention to how to nurture or mentor people,” Brizendine says. “HR ends up being a counselor to managers as well as employees.” As another HR professional in a dot-com environment puts it, the experience is a lot like “being a counselor at a day camp.”

Despite these issues, Leifman and others have learned that a certain amount of structure is welcomed in the dot-com culture. “I’m getting a lot of positive feedback from a number of the staff,” he says. “On one level they resent it, but on another they acknowledge and accept the fact that structure is going to make their lives better and easier.”

Being the first to develop HR structure for a workplace also can be rewarding. Hulme, now working at HotJobs.com, has more than 13 years of HR experience, primarily with Fortune 500 companies. She has worked at a financial institution in New York, a potato chip factory in New England and one of the major telecommunications companies in the world. “I wasn’t necessarily looking to change jobs, but when presented with the opportunity at HotJobs, I knew it was something special,” she says. “I had the chance to build the HR organization from scratch. That kind of opportunity just doesn’t exist in a large and more established company.”

Turnover and Recruiting

Corporate growth is another important issue. These companies can grow at a phenomenal pace. Within the first six months of Keim’s tenure with Multex, the company grew from 350 to 550 employees, acquiring two other companies in the process. And, she adds, “I’m sure there will be other companies acquired before I leave.”

“I think the majority of the work in most dot-com start-ups is almost always recruiting-oriented because the biggest issue for most start-ups is how to attract the most people,” Brizendine says.

“Propelled by the need to do more faster, better and differently than anyone else, hiring and firing within dot-coms is occurring at record speeds,” says Joanne Smith, a consultant with the Woodland Hills, Calif., office of Drake Beam Morin, an outplacement consulting and career transition services firm. “This has implications for the role of the HR manager within such organizations.”

Smith gives this example of how the swift pace of dot-com turnover can push HR too hard. An HR representative from an online healthcare firm called 15 minutes before a layoff of 30 people to ask how much Drake Beam Morin’s outplacement services cost. “While we suggested that this probably required a little more discussion and planning between her firm, her employees and DBM, her response was, ‘Oh, I’ve done this twice already. I know what I’m doing.’” Smith suggests the need for more “strategic planning and charting for economic expansion and contraction” in these firms.

She adds, “I’m seeing well-trained HR professionals who move from the traditional corporate setting into the dot-com environment are often pressured into moving at hyper-speed and operating in a fashion that goes against their principles.”

The instability can take a personal toll on HR as well. Brizendine tells of a friend who recently was recruited from one dot-com company to another. She took two weeks off between job transitions. When she arrived for her first day at her new job, Brizendine says, “She was informed that her position had already been eliminated a week before.”

Instability is inherent to any dot-com environment, Hulme says. “The instability results from rapid growth, the novelty of the business and internal team dynamics. It is perhaps the greatest potential drawback of working in a dot-com,” Hulme says.

Who Succeeds in Dot-Com HR?

In spite of the uncertainty, the chaos and the cultural differences, many HR professionals are making successful transitions from traditional to dot-com environments.

Keim worked for an insurance company before moving to Multex.com. Her former company, she says, “was extremely conservative, both in dress and personality. Getting anything done there took an extremely long time, a lot of questions and a lot of red tape. It was just too frustrating for me.” Multex, she says, gives her “just a pleasant feeling all over. You’re with people of seemingly similar aspirations who enjoy the fast pace and enjoy moving forward with a task without having to have a million people OK it.”

Leifman formerly worked for two large HR and compensation consulting firms. “One of the exciting things about working in a dot-com,” he says, “are the intelligent, enthusiastic, energetic people that it attracts. The whole space buzzes with energy. Unfortunately, that hasn’t always been the case in my personal experiences with some of the larger corporations I’ve been with.”

Ojimba held traditional HR positions in health care and manufacturing before moving to a dot-com. “I felt that my career was not moving in the direction I wanted it to go,” she says. “I wanted to work with people who would stimulate me intellectually. I wanted to work for a company I would actually have an impact on. Salary.com met all of those criteria.”

While she doesn’t knock structure or having processes in place, “When they impede or stifle your ability to do what you need to do, then it becomes frustrating,” Ojimba adds.

Goldenberg says that successful candidates for positions in dot-com companies are people who have a passion for the Internet and e-commerce and who are willing to build a business over time, rather than looking for a quick-fix solution to an HR problem. Successful dot-com HR candidates will view the risks associated with a start-up as a positive challenge, not a red flag. And they will be able to refine their services constantly, to keep up with the competition, she says.

“Ultimately, flexibility and resilience to chaos are the factors or traits that lead to success,” Brizendine agrees, “because from one day to the next, the business plan, or the focus of the company, could change and what the HR professional is expected to do can change as well.”

"If you’re used to having a big office with a window and having your things neatly placed, a dot-com environment is not for you,” Ojimba says. “If you’re somebody who needs to have a great deal of structure and needs to defer to people constantly, a dot-com environment is not for you.” But, she adds, a dot-com environment might be right for you “if you’re somebody who likes to be challenged and who doesn’t mind the fact that you may have to work out of cartons until you have a desk.”

“The important thing is to look at your own skill set and to be very critical about yourself and the type of environment you can work in,” Range stresses. “Don’t kid yourself.”

Fox says he views the decision of whether to work for a dot-com as a decision about “making an investment in a company.” He advises candidates to “do the same type of research of that company that you would if you were investing a million dollars.”

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