From New BMWs to Sabbaticals, CEOs at America's Fastest Growing Tech Firms are Finding New Ways to Hire and Retain Employees, Says Deloitte & Touche Survey

Business Wire, May 3, 1999

SAN JOSE, Calif.--(BUSINESS WIRE)--April 29, 1999--

Citing "hiring and retaining qualified employees" as their primary challenge, CEOs at America's fastest growing technology companies are finding new ways to attract and retain valuable employees, which include offering free BMWs to sabbaticals, according to a survey of CEOs at the Deloitte Technology Fast 500 companies.

The Fast 500 is a ranking of the fastest growing technology companies in the United States based on revenue growth for five years.

"Sixty percent of the Technology Fast 500 CEOs cited finding and retaining good people as their primary challenge and credited their employees as most responsible for their success," said Mark A. Evans, managing director of Deloitte & Touche's High Technology Group based in San Jose.

Carrots Range From BMWs and Sabbaticals to Onsite Meals and Lift

Tickets

Among the corporate carrots at America's fastest growing technology companies today are: company-paid sabbaticals, onsite meals 24 hours a day, special ski days including lift tickets, and even new BMW Z3 cars to employees that pass the two-year mark. The incentives are paying off. Deloitte & Touche Technology Fast 500 companies showed growth rates ranging from 507 to 43,103 percent for the five-year period of 1993-1997. Thirteen percent of the companies have appeared on the listing for three consecutive years.

In addition to offering special incentives, many of the Technology Fast 500 CEOs offer employment packages that also provide unique work environments, stock options, pension plans, continuing education and mentoring programs, and cash bonuses for everything to new employee referrals to exceptional job performance.

Attracting and Keeping Employees is Harder than Finding Funding

Attracting, hiring and retaining valuable employees was the biggest challenge faced by the 60 percent of the CEOs. Coming in second, with 19 percent, was raising capital for growth.

Evans said, "The CEOs clearly identified the human element to be even more of a challenge than raising funds. The Technology Fast 500 companies are clearly are the top of their industries, because they recognize what they need to do to solve their number one challenge -- attracting the caliber of people they need to help them sustain their growth."

Raising money is not a high priority for the majority of the CEOs who responded to the Technology Fast 500 survey. Sixty-four percent of the CEOs indicated that the company was financed by the founder's personal investment.

Twelve percent of the companies were funded by angel investors. Only 14 percent of the Technology Fast 500 companies were funded by venture capitalist funds -- and 1 percent by a traditional bank.

Sixty-Four Percent of Founders Bet on their Own Success -- and

Won

"Sixty-four percent of the Technology Fast 500 CEOs believe in their companies so much that they bet their own money on success," Evans pointed out. "Many CEOs feel that self-funding allows them to make decisions quickly and change direction without consulting a committee."

Keeping up with Technology Not a Problem

Only 10 percent of responding CEOs felt that adapting to rapid market change is their biggest challenge. In fact, 50 percent of the CEOs attributed their success to having exceptional or unique products, or being in the market at the right time. Only 12 percent credited their success to proprietary technology. In fact, only three percent of respondents felt that keeping up with technological advances was a primary challenge.

"Successful technology companies today don't have to create the latest technological breakthrough product -- but they do have to know how to find niche markets and exploit them," Evans said. "Each of the Technology Fast 500 companies has become expert at delivering solutions that their customers demand."

International Competition Not a Threat

The Technology Fast 500 CEOs don't see international competition as a significant threat. In fact, 61 percent of the respondent CEOs said international competition was of minimal, insignificant or no competition whatsoever. Nineteen percent indicated they felt there may be a moderate threat, while only 10 percent saw international competition as a significant threat to their business.

Of those that cited that there would be some international competition, 67 percent cited Western Japan and Japan as the countries to watch short-term. Other Pacific Rim countries rounded out the figure to 82 percent. Long-term (over the next decade), 86 percent of the CEOs indicated that Western Japan and Japan would become more competitive with companies in the United States.

Internet is a Valued Resource, with 97 Percent having Web Sites

Regardless of their industry -- from computers to biotechnology -- the vast majority of Technology Fast 500 CEOs believe the Internet is a valuable resource to share information both internally and externally and to market and sell products. Ninety-seven percent of the companies surveyed have a Web site and 65 percent also use an Intranet. Sixty percent market and sell products on the Internet, and 55 percent see it as a tool for gathering market intelligence.