In a knowledge-based economy, it pays to do your homework.
Just ask one of the many disgruntled workers who have written @Work to report that they've accepted a job with a tech start-up only to learn that their compensation structure, their company's business model or their job description is shifting radically.
In some cases, workers complain that high-tech companies broke promises they had set out in writing. But far too often, these now-disgruntled employees ignore the best opportunity they have to learn about how a tech firm really operates: the job interview.
Consider Sharon, who has logged 15 years as a manager in the high-tech industry, acting as a buffer between geeks and corporate executives for four different companies. She considers herself fairly savvy.
But when she took a job at a local software firm two years ago, Sharon had no idea that the company had a history of laying off people in the fall, as its revenues sank and it failed to develop new products to bring in money. Before getting hired, Sharon never thought to check written reports the public company filed to shareholders and the Securities and Exchange Commission. And she didn't ask current employees about potential trouble spots when she interviewed with the firm. Then one day she learned her job was on the block.
(Sharon declined to go public with her last name or the company's identity because she signed an agreement not to talk about the firm in exchange for a severance package.)
In some ways, the rush of excitement felt by Sharon and so many other experienced workers in the tech industry is understandable. Entrepreneurs are blessed with unbounded confidence that especially shines when they are trying to lure talented workers. The beauty is, these dreamers are so persuasive that sometimes they do change the way business is done. But for every America Online there are thousands of companies failing each year.
And the list of complaints from unhappy employees goes on and on. One correspondent reported that a company offered stock options at one price when he started work, then raised the "strike price" months later when the company finally put things in writing. Another said she took a job because she was promised flexible work hours--but the company changed its tune a mere six weeks later. A third, executive-level candidate accepted a position at a new tech firm, only to see his duties and salary adjusted downward.
"I am not the only one that has accepted a position and found the circumstances have changed," he wrote bitterly.
To the minds of these job seekers, too many technology companies are engaged in the same kinds of disreputable sales practices described in junior-high consumer-education classes. Remember the "bait and switch"?
While there are some businesspeople who actively mislead job candidates, Gene Reichers, managing director of FBR Technology Venture Partners, said it's more likely a case of entrepreneur and job seeker "talking past each other."
"To an entrepreneur, being able to make payroll for a month or two is being financially successful. The entrepreneur didn't lie. In his mind, he or she told the truth," Reichers said.
That's why it's important for people in the job market to seek information on a company from several different sources, from Web sites that offer general information and financial data on companies, such as www.hoovers.com and www.sec.gov, to talking with current and former employees.
"You're making a huge investment. People looking should ask questions like 'How much capital do you have? What's your burn rate [the rate at which a company spends its cash as it awaits profits]?' Ask for a business plan. Make some calls," advised Mark Ein, a venture capitalist at the Venturehouse Group. "People should do due diligence just like VCs would."
To get at the more touchy-feely aspects of an organization, ask how people at a company relieve stress and how creativity is rewarded, said Kristina Ackley, author of "100 Top Internet Job Sites" (Impact Publications, 2000) and a staffer at Network Solutions Inc. Ackley also recommends inquiring about a company's future hiring plan, to find out whether it promotes talent from within or steals managers from its competitors.
As for the old bait and switch, D.C. employment lawyer David Cashdan said workers may be able to sue under the common law of "negligent misrepresentation." Not all legal experts would encourage litigation under those circumstances. Such disputes can become expensive "he said, she said" contests, but Cashdan said these claims are strongest when employees can show that they relied on the company's word to move across the country to take a job or made other sacrifices. Lawyers who work closely with tech companies in the region said it's difficult for employees to win such contests when, as frequently happens, they do not insist that employers put information about stock options or salary in writing.
Some frustrated management-level employees who are moving from traditional firms into the start-up world may be reacting mostly to the culture clash: no one to bring you coffee, no one to fix the busted copy machine, and no resistance when a firm decides to scuttle its business plan and move in an entirely new direction.
"These companies are rapidly changing all the time," said Jack Lewis, a lawyer at Shaw Pittman in McLean. "I can't tell you the job you're going to have today is the job you're going to have six weeks from now."
Still, there's a large segment of high-tech workers out there who aren't demanding basic information on a company's health as part of the hiring process. So the next time you find yourself growing woozy during a tech entrepreneur's pitch, give yourself a little pinch and ask in the sweetest possible way how the company expects to make money within the next year.
Last week's @Work column contained an inaccurate URL. To get a copy of Clifford Adelman's report on information technology certification, visit www.aahe.org/ change/paralleluniverse.htm. Thanks for all of those 9 a.m. e-mails last Sunday. Who knew techies were such early risers?
Send tips, gripes and your impressions on punching the virtual time clock to Carrie Johnson at johnsonca@washpost.com.
