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1998 Competitive Advantage Optimas Profile Remedy Corp.

February 1, 1998
Related Topics: Competitive Advantage, Candidate Sourcing, Retention, Featured Article
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Work is fun. It's a statement that gives one pause at the very least. But Remedy Corp. has a case. Here's a company whose managers have been known to don hula skirts and sumo-wrestling suits. Their version of a serious job fair is a romp at a mini race-car track. And they actually encourage employees to goof around during the workday, sponsoring pinball games and foam-ball shootouts.

And yet, as much as executives here kid around, their humor has serious payback. The software company, based in Mountain View, California, has doubled its size, revenue and customer base for five consecutive years. Its product line—internal help desks that identify glitches on computer networks and maintain databases to record the problems—earned the young company revenue of $37.1 million in the third quarter of 1997.

Remedy's success, impressive even in the exploding, voracious Silicon Valley, is tied inextricably to its ability to attract and retain the best employees in the exploding, voracious Silicon Valley. Remedy executives do this better and cheaper than the average industry employer, and they have fun doing it.

Remedy plays the recruiting game—literally.
When Remedy's three founders, Larry Garlick, Dave Mahler and Doug Mueller, started the company in 1990 in a tiny backyard cottage, they were adamant that their business should be fun as well as profitable. The challenge became, then, growing as rapidly as they needed to while still keeping the spirit they started out with. So when they realized their kind of growth meant doubling the employee base every year, they launched a seriously amusing strategy. The theory: Show candidates that work doesn't have to be all stress and straight faces, and employees will come running.

"Recruiting in Silicon Valley is probably one of the toughest things any company in this area can face," says Cara Jane Finn, vice president of employee services. "But our recruitment practices haven't changed since we began. It's not like we started doing a lot of flashy things because the hiring is so difficult. We do what we do because it's part and parcel of our culture."

What the HR staff does is launch continual job fairs designed to present a relaxed atmosphere in which candidates can really get a feel for the company. They often rent out a local mini race-car track, conducting interviews at the track and then inviting applicants to take a few spins. They also have invited applicants to flights on a virtual-reality simulator, with interviews following.

All candidates at these special events already have been through one round of screening, and the second round serves as a means to see how well the candidate and the company fit. "The intention is to be more informal and relaxed, but you also see how people act in unusual circumstances," Finn says. "You see how they respond to our rapid culture as well as whether or not they respond to a spirit of enjoyment about work."

To keep the applicant pool brimming, Remedy also sponsors a fairly lucrative employee-referral program. Employees whose referrals are hired receive between $2,000 and $5,000 once the new hire has worked 60 days.

Money keeps employees interested, while theme-based referral campaigns keep them amused. For one recent theme—"Starship Remedy, the search for intelligent life"—HR performed a Star Trek/Star Wars spoof at an employee meeting and gave out "biogarments designed just for you to shield the upper part of your life form." For employees whose referrals were hired, Remedy also named a star after them or a friend and filed the names with the U.S. Copyright Office.

Another recent campaign—"It's a Jungle in Here"—combined recruiting with Remedy's philanthropic effort. The kickoff meeting featured all the Remedy executives, including the CEO and the CFO, in full animal costumes. Employees whose referrals were hired received a referral fee, and Remedy made a $25 dollar donation to the World Wildlife Fund in their names.

Remedy executives get down to business.
Finn says as good as Remedy is at generating interest from potential employees, it's even better about getting them to join the team. "The first attempt to reach us must be met with enthusiasm and speed. A lot of new hires said our managers are so responsive that they'd been hired before other companies had even called them back." Finn says the average hire takes only three weeks. Martin Doettling, a recently hired director of product marketing, says it was his interviewing experience at Remedy that convinced him to leave a company he'd been with almost eight years. First he met informally over breakfast with the vice president of marketing. That was just the start. Doettling ended up interviewing with 17 people during three rounds. What impressed him most was their thoroughness. They had done as much homework on him as he had on Remedy.

"I met with the engineering people here. The co-founders probed me in terms of how well I can push back, how well I argue my points and whether I could speak the engineering language," he said. "That, as a candidate, makes me feel very confident about this company and my future here."

Remedy's combination of light-hearted and serious recruiting pays off. An average of 45 percent of the company's annual hires come through the referral program—140 of the company's current 530 employees are referrals. During the first half of 1997, 43 percent of Remedy's hires, 66 people, came through the program with HR paying out $200,000 to employees for their tips. Even with this cost, the program has kept Remedy's cost-per-hire at $6,100, thousands below the industry average of $8,450.

John Wentworth, president and CEO of the Wentworth Company Inc., a recruiting firm in San Pedro, California, says such success is beyond impressive in Silicon Valley. "Companies are trying everything, leaving no stone unturned," he says. "The demand [for technology workers] has simply outstripped the supply. A firm that can get actual good employees instead of warm bodies has a serious advantage."

Keeping employees in the game.
If hiring is difficult in Silicon Valley, retention is even trickier. So Remedy's HR professionals pay special attention to keeping the work atmosphere enjoyable—particularly in the wake of the company's 1995 initial public offering. "When Remedy was pre-public, a lot of people stayed to see if they could grab that golden ring," Finn said. "But once they had the golden ring, the question became, 'What are you going to do to keep people here now, Cara?' So our energy [in HR] is spent on making this place a good place to work, not just fun, but a place with camaraderie, where you can make a difference, get recognition and feedback."

Little things like refusing to have employees wear name badges—unusual in high-tech companies—forge a closeness, Finn says. It forces people to get to know each other.

On the first day of work, each employee also receives a Take a Chance card. The Take a Chance program encourages employee risk taking—it's basically a license to take action without fear. The card entitles its bearer to push the envelope in making decisions or creating projects. Like Monopoly® Get Out of Jail Free cards, the Take a Chance cards can be cashed in when employees' risk taking doesn't pay off. "All employees get one; managers get more because they're expected to take more risks," says Finn. "I have my own supply. When you give it to a manager, it obligates that manager to take your decision in a broader context." One engineer stapled a card to his resignation letter—he wrote that Remedy had been so nurturing about his risk taking, he felt there was nothing he couldn't do, so he was striking out to start his own firm. Finn has turned in several in her quest to focus the company on a four-year plan for the future, which she says, "Takes a lot of guts when everything's going so well now as it is."

The main reason things are going so well is Remedy's executives. They maintain a healthy workforce because they have such a strong sense of enjoyment. They look for reasons to play—it helps offset the long days most employees put in. "With people working harder and harder these days, we sometimes forget to do the smaller things," explains Leslie Yerkes, co-author of "301 Ways to Have Fun at Work" (Berrett-Koehler Publishers Inc. 1997). "One of the first things we forget to do is have fun, but fun is the best antidote to stress. Good leaders facilitate joy and fun. Top-performing companies tend to have the more fun workplaces. That's especially true for Silicon Valley."

It's a notion exemplified by Remedy. Last year, new hires padded up and got to sumo wrestle their managers. At a picnic, they got chances to dunk the Remedy executives into cold-water tanks. Other workers have become human foosball players, linked to each other by lengths of pole as they played soccer in the Remedy parking lot. An employee-appreciation day could have managers out washing every employee's car.

A department head may also decide to take the whole team to a movie or to Disneyland. "We try hard to keep a balance of seriousness and enjoyment," Finn says. "You get a different sense of your executives when you see them riding a tricycle in a race, and then see them in the hall. You know they're real human beings." This type of camaraderie has given Remedy's charm remarkable staying power: Attrition is just over 8 percent annually in an industry that hovers between 10 percent and 12 percent. Remedy's retention averages 42 months; the industry's average is 20 months. The company has become an employer of choice in the valley, with some employees driving 90 miles one way from as far north as Berkeley and as far south as Santa Cruz.

This loyalty, of course, helps the bottom line: Remedy's market share now exceeds that of the company's top three competitors combined.

Good times combined with good business results—sounds like good HR.

Workforce, February 1998, Vol. 77, No. 2, pp. 38-42.

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