Hiring Cooldown May Aid Midsize Firms

The economic jitters that have huge corporations whispering the word "layoffs" and dot-coms closing up shop may actually be good news for companies caught in the middle. Established midsize companies, which lack the star power of the giants and the payoff potential of the startups, are reporting an unexpected upside to the downturn.

"I recently spoke with a [large] company trying to shed a whole engineering team--that didn't happen a few months ago," said Michael Franz, engineering vice president at PLX Technology Inc. On the other side of the coin, "The startup's appeal has been a lot of promise, but as of lately that promise has not come to fruition," Franz said. "So they're not as glitzy as they used to be."

The result could be an easing up of the severe labor crunch that has kept midsize companies from finding the engineering help they need. "I think the tide is changing," Franz concluded. "Recruiting is a little easier--if you are still recruiting."

While no hiring manager is hoping for a major slump, those at medium-size electronics companies--outfits that have been around a few years without becoming huge or being acquired by a giant--are beginning to say that a slowdown in the dizzying growth rates of the recent past could make their jobs slightly easier. Often, engineers who prefer security turn to larger corporations, and those who want exciting challenges or a high potential payoff go with extremely small ones. While convincing designers to join the companies in the middle can be tough, there's hope right now that things might be easing.

"The competition is still ferocious, it's a bit dog-eat-dog," said Franz. "[But] it is changing a little bit now." Whether that's a short-term blip or the beginning of a trend remains to be seen, he commented.

Franz noted, however, that regardless of how much things change, the key reason for engineers to take a job will remain the same. Money is no longer the key differentiator.

"We don't talk about benefits that much," Franz said. "You have to pay competitively with [the rest of the industry] in benefits and bonuses. Why engineers like to work in a particular place or why they leave is a simple [matter]. A good engineer can be rewarded by the work itself. Whether your company is large, small or in the middle, you have to create an environment where engineers enjoy their work."

Making a job sound interesting can often be more of a challenge than determining what the right pay scale is. Megacorporations offer the gloss of a brand name, and can often provide more workplace amenities like training programs. Startups, on the other hand, offer a freewheeling atmosphere where designers can make a big impression. Sometimes, entire industries fall into the middle ground, no longer leading edge but still in need of strong engineers if they expect to remain competitive. That can make selling the place to recruits even more difficult.

Some midsize companies fell behind during the chaotic 1990s, when growth spiraled and the supply of new engineers was limited by the size of collegiate programs and the government's largess in letting foreigners into the United States. For example, RadiSys Corp. brought in a new human resources manager a bit over a year ago, but found that additional help was still needed to lure top talent to the embedded-computer manufacturer.

"I was hired about a year ago for a new position," said Marlene Barclay, benefit and work-life manager at the Hillsboro, Ore., company. "That demonstrates that they wanted to look into a services program that recognizes that people have lives at work and lives away from work."

Making that work environment as rewarding as possible is one way that the companies in the middle try to distinguish themselves.

"We sell our working environment as a distinct advantage," Barclay said. "We feel we're offering the same level of pay and benefits, so we push our culture-a growing company but not a huge place where you can get lost."

For some managers at midsize operations, that means paying close attention to the division of labor. As teams grow in size, this becomes more important, many say.

"Work needs to be organized in a fashion that is rewarding, not chopped up in ways that are unsatisfactory, like an assembly line with small pieces people can't understand," said Franz. "We like to structure projects in [such] a way that engineers have meaningful portions."

Such work is now handled by teams. "There are no lone-wolf engineers any more," Franz said. Within those teams and outside of them, in adjacent groups, a company must precisely define the chain of command and communications channels so that the individuals and groups know what to expect and what to deliver, he added. Beyond that, keeping human beings in mind is critical.

"Engineers have to understand things at the human-interface level; it's easy to lose meaning of what they're doing in a complex hierarchy," Franz said. "One thing that's very important in our work is the hierarchy of design, largely because of the complexity of the chips. It's easy within a chip to get lost in what the purpose of a submodule is."

Though midsize companies tend to play up the working environment as the main lure for new hires, managers acknowledge that they also have to match pay scales with those of the industry giants. And even though the stock prices of the established companies don't have the explosive growth potential of startups, existing companies can often do more customizing to meet the needs of various engineers. That can be a big benefit over larger corporations.

"One advantage small companies have is that the large companies have a one-size-fits-all package," said Alderman of VMEbus International. "One advantage small companies have is they're doing neat things, so they can attract creative engineers."