It seems another software company emerges every day. And with every new arrival, Canada’s talent supply shrinks.

Software CEOs know that their success depends on people. But what do you do when conventional hiring channels can’t find the good ones? Do you putter along with what you’ve got, or do you swing for the fences? The tech bull market of the 90s might hold some answers.

How Descartes won big in a bull market
Swinging for the fences is exactly what Descartes CEO, Peter Schwartz did in the late 90s. His company invested nearly $3 million in headhunting fees – in a job market that looked like this one. You may question his spending, but you can’t deny that Descartes did what most Canadian tech companies haven’t done – an IPO on the NASDAQ.

Some will argue that the stock market was drunk on greed at the time. But every other tech company had the same opportunity. Did Descartes spend more money on recruiting than most tech companies? Yes. But, they also hit the proverbial home run and a multi- billion-dollar market cap. Not many Canadians tech companies have done better.

Headhunting in motion
Between 2000 and 2001, my previous company served an emerging tech company that invested close to $1 million in recruiting its North American sales force alone. The company could have posted ads on the Internet and in newspapers and saved money. But they didn’t. They moved fast and smart. Today, Research in Motion is a global success story.

I’m not suggesting that headhunters are the end all and be all for hiring. Workbrain (TSX:WB) and Redknee (AIM:RKN) rarely used headhunters and still managed to IPO. But they grew at a time when talent was abundant and good people were actually looking for work. Yesterday’s movers and shakers are older and happily employed at profitable companies today. Could these two great companies have been as successful before 9-11? I don’t know. You tell me.

If I were a software CEO right now, I’d be changing my game plan. I’d give my people raises before my competition does. Then, I’d ask a good headhunter to bring me the best players from companies that haven’t realized that we’re heading for 1999 all over again.