President of ESG (Hot Firm #36 for 2017), a 120-person architecture and design firm based in Minneapolis.
By Liisa Andreassen Correspondent
“We have a small SWAT team that focuses on networking and about 75 percent of our work comes from that,” Roseth says.
A conversation with Aaron Roseth.
The Zweig Letter: What’s the best way to recruit and retain top talent in a tight labor market?
Aaron Roseth: Word-of-mouth has been our main recruitment tool. We offer employee incentives. If a new hire that is referred stays a few months, the employee who referred him/her receives between $1,500 and $2,000. Our senior leadership also does a lot of “professional dating” or networking. It took me about two years to court one of our hires – it’s about perseverance and communication. That person is now one of our top performers. Our retention rates for people who have been here for three or more years is great. We have more difficulty in the one- to three-year time frame. The millennials tend to be soul searchers. They need to experience things on their own. We had one person who left in the one- to three-year category, but ended up coming back.
TZL: What is the role of entrepreneurship in your firm?
AR: We’re a 100 percent meritocracy. People are rewarded for what they produce for ESG. The leadership here put a great deal of trust in me early on and I delivered. Entrepreneurship is at the heart of who we are. We reward people who “bring it.”
TZL: What’s your prediction for 2017 and for the next five years?
AR: We’ve grown a lot over the last four years, adding about 20 to 30 people per year. This year, we plan to add about five to 10 new people. Our growth has been questioned at the shareholder level and it’s been recommended that we don’t want to go beyond much more than 130 employees. We’re saying “no” to more projects and weeding out what we don’t really want to do. We’re focused on stabilizing our growth. We want to remain a boutique firm and don’t want to lose that family feel. We’re focused on working with the stars.
TZL: What’s the recipe for creating an effective board?
AR: Assembling a board that supports growth is important. Ours does and its extreme focus on our markets has helped us to grow. We have an internal board that is comprised of 15 shareholders. We vote once per year. I made a motion to maintain the board composition for the next three years. Why? Because we wanted the founders, who are still active at the board level, to know their role would not change.
TZL: How do you go about winning work?
AR: We are 100 percent network driven. Some partners go through the RFP process, but we also have a small SWAT team that focuses on networking and about 75 percent of our work comes from that. We’ve also had great success with national projects and as those clients grow, they take us with them.
TZL: Once you’ve won a contract, what are the “marching orders” for your PMs?
AR: We are 90 percent developer oriented. First we assess the plans and studies to see if pro forma and zoning are met. Next, we focus on concept and schematic design and then dive in. Building relationships with the client is of utmost importance. We build unique structures and work to build unique relationships, too. The whole process is very personal. We build stories around our unique personality and theirs.
TZL: How does marketing contribute to your success rate? Are you content with your marketing efforts, or do you think you should increase/decrease marketing?
AR: Marketing is vital to our success. Our marketing team is top-notch. They can build collateral quickly and know how to communicate who we are. It goes back to the story telling. It’s not only important for clients to know who we are, but for employees and potential hires to know, too. You have to market internally and externally.
TZL: What has your firm done recently to upgrade its IT system?
AR: We are 100 percent Revit. We have a full-time research and development guy who follows trends in software and is constantly on the lookout to improve. We recently spent $250,000 on server upgrades and backup. We’re going to the cloud with more software. Data is so intense. You have to continue to move forward and evolve.
TZL: What’s the key benefit you give to your employees? Flexible schedule, incentive compensation, 401(k), etc.?
AR: Our culture is why people want to stay. We are flexible with work hours and put a ton of trust in our employees. We’re fun and have things like impromptu happy hours and project-win celebrations. We have a very open culture. We’re unsurpassed in bonuses. Coming out of the recession we continued to give bonuses to people who delivered – not just senior leadership. Bonuses are typically 10 percent of the employee’s salary.