“I’m not the most popular CEO in the area right now to the extent that we’ve been hiring some terrific people away from existing teams, that’s for sure.” – Bandwidth CEO David Morken

RALEIGH – Bandwidth CEO David Morken isn’t making many friends as he continues to staff up the communications provider. He’s apparently become a master at so-called “talent poaching.”

In a tight labor market with talent becoming harder to find as unemployment drops, Apple and Amazon considering coming to the Triangle, and already open jobs in the tech sector soar above 23,000 in North Carolina, Morken on Tuesday talked candidly about how Bandwidth is raiding neighbors for new hires.

“So we are hiring from primarily Research Triangle Park-based technology companies like Citrix, Share File, like Red Hat, places in the Park like IBM, large private technology companies like SAS,” Morken said in response to a question about hiring during an earnings conference call with Wall Street analysts.

Bandwidth logo


“And I’m not the most popular CEO in the area right now to the extent that we’ve been hiring some terrific people away from existing teams, that’s for sure,” he acknowledged, “but these are folks who are highly qualified and outstanding.”

While lawsuits have been fought in Silicon Valley over agreements among firms to discourage such talent raids, there’s apparently not a problem in the Triangle with Bandwidth recruiters constantly on the prowl.

Poaching is not universally popular or praised. Notes talent website TalentNow: “Poaching candidates is an aggressive hiring tactic which is practiced globally. But this practice has often been criticized by industry experts and there is a divided opinion when it comes to the morality of whether a candidate should be poached. Many perceive it to be an unethical practice, while others consider it to be the best method to recruit talented personnel for the job.”

Job hopping is getting worse with more people willing to leap to another opportunity, Zane Sosna, senior vice president and branch manager at Robert Half Technology, a talent management firm in Raleigh, told WRAL TechWire recently.

“The tech hiring market is robust locally and tech professionals are now more willing than ever before to voluntarily change jobs with the hopes of gaining access to work with and learn new skillsets in the security, cloud [computing] and java script space.

“Also, there are more tech job options now and job hopping isn’t frowned upon as much as it once was.”

Whatever the prevailing attitude is about poaching, the job markets definitely favors workers. In the US, nationally, there are more open jobs than unemployed people to fill them. And companies are crying for skilled workers ready to hit the cubicle running.

Investing IPO funds

And Bandwidth will continue charging ahead, Morken said.

The pace of hiring will continue to grow at Bandwidth, which went public late last year and has openly said it would use proceeds from the stock offering to add staff. It now has beaten Wall Street expectations of earnings four consecutive quarters, notes business news site SeekingAlpha.

Yet in terms of size (300 employees) and global clout, Bandwidth doesn’t match up well with SAS or Red Hat, let alone IBM.

Going public helped, Morken said, providing Bandwidth a variety of ways to lure away people.

“And I think being a public company has raised our profile, and I think we’re able to attract and hopefully incent and retain folks that we otherwise would have had a harder time landing,” Morken said.

“So that’s just an overview of the kind of psychographic profile background of who these folks are, and we’re very pleased.

“I’m doing new hire breakfast orientations consistently, and I’m delighted and glad I joined the company before the quality of the folks that are coming onboard now or else I might not be able to join.”

Looking for more talent

Morken and Chief Financial Officer Jeff Hoffman wouldn’t talk with analysts about specific hiring numbers but said the “help wanted” sign is out. Bandwidth reported a solid financial quarter but said operations expenses would rise due in part to research and development as well as stepped-up hiring.

“So in terms of the loss that we’re projecting in third quarter that has to do with the ramp of our investments,” CFO Hoffman said in the call, according to a transcript provided by SeekingAlpha.

“It’s mainly hiring, and you’ll see that in our – that will occur in OpEx. So leading the way would be R&D and the hiring that we’re doing there, followed by sales and marketing.”

Hoffman told one analyst that “we don’t announce specific headcount numbers for any area of the company, but we are tracking to plan in 2018 as we’ve outlined, in the use of proceeds from the IPO. And we’re very pleased with the recruiting and the training on the hunter sales team as well as the strategic sales team.”

“Hunter teams” are Bandwidth’s term for personnel assigned to find customers and work with them to begin generating revenue quickly.

“The hunter team will onboard a customer, and we’ll see that customer ramp between very quickly zero to 90 days to generate revenue,” Hoffman explained.