If a candidate for a full time dev position runs another company, is this a problem?

Question

We have a candidate for a full-time development gig (contract to possible perm) who runs his own small business with 7 employees and lists himself as CEO. He's technically strong and his rate is reasonable for his skills. I understand he will not be here in 3-4 years, but if we need someone for 1-2 years should this be a red flag?

When asked directly the balance between us and the other job, he said he would "play it by ear."

Consensus in the group is that he will be fine, but there's a hint of concern from myself and a few others.

Bring him on or back off?

Update: We have been pleasantly surprised in this case. The consultant has become very valuable member of the team. I could not have anticipated it would go quite so well. It adds a lot of value having a real self-starter with strong entrepreneurial spirit on the team.

I do not consider our experience to be typical, if you run into this situation yourself, proceed with caution.

Answer 1

Personally, I would back off, especially if he cannot commit to making your company his priority. If anything hire him on contract.

Answer 2

I would back off. Just consider that both your and his company has to meet a deadline at the same time and both are a bit behind schedule. What might his decision be?

Answer 3

I run my own business on the side, but I don't have 7 employees.

I would see that a person with 7 employees, is most likely NOT looking for a fully dedicated perm position with someone else. Especially starting out on contract.

So I'd back away.....but that's just me.

Answer 4

I have never met a CEO of a small business that didn't devote a majority of their time to their business. They don't frequently have any time left for themselves or their family. No way he could devote full-time to you.

Answer 5

Been here before and been burned.

I would walk away, this is a recipe for disaster. What happens at a critical time for your business where you need his fullest attention and his company needs his time?

Unless you can nail down a contract detailing exactly how much time he'd spend on your projects his priority will always be to his own company.

There's plenty more fish in the sea.

Answer 6

"Play it by ear" seems in this case to be a code phrase for "you won't like the answer to that question". Definite red flag. Sign a contract with his company and make sure it has penalties for not delivering in a reasonable timeframe.

Answer 7

Depends on the exact situation. Things like that can work if you manage expectations as you move forward. It does complicate things though. Is he worth it and are you prepared to deal with some possible future issues.

Answer 8

Does this fall under the category "Conflict of Interest"? It seems so to me.

Update:

If he will work as the 'Company' (Company-to-Company), then this scenario will work. But when he will work as an individual outside of his company (individual-to-company), I think this is where the conflict of interest comes in the picture.

Answer 9

I think the advice to backoff is sound. Consider that no one can serve two masters without hating the one and loving the other ;-)

Answer 10

As a small business owner, I think it can work.

If his company is a services company, I don't think it would be any different than hiring any other consultant. His people are working on their own contracts, and he might have to step out occasionally to meet with some of his other clients to get work for his people, but otherwise, you're just another client of his firm - who happens to be being serviced by the owner.

I worked at a place once where a consultant there had a team of 6 guys in Moscow that he managed - they were sort of a outsoucing/product company, but it worked out well. He typically would have to run into his office a few times a day and yell at someone in Russian, but he always clocked out for that time accordingly.

Think of it this way - you're getting someone who probably knows how to manage people and knows what he's doing - as long as he's honest about when he's working on his firm's projects and when he's working on your stuff, then it's all good. Plus, he could probably throw another 7 guys on your project were you to hit a tight deadline - and then take them all off instantly as well. That kind of flexibility could be nice to have.

Answer 11

I think you should be asking why someone who runs a business with 7 people should be wanting to take your gig in the first place.

Answer 12

I ran a small web hosting business for a few years while working full-time in a job. In that situation, though, the impact was minimal. I had to take a day's leave once at short notice to sort something out, but otherwise there were no problems.

I wouldn't see a problem with employing the guy on a contract basis, but not as a permie. That said, I don't think employing someone as "contract to possible perm" really makes sense, since you don't grow your organisation knowledge. Unless software is not your core business, in which case why not outsource all of it?

Answer 13

Back off, nay, run in the other direction. I'm the CEO of two companies (related, yes, but different companies) and it's a full time job. If you'd said "he runs his own company, he builds PC in his house" then I'd have said it might work. But as soon as you added the "7 employees" into the mix I think you're sunk. If you really, really, really like him, either buy his company, or, ask him if he's at least using a PEO to handle the "employee" stuff. 7 employees is too few to have an HR department, and too many to not have to spend time doing HR stuff, it's a hard spot to be -- I know!

Answer 14

Expanding on Kev's answer, you need to nail down the time arrangement and you need to put it into writing. Anything not put into writing and signed by both parties is asking for trouble. You also need to have opt-out clauses or penalties to protect yourself if he isn't pulling his weight like he should. If he isn't willing to commit to that, move on and look for someone else that is.

Answer 15

This sounds like a really bad idea. Either your position is full-time or it isn't. If it is, no amount of contractual obligation will actually ensure that you get what you need from this guy. You're not in the lawyering business, are you?

Answer 16

Unless the talent pool in your area is pretty bleak, it's probably best to back off.

Highly recommended reading: The Guerrilla Guide to Interviewing (version 3.0)

If you’re having trouble deciding, there’s a very simple solution. NO HIRE. Just don’t hire people that you aren’t sure about.