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RFRA controversy complicates tech recruiting efforts

April 3, 2015

Steve Hershberger of fast-growing SteadyServ Technologies is constantly in recruiter mode, like many in a tech industry where demand for talent often far exceeds supply.

But the past eight days have been more challenging than usual. The Indianapolis-based company, which makes beer-management software, has faced job candidate questions about Indiana's Religious Freedom Restoration Act, which touched off a national firestorm and was widely criticized for being anti-gay.

"These people can go anywhere they want," Hershberger said. "And when I'm talking to them, the question has been consistently: 'What precipitated the state to feel like it needed to pass this law and, with the world watching, why did you guys do it now?'"

Hershberger and other tech leaders said the law has been a burdensome headwind over the past week, making job discussions longer than necessary and injecting unease in the minds of some candidates.

Several companies, including Eli Lilly & Co., have decried the law for its potential impact on recruiting and retaining talent. But tech companies in particular have condemned it because their prospective employees are more often progressive, gay or both, local tech leaders said. And Indiana's tech companies already had a tough time drawing people who have no Indiana connection.

Talent is part of the lifeblood of "fragile" emerging tech companies, and it has implications on capital and customers, said TechPoint CEO Mike Langellier.

"They have a lot of options, and they're increasingly choosing where they want to live before where they want to work," Langellier said. "So a place that has a stigma attached to it does a huge disservice to the companies in that place."

Jon Gilman, CEO of Indianapolis-based Clear Software, said he has satellite workers across the country. He was looking to consolidate them here, but the law has made that difficult.

"We have some of our workforce in California and we're trying to convince them to move here," Gilman said, "and this has basically been a nail in the coffin in those conversations."

Sally Reasoner, of TechPoint, is involved in bringing students to Indianapolis for tech internships and former Indiana natives back for tech jobs.

For the Xtern program, Reasoner said, students have brought up the law, but none of the roughly 100 students have pulled out of their planned internships. For the Xpat program, Reasoner said, "It's absolutely impacted the conversation, immensely."

"I think it's a concern that gives them a lot of pause," she said. "Hopefully we can mitigate it so it's not a complete deal-breaker."

Hershberger said he's contemplated recruiting talent to his North Carolina office and possibly transitioning them to Indiana later.

Grant Glas of app-development company App Press said he's looking to hire people soon that may include out-of-towners.

"It's one of those things where I feel like I'm going to have to pre-emptively talk about it," Glas said.

Langellier said there could be silver lining to the fallout, which placed Indianapolis in the public spotlight for a week.

"It remains to be seen, but a lot of it is going to be determined by how we react," he said. "But we're at an inflection point where we're really going to have to dig in and compensate for some of the damage that's been done."

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