In its first year of business, Hired organized thousands of developer interviews for companies trying to fill spots. It quickly became clear why some companies couldn’t hire. “Ninety percent of companies are bad at hiring, but it’s particularly bad among seed stage companies and first time founders,” says founder Matt Mickiewicz. Here are the most common hiring mistakes made by employers on Hired:
Too many twentysomething founders look for employees just like themselves. “So you discriminate against anyone who is in their 30s or 40s or has a family,” says Mickiewicz. “But the most talented and experienced people will be in their 30s and 40s. I know one well-known startup who has been trying to fill a role for over four months, and has gone through two dozen candidates, simply because the founder mandates 80-hour workweeks.”
Founders typically look for candidates who have a similar educational background to themselves and live within 25 miles of their office. A CEO with a Stanford CS degree will often look down on anybody who doesn’t, but this seriously limits the talent pool available to his startup. “We look a lot outside Silicon Valley,” says Mickiewicz on recruiting for Hired itself. “There are really talented people who don’t live on the coast and there’s a lot less competition for that talent.”
Another typical form of hiring self-sabotage is to concentrate on candidates from well-known companies like Google, Facebook, or Apple. “Don’t just cherry-pick the Google engineers and the Stanford grads to work at your ‘Uber for Laundry,'” says Mickiewicz. “Hiring Google engineers is generally a really bad idea. If you work at Google you have access to an entire set of tools and technologies that you won’t have in a smaller startup environment.” Hired has also found that Google engineers are three times more likely than average to reject interview requests, simply because few companies are willing to match a Googler’s existing salary.
On the other hand, startup CEOs tends to be prejudiced against developers who work for less cutting-edge large companies, like Dell, Accenture, or Salesforce. Mickiewicz points out that Uber’s CTO was hired from VMware.
Too many interviewers still rely on puzzles and programming trivia questions. Google stopped asking puzzle questions in interviews when it found that the fact that a candidate could calculate how many golf balls fit into a plane had no bearing on whether they could actually do the job.
Viewing the interview as a combat sport is another common pitfall. “Asking an engineer to architect Google Maps on the whiteboard when they work for a car-sharing startup,” Mickiewicz says, “just because the CTO worked on Google Maps. It becomes like a battle of wits. The CTO versus the applicants: Who’s smarter?”
Mickiewicz suggests that Stripe’s interview process, which is based on setting more realistic programming tasks, is a better model to follow. Hired interviews its own engineers in a similar way. “Pair programming is something that we do ourselves. The engineer we are interviewing will work alongside one of our engineers for 2-4 hours to solve an issue that we are currently tackling.” Mobile consulting firm Mutual Mobile gives candidates broken code to fix.
The biggest variable between hiring companies, and the best way to compete with employers like Google, Facebook, and Apple, is simply speed. “You should be able to present a final paper offer within 5-10 days of first meeting someone,” says Mickiewicz. “Move the process as fast as the candidate allows versus as fast as is convenient for you. We have seen hundreds of cases where companies just forget to follow up with candidates or to reject a candidate. They’ll reschedule interviews three times because of other priorities.” Series B companies are Hired’s best customers and they tend to have much more organized hiring processes, giving them another advantage over seed stage companies in the battle for talent.
Startups underestimate how much time they should spend on recruitment. “20-25% of your time should be spent interviewing,” says Mickiewicz. “It’s a really good metric as to whether you have a hiring culture. If you view hiring as a core competency you need to develope in the business, then you’ll do whatever it takes.”
You must pay market-rate salaries. “Don’t ask people to take a pay cut when they live in San Francisco and have car payments or house payments,” says Mickiewicz. New graduates can command $100,000 a year in Silicon Valley. Hired has found that bumping the offer up to $120,000 gives you access to 30% more candidates. “There are definitely people who are 2 -3 times more productive than others and if you believe that, then paying them 20% more is a bargain.”
Most founders vastly overestimate the value of their equity. Don’t expect employees to take stock options or even equity to compensate for a lower salary. If you can’t match a Google paycheck, then offer flexibility instead. Many developers want to work from home or to work part-time.
Hiring bottlenecks can seriously stall a startup’s progress and even threaten its entire existence. “Even though we have only been around for a bit over a year, many of the companies who were really bad at hiring have already gone out of business or been acqui-hired,” says Mickiewicz. “Based on behaviors I see, I can predict who the next three or four companies to go under will be.”
[Image: Flickr user Michael Duxbury]