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Eliminating the Job Interview via Partnership

If you follow this blog with any regularity, you probably know my take on the job interview.  One of my more popular posts asserts that hiring, as we know it, isn’t worth fixing.  And, my book, Developer Hegemony, contains an excoriating treatment of job interviews.  The practice started as a silly whim about 100 years ago, and we’ve just kept doing it, uncritically, ever since.  I’m going to talk today about partnership, and how I think we can leverage it to help.

But let me set the scene a bit, first.  In Developer Hegemony, I talk in more detail about the world without job interviews.  On the blog, however, I’ve just advised developers to interview with companies that minimize the stupidity of the process.  On the company side, the only advice I’ve offered is to picture a world where you weren’t allowed to interview.  Using this creative constraint, come up with alternatives.

Because of this less than detailed treatment, I’ve received reader questions like the following.  And, understandably so.

I love these articles, but I wish you would write one about what I should be doing to make good hires, instead of reinforcing how bad all the possible options I can think of would be 😉

So I’ve decided to address this.  In today’s post, I’ll offer an idea for an alternative.  I may turn this into a series, with different ideas, but I don’t want to get ahead of myself.

Caveat Emptor

First, a quick disclaimer.  What you’re about to read contains absolutely zero long-contemplated, research-backed academic work.  I haven’t even asked anyone for an opinion on this.

Instead, you can think of this more as something I dreamed up in the shower a few weeks ago.  Since then, I’ve idly contemplated it while waiting to board a plane or going for a walk in nice weather.  In this post, I will actually flesh it out in a bit more detail for my own clarification.

I won’t belabor the point further, but I do want you to understand that holes will exist.  I’m not writing this post to give you a ready-made playbook, but to give you the seed of an idea that you might incorporate as you make hires.  And, plus, it feels good to write something optimistic instead of frustrated and cynical every now and then.

Hiring Partnership, As It Exists Today

If you’ve worked for a few companies or for a large enterprise, you’ve probably encountered the employee referral bonus.  Basically, your employer rewards you with money for helping them make a hire.  When they need to fill a position, you can refer people from your network.  If this results in a successful hire, they pay you, say, $1,000.

I respect this policy, particularly when wearing my management consulting hat.  It aligns the organization’s best interests with its staff’s best interests instead of relying on patronizing idealist fodder like “you should want to help for the good of the company.”

On top of that, it moves companies slightly away from what I call the stranger interview.  Stranger interviews comprise the overwhelming majority of hiring, and if you described them honestly, this is how you’d do it.

We need to grow headcount, so here’s what we’ll do.  We’ll invite people that nobody here knows to come in for a few hours.  We’ll decide on who to hire subconsciously, as soon as we see them, based largely on physical appearance, demeanor, and other low information signals.  Then we’ll ask them a bunch of rather silly questions for a few hours so that we can apply revisionist history to candidates’ answers and justify our initial, low information decisions.  Then we’ll justify the whole farce with a canard like “A players hire A players and B players hire C players.”

So in my estimation, anything that moves us toward partnership and away from…. that… deserves applause.

Limited Effectiveness

A decent number of hires, I believe, happen due to these referral programs.  And, as I’ve said, these have immediate advantage over stranger hiring.  But I can think of two important shortcomings of this approach.

First, employees may be responding to the cash incentive.  But they may also be responding to idealist culture and wanting to justify their own decision to work there.  Or, they may simply want to work with their friends.  Assuming these motivations suffice, the cash reward sort of constitutes waste (though no doubt these folks appreciate it).

Secondly, the cash incentive seems like a nice kick.  But elapsed time and relatively low probability of hire detract somewhat from the effect.  Anecdotally, I’ve never really considered $500 or $1,000 after six months of a successful hire worth chasing.  All of the things that can go wrong reduce the expected value of my efforts to a fraction of the actual reward.  And this also presents risks.  What if the interview goes poorly or what if the candidate hires on and then flames out?  This could damage both my relationship with my employer and with my contact.

So, while I like these policies, they offer somewhat muted effectiveness.  They fail to account for the nuance of employee motivations, and they offer a fairly convoluted feedback loop.

Putting the Partnership Angle on Steroids

Let’s then take the employee referral program and soup it up considerably.  What I’m envisioning tightens the feedback loop and aligns everyone’s interests even more tightly.  Oh, and it eliminates the job interview altogether.

First, forget the cash rewards.  Let’s instead reward the referring employee with 2% (picked arbitrarily) of that employee’s salary for the duration of her stay with the company (employee gets her full salary, and you get 2% on top).  That pretty much ensures intense interest in the referral program.  Instead of potential lump of found money, successful referrers now get raises.  If you refer 5 or more employees, you can up your pay in an mount equivalent to receiving a promotion.  Referral hires now constitute true partnership.

As for the interview portion, that just goes away in favor of referrals.  When you make a referral, the referred person simply shows up next Monday and starts working.

Now to address a glaring flaw in the program.  If an incentive existed before to spam the top of the funnel for rewards, you’re now inviting a veritable Ponzi scheme.  The referral program needs to reward good matches rather than any matches.  Toward this end, I propose that the referrer pay a $1,000 sponsorship fee.  This means that, for a new hire making $104K per year, the referrer needs him to last 25 weeks before breaking even.  True partnership means putting your money where your mouth is.

Why I Like This (At Least, at First Blush)

As I contemplated this, a number of wins came to mind.  First and most obviously, it eliminates the job interview.  That was, after all, the main premise of the post.

But, on a deeper level, this encourages meaningful partnership for employees with the company as it grows.  In a sense, the company rewards its employees for increased headcount the way it would give them stock options.  They care deeply about helping the company grow sustainably.  In fact, helping the company grow becomes a bonafide career path in and of itself.  Without ever moving into management, a well-connected software developer could eventually earn an executive-like salary by helping the company land a lot of developers over the years.

I also see significant potential for helping with general morale and cohesiveness.  If I refer you and put up a sponsorship fee, I’m going to do everything in my power to make sure you feel happy and that you get training and support.  The better you do and the longer you stay, the better I do.  I want you to earn promotions because that earns me money.  And I want to do everything I can to prevent attrition, since that means money out of my pocket.  Someone has real skin in the game for every employee.

You Take it From Here

As I said before, I’ve laid out the foundation of an idea here.  I cannot call this a fully baked plan.  You would need to take elements of it, tweak it, adjust the numbers, and make it make sense.

And you would probably encounter some fairly significant obstacles.  Radical departures from anything as deeply entrenched as the job interview will make everyone nervous and skeptical.  This holds doubly true when you attempt something that (as far as I know) no one has tried before.

But still, I think it’s worth ruminating on a bit and perhaps conceiving of a way to experiment with it to see how it works.  It may not prove perfect or even tenable.  And I could certainly have overlooked some “law of unintended consequences” possibilities.  But still, it’s hard to imagine doing much worse at hiring than our current process, the stranger interview, which gives us pretty much the conceptual opposite of partnership in every way.

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  • Rodney Smith

    I’ve worked at places where the referral bonus was $2k, I’ve worked at places where it was $500. I’ve never worked in recruiting, but I gather that their fees are typically in the ballpark of 10% of placed employee’s salary. So, as an employer, why would you pay $10k to a recruiter to help you find a good employee, but only pay your existing employee $500 for the same end result? It almost seems like employers don’t want to enrich their employees. Why take care of your own employees, when you can funnel that money over to your buddy’s recruiting agency, and have a good laugh about it on the golf course? Business partners are business partners, and employees are employees. If I pay my employees too much, they might be able to afford to move into my neighborhood, and then how will I know that my position in the socioeconomic strata is above theirs?

    We all understand keeping costs down to increase margin, and employee salary is just another cost. But, to forgo giving money to an employee that I AM GOING TO SPEND ANYWAY, to attain the same objective? There is something else at play here. Something something good old boys’ club.

    • That’s a good point about recruiters, and one I’d never thought of. And, usually those firms quote you 20% of first year’s pay and can be bargained down to 15% (at least last time I was playing the hiring game through recruiters), so at 10%, you’re even understating the point. It does stand to reason that you’d offer employees at least a little less, or else you might as well just use the recruiter. But that is a pretty wide gap.

      And, your point about knowing one another’s salary is a good one as well. I think you could work around that relatively easily by just using the median salary of the salary band in question, but I’d rather see organizations be transparent about compensation.

  • Rodney Smith

    Another reason why employers would probably never bite on the model of “pay a current employee a percentage of referred employees salary” is that it would allow you to figure out another employee’s salary. And that’s a big no no in the HR world.

  • Hernan

    I see some problems.
    you can have beginner expert bringing other ‘experts’ like him.
    job interviews are not perfect. some are bad. but I think 1-2 hours (not saying 5-6 hours like some places) or a home work assignment to asses you skills is the best approach.

    I don’t decide based on looks or anything else. I don’t expect candidates to know it all.
    I ask about their resume. about what they have done and we talk about it. a good skilled developer will be able to speak about it and we can have a good conversation about his experience.
    everybody googles questions like interface vs. abstract, but I think if you don’t know that…you are not a good developer (although you can still work and write code).

    • There are certainly going to be problems 🙂 I didn’t address the mechanisms for flushing bad referrals out of the company, for one.

      Regarding deciding based on looks, though, we all do that and we all think and assert that we don’t. It’s subconscious, cognitive human bias. Check out the book written by the former head of HR at Google, wherein he took a critical look at hiring and concluded that the way we interview basically doesn’t work. (One of their experiments was to take a round of candidates they had rejected them, hire those candidates anyway, and evaluate their performance scores against those originally accepted — they found absolutely no difference, indicating that their interviews at the time were literally useless.)

      One of the things they identified in their studies and incorporated into their process is to have one person conduct the interview and another person, with no knowledge of the candidate’s age, gender, ethnicity, etc, evaluate it based on the transcript. They did this in response to findings that everyone doing the interviewing exhibited the sorts of subconscious bias that I mentioned. Of course, we know this as a society. It’s why stock interview advice includes, “lost a little weight before the job search” and “sit up straight, look them in the eye, smile, etc.” Those things all affect “performance” and none of us, as humans, is immune to registering these biases.

  • Phil Vuollet

    Actually, if the company in and of itself, viewed its employees as partners in ALL respects – your model would extend to just “share in the profits”. If brining on the right person is profitable, then all partners would benefit…perhaps this would result in an uneven distribution between the partners. In that case award more shares/options for a successful hire (as determined by an increase in profit). In the end what does it matter if the productivity increase was brought about by hiring another head or say outsourcing the work, so long as your actions improved the bottom line. In that light, brining more people into a true partnership would make matters worse as it would dilute the share-pool. So first and foremost, increase efficiency THEN look for contractors/outside help THEN bring on new permanent members into the fold…unless they directly add to profitability, then its just not worthwhile and you really have everyone working towards the best interests of the company at that point.

    • aaa

      so if the company is losing. do they also lose?

      • Phil Vuollet

        Surely, if a company is losing everyone who depends on it’s success loses anyways, this is how it works today. Ever have to wait to get paid? Ever get laid off?

    • I definitely agree with your take. As a matter of fact, it lines up directly with what I offered in my book as the way I see software firms of the future operating. I view scaling up headcount (partners) as something to approach with caution and scaling up headcount with employees as something these firms probably shouldn’t do, opting instead for using contractors/vendors or partnering up. But certainly increasing profits with the existing headcount trumps any of that.

      But for this post, the context of the reader question was to muse about what existing, run of the mill shops could do (or at least start making the case for in the abstract).

  • David S

    I like this idea more the more I think about it. I doubt the $1000 buyin is even necessary: I think for most engineers, there’s already a strong disincentive from making a bad recommendation. If the guy I recommended doesn’t work out, I both risk my friendship with him, AND I damage my professional reputation.

    It does seem like, in a small group, this could lead to a dynamic where there’s one or two guys who become the “Big Man on Campus”. I’m imagining someone who, after tens years of working the amateur recruiter angle, becomes the de facto department head. He’s recruited the majority of the department and collects a 50% greater salary than anyone else.

    I don’t know if that’s necessarily a bad thing, but I’m sure it’s a power dynamic which would make people in positions of org chart authority uncomfortable.

    So maybe it would make more sense to just pay a much larger one-time bonus, probably something on the order of 10% of first year salary. Not only is that enough cash to genuinely make it worthwhile to search for good people, but it seems to present it as a partnership: More along the lines of “We save $20,000 in recruiter fees, and you vouch for this guy. We’ll split the savings; everyone wins” rather than “You saved us $20,000 in recruiter fees. Here’s a Starbucks gift card and a pat on the head”

    I’m not sure the partnership/referral process would entirely replace the resume/interview process. My hope, though, is that it could reduce it from the circus it is now to something more congenial: “We’ve already mostly decided to hire you. This interview is just to reassure us that you aren’t a total bozo: you can talk to us for half an hour without whining about your old boss or launching off on a racist tirade, you are somewhat familiar with technology, and you basically want to work here”

    • I think it (or anything else) would really only replace the interview process if you forced it to — actively setting out to do just that. But for what it’s worth, the type of conversation you’re talking to doesn’t really strike me as an “interview,” per se, but a conversation between prospective business partners. And, I think that’s personally reasonable. So, this conversation goes something along the lines of “so and so vouches for you, so we’re inclined to work with you, but let’s discuss whether you think you can do this work and whether you want to partner up.”

  • Justin

    Knowing the corporate world it would probably just inspire them to go “Hey we’re saving money by having our employee’s do all the hiring now.” Instead of letting your developers focus on their strengths it would evolve into the developers doing screenings and “personal reviews” outside of business hours per the required “stamp of approval” for corporate references.
    In reality it would be just as easy to waive the cost for the first 25 weeks and then start to give them the bonus of (the arbitrary) 2%. Granted the flaws exist here too. The problem here is the shotgun approach. It would be like throwing whatever you can at the wall and whatever sticks is an extra paycheck, yay me!

    • In my experience, most organizations have developers do screening and hiring activities anyway, without really curbing their normal duties. I think a lot of people don’t mind putting in the extra hours because participating in the interview process from the evaluation side is, for many, a rush of sorts. Or, perhaps just vengeance for all of the times it’s been done to them 🙂

      Regarding the incentives, to the company the $1000 vs 25 weeks deferment is six of one, half a dozen of the other. But to the employee forced to cut the $1,000 check, it prevents the shotgun approach. You’re not going to shoot at the wall when the shells cost $1,000 a pop.