How to hire to

How to Hire

Below is an excerpt from a talk I gave at the eShares Town Hall in November 2015. I hope it is helpful to other CEOs struggling with hiring.

Hi everyone. As you know, I have opened 27 new headcount for department heads to fill by end of year. If they succeed our headcount will be 74 in January. Of our 74 employees, 37% will have been at eShares less than three months and 79% less than one year.

Many of you will be interviewing and hiring over the next couple of months. How do we hire quickly and create a better company (and culture) than we have today? That is the challenge we face now. To that end, I’d like to offer you a set of hiring principles and heuristics to guide your decisions.

Hiring Principles

1. Hiring means we failed to execute and need help
First, let me quell a misconception. Hiring is not a consequence of success. Revenue and customers are. Hiring is a consequence of our failure to create enough leverage (see eShares 101) to grow on our own. It means we need outside help. The perfect business is a computer plugged into the internet. Starting with me, every human thereafter is overhead. And we are increasing overhead by 50%.

I want to repeat this point. We are increasing overhead by 50% because we failed to execute. It is not something to be proud of. It is humbling to go back to the labor market, hat-in-hand, asking for help. We did this when we hired you. We asked each of you to help us. You did not need us. There are plenty of great jobs. But we needed you. And thank goodness you came. We wouldn’t be here without you. But each of you was hired because the team before you failed to execute without you. And this is still true today.

2. Employee effectiveness is a power law
Much like startup performance follows a power law, so do startup employees. The most effective employees create 20x more leverage than an average employee. This is not true in an efficiency company — the best employees might work 2x faster than their peers. But in a high-leverage startup like ours, the effectiveness gap between employees can be multiple orders of magnitude.

Our minds find it easier to think in terms of efficiency and normal distributions than leverage and power law distributions. So we mentally squash the employee power law curve into a normal distribution curve. We underestimate the most effective employees and overestimate the ineffective ones.

We rationalize this behavior with “lies we tell ourselves.” Here are a few lies people use to keep an ineffective employee:

Conversely, we should dramatically expand the responsibility of 20x performers. Most don’t and rationalize limiting their most effective employees by saying:

In startup hiring there are few shades of grey. Most employees are great. Some are not. There are surprisingly few in between.

3. False Positives are ok, False Negatives are not
A False Positive (FP) is when we hire somebody who doesn’t work out (i.e. we falsely believed they would be great). A False Negative (FN) is when we did not hire somebody who would have been great. Hiring efficacy is measured by a low False Positive and False Negative rate. A perfect hiring team would never hire somebody that didn’t work out and never pass on somebody that would have been great.

The problem arises in measurement. It is easy to know False Positives but impossible to know False Negatives (i.e. we know if we made a bad hire but we know nothing about those we passed on). This, and a reluctance to fire, is why companies focus on reducing False Positives — it is their only measurement. The phrase “Hire slow, fire fast.” comes from this asymmetry. Companies hire slow because they fear False Positives.

There are dozens of employees at eShares I describe as saying “I don’t know how we would have gotten here without them.” Most were controversial hires. I’ll pick on Eric — a classic 20x hire. It is hard to imagine this today, but the majority of people who interviewed him did not want to hire him. Today his nickname is the The Oracle. Eric is not unique. I can count at least a dozen more examples.

It sucks to let people go. I hope we get better at not hiring False Positives. But False Positives is the only way we learn. We learn nothing from False Negatives. And there is a huge risk we miss out on a 20x employee. The way we get better at hiring is to hire, learn, and improve. Do not be afraid of hiring False Positives. Give people chances. Be afraid of missing the 20x employee.

For those of you questioning the morality of fast iteration of new hires please consider the alternative: we deny people opportunity for fear they won’t succeed or we keep people in roles where they won’t be successful. This creates walls around (and within) organizations. Let’s welcome those who want to join us. Let’s give them as much as opportunity as we can. And let’s quickly tell them if they will have more opportunity elsewhere. As long as we do it helpfully and respectfully (which we always will), helping people sort themselves into and out of eShares is good for all involved.

4. Culture-contributors are better than culture-fitters
When eShares was a company of one, me, our culture was “my culture”. My culture was quickly replaced by the culture of the first ten employees. I couldn’t stop it if I tried — I was outnumbered 10 to 1. Today, the 37 of you that joined us since have vastly outnumbered the first ten. And thank goodness! Our culture today is far better than it was when we were ten and infinitely better than when it was just me.

Because of Built to Last, good corporate culture is considered static and decided early in a company’s life. For these companies, hiring means selecting people who fit the existing culture and keeping out those who don’t. Hiring is gatekeeping. If culture is a Venn diagram and each circle is an employee’s contribution, then gatekeeping is preserving the intersection of those circles.

Our culture is dynamic. It should expand like our business. We welcome its change. Just like we want people to contribute new skills and ideas, we want people to contribute new culture. Hiring culture-fitters does not make our culture better. On the contrary it makes culture worse through decay. The 47 of us in this room will soon be outnumbered by new hires. They will decide our future culture, not us. Hire culture-contributors who will make our culture better.

Hiring Heuristics

So how do we find these Helpful, 20x, Positive Positive, Culture Contributors? It is hard. Very hard. But I can offer a few interviewing and hiring tips that I hope will help:

1. Hire for Strength vs Lack of Weakness
Most companies hire by consensus and committee. In a committee of N, each positive vote is worth 1/N of a hiring decision. However, one negative vote will reject a candidate. No matter how a strong a voter’s conviction, their vote will never count more than 1/N. Conversely, the slightest negative view will kill a hire. Consensus optimizes for employees with the fewest objections (least weaknesses). It works well to reduce False Positives but creates many False Negatives.**

For that reason, hiring at eShares is not a democracy. We do not vote. The hiring manager makes the decision. However, we have an interview team help the hiring manager triangulate a good decision. They help by looking for and discovering strengths. The single purpose of an interviewing team is to answer the question, “what is this candidate amazing at?”

We do this for two reasons. First, someone who is amazing at one thing will often become amazing at other things too. Most often the candidate hasn’t been trained yet. We can train them. As an organization we are very good at that.

Second, we can hire complementary skills. For example, we can hire one candidate who is amazing at web development and another who is amazing at algorithms and make a team out of them. You may retort, “that means you need to hire two people when one person could be good at both.” That is the efficiency argument. We are a leverage company. Two amazing people are always better than one pretty good person. If we were in the business of buying cars we would buy trucks and Teslas — we would never buy a Prius.

2. Hire for Trajectory vs Experience
It is important to note that Trajectory and Experience are not opposites. Trajectory is the first (and second) derivative of Experience. Most candidates have both and both are important. But Trajectory is far more valuable. Our job is not to hire for Experience. That’s what everyone else does. Our job is to hire people whose Trajectory will explode when they join eShares, pulling us along with them.

Interviewing for experience is easy because you are discovering what someone has done. Interviewing for Trajectory is hard because you are predicting what they will do. The best indicator that someone will have high Trajectory is if they value Trajectory over Experience. The tell? They get excited talking about what they could do rather than what they have done.

3. Hire Doers vs Tellers
The best predictor of a successful new hire at eShares is if they like to get their hands dirty. Whether it is writing code, building spreadsheets, calling customers, or stocking the fridge. This is true at every level. Our senior managers are hands-on, care about details, and are not afraid to roll up their sleeves. They don’t last long otherwise.

One way to find Doers is to ask a candidate how to do something and then ask them to do it. I ask engineers how they would solve a coding exercise or a sales rep how they would sell cap table software. After listening to the answer I ask them to take out their computer and write code or pretend I am a buyer and sell me software. You can quickly see who prefers doing something versus talking about doing it.

Be wary of seductive Tellers. They tend to be good interviewers. Interviewing ability has almost no correlation to employee effectiveness. The most common hiring mistake is hiring good interviewers. Don’t make that mistake — hire Doers, not Tellers.

4. Hire Learners vs Experts
This doesn’t mean expertise isn’t important. We are a company of specialists, not generalists. Each of us is an expert, or becoming an expert, in our domain. You cannot be successful at eShares without being an expert at something.

However, the velocity of change at eShares is so high that static expertise quickly becomes obsolete. To survive and grow we must be a learning organization. And that means we need people who are awesome at learning. As Paul Graham says, “When experts are wrong it is often because they are experts on an earlier version of the world.”

The clearest signal of a Learner is curiosity. Curious people, by definition, love to learn. While Experts talk about what they know, the Curious talk about what they don’t know. When you interview, verify expertise by discovering strengths. And then look for Curiosity.

5. Hire Different vs Similar
In our short history, our best hires were very Different from the team that hired them. They don’t seem Different now because they expanded our culture. They changed what Different looked like.

There is a deep and natural human bias to hire people “like us.” Fight this bias. Hiring Similar means we value repeatability and efficiency over creativity and leverage. Hiring Different brings new skills, paradigms, and ideas which are the sparks and tinder of leverage. They expand our Venn diagram rather than contract it.

I can’t stress this enough. You will naturally want to hire people you “connect” with. Fight your instincts. Hire Different.

A quick aside about diversity: This is an important topic for a broader discussion we will have in the future. But I will preview that talk by saying that diversity is fundamentally about valuing people who are different. If we view our culture as the sum of our people, and a broader group of people creates a broader and better culture, then diversity, as defined by hiring people who are different, is competitive advantage. Notice I say nothing about race, gender, religious preference, sexual orientation, or any of the categories typically ascribed to diversity. Diversity at eShares starts with a self-awareness about personal bias and a conscious effort to recalibrate. Hire Different vs Similar.

6. Always pass on ego
For most of this talk I have talked about signals to hire. I’ll conclude with a signal to not hire. Confidence and ego are opposites. Modesty and humility are traits of the strong. Ego and arrogance is a disease of the weak and insecure. The truly confident don’t need people to know they are great. They are happy to know it themselves. And the truly Great use their greatness to make those around them greater.

Most companies have a no assholes rule. We do too. But there are many people who would pass the asshole test but not the ego test. And ego is the far more dangerous disease. Assholes are not contagious but ego is because it creates an arms race of competing egos. Anyone can be a victim but executives are the most susceptible making it an attack on our central nervous system. I would rather hire the humble asshole than the arrogant nice guy.

The good news is egos and assholes are highly correlated. But not always. There are nice people with huge egos. They just disguise it well. Your job as the interviewer is to figure that out.

Always pass on ego. Always.

Good luck
That’s all I have. Good luck with your hiring. I’m excited to see who you bring to eShares.

** I once spoke to a venture investor about this and he said the same thing about investment decisions. Their partnership doesn’t vote on deals because it produces the least risky investments. They prefer seeing a partner with huge conviction over broad consensus. They think that produces the most exciting and ambitious deals.

Special thanks to Joshua Merrill and James Seely for helping me write this.

How to hire executives

To build a great company you’ll need to hire great people — it’s one of the top three priorities of the CEO. Executives have outsized influence on your company, and there is a slightly different process to hire them versus most employees.

Today I’ll share my experience hiring executives to clarify my thinking, learn it one level deeper, and teach others (continuous learning is one of our values at Coinbase). These are the steps I like to follow.

As you can see, it can take 3–6 months to hire an executive. Let’s dive into each section in more detail.

1. Speak to subject matter experts

When hiring an exec, it will likely be outside your area of expertise. You’ll first need to get a crash course in that role.

Let’s say you’re trying to hire a great VP Finance. You’ll want to reach out to your network and speak with three great VPs of Finance, CFOs, or CEOs who’ve hired finance leaders before. Ask them questions like:

At the end of the call it may be tempting to ask subject matter experts if they are interested in the role themselves (I’ve tried this a number of times, haven’t had it work yet!). But you probably aren’t ready for this yet since you don’t have the role defined yet. This will come in step 3.

After your crash course, you’ll understand some of the basics, but you’ll still be far from an expert. That’s ok — keep going.

2. Choose the hiring committee

Next you need to decide who will evaluate the candidates. You won’t usually decide on a new hire unilaterally, so you’ll need to gather input from various stakeholders.

Aim for 4–7 people on the hiring committee. Enough people to get a range of input, but also not so many that you’re wasting people’s time (it will take 1–2 hours per candidate per member of the hiring committee, so it adds up quickly).

A common mistake here is to decide what you want in a candidate first, and then later bring in the hiring committee to tell them what they should be looking for. In my experience, you need to genuinely gather their input, and incorporate it, to get them bought into the process (I’ll cover this more in the next step).

It helps to get clear on what you want each member of the hiring committee to interview for. You may even want to assign specific competencies for them each to drill down into.

3. Draft the mission/outcomes/competencies (MOC) document

It’s time to gather input from the hiring committee and reach consensus on what you’re all looking for.

MOC is just one term (some people call it a job spec, candidate profile, etc which are all the same thing). The goal is to answer the following questions:

I like to first solicit input from the hiring committee on what outcomes and competencies we should be looking for. Then I consolidate everyone’s input into an initial draft of the MOC, and have the hiring committee meet in person to discuss the draft. Use this input to create your second and final draft. Make sure everyone feels heard, but look for consensus (you don’t have to include something if just one person thinks it is important).

If your company has a diversity and inclusion program, now is a good time to get clear on what sourcing targets you have as part of this search. Clearly articulate this as a must have or nice to have in the MOC.

I typically choose the top three competencies as “must haves”. If you have more than this it can be difficult to find candidates which meet all of them.

Now that you’ve completed the MOC document, the hiring committee should be in sync on what you’re all looking for. This is easier said than done — in almost every search I’ve done, there is a moment later in the search where the hiring committee has to come back to this document to review/update it, and get back in sync.

4. Source candidates

Now that you know what you’re looking for, it’s time to get candidates in the pipeline.

There are many ways to do this. In each case, use your MOC document to help people understand exactly what you’re looking for.

If it is VP or C-level and speed is important, I’d recommend using an exec recruiting firm. Otherwise the first two options can work (and will be cheaper).

A whole article could be written just about how to work with exec recruiting firms, but here are a few things I’ve learned:

From here on out in the search, you’re going to cycle through the following steps in a loop: source, build relationship, evaluate, close. At any step, you can ask yourself the following question:

Are there at least three candidates in the pipeline this week that I’m excited about?

If the answer is no, that is your clue to go back to the sourcing step and get more candidates in the top of the funnel.

Keep going through this cycle until you close someone.

5. Build the relationship

Like making any hire, you’ll need to get the candidate excited about what you are building, and the idea of working with you.

People join companies because of the mission and who they get to work with. They need to like you and want to work with you. Other factors like compensation come into play, but they are a lot farther down the list.

The steps I like to go through here are:

Throughout the process you’ll need to ensure the candidate forms a positive impression of you and the company.

6. Evaluate candidates

Steps 4, 5, and 6 sometimes blur together. You are doing a dance back and forth between finding candidates, convincing them to join, and evaluating them, at the same time.

Evaluating candidates happens in five main ways:

Evaluating first starts during step 4 (sourcing). I like to be quantitative about whether the sourced candidates are matching the MOC document (otherwise the discussion can feel too unstructured). For each of the must haves and nice to haves in the MOC, assign a 1 to 5 score. Then you can sort candidates by total points, and decide who to reach out to first (weight the must haves higher using the spreadsheet).

See this sample spreadsheet. I like to start the weekly sync meeting for the search by reviewing this document.

This will help you determine if your sourcing process (or exec search firm) is delivering candidates who are “on profile”, and next steps for each candidate.

Once candidates start coming in to interview, use an applicant tracking system like Greenhouse to create scorecards that each interviewer fills out.

This will help encourage the hiring committee to interview based on what you’ve agreed is important. It also starts to build a dataset that can be valuable over time (for example, you may not realize that someone at your company has already interviewed this candidate, or you can start to look at trends around unconscious bias).

Presentation to the hiring committee

If the in person interviews go well, I like to have candidates give a presentation to the hiring committee as a next step. This provides a lot of signal about what it might be like to work with this person.

Can they clearly convey information to a group of people? Can they avoid going over the allotted time, or getting flustered if something doesn’t work perfectly with their slides? Are they humble and open to alternative viewpoints in the Q&A?

Here is a sample prompt we might use:

This is intentionally a lot of information to cover in half an hour. We like to see if candidates can reduce a lot of information down to the key points, and be concise (this is more specific to our culture).

An alternative presentation format that can work is to have the candidates present a plan for their first 180 days on the job, acting as if this is their first day on the job. (Note: this may require the candidate to have a good amount of context about your organization to be effective.)

The roundup (hiring committee voting and discussion)

During this process, every member of the hiring committee starts by showing a thumbs up, sideways, or down (everyone at the same time), to indicate whether they are a yes, maybe, or no on hiring this candidate. You can then go around the room and share more detailed thoughts, starting with the most junior people first (to avoid group think).

There doesn’t have to be a unanimous yes, but there should be at least some people who are a hell yes, and ideally no hard nos, to move forward.

These discussions can sometimes get heated. It’s a good idea to provide clarity up front about how the hiring decision will actually get made. Requiring a unanimous yes vote from the committee is probably a bad idea. I prefer to have the final decision get made by the following group (sometimes you’ll only have 2 out of 3 of these, which is also ok):

A unanimous yes is required from the group above to make the hire (or put another way — any one of those three can veto the hire).

If the roundup gets to a yes, you should now ensure that your reference checks are in place.

You don’t need to wait until the roundup to start reference checks. In fact, you should probably start them right after the first in person meeting with a candidate (it will save you time the sooner you start since it may cut someone out of the process before you invest more time).

An entire article could be written on reference checks alone, but I’ll summarize the key points here.

You should ask the candidate for “front door” references (these can be helpful to better understand how to work with them), but they will usually be 100% positive. In my view, it’s far more important to get backchannel references.

Under no circumstances should you skip backchannel references when hiring a senior candidate.

You’ll need to look for people they’ve previously worked with, through your network, while being cautious not to create any issues with their current employer. This can be tricky, but it is worth the effort. For example, you can ask a trusted reference whether they would be willing to keep a call strictly confidential, before revealing a candidate’s name.

It’s a good idea to ask for dates of employment to see if they match the candidate’s resume. Some candidates will remove work history from their resume when there was an issue — and these could be the most valuable references you find.

A single negative backchannel reference is not a deal breaker, but you should be looking for recurring negative patterns. Ideal candidates find a way to maturely bring up and discuss prior work experiences that didn’t go well, without blame or criticism.

Finally, you’ll want to do a criminal background check to ensure there is nothing you’re missing (this may only hit one in a hundred times, but is worth doing).

Some quick final thoughts on evaluating candidates:

Improving how you evaluate candidates is where you’ll really get your success rate up on hiring executives.

7. Close them

If the hiring committee gets to a yes and the references check out, you’ll need to construct an offer for the candidate that is compelling.

It’s a good idea to work with a compensation firm (such as Radford, Compensia, Connery, etc) or your investors who can provide market data. Otherwise you’ll just be guessing based off a few anecdotal data points. Construct the offer based on your leveling system, market data from the compensation firm, and your compensation policy (for example, you might target 75th percentile for equity, and 50th percentile for cash).

Go for a walk with the candidate or schedule some time to discuss the offer by phone (in person is better). You’ll need to get good at explaining the value of the equity. Not all candidates understand how to value equity. It’s a good idea to use a table of outcomes. Be as transparent as you can (I think you should always disclose the total number of outstanding shares) but work with your legal team to ensure you don’t create any issues for the company while doing this. For example, you’ll need to create a disclaimer that more shares could be issued between when the offer was made and when the equity grant gets approved by the board.

Some people like to bracket the compensation negotiation by coming in low. However, this can lead to unfair outcomes (some candidates are much better at negotiating than others) and it can start the relationship off on a sour note. So I prefer to simply come in with a good offer from the start based on the compensation data and philosophy that you have.

During the close, a few things that seem to help:

Conclusion

It’s a lot of work to recruit great executives! Most of my exec searches have taken between 6–12 months, although I’ve seen others do it consistently in about 3 months (this is where I’d like to get to next).

It’s a good idea to schedule a half hour weekly meeting while the search is ongoing, where you invite all relevant parties (the exec search firm, your in house recruiter, any investors who are helping refer candidates, etc). This will ensure the search keeps moving forward, and you don’t forget to follow up with anyone. Start this meeting by pulling up the sample sourcing spreadsheet shown in step 6 to get everyone in sync.

Here are a few common mistakes I’ve made (or seen others make) during exec searches:

Finally, when a new exec joins your organization, it’s a good idea to spend extra time with them during their first 30 days on the job. For example, if you normally meet with reports every two weeks, meet with your new hire several times a week for the first 30 days to ensure they successfully integrate into the organization.

I hope this guide helps you improve your success rate hiring executives, and growing your company!

Thank you to the following people for reviewing drafts of this post and teaching me about hiring: Adam White, Aurora Harshner, Barry Kwok, Barry Schuler, Bruce Wallace, Dan Romero, Jeff Stump, Jonathan Downey, Matt Levy, Matt Oberhardt, and Nathalie McGrath.

If this sounds like an organization you’d like to be a part of, check out our open roles at Coinbase and GDAX. Thank you!

How to Hire Employees

A Comprehensive Guide

Today’s companies are growing at a phenomenal rate, making the competition for top talent fiercer. Resources are getting scarce, and the demand for top talent is through the roof. Gauging a great fit is tough, and if you try to take a leap of faith without the right due diligence, it could cost you a small fortune.

Hiring has become difficult, and this guide can help you with how to hire employees. It discusses some fundamental concepts that apply to the hiring process. It also highlights a wide variety of hiring techniques that employers can use to meet their needs.

What is Hiring?

The hiring process involves reviewing applications for the open roles, shortlisting the potential candidates, testing the candidates through interviews and other testing tools, and making the decision to hire them. The hiring process also involves performing various pre-employment tests and checks.

Signs You Need to Hire

As with most things in business, there is no definitive answer to this question. But there are signs that you may have missed or overlooked because you may have been too pre-occupied with other essential aspects of your business.

These five red flags indicate that it’s time to hire:

Your employees are overworked

Have you noticed that your people are missing deadlines on their projects?

Do they appear more stressed than usual?

Deal with employee burnout by adding more people to the team. If you don’t, you may lose some of the people you have, making the situation worse for people who stay.

Your current team has a skills gap

Are you finding it challenging to meet your growing business needs of specialized skills?

When you started your business, your team was good enough to meet the business needs. But now, as you grow your business, the skills of your current team may not be enough; you need people with more specialized skills. You have a choice to either train your existing team to level up or add a team with a better skill set. Step up and make that decision.

You’re missing new opportunities

Do you turn down a new client or a new exciting project because you don’t have the time to manage it?

Hiring a team of qualified candidates who can tackle new projects or clients can solve your problem.

Cutting down costs is turning out to be expensive

You may think that having a small team is a way of saving money. But are you really saving money?

If a project needs extra human resources to meet the deadline, do you end up paying your employees for overtime?

Making your employees work overtime is not a long-term solution; it may result in burnout and employees heading for the door. When employees leave, you lose the investment you put into hiring employees and training them. That’s not all – you also lose time and energy in looking for a replacement.

Customer service is weakening

Have your customer complaints gone up?

Are project deadlines extended or not met at all?

Recognize the problem and correct it. If you have checked off the above points, then you have realized that you need to hire employees. That said, hiring employees is not an easy process. The statistics in the next section tells us just how challenging hiring employees can be.

Important Statistics That Reveal Top Challenges Hiring Managers Face While Hiring

According to a Glassdoor survey, the following are the challenges most hiring managers face:

74% of hiring decision-makers feel that candidates have access to enough information about the company and the job before they apply. Yet, three in five candidates say job realities do not match expectations.

76% of hiring decision-makers face challenges in attracting and hiring passive candidates as they are slow at responding to contact through networking sites.

Top Challenges Hiring Decision-Makers Face When Recruiting Informed Candidates

76% report the poor quality of candidates.

65% don’t know where to advertise jobs to attract and hire the right person.

65% have trouble competing with compensation and employee benefit packages offered by the competition.

72% face budget constraints.

Top Factors That Influence a Candidate to Join an Organization

How to Hire Employees

The hiring process starts with the company identifying its hiring needs and ends with the candidate accepting a job offer. The typical hiring process steps vary depending on the job role and company. But, most hiring process goes through these seven phases:

Initiation of the Hiring Process

Attracting Candidates

Initiating the Candidate Screening and Evaluation Process

Candidate Evaluation

Important Pre-Employment Checks

Rolling out the Offer

Employee Onboarding

Phase 1: Initiation of the Hiring Process

The first phase involves planning. Follow the steps below to get the ball rolling.

Document exactly what you want an employee to do

Even before you start searching for a new employee, it’s recommended to be clear from the get-go on what the job requires. List down the job’s responsibilities and skills required. Get the specific details of the job expectations and work requirements documented.

Prepare a job description

Job descriptions help organizations and job applicants figure out what is expected in a specific position and help determine whether an applicant is a good fit for that position.

Importance of
a Job Description

5 Key Elements of an Effective Job Description

Job Title and Summary

Competencies

Work environment and activities

Performance expectations

Compensation and benefits

Phase 2: Attracting Candidates

Once you are finished writing a job description, it’s ready to reach out to the masses. The 3 methods below are proven to be successful in getting the attention of the potential candidates.

Employee Referral

According to CareerBuilder, 82% of employers said that employee referrals generate the best return on investment (ROI).

Employee referrals are a tried and true hiring strategy. You can turn your employees into your very own hiring agency. Why? Because your employees know your business inside out.

Benefits of Employee Referrals

However, make sure you reward the employees for the referrals. Consider these options to offer:

Posting a Job

31% of hires come from job search engines and job boards. Job postings remain a top source of hires.

Although job posting and job description may be used interchangeably, they are not the same.

A job description is a detailed document that outlines the responsibilities and duties of the position while a job posting is an advertisement specially designed to sell the position to potential applicants. Therefore, a job posting is a thinner and concise version of the job description.

5 Characteristics of an Effective Job Ad

An effective job ad generally consists of the following:

Job Posting and Advertising on Job Portals

You have numerous options to post your job ads on job boards. Some job boards like Indeed and Glassdoor have a massive database and extensive reach across background, industry, and experience. Some job portals like Career Builder and Glassdoor take a fee for job posting, but they help you attract strong candidates through their AI and machine learning tools.

Job Posting and Advertising on Social Media

Job seekers depend on social networks to search and apply for jobs. So, to attract these people, you need to be where they are – on popular social sites like Facebook, LinkedIn, and Twitter. Posting jobs on these social networking platforms helps increase the visibility of your job ads among job seekers and potential applicants.

Using a Recruitment/Staffing Agency

In a buoyant jobs market, companies are competing with one another for top talent. Hiring a staffing agency to identify and attract talent can give you a competitive edge.

Benefits of Hiring a Staffing/Recruitment Agency

#1. Ability to identify talent
They work as an intermediary between you and the potential candidates. They have strong networks and have a clear idea of where to find talent.

#2. Negotiate salaries
They can successfully negotiate salaries on behalf of both the parties to reach a mutually agreeable remuneration package.

#3. Advertise roles
They advertise vacancies – both online and on the high street. They also actively look for professionals who fit the job description.

#4. Offer industry insight
They have significant expertise and job market insights to understand the impact of supply and demand in the job market.

#5. Interview candidates
They have their own candidate screening and interviewing process in place, which can save your time and money. Rest assured, the candidates who come to you are a filtered product of the agency’s screening and interview process.

Phase 3: Initiating the Candidate Screening and Evaluation Process

After the successful completion of Phase 2, you’ll have tons of applications to sort through. According to a survey, resume screening is the most time-consuming part of the hiring process, and it is estimated to take up 23 hours for just one hire.

Resume screening and shortlisting of candidates

You can begin shortlisting the candidates based on these parameters:

The below how-to guide focuses on how you can use technology to screen and shortlist candidates.

The biggest challenges of screening resumes: volume and quality of hire.

Automation helps solve these two significant challenges. There are various tools and software available which have a shortlisting algorithm that enables you to shortlist candidates on various data points, thus making your job easier. One of the hiring technologies is an Applicant Tracking System (ATS).

94% of the organizations that use ATS say that it has improved their hiring process.

An ATS organizes all the resumes received for each job role and makes accurate recommendations about which candidates should move forward to the next stage, thus increasing the quality of hire too.

Advantages of Using an ATS

Sam Altman

How to hire

After startups raise money, their next biggest problem becomes hiring. It turns out it’s both really hard and really important to hire good people; in fact, it’s probably the most important thing a founder does.

If you don’t hire very well, you will not be successful—companies are a product of the team the founders build. There is no way you can build an important company by yourself. It’s easy to delude yourself into thinking that you can manage a mediocre hire into doing good work.

Here is some advice about hiring:

*Spend more time on it.

The vast majority of founders don’t spend nearly enough time hiring. After you figure out your vision and get product-market fit, you should probably be spending between a third and a half of your time hiring. It sounds crazy, and there will always be a ton of other work, but it’s the highest-leverage thing you can do, and great companies always, always have great people.

You can’t outsource this—you need to be spending time identifying people, getting potential candidates to want to work at your company, and meeting every person that comes to interview. Keith Rabois believes the CEO/founders should interview every candidate until the company is at least 500 employees.

*In the beginning, get your hands dirty.

Speaking of spending time, you should spend the time to learn a role before you hire for it. If you don’t understand it, it’s very hard to get the right person. The classic example of this is a hacker-CEO deciding to hire a VP of Sales because he doesn’t want to get his hands dirty. This does not work. He needs to do it himself first and learn it in detail. Then after that, he should lean on his board or investors to give him opinions on his final few candidates.

*Look for smart, effective people.

There are always specifics of what you need in a particular role, but smart and effective have got to be table stakes. It’s amazing how often people are willing to forgo these requirements; predictably, those hires don’t work out in the early days of a startup (they may never work).

Fortunately, these are easy to look for.

Talk to the candidates about what they’ve done. Ask them about their most impressive projects and biggest wins. Specifically, ask them about how they spend their time during an average day, and what they got done in the last month. Go deep in a specific area and ask about what the candidate actually did—it’s easy to take credit for a successful project. Ask them how they would solve a problem you are having related to the role they are interviewing for.

That, combined with the right questions when you check references, will usually give you a good feel about effectiveness. And usually you can gauge intelligence by the end of an hour-long conversation. If you don’t learn anything in the interview, that’s bad. If you are bored in the interview, that’s really bad. A good interview should feel like a conversation, not questions and responses.

Remember that in a startup, anyone you hire is likely to be doing a new job in three to six months. Smart and effective people are adaptable.

*Have people audition for roles instead of interviewing for them.

This is the most important tactical piece of advice I have. It is difficult to know what it’s like working with someone after a few interviews; it is quite easy to know what it’s like after working with them

Whenever possible (and it’s almost always possible), have someone do a day or two of work with you before you hire her; you can do this at night or on the weekends. If you’re interviewing a developer, have her write code for a real but non-critical project. For a PR person, have her write a press release and identify reporters to pitch it to. Just have the person sign a contractor agreement and pay them for this work like a normal contractor.

You’ll get a much, much better sense of what it’s like working with this person and how good she is at the role than you can ever get in just an interview. And she’ll get a feel for what working at your company is like.

*Focus on the right ways to source candidates.

Basically, this boils down to “use your personal networks more”. By at least a 10x margin, the best candidate sources I’ve ever seen are friends and friends of friends. Even if you don’t think you can get these people, go after the best ones relentlessly. If it works out 5% of the time, it’s still well worth it.

All the best startups I know manage to hire like this for much longer than one would think possible. Most bad startups make excuses for not doing this.

When you hire someone, as soon as you’re sure she’s a star you should sit her down and wring out of her the names of everyone that you should try to hire. You may have to work pretty hard at this.

Often, to get great people, you have to poach. They’re never looking for jobs, so don’t limit your recruiting to people that are looking for jobs. A difficult question is what you should do about poaching from acquaintances—I don’t have a great answer for this. A friend says, “Poaching is the titty twister of Silicon Valley relationships”.

Technical recruiters are pretty bad. The job boards are generally worse. Conferences can be good. Hosting interesting tech talks can be good for technical hiring. University recruiting works well once you’re reasonably established.

Don’t limit your search to candidates in your area. This is especially true if you’re in the bay area; lots of people want to move here.

View candidate sourcing as a long-term investment—you may spend time now with someone that you don’t even talk to about a job for a year or more.

Use you investors and their networks to find candidates. In your investor update emails, let them know what kind of people you need to hire.

As a side note, if I were going to jump into the mosh pit of people starting recruiting startups, I would try to make it look as much like personal network hiring as possible, since that’s what seems to work. I’d love a service that would let me see how everyone in my company was connected to a candidate, and be able to search personal networks of people in the company (LinkedIn is probably good at this for hiring sales people but not very good at this for developers).

*Have a mission, and don’t be surprised at how much selling you’ll have to do.

You need a mission in order to hire well. In addition to wanting to work with a great team, candidates need to believe in your mission—i.e., why is this job more important than any of the others they could take? Having a mission that gets people excited is probably the best thing you can do to get a great team on board before you have runaway traction.

As a founder, you’ll assume that everyone will be as excited about your company as you are. In reality, no one will. You need to spend a lot of time getting candidates excited about your mission.

If you have a good mission and you’re good at selling it, you’ll be able to get slightly overqualified people—although, in a fast-growing startup, they’ll end up in a role that they feel not quite ready for quickly anyway.

You should use your board and your investors to help you close candidates.

Once you decide you want someone, switch into closing mode. The person that the new hire will report to (and ideally also the CEO) should be doing everything possible to close the candidate, and talking to her about once a day.

*Hire people you like.

At Stripe, I believe they call this the Sunday test—would you be likely to come into the office on a Sunday because you want to hang out with this person? Liking the people you work with is pretty important to the right kind of company culture. Only a few times have I ever seen a scenario where I didn’t like an otherwise very good candidate. I only made the hire once, and it was a mistake.

That being said, remember you want at least some diversity of thought. There are some attributes where you want uniformity—integrity, intelligence, etc.—and there are some where you want coverage of the entire range.

*Have a set of cultural values you hire for.

Spend a lot of time figuring out what you want your cultural values to be (there are some good examples on the Internet). Make sure the whole company knows what they are and buys into them. Anyone you hire should be a cultural fit.

Andrew Mason says “Values are a decision making framework that empower individuals to make the decision that you, the founder, would make, in situations where there are conflicting interests (e.g. growth vs. customer satisfaction)”.

Treat your values as articles of faith. Screen candidates for these values and be willing to let an otherwise good candidate go if he is not a cultural fit. Diversity of opinions and certain characteristics (e.g. you want nerds and athletes both on the team) is good; diversity of values in a startup is bad.

There are some people that are so set in their ways they will never get behind your values; you will probably end up firing them.

As a side note, avoid remote employees in the early days. As a culture is still gelling, it’s important to have everyone in the same building.

In the grind of a startup, you’ll always need someone yesterday and it’s easy to hire someone that is not quite smart enough or a good enough culture fit because you really need a specific job done. Especially in the early days, never compromise. A single bad hire left unfixed for long can kill a company. It’s better to lose a deal or be late on a product or whatever than to hire someone mediocre.

Great people attract other great people; as soon as you get a mediocre person in the building, this entire phenomenon can unwind.

*Be generous with compensation packages, but mostly with equity.

You should be very frugal with nearly everything in a startup. Compensation for great people is an exception.

Where you want to be generous, though, is with equity. Ideally, you end up paying people slightly below to roughly market salaries but with a very generous equity package. “Experienced” people often have higher personal burn rates and sometimes you’ll need to pay them more, but remember that great companies are not usually created by experienced people (with the exception of a few roles where it really matters a lot.)

I am sure I will get flamed for saying this, but it’s the right strategy—if you want an above-market salary, go work at a big company with no equity upside.

Ideally, you want to pay people just enough they don’t stress about cash flow. Equity is harder, but a good rule for the first 20 hires seems to be about double what your investors suggest. For a company on a good but not absolute breakout trajectory, some rough numbers I’ve seen are about 1.5% for the first engineer and about 0.25% for the twentieth. But the variance is huge.

Incidentally, a very successful YC company has a flat salary for effectively all of their engineers, and it seems to work well. It’s lower than what these people could get elsewhere, but clearly they enjoy the work and believe the stock is going to be worth a lot. The sorts of people that will take this deal are the kind of people you want in a startup. And unless something goes really wrong, at this point, these engineers are going to make way more money than that would have taking higher salaries elsewhere—not to mention how much better their work environment has been.

You will likely have to negotiate a little bit. Learn how to do this. In general, materially breaking your compensation structure to get someone is a bad idea—word gets out and everyone will be upset.

*Watch out for red flags and trust your gut.

There are a few things in the interviewing/negotiating process that you should watch out for because they usually mean that person will not be successful in a startup. A focus on title is an example; a focus on things like “how many reports will be in my organization” is an even worse example. You’ll develop a feel for these sorts of issues very quickly; don’t brush them off.

If you have a difficult-to-articulate desire to pass, pass.

*Always be recruiting.

Unfortunately, recruiting usually doesn’t work as a transactional activity. You have to view it as something you always do, not something you start when you need to fill a role immediately. There’s a fair amount of unpredictability in the process; if you find someone great for a role you won’t need for two months, you should still hire her now.

I have never met a newbie founder that fires fast enough; I have also never met a founder who doesn’t learn this lesson after a few years.

You will not get 100% of your hires right. When it’s obviously not working, it’s unlikely to start working. It’s better for everyone involved to part ways quickly, instead of hanging on to unrealistic dreams that it’s going to get better. This is especially true for the person you have to let go—if they’re just at your company for a couple of months, it’s a non-issue in future interviews. And everyone else at the company is probably aware that the person is not working out before you are.

Having to fire people is one of the worst things a founder has to do, but you have to just get it over with and trust that it will work out better than dragging things out.

*Put a little bit of rigor around the hiring process.

Make everyone on your team commit to a hire/no hire decision for everyone they meet, and write up their thoughts. If you get it wrong, this is useful to look back at later. It’s good to have a brief in-person discussion with the entire interviewing team after a candidate leaves.

Have someone take the candidate out to lunch or dinner. Insist that everyone is on time and prepared for interviews/auditions. Make sure every candidate leaves with a positive impression of your company.

Be organized—one person should coordinate the entire interview process, make sure every topic you want to cover gets covered, convene people for the discussion after all interviews are done, etc. Also, have a consistent framework for how you decide whether or not to hire—do you need unanimous consent?

Remember that despite being great at what they do your team may not be great interviewers. It’s important to teach people how to interview.

Many founders hire just because it seems like a cool thing to do, and people always ask how many employees you have. Companies generally work better when they are smaller. It’s always worth spending time to think about the least amount of projects/work you can feasibly do, and then having as small a team as possible to do it.

Don’t hire for the sake of hiring. Hire because there is no other way to do what you want to do.

Good luck. Hiring is very hard but very important work. And don’t forget that after you hire people, you need to keep them. Remember to check in with people, be a good manager, have regular all hands meetings, make sure people are happy and challenged, etc. Always keep a sense of momentum at your company—that’s important to retaining talent. Give people new roles every six months or so. And of course, continue to focus on bringing talented people into the company—that alone will make other good people want to stay.

Always be identifying and promoting new talent. This is not as sexy as thinking about new problems to solve, but it will make you successful.

Thanks to Patrick Collison, Andrew Mason, Keith Rabois, Geoff Ralston, and Nick Sivo for reading drafts of this.

Как нанимать сотрудников: подробный гайд от Head of Products

Поэтому мы написали пошаговый гайд. Рассказали, как правильно выстраивать воронку найма, описывать вакансию, составлять тестовое и вопросы к интервью.

Но для начала познакомьтесь с Томом.

Том решил посоветоваться со своим другом Эндрю, который работает HR-специалистом.

Эндрю присылает свою заметку. Она начинается с перечисления этапов.

Том открывает ее, чтобы разобраться в процессе найма.

1. Поймите, кого вы ищете

Вы ищете специалиста, который сможет справиться с определенными задачами. Чтобы найти подходящего сотрудника, сначала нужно понять, какими навыками и качествами он должен обладать. На эти качества вы будете обращать внимание в резюме. Их же вы будете проверять на следующих этапах найма.

Составьте список необходимых качеств сотрудника

Универсального списка качеств не существует. Ориентируйтесь на потребности компании и перечень ежедневных задач.

Нужно понять, какие у кандидата будут hard skills — профессиональные навыки, которые можно проверить и измерить. Это может быть использование конкретных программ или знание языков. Эти качества вы сможете прописать, когда поймете, чем человек будет заниматься каждый день. Например, если кандидату нужно будет писать SEO-тексты, то записывайте в раздел hard skills именно этот навык.

Дальше нужно определить soft skills — навыки, которые зависят от характера человека и его опыта. Например, коммуникабельность, умение работать в команде, гибкость. Эти навыки помогут понять, сможет ли кандидат работать в условиях, которые вы предлагаете. Например, если сотрудник должен работать с людьми, необщительный кандидат точно не подойдет.

Тому нужен специалист на full-time работу в стартапе. У него нет ресурсов обучать продуктового маркетолога, поэтому он ищет опытного специалиста.

Ему нужен человек, который:

Сможет построить воронку продаж

Знает, как ставить ТЗ подрядчикам

Разбирается в веб-аналитике

Умеет работать автономно

Принимает решения, основываясь на данных

Понимает специфику образовательного продукта

Пропишите минусы, которые вы готовы человеку простить

У любых положительных качеств есть противоположные — отрицательные. Например, креативные люди могут быть неусидчивы и не пунктуальны. Трудно найти креативного сотрудника, который хочет решать рутинные задачи. А усидчивые люди способны работать с шаблонами и потоковыми задачами, но, наоборот, могут быть не креативными.

Сотрудника без минусов найти не получится. Поймите, на что вы готовы закрыть глаза — так вы сможете найти подходящего специалиста гораздо быстрее. Если вы ищите сотрудника, который будет заниматься только бумажной работой, не стоит включать в список качеств целеустремленность. Чаще всего такие люди амбициозны, а вы не сможете удовлетворить амбиции этой вакансией.

В приоритете у Тома создание воронок, маркетинговых стратегий и автономное выполнение задач. Он готов принять, что у человека нет самостоятельного опыта запуска рекламных кампаний и что он не будет это делать без подрядчиков.

Также Том готов к тому, что сотрудник не будет работать по жесткому графику с 9 до 18. Главное, чтобы сотрудник решал рабочие вопросы вовремя и автономно.

2. Составьте описание вакансии

Описание вакансии помогает кандидату провести самодиагностику и понять, подходит ли он на должность. Чем четче вы опишете, что от человека требуется, тем больше вероятность отклика от нужного специалиста. Поэтому пишите в требованиях к кандидату те навыки, которые нужны для решения ежедневных задач.

Допустим, вам нужен копирайтер в англоязычный блог. Важно, чтобы этот копирайтер писал тексты автономно. Тогда в требованиях вы могли бы указать:

опыт написания SEO-текстов

знание английского на уровне В2 и выше

опыт работы копирайтером от 2-х лет

автономность в работе

знания контент-маркетинга: составление контент-плана и взаимодействие с экспертами

Есть кандидаты, которые откликаются практически на все вакансии. Им не важно, что вы написали в требованиях, их цель — откликнуться. Но вам, скорее всего, подойдут другие кандидаты. Те, кто тщательно изучает вакансию и пытается понять, подходит ли она им.

Поэтому если хотите получить отклик от таких людей, помните о следующих правилах.

1. Указывайте заработную плату

Если вы не укажете зарплату, то потеряете часть кандидатов. Поставьте себя на место человека: стали бы вы тратить время, если даже не знаете, на что можете рассчитывать? Скорее всего, вы бы искали что-то более подходящее.

Помимо точной суммы можно указать зарплату тремя способами: прописать зарплатную вилку, указать максимальную или минимальную ставку. Разберемся, как в каком случае лучше указывать зарплату.

Первый вариант — указать верхнюю границу зарплаты. Ее указывают, чтобы дать кандидату понять — вы способны платить за профессионализм человека. Например, если вам нужен senior UX designer в компанию, укажите зарплату от 3000$ в месяц, чтобы обратить на себя его внимание.

Вы можете прописать, до какой суммы может доходить зарплата, чтобы отсеять кандидатов, которые вам не по карману. Этот вариант хорошо подходит для массовых и начальных позиций. Допустим, если вам нужно набрать штат сотрудников или взять новичков для обучения. Тому же Junior UX designer вы могли бы указать зарплату до 600$.

Это вариант, в котором вы указываете сразу и нижнюю, и верхнюю границы зарплаты. Представим, что вам нужно нанять человека на должность Junior UX designer. Вы могли бы обозначить ему зарплату в 500-600$. Но в этом случае человек может оценить себя на максимум и потом разочароваться, если ему заплатят меньше.

2. Пишите о преимуществах компании перед конкурентами

Не думайте, что выбираете только вы. Кандидаты тоже выбирают, куда именно пойти работать. Поэтому вам нужно продать свою вакансию так, чтобы вас выбрали из десятка других.

Покажите, чем вы отличаетесь. Это повысит вероятность, что человек пойдет именно к вам. Кандидату нужно понимать, в какое место он собирается прийти. Посмотрим, как можно оформить описание вакансии на примере Тома.

У Тома стартап. Он не может пообещать сотрудникам социальный пакет или просторный офис в центре городе. Зато в его стартапе можно быстро расти, самостоятельно принимать решения и выстраивать процессы с нуля. Поэтому в описании вакансии Том решил сделать упор на возможность карьерного роста и почти полную свободу действий во время работы.

Но бывают случаи, когда одного описания всех преимуществ и перспектив недостаточно, чтобы привлечь нужных людей.

Гайд по лучшим статьям skillsetter

В нашем блоге уже больше 150 статей про рост продуктов и карьеру в IT. Для удобной навигации мы объединили их в тематические подборки.

Задание

Представьте, что в вашей компании немного денег, а на рынке нет специалиста по маркетингу за вашу цену. На его обучение ресурсов тоже нет. Как бы вы решили проблему с такой вакансией?

3. Корректируйте вакансию в процессе найма

С первого раза вакансия не получится идеальной. Хорошо, если вы покажете вакансию HR-специалистам и получите фидбек.

Но любую вакансию все равно корректируют в процессе. Вы не сможете заранее понять, какие проблемы появятся. Чтобы быстро исправлять вакансию, анализируйте процесс найма и отслеживайте, на каких этапах возникают проблемы.

Когда вы составили вакансию, не нужно торопиться начинать найм. Сначала нужно построить воронку найма.

3. Составьте воронку найма

Воронка найма — это инструмент, который позволит вам привлечь, оценить и нанять лучших из доступных людей. А еще она поможет проанализировать эффективность отбора на каждом этапе.

С помощью воронки вы сможете отсеять неподходящих кандидатов. Для этого нужно прописать критерии отбора для каждого ее этапа. Так вы максимально оптимизируете процесс найма и начнете быстрее отбирать нужных кандидатов.

Воронка найма обычно состоит из отбора по резюме, тестового задания, интервью и испытательного срока.

Том решает спросить у Эндрю, насколько эффективно работает воронка найма.