Hiring in a Dysfunctional Job Market

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For 2 decades, I have made a living deploying mathematical models to find hidden value in the securities markets. This is a difficult problem because these markets are very efficient, meaning that it’s very hard to do better than just showing up and stating your needs. Consider the stock market: If you want to buy a share of Microsoft stock, you can have your order filled within seconds, knowing that you are within a penny or two of the best price on the planet and that every share is identical to every other one.

On the other hand, you can spend months looking for the best house, because the real-estate market is inefficient. Each house is different, and you won’t fully understand your needs until you begin looking. Your reward for investing time in the search is the pleasure of living in a much better house than one you could find in an afternoon.

As employers, we are also in the market for human capital, which is even less efficient than the real-estate market. Many of the best people are almost impossible to find.

Searching résumé databases is tedious and yields few qualified candidates who are available right now. Recruiters are expensive, often add little value, and shy away from recent graduates and the unemployed. College placement offices are more interested in getting us to their career fairs in May than in finding candidates who meet our current needs.

Even the most targeted ad generates a flood of résumés from people who have not researched our company or prequalified themselves. Who can blame them? Employers often treat hiring as a process of elimination in a numbers game. A day spent researching a firm, crafting a letter, and customizing a résumé is wasted when a hiring manager or human resources (HR) person spends only a few seconds glancing at them.

Yet an inefficient labor market isn’t such a bad thing for those who are willing to dig a little deeper. Such a market can reward well-spent effort in ways that efficient markets don’t. I would like to share with you some of the ways my colleagues and I have approached hiring in a rather dysfunctional labor market.

We begin by advertising as broadly as possible—with a very general job description—hoping for a flood of résumés, which we immediately ignore.

Instead of poring over each submission (or scanning each one for 9 seconds), we automatically respond to everyone with an extensive description of our group, the firm, our industry, our needs, career prospects, physical location, commute, work hours, and so on. We avoid selling ourselves and err on the side of full disclosure, with particular emphasis on the problems and risks we face. In short, we arm our applicants with the information they need to eliminate us from their consideration.

We close by asking those who are still interested to write a letter making their case.

As we wait for their responses, we read those résumés as time permits, looking for exceptional candidates who we fear might not take the next step. We send them encouraging notes saying things such as, “Have you thought about how the Principal Components Analysis you’ve done might apply to stock market data?”

Typically, 10% to 15% of initial applicants send the requested follow-on letter. Of those, perhaps half make a case worth investigating.

We still might have a dozen or more candidates, so rather than scheduling interviews, we might hold an open house with beer and pizza or some other ice-breaking activity. Most appreciate the fact that we give everyone a chance to visit rather than eliminate three-quarters of them based on a résumé and a letter. We encourage them to talk to each other and swap job leads. This allows us to see how they interact. Continue reading “Hiring in a Dysfunctional Job Market”

Give us your tired, your poor, your overly-automated.

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Deborah Branscum just wrote an article in Medium Backchannel: Our Hiring Process is Broken. Can a Hackathon Fix It? It talks about her experience of a new approach to hiring that my partner, Noah Goldman, and I are pioneering that we’re calling Staffup Weekend. You can see a photo of the attendees, a report on the event, and a video of Deborah here.

This story appears to be a hit because my inbox is flooded.

People writing appear to fall into a few categories that we list below (along with the response you should expect as soon as we can get to it):

  • I have an opinion. (Noted.)
  • I have a complaint. (Noted.)
  • I want you to help me get a job. (Give us time to work on a story offering advice for the masses and then if that doesn’t do the trick then please write again. In the meantime, please: Read my advice for job seekers on my website, follow me on twitter, check out our company (BetterWorkWorld.com), and go to Staffup Weekend where you can sign up for our newsletter and learn about future events.)
  • I want you to help us hire better. (Let’s schedule a call ASAP.)
  • I want to make money doing what you do. Can you help me be a competitor? (Absolutely. If enough people do what we do then we don’t have to do it. Tell us more about yourself.)
  • I want you to look at our software that makes everything easier so people don’t have to get involved. (Maybe later. Please read our response to one such a software developer below.)

Hope this helps. More later.

Brooke

BrookeAllen.com

Here is my response to a reader who wrote: “I invite you to visit our website and get a general feel for what we are about.  Essentially, we offer a software solution backed by solid Industrial Organizational Psychology and vast experiences working with high performance clients.”

Thank you for writing. 

I have copied Noah, my partner in Staffup Weekend. He might have time to evaluate your software. Right now, because I am the only one of us mentioned in the article, I’m busy fielding requests from people who want us to help them hire rather than help them develop product in competition with us. Continue reading “Give us your tired, your poor, your overly-automated.”

How to hire good people instead of nice people

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Usually, employers rapidly scan the resume of each job applicant looking for relevant education, skills, and work experience. They select 10 candidates for telephone calls, invite three in for interviews, and hire the one they like the best.

This is a bad way to hire because at best it gets you nice people.

You don’t need nice people.

You need good people.

Good and nice are not the same thing. The opposite of good is bad. The opposite of nice is unlikeable.

Nice people care if you like them; good people care about you. Nice people stretch the truth; good people don’t. If you tell a nice person to do something evil, they might do it because they do not want to upset you; a good person will refuse to do it.

You might think you are a good person, but you are fallible, so if you want to avoid inadvertently doing something evil you must surround yourself with good people, not nice people.

How do you separate the good from the nice? If you do what I do, it will be a piece of cake. Continue reading “How to hire good people instead of nice people”