The hidden costs of engineering time in technical interviewing

http://blog.interviewing.io/you-probably-dont-factor-in-engineering-time-when-calculating-cost-per-hire-heres-why-you-really-should/

by leeny • 7 years ago

113 70 7 years ago

blog.interviewing.io

mikece2• 7 years ago

I've suggested to recruiting firms that they should hire (or retain) a couple enterprise architects and have them meet with the technical managers looking for developers and let these highly experienced engineers pre-interview candidates based on the hiring company's needs and only refer people who can pass the enterprise arch's review. The time saved by the hiring company to not have their in-house archs, team leads, and engineers tied up interviewing candidates should MORE than make up for the premium such pre-interviewing would demand.

(Something else that would help is paying employees a lot more than $500 for making an in-house referral. I know of cases where locally where in-house referrals could have happened but by referring through a chosen recruiter got the referred a $1000 referral fee instead of his company's $500 referral fee... but that's a separate rant.)

ghaff2• 7 years ago

Internal referrals are great. The problem is that, if you increase the fee too much, it's going to get harder and harder for employees to prioritize referring someone they know would be a great fit for a position (and get a nice spiff in the process) versus randomly referring people they vaguely know on the off-chance they'll get a multi-$K payout.

Traster• 7 years ago

That very much depends on the company size too. If you're in a 100 person company you'd need a very high referral fee before you start pissing off your colleagues referring crap candidates. Whereas if you're in a megacorp you can pretty much do it with impunity.

hak8or• 7 years ago

I've never seen a referral bonus come without a requirement of te new employee staying at least 6 montha or a year.

jkukul• 7 years ago

One thing to keep in mind with the internal referrals is that people tend to recommend those who they like or with whom they had had a good "cultural fit" before. So if you only rely on internal referrals you might end up having a very homogenous workplace.

dominotw3• 7 years ago

so how many rounds of interviews do i have to endure under this scheme?

why would a company take the word of biased party ( recruting companies) about the ability of a candidate?

mikece2• 7 years ago

I was contacted by a recruiter friend (yes, programmers and recruiters can be friends) a few years back because they had a client with a very specific need to find .NET devs who had a deep understanding of threading and parallelism. I told them to contact Joe Smith (name changed, obviously) as he knew more about multi-threading and parallelism than any dev I knew and suggest he pre-screen all candidates for the client (and offer to have Joe talk to the client's architect to prove his knowledge). The client was VERY happy with the improved quality of the candidates (the only thing about which they were unhappy is that Joe Smith didn't want to work for them).

It's not idle theory... I've seen this work.

cosmodisk• 7 years ago

I've got a connection on LinkedIn, he's a technical guy turned recruiter. He knows the platform he's specialising on pretty well,can talk to devs the same language as opposed to some random guy who doesn't even know half of the things mentioned on candidate CVs. It would be great to see this a more common practice. .

dpio• 7 years ago

That's a good question, why don't recruiting firms filter leads through technical guys rather than just looking for term matches?

pkaye• 7 years ago

Our internal recruiter at my previous company had a CS degree so she was quite capable of identifying candidates with good fit.

neilv2• 7 years ago

Regarding referral fee arbitrage... An organization might want to stop that on ethics grounds: if the employee is making money by redirecting a referral through a recruiter, without disclosing that to the organization... then the employee might have two conflicts of interest:

* employee is disregarding an official process, to enrich themselves at a cost to the organization

* employee might be involved, officially or unofficially in deciding acceptance of the candidate, without the organization having an opportunity to manage that

Besides the immediate impact of each incident, this can lead to a culture in which such things are viewed as OK, which can then escalate to much worse incidents/scandals, bad morale, dysfunction.

rurp• 7 years ago

Or... the company could just pay their employees a fair price for referrals. Management asking employees to go above and beyond to provide a referral, then short changing them on the value and strong arming them into not getting a better price from a recruiting agency, is a pretty terrible way to build a loyal workforce.

eropple• 7 years ago

This is exactly how my old recruiting sideline (I was a consultant, but recruiter money is great) worked. I spent time not just pre-interviewing candidates, but pre-interviewing companies; it made it pretty easy to connect good candidates with good companies.

(Been thinking about getting back into it for local Boston companies. Anyone out there interested in working with me to find you great, Boston-local candidates? Please feel free to drop me a line.)

traviscj• 7 years ago

Seems like a tough sell to find enterprise architects that want to screen full-time, but maybe it would make more sense to someone that actually liked interviewing... or, as you said, maybe you could just pay them enough!

emidln• 7 years ago

One data point here: my employer's in-house referral bonus is $7500 with an additional $7500 to a charity of my choice. This is paid after the referred hire celebrates their six month anniversary. We have 5-10 inside referrals a month.

gumby• 7 years ago

Don’t forget the candidate’s time as well. You should only bring them onsite if you think (from phone’s screen etc) they’re probably worth hiring so if they don’t work out you should be improving the upstream screening for everyone’s benefit.

rexpop6• 7 years ago

Why should a company value candidates' time?

Edit: To be clear, corporations are morally bankrupt slow AI whose goals are increasingly tangential to ours. However, their proponents must have _some_ justification for valuing what we value (in this case, candidates' time), or else admit the above moral bankruptcy.

I am not being sarcastic, I am challenging this forum's many corporatists to reassure me that corporations are motivated to accommodate a basic decency represented by valuing candidates' time.

Downvotes on a simple question, as usual, evidence this forum's continued inadequacy as a harbor for empirical discussion.

I am not trolling, nor sarcastic. I am simply ignorant of the corporatist argument for valuing candidates time.

dominotw3• 7 years ago

fair question. not sure why its downvoted.

Airbnb bought me onsite for 2 day interview process and kicked me out after 1 st interview.

I went to the beach and museums in SFO for 2 days. Not the best use of my vacation time but not the worst either.

nullandvoid• 7 years ago

Because looking for a new job !== I have time to piss down the drain? Many people are still working a full time job and have kids whilst trying to juggle landing a new role

natalyarostova• 7 years ago

It's a fair question. The best argument is if you give a horrible interviewee experience, they will tell all their friends about how much you suck, or post about how much you suck on HN, and that represents a cost.

Particularly if you treat a well connected talented engineer poorly, and they tell their friends, or even end up not using your service in the future out of spite.

pfranz2• 7 years ago

Depending on the other options your candidate has, you could be filtering out the best candidates. You could also ruin the company's reputation.

I've seen close friends have all-day interviews, or require spec work (requiring higher end hardware and a couple days of dedicated work) as part of the interview process. Peers blow off those companies or knock them down a tier when seeking work.

Just having an all-day interview can make scheduling way more difficult, delaying it until that other job with a 2-hour interview has happened and moved onto negotiating benefits.

PeterisP• 7 years ago

Because that results in worse candidates due to self-selection - the really good candidates who you want to hire are in demand, know that, and thus would simply refuse to participate in a process that's wasting their time and go interview elsewhere; while the desperate candidates (the very ones you'd want to filter out) will stick through.

commandlinefan• 7 years ago

I once interviewed with an airline (for an "enterprise architect" position). I had every single "skillset" they asked for (including the nice-to-haves), did well in the phone screen, they brought me on site for a four hour face-to-face interview. Then they asked me to come back again for another four hour face-to-face interview (with different people). They never called me back.

maxxxxx2• 7 years ago

I don't think that time is very hidden. You have to sift through a ton of resumes and then spend hours and hours interviewing and phone screening. If you have actual work to do it's pure misery. I also don't have time to really think about my interviewing technique.

I would much prefer if we had a "hiring department" who are technically knowledgeable, talk to applicants, maybe give them tests and build up a pool of candidates who then can be interviewed by the actual engineering teams.

e_ameisen• 7 years ago

Great article! Add to it the moral cost of interviewing multiple subpar candidates and improving the fit of candidates at the top of the interview process has a huge impact.

This is one of the reasons that many companies work with us at Insight (insightdatascience.com), as the interviews to join the program are done by Data Scientists and Engineers.

ChrisCinelli• 7 years ago

You could say:

"It is a funnel, you look at the stages, and at the end there is a great engineer that is usually working for a long period for the company.

Each level has expenses and conversions. Go an optimize keeping in mind the constraints."

But what I noticed is that is all about your company specifics and how you overcome the trade off...

For example the average new startup in unsexy industry has problems to get any body in the funnel. Getting somebody that know how to write some code can be a challenge... interview is more about persuading them to accept the job.

Great "sexy" companies have ton of people applying and would do everything they ask them to do. The problem for the company is to efficiently select those people.

When you have enough candidates, somebody may think: "We can save time and make accurate evaluations by giving a screening test offline to evaluate most of the relevant skills of the person!". Unfortunately the test takes on average 10 hours to finish.

Result: mediocre candidates desperate for a job try so hard to get everything done, but the great engineer has plenty of options and does not want to spend 10h on a test. In the end all great people that you would like to hire quit in the process.

pryelluw• 7 years ago

It's why I prefer quick phone interviews. It gives me enpugh of a glimpse into their culture.

ebiester3• 7 years ago

I always wonder... Would you take a job if you heard 20-40% of people who accepted the job were fired within the first month?

If an organization was good at firing fast, would people be willing to take a job there? Would you be able to truly assess an engineer within a month in a way you wouldn't in an hour?

The first two weeks are usually a wash. But you might be able to get more signal in that second two weeks?

Does that same equation hold true if it's contract to hire? Would you take such a job?

thedufer2• 7 years ago

I mean, we have plenty of people take ~this offer every year. The term is more like 3 months, and we call them "interns".

For people who already have full-time jobs it seems like a much worse deal, though. I certainly wouldn't take it, at least - it makes very little sense to give up the certainty of my current job in exchange for being maybe unemployed in a month.

bartread• 7 years ago

If an organization was good at firing fast, would people be willing to take a job there?

It's an interesting question. Having worked for organisations that fire fast, and those that don't, in general I tend to see it as a positive cultural indicator [1] - albeit one that needs some digging to verify - but I can understand that it might unsettle some applicants.

In fact nowadays I favour it strongly enough that next time I'm the one going through the interview process I'll probably investigate. I may even ask outright although, again, "What does somebody have to do to get fired around here?" is a question open to some misinterpretation.

[1] Working with difficult or unproductive people for long periods can be hugely draining on a team, not to mention hugely damaging commercially. Left unchecked it can even destroy your business.

watwut• 7 years ago

If the company fires 20-40% within first month, I would assume they are looking for too specific mold to fit in. I do not like places with too much pressure on conformity, so I would pass.

People in places where they fire easily and often are too insecure. That means taboos over things that should be discussion and fear of disagreement.

krageon3• 7 years ago

I have in the past accepted a job at a company that professed they had a 60+% turnover of employees within the first six months. At least half of that number was fired within the first month. It did not bother me that they did so, I just needed work at the time and I was confident I was good enough to stay.

EuroShill• 7 years ago

I work in Europe in a city of startups, Berlin. I can tell you most of the startups here have no concept of or simply don't care about hiring great candidates. A great number of them run on selecting for candidates who are most willing to bend over to exploitation.

Screening tests and "case studies"/homework that takes 10-20 hours of time are abundant to weed out anyone who might be a pain to manage. They don't want independent thinkers or challengers who think out of the box, they just want 'doers' who will follow every twist and turn of senior management 'vision'.

As a non-German or non-EU, they then offer you a craptastic package of maybe 40-60k EUR before taxes (local Germans will get anywhere from 60-90k for a similar position). If you say no, congrats, they've succeeded in weeding out the next group of annoyances: anyone who wants to be compensated fairly.

The result is startups get the exact kind of workers they love - the kind that is easily exploited both in terms of work quantity and financially.

European startups like to whine about "shortage of talent" but what they're really complaining about is the lack of total naive locals and foreign talent willing to move to be exploited. Also startups in Europe usually DO NOT adhere to the "EU work life balance" that is parroted around the internet. You get worked like you're in America, minus the American salaries.

clappski• 7 years ago

Trying to place Berlin as the whole of Europe is pretty unfair to the rest of Europe (considering it contains a wide variety of cultures and expectations on working life). Also, people referring to 'EU work life balance' are probably really talking about the much more substantial labor laws in the EU compared to the US, rather than meaning that they only work 2.5 hours a week for 90k$ or something.

I can't say I've had the same experience working for start ups in London, in fact I've had the opposite - competitive pay (probably about 20% less than working in tier 1/2 banks but above market in industry), good benefits (incl. private health, gym etc.), fair work life balance (incl. holiday days and WFH policies) and rewarding work with intelligent colleagues. Non-EU/UK workers that I've worked with have the same experience as far as I can tell (perhaps even more positive, considering that some of them require visa sponsorships).

robocat• 7 years ago

Why use the cost of an engineer hour?

The correct metric is the opportunity cost of that hour - the lost productivity for that hour.

As an approximation take total revenue and divide by total engineering hours.

If you are hiring engineering because engineering is a bottleneck (not just hiring due to churn), then the metric is realistic. It would still be an underestimation in his calculation because he isn't including the hours taken to get new hire up to speed (oppositely assuming hire is due to churn).

cm20122• 7 years ago

Also, an hour for interviewing costs more than one hour of productivity because it interrupts flow state. A 3 hour free chunk in the schedule is more productive than three one hour chunks.

onion2k2• 7 years ago

To be fair though, that's just a scheduling problem. Put interviews first thing in the morning or immediately after lunch and there's no way you'll be interrupting an engineer's flow state.

onion2k2• 7 years ago

As an approximation take total revenue and divide by total engineering hours.

This does assume every hour spent on engineering is equal, and that's not even close to true. In most companies about 50% of the hours account for 99% of the revenue. Companies spend lots of time on things that don't make any money, and in some cases they knowingly spend time on things that lose money.

If you can identify the waste then you can easily find engineering time to spend on things like hiring with no impact on the bottom line at all.

jiveturkey• 7 years ago

This does assume every hour spent on engineering is equal, and that's not even close to true. In most companies about 50% of the hours account for 99% of the revenue.

Yeah, the other 50% is interviewing. :P

Justsignedup• 7 years ago

To be fair... $150 an eng hour? That's a 312k salary. I don't think that is accurate. And a recruiter makes 200k salary on average?

These numbers are a bit nuts.

Agree with a lot of what is written tho, but not this crazy number.

a_t48• 7 years ago

Including benefits/facilities costs/ etc this isn't entirely unreasonable.

twblalock• 7 years ago

312k total compensation (not just salary, but stock and bonuses also) is not uncommon at FAANG and unicorn startups for senior people. The cost to the company is higher than that due to benefits, office space, and other HR costs.

I don't know much about what recruiters earn, but for a senior engineer that is not crazy.

dasil003• 7 years ago

It's not a $312k salary unless the person takes no holidays, sick days, vacation and has no benefits or other fixed costs associated with their employement.

mouldysammich• 7 years ago

Are holidays and sick days not paid in the US?

village-idiot• 7 years ago

Hiring manager here: we talk about the opportunity cost of interviewing a lot.

diNgUrAndI• 7 years ago

Sometimes interviewing a candidate as a team can have small benefits such as strengthening / making explicit what values are important to the team among the participants. This assumes that the team is operating in a full transparency, which is often seen in a small startup. I had the experience that after being eng. interviewer a few times I felt more glued and aligned with the team.

speedplane• 7 years ago

A bigger question about recruiting and engineer time, is whether they are effective at weeding out unproductive candidates. I'm not a recruiter, but I have interviewed a number of folks, and I still find it very difficult to determine if someone is good or bad. Folks that sound good during the interview, may just be good at communicating ideas, which is an important trait, but is still just one trait.

Even after you hire them, and you see them under-perform, it can be difficult to know if it's because of some intrinsic problem (e.g., just not so smart, or laziness), or if the problem is with the employer (e.g., not managing work, lack of communication, poor team integration). Yes, there are obvious stars and duds, but the middle is a vast gray area.

As engineers, we naturally try to turn hiring and performance assessment into an analytical questions that have clear answers, or that at least can follow a clear process. However, it still seems like voodoo.

The hidden costs of engineering time in technical interviewing

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