There’s an elephant in the room- we can’t ignore employee compensation! PART 1/2

August_2019_article

It’s more than obvious to all of us that compensation plays a major part in employees’ level of motivation. Well paid employees will try to do even better as they see their efforts getting rewarded. Employees treat customers, vendors, investors the way they are treated by the company. Well paid employees go out of their way to please the partners in your company’s progress. Poorly paid employees tend to be insensitive to the problems faced by customers, vendors, investors and even other employees.

Given how important compensation is, we decided to see if companies are doing justice to this topic. Recently we conducted a survey in which we asked the same set of questions to the employees and to the HR managers. Here are some insights from the survey

payimportant1

payimportant2

1) Both employees and HR managers agree that pay is one of the main reasons why someone joins a company and it’s also one of the main reasons for someone to leave.

Table: Pay is important

  Candidates’ Opinion HR/TA Managers’ Opinion
Pay as a reason to join 88% 82%
Pay as a reason to leave 88% 83%

openly

2) In spite of being one of the most important factors; the majority of the respondents said that compensation is never discussed openly as it’s against the company culture

Table: Yet we avoid discussing pay with employees

  Employees’ Opinion HR/TA Managers’Opinion
Pay is never discussed. Company culture doesn’t allow it 78% 83%
Compensation policy is secret-No transparency 63% 74%

3) Majority of the respondents agreed that among other factors, an important one is how indispensable you are to the company- which is counterproductive as it incentivizes people to become indispensable by holding secrets and not letting others learn.

4) Majority of the respondents also felt that the relationship with superiors is one of the main factors that determines their compensation. Being a team player is good, but we run the risk of surrounding our managers with sycophants by relating pay with personal relationships.

payfactors

In general, we need to be more objective in determining pay and not leave room for guessing. Employees attribute wrong motives when they have no clarity and transparency on why they are not getting what others are getting.

adhoc

To add to this, most companies seem to entertain ad-hoc requests by employees for pay negotiations. This clearly shows the lack of confidence by the companies in their own compensation policies. Are companies sending a wrong signal by encouraging employees to negotiate? Shouldn’t the companies insist on adhering to their compensation policies?

Table: Are we giving a wrong signal?

  Employees’ Opinion HR/TA Managers’Opinion
The company entertains individual ad-hoc requests for pay raise 43% 58%
Pay depends on how good are your relations with your superiors 80% 58%
Pay depends on how critical/ indispensable you are 92% 83%

Compensation policies

Many companies have pre-determined bands having

  • A fixed minimum
  • A fixed maximum
  • A fixed annual increment

This age-old structure doesn’t have any flexibility. In this model, the compensation is by and large dependent on seniority and tenure. Companies need to recognize that two people with the same level of seniority or experience can be significantly different in their performance.

One out of 4 companies announces a fixed percent increment every year. This policy doesn’t encourage high performers. On the contrary, under-performers get unjustifiably rewarded.

In our sample, there was no company having a simple compensation model that could be shared and understood by everyone. In the next part, we will discuss a model that is simple, easily understood and addresses many of the issues raised in this article. It’s not just a theoretical model. This model is in operation in the author’s company for the last several years.

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Transparency is the foundation of good candidate experience- Part 3

Shroud of Secrecy

There is a general shroud of secrecy around the interview process , hiring decisions and compensation offered. When you don’t communicate, people tend to lose trust. No wonder a recent survey by Team Blind shows that 70% tech employees don’t trust HR. In Part 2 of this 3 part article we saw the lack of transparency in the early parts of the tech hiring funnel. Viz. Resume completeness, job description and technical screening. In this part we will take a peek at what the candidates think about the end of the funnel- technical interviews , hiring decisions and compensation offered. From the results of the survey, it will become clear that lack of communication leaves the candidates guessing and left to themselves they aren’t kind to the IT companies. Remember talent is the primary driver of revenue and profits in the IT industry.

Candidates impression 1: Buzzwords score well in the technical interviews.

Buzzwords & Presentation score well

Buzzwords & Presentation score well

In the same survey more than 70% candidates said that interviewers do go into details of past experience giving more importance to analytical skills and problem solving abilities. About 44% also say that the frequently face deep dive technical interviews involving hands on coding exercises. But an overwhelming 70% surprisingly felt that companies give more importance to presentation skills and ability to use buzzwords. Companies can easily correct this impression by communicating their rationale behind choosing candidate A over candidate B. This information is never explicitly captured in the hiring process.

Candidates impression 2: Technically weaker developers can do better.

Technically weaker candidates can do better

Technically weaker candidates can do better

There is a feeling among candidates that technical abilities don’t translate into higher pay. It could be because there is no formal measure of technical ability. Every candidate thinks that she is technically better than the others. This impression can be corrected if companies adopt and widely share a metric that allows them to justify why someone deserves better pay as compared to others with the same level of experience. Interviewers’ individual opinions lack objectivity. Often competing candidates aren’t interviewed by the same panels leading to further deterioration of objectivity. A metric of technical ability can help the companies to reach more rational and objective decisions. 

Candidates impression 3: Job hoppers get better deals.

Job hoppers do better than loyal incumbents

Job hoppers do better than loyal incumbents

Some candidates become proficient in their interview skills. There are several resources on the internet like Glassdoor which give fair insight into the types of questions that are likely to be asked for specific jobs in specific companies. As a result those who switch jobs more frequently tend to do better in their interviews. Loyal incumbents lag behind. Companies maintain confidentiality and secrecy about the negotiated and offered compensation. The loyal incumbents get upset when the secret becomes widely known . Companies should realize that employees tend to freely share their compensation numbers among themselves. You can’t expect well performing cohesive teams without this level of informal communication. Companies should reward loyalty by correcting their pay structure to match the levels ruling in the market. Companies can use services like paywatch for effective pay corrections.

Conclusion

There is no doubt that there are many problems with technical hiring that need to be fixed. Lack of transparency reflects general apathy of the IT companies towards what candidates think. There will be a few companies who will see this as an opportunity and fix the problem by becoming more progressive and communicative. Software such as the Rezoomex Assessment and Ranking System will help these companies to measure technical ability and set compensation levels based on hard data to bring objectivity to the decisions. May be these progressive companies will get a headstart over others.

Transparency is the foundation of good candidate experience – Part 2

In part 1 of this article we saw that candidates don’t get any constructive feedback in the assessment and interview process. The real problem is not the willingness of the companies. It’s the ability to quickly and efficiently get the information needed to give the feedback. There are 2 problems.

1) General lack of information due to non availability of data or because raw data is left unprocessed.

2) Communication gap between HR, Hiring managers, Clients, BU Heads , Technical Leads and other stakeholders

Non availability of data

It starts with the applicants providing their information in varied levels of detail. Some are sketchy 10000 feet view of decades of experience with no details of time period or job switches. Others are way too detailed giving more information about their employers and projects than the exact roles and responsibilities. This variety makes apples to apples comparison very hard. Do companies bother to get the missing information from the applicants? Some of them do- more of them don’t. That’s exactly what a recent survey discovered

MissingInfo

Raw data is left unprocessed

A job description provides broad guidelines. It’s also subject to interpretation. Lastly as the name indicates , it’s descriptive and lacks objectivity. This raw data needs to be processed to arrive at the exact selection criteria and the importance to be associated with each of them- preferably using metrics to measure each criterion and a weight indicating its importance. Do companies take the effort? Do they communicate the outcome to all the stakeholders? Most of them don’t as indicated by our survey administered to a representative sample of candidates. There seems to be a communication gap – which is quite apparent to the candidates.

JDsAreAmbiguous

Tendency to share just enough information

After answering all the technical questions, it’s candidate’s right to know whether her answers were right or wrong. Assessment and interview process is a two way communication. Interviewers who can confidently show the candidates their mistakes and share the right answers draw a lot of respect from the candidates. These technical discussions become more meaty when information isn’t withheld. In fact these are low hanging brand building fruits for companies to pick. Unfortunately most of them don’t as indicated by our survey.

ShareAnswers

Communication gap and lack of co-ordination

As it might be obvious- there are many participants in the hiring process. They aren’t from the same department or team. In fact every job opening has its own set of stakeholders and each one approaches the problem from a different angle. It’s a team with an ambiguous mandate and no clear owner. Each one has a different approach to hiring. The client wants results – he doesn’t care how. The hiring manager can’t tell the selection criteria , but she has an ostensive job definition. The HR manager is basing the job description on what the hiring manager seems to want. The BU head has his own agenda of building high performing teams and the dev lead who is involved in the day to day grunt work wants the candidate to jumpstart with minimal hand holding.

OneJobManyPerceptions

Conclusion

There seems to be a need for a quantifiable metric that will measure a candidate’s suitability for a job. To arrive at it we will require a set of objective selection criteria and weights depicting the importance of respective selection criteria. This will provide a universal understanding of what is required. It will also provide a mechanism to do apples to apples comparison between candidates. Coordination between various stakeholders will improve as they would speak the same language and recruiters would be able to justify their recommendations with confidence. Readers may want to check the rezoomex assessment and ranking system which provides a framework to measure suitability.

Transparency is the foundation of good candidate experience- Part 1

An article by my colleague Dinesh Gokhale described how a candidate would feel short-changed by a well orchestrated, well thought out , stage managed candidate experience. We conducted a survey to understand the candidates’ psychology better. This two part article covers the insights gained in the survey.

Candidates actively seek more information

Some might think why add to the information overload by telling the candidate why she is rejected. What difference would it make to her? Contrary to what is commonly believed majority of the candidates do value feedback. The survey shows that majority of the candidates call the company to get feedback. There’s no teacher better than failure. But how can you learn from the failure unless you know the reason behind it.

Candidates Value Feedback

Candidates Value Feedback

Applicant Processing- A Lost Opportunity

Applicant process is in fact a marketing opportunity for the company to enhance its brand image. The applicant is a representative of the target segment and the process is a rare opportunity to engage in a two way communication with the target market. Every applicant is a potential future employee even if she may not be the best fit for the job for which she has applied. Companies must use this opportunity to develop a strong bond with the applicant by having a meaningful dialogue. How many companies actually do it?

Companies don't provide feedback

Companies don’t provide feedback

Companies get all the information and get answers to all their questions, but that’s just half the story. Our survey indicated that majority of the applicants rarely get any constructive feedback. Most companies are simply wasting this valuable opportunity to engage. It’s more like a monologue and less like a dialogue.

Companies Fake It But Don’t Make It

Only one out of many applicants is selected. Thus it’s important to study the feedback that is received by the majority- the rejected applicants. Here are some typical answers given by companies to the rejected applicants.

Top 5 Excuses

Top 5 Excuses

Excuses can’t replace relevant and constructive feedback. Relationships can’t be built by pretending to be engaging. “Fake it till you make it ” formula doesn’t work if there is no intention of ever making it. In fact companies who provide stock answers instead of meaningful feedback may be perceived as spammers. The same sentiment is resonated by this article about “Well Designed Candidate Experience” .

Companies who buy time with  promises that are never kept are pushing the applicants to become frustrated. Delay is the deadliest form of denial. One fails to understand why most companies take the applicants for granted.

What is the problem?

Companies don’t deliberately withhold information. The root cause is elsewhere. It’s the general lack of communication and clarity that engulfs all stages of the hiring process. Hiring is not seen as an activity of strategic importance by those engaging in it. Job descriptions, screening of resumes, interview scheduling and interviewing are conducted in silos and individuals engaging in these activities are not working in consonance as a single team. We will publish more insightful data which support these facts in the second part of this article.

 

Toolset used by the IT Recruiters

A panelist in a recent conference said that IT recruiters are overwhelmed by the number of software tools that they are required to use. They have to perform many tasks even after sourcing the required resumes . An earlier post covered various sources from where they source the talent.

This article is based on a survey that explores variety of tools used by technical recruiters for various tasks after sourcing a bunch of resumes. Total of 43 respondents who worked as recruiters in medium and large IT companies in Pune participated in the survey.

Technical Assessment

Technical assessment has always been a challenge for the IT recruiters because of their non-technical background. Tools like Hacker Rank, Hacker Earth, Mettl, Reliscope and Glider are being used by one third of the recruiters to overcome this challenge. Among all these Hacker Rank seems to lead the pack. Wonder what is keeping any of these tools from widespread adoption. May be it’s the time and effort to create, administer and analyse results of these tests. May be it’s sheer inertia. Total cost per use is non-trivial. These tests need continuous updates as new technologies get added every day.

Technical Assessment Tools

Technical Assessment Tools

There is no established software solution to conduct technical assessment. Two thirds of the organizations depend on in house on line or off line tools. Hacker Rank undoubtedly leads the branded technical assessment tools lot.

Applicant Tracking Systems (ATS)

 Applicant tracking solutions are by far most used special purpose tools. Here the adoption is close to 50%. There are many ATSs providing varied degree of automation at number of price points. Many enterprises already use Oracle and SAP resulting in their natural affinity towards Taleo and Success Factors respectively. I will be surprised to find a company using the ATS without the ERP. It’s surprising that none of the respondents mentioned the Naukri RMS in spite of it being integrated with the most used source of resumes.

 

Applicant Tracking System

Applicant Tracking System

The respondents are evenly divided between branded ATSs and other means to track. Taleo and Success Factors tie for the first place in branded ATSs.

Personalised Log of transactions or Tracker

There is no personalised database solution available for the recruiters to maintain their own pipeline of current and past candidates sourced by them for various openings. Excel is the default choice – easy to use and ubiquitous. Looking at 80% adoption there is no reason for any competing solution to try to dislodge Excel. Recruiters are so additced to Excel that they are maintaining their trackers even though the entire log of all the transactions is automatically tracked by the ATS!

Personal Database (Tracker)

Personal Database (Tracker)

It’s a surprise that 100% don’t use excel. Wonder whether the others maintain their personal database.

Interview Scheduling Tools 

Microsoft Outlook and Google calendar are the leading scheduling tools used by the recruiters accounting for more than 91% of adoption. It’s logical that most ATSs provide integration with these 2 scheduling tools. The vCal and iCal format of calendar invites are becoming the de-facto standards.

Interview Scheduling Tools

Interview Scheduling Tools

90% of the respondents use either Outlook or Google Calendar to schedule interviews. Some years back Outlook had even bigger share.

Remote Interviewing Tools 

What about “Specialised” video interviewing tools like InterviewMocha or Talview? There seems to be no significant adoption. Recruiters are still using Skype and phones.

Remote Interviewing Tools

Remote Interviewing Tools

Skype is the winner with 55% respondents using it as the preferred way to conduct remote interviews – landline calling comes distant second.

We love automation but we hate the loss of control 

Wonder why recruiters are maintaining trackers in Excel and schedule interviews using Outlook or Google Calendar when the entire history of their transacations is maintained and automated alerts are given by the ATS? Is it because old habits die hard? The answer is partly that and partly the fact that automation is a black box. People want to be doubly sure that the interviews happen as scheduled and they don’t lose the history including their comments. It’s the same reason why we carry cash even though we hardly ever use it. I am sure for the same reason we will have our hands on the steering wheels and our feet on the pedals when we get to “drive” our autonomous cars.