IT hiring as seen by interviewers/hiring managers: Part 2

In this part, we will propose a solution to the problems perceived by the hiring managers as concluded in part 1 of this article. Ideally, there’s no need to have such an elaborate solution if the hiring manager did everything from writing the job description, determining and communicating the selection criteria to conducting the interviews. Practically as we have learned, only 50% of the hiring managers write the job descriptions. Only 64% of them are engaged in determining and communicating the selection criteria and most of the interviews are conducted by interviewers who are not the hiring managers. Hence the need to have a solution that facilitates collaboration and communication.

The diagram below describes the proposed solution. Here are the steps of the solution.

ProposedSolution

Step 1– Hiring manager creates the job description and the software will help him decide the selection criteria based on the JD.

Step 2– A software service applies the selection criteria to the resumes uploaded by the recruiters and computes the suitability scores.

Step 3– Top-rankers based on the suitability score are identified. Recruiters follow up to gather any missing information and administer a technical quiz to each one of them.

Step 4– The technical quiz is a quick, in-camera assessment, conducted on the candidate’s smartphone. The candidate can take the short 20-minute test at her own convenience. Recruiters can ensure authenticity by checking the video recording.

Step 5– Only those few top-rankers who score well in steps 3 and 4 are presented to the interview panel.

Step 6– Feedback from all the interview rounds is processed by the hiring manager and any obvious disconnects between the recruiters and the interviewers can become visible to the hiring manager on the dashboard. E.g. The top-rankers as per steps 3 and 4 get rejected and bottom-rankers get selected.

Step 7– Based on the results as seen on the dashboard the hiring manager can tweak the selection criteria and the technical quiz to align the recruiters’ and the interviewers’ understanding of the requirement.

Let’s take a closer look at the problems identified in the conclusion section of part 1 of this article to understand their magnitude and severity. Let’s also examine if the proposed solution addresses those problems.

Problem 1 : The interviewer is not completely plugged in and it results in a lower hit rate. On an average 3 out of 5 candidates are found to be unsuitable in the face to face interviews. This may be the tip of the iceberg as we are assuming that those who are selected are perfectly suitable. Bad hiring decisions are rarely acknowledged.

HitRate

Solution 1: Sharing the job description, and the selection criteria with all the interviewers will improve everyone’s understanding of the real requirement. Assigning weights to the selection criteria would further refine this understanding. It will bring cohesion between the job description, the selection criteria, the quiz questions and the interviews in steps 2, 3 and 5.

Problem 2: As already seen in part 1 of this article majority of the interviewers think that they are wasting a lot of their time in the hiring process. On average an interviewer spends 45 minutes per interview.

InterviewTime

Solution 2: Justify to the interviewer the time spent by her by sharing the reason why the candidate deserves to be selected, with specific reference to the weighted selection criteria as stated in steps 2 and 3. This will positively orient the interviewer going into the interview, and keep the preliminary screening process honest.

Problem 3: The recruiters are unwilling to reject candidates at their level. It’s obvious that the recruiters need better tools than preliminary phone screens and tests. Technical tests are inconvenient and time-consuming. Some candidates cheat while appearing for the online tests.

Solution 3: Improve overall quality in the preliminary screening process by doing the following

  • Recognizing fact-finding work resulting in the rejection of candidates by the recruiters as their value addition. Presently, in most companies, the recruiter gets no credit for rejecting a candidate at her level. We should stop looking at the number of interviews scheduled as the measure of the recruiter’s performance. Recognizing the value of rejection will bring quality consciousness and reduce the stress placed on the interviewers by mindless overcrowding of the recruitment pipeline.
  • Having some kind of metric to measure the suitability as depicted in step 2. Such a metric will encourage the recruiters to focus their attention on sourcing more suitable candidates. Recognizing average and total suitability scores as measures of the recruiter’s performance would improve the choice and quality of candidates.
  • Having a lightweight and efficient technical screening in step 4. This would eliminate candidates who can’t answer simple questions on topics that are important.

Problem 4: The formal feedback process is geared to capture the overall impression of the interviewer, but doesn’t help to improve the next batch of candidates. We need to learn and improve by a better understanding of the reasons for rejection.

Solution 4: The interview feedback should require the interviewer to indicate his acceptance or rejection against the commonly shared weighted selection criteria and the reasons for proposing the candidate as suggested in solution to problem 2. This will enable the recruiters and the interviewers to change the selection criteria as needed and capture the reasons for such changes in the interview feedback forms.

Problem 5: Interview feedback is not shared with all the stakeholders. As the purpose of the feedback is more for documenting the reasons for selection, the same is shared with HR and other managers who are supposed to take further action upon the selection of the candidate. The need to share it with the recruiters is not felt. Recruiters often don’t have access to the detailed feedback provided in the system. They have to remain content with short “Selected” or “Rejected” status that shows up in the system. Part of the problem is also because the recruiters rarely state the specific reasons why a candidate deserves to be selected, hence they forfeit their right to know the reasons for rejection.

Solution 5: In step 6- the interview feedback process the interviewer could provide some tips on what the recruiter could have done to reject the candidate at her level. This information can be used by the recruiter to improve her hit rate. With some additional work, the recruiter can also pass on a part of the feedback to the rejected candidates. Useful for the candidate to improve herself. Maintaining this level of transparency will go a long way in building the employer’s brand.

 

IT hiring as seen by interviewers and hiring managers: Part 1

In a recent survey conducted by the author, the majority of the interviewers said that the hiring process was wasting a lot of their time. More than 20% felt the need to complain as they could use that time for more important project-related work. About 50% didn’t complain, although they felt that their time was being wasted.TimeSpentRating

Why do they get involved?

Are the interviewers a willing party to this waste of time? Why do they get involved? A short survey showed that only a few times the hiring manager interviews candidates for a project in which he or she is directly involved. This means he or she is merely an interviewer working for some other hiring manager. The majority of the time the interviewer is roped in by HR or by his superior for his or her expertise. Organizations do want their best experts involved in the selection process. There are a few times when the interviewer gets called in at the last moment because the pre-appointed interviewer is unavailable. Would the interviewer serve as a good proxy for the hiring manager? Would he be as familiar with the job for which the candidate has applied as the hiring manager? One wonders what impact all this has on the quality of hiring.

Broken communication starts with the job description

The hiring manager is supposed to write the job description and decide the selection criteria. The interviewers are supposed to select candidates based on the selection criteria and the JD. Very often the JD is not written by the hiring manager. Some hiring managers said that they don’t look at the job description, many said that they believe in a short one-line description of the requirement.

Does everyone know when the Job Description changes?

Given this initial low level of participation in the creation of the JD by the hiring managers, it’s not a wonder that only 20% of the respondents are able to always keep using the initial job description. In the remaining 80% cases, the job description changes. When it does, ideally, the hiring manager should change the selection criteria.

Surprisingly 36% of the respondents didn’t see any need to communicate this to the recruiters and “Almost Always” kept the selection criteria secret! It must be quite frustrating for the recruiters as they are left guessing the real job requirements.

How do you communicate changes to the selection criteria?

selectionCriteria

Impact of broken communication on the hiring process

We asked the hiring managers whether they noticed some gaps in the way the hiring process identifies and short-lists candidates. They were unequivocal in their feedback – “Sometimes it works, sometimes it doesn’t” (see the table below). There are some obvious facts that the recruiter can check at her level even before sending a resume to the hiring manager. E.g. Whether the candidate has relevant experience? Whether the candidate’s pay expectations are within budget? Has the candidate been a rolling stone?

What are some of the obvious weaknesses in the resumes that are overlooked in the pre-screening stage?

RecruiterMisses

When we talked to some recruiters, we discovered that they were maximizing the number of candidates interviewed. As a result, there is an overall resistance by the recruiters to reject a candidate. They would like to maximize the chances of selection by recommending as many candidates as possible. As a result, the interviewer’s available time is quickly consumed. This has two downsides

  • With so many candidates to be interviewed, multiple interviewers conduct interviews for the same position. This makes objective comparison difficult. Hiring standards become inconsistent and the quality of hiring suffers.
  • Interviewers are overworked. Fatigue sets in. The communication between the interviewer and the recruiter becomes tenuous. Recruiters feel that their hard work is not rewarded and the interviewers are frustrated by interviewing unsuitable candidates.

Are we using the interviewers’ feedback to improve the success rate?

We discovered that the same reasons for rejection appeared multiple times in the feedback provided by the interviewers. Does that mean that the recruiters are not using the feedback to improve their selection? In which form is the feedback provided by the interviewers?

We asked this question and please see the responses we received in the table below.

What is the mechanism for providing interview feedback?

IntFeedback

It is evident from the table that there’s no commonly followed standard process. Each company follows its own process. The majority (17 out of 25) seem to be using some kind of form. It appears that the primary objective of the form is to put on record the impressions of the interviewer.

We are wondering whether the feedback reaches the recruiter and whether the recruiter is able to change the selection criteria based on the feedback. These two are topics for further research.

Reasons for rejection would reveal what changes we need to make to the selection criteria. Informal conversations with the hiring managers led us to believe that the feedback forms are mainly meant for justifying the selection and not enough importance is given to the reasons for rejection. Also as seen in the table, about 40% of the respondents “frequently” send emails justifying selection, but find no need to justify rejections. Without this information, one wonders if the interviewers’ feedback is used for reducing the number of rejections.

Conclusion

We can conclude that hiring for software engineers is a broken process

  • Not every interviewer is “plugged in” to have a good understanding of the job.
  • Most interviewers and hiring managers feel that their time is being wasted- even though majority don’t complain.
  • Recruiters are averse to the idea of rejecting candidates. They often overlook easily detectable weaknesses evident in the resumes. They try to maximize the number of interviews. This results in overwork, fatigue and tenuous relations between the interviewers and the recruiters.
  • The established feedback mechanism doesn’t serve the purpose of improving selection rates. More stress is given on the reasons for selection than those for rejection.
  • Selection criteria do change but the links carrying the communication back to the recruiters are weak.

We will take a look at the impact of these shortcomings on the organizations and suggest some probable solutions in part 2 of this article.

 

Model for determining compensation

There’s an elephant in the room- let’s build a pragmatic, objective and transparent compensation policy! PART 2/2

As stated in part 1, this is an experience report from the author’s company where a more pragmatic, objective and transparent model is being used to determine compensation. For most skills having a sufficient number of jobs and job-seekers, a market mechanism becomes operational. Ruling market rates are the most impartial and objective way to determine compensation.

Boundaries that define the “Job Market”

There are 4 factors that define “market” for the purposes of employee compensation:

inflation

  • Geography- Inflation rates vary from country to country depending on the economics of that country. Fast-growing economies such as China and India tend to have higher rates of inflation.
  • Skills- Certain skills tend to be more in demand. Recently “Data Science” skills are in demand, which has resulted in better compensation for Data Scientists

scurve-jobs

  • Experience- A professional becomes better at his job as he gains more experience. This trend tends to taper off after 7 years. At which point one can think of up-skilling to get a better job.  The graph above shows how compensation reaches a limit after a few years in a job. The only way to break out to the next compensation level is by up-skilling to acquire a better job.
  • Performance- If we do A/B/C grading for employee performance on the job, A graders tend to do significantly better and C graders tend to do significantly worse than the average.

How to determine “market” compensation

We can practically determine the ruling market compensation by taking a small randomly selected sample. The sample should be large enough so that it results in a bell-shaped frequency distribution. We sampled candidate data sourced from job portals, employee and agency referrals for certain job skills and experience ranges in certain cities. Please refer to one such frequency distribution in the graph below. We observed that most samples resulted in a slightly right-skewed bell shape for sample sizes as small as 50!

Model for determining compensation

Model for determining compensation

The compensation model

We used these frequency distributions to build a compensation model that passes the following tests –

  1. Can the model be shared with all employees to bring transparency and objectivity
  2. Can the model manage non-uniform expectations based on skills and experience?
  3. Can the model lend itself to hire talent by offering good pay hikes to the new hires, without upsetting the loyal incumbents?
  4. Can the model account for special rewards for the superstars, thus avoiding ad-hoc negotiations?

Our company conducts quarterly performance appraisals in which employees are appraised of their last quarter’s performance by their immediate superior in an hour-long meeting. They can openly discuss and understand what OKRs they need to achieve in the next quarter to achieve an improved grade. We have successfully managed employees’ expectations by clearly linking percentile of pay level with grade achieved in an appraisal. (Refer to the table above) E.g. All “B” graders are paid at 75th percentile. There is total transparency as any employee can study the frequency distribution based on her technology skill and experience level. She can then decide whether to achieve better pay by up-skilling to a hot technology or to build deeper expertise in the same technology. As this model is based on the frequency distributions it makes it much simpler to uniformly relate performance to percentiles across multiple experience levels and technology skills.

Here’s a link to the frequency distributions we have compiled based on samples taken from 28 technologies and 5 experience ranges. We have made this data accessible by writing a web-based application called Paywatch. Our company has been Paywatch for building our compensation model as described above. You may want to use this data which is updated on an annual basis as it’s open for all to use and provide feedback.

We have carefully drawn samples across various experience levels to compile the Paywatch frequency distributions. The report is categorized by technologies because hot technologies like AI and Big Data tend to have higher pay levels as compared to older technology categories like Java or Dotnet. Your company can be easily benchmarked for each of these categories and experience brackets. Companies can achieve transparency by using Paywatch to formulate a rational compensation model. The model can be made transparent as employees can verify the pay levels by using the Paywatch frequency distribution relevant to their technology skills and experience levels.

Results

This model is broadly known to all employees in the company. Those recommending pay raises have been briefed in meetings and via e-mail. We have been using Paywatch for the past 3 years for determining employee compensation. We have quarterly appraisals. A few (less than 1%) employees request reviews of the raises recommended by their superiors. Though Paywatch is open to all, not many employees actually use it to cross-check.  This article is also an attempt to get our employees to use Payatch and provide their valuable feedback.

Initially, we observed that some managers were more lenient in grading and generous in recommending raises. These anomalies stood out as they were clearly violating the Paywatch frequency distribution. We had to educate those individuals by asking them to justify their actions in writing. Some of these justifications were not valid. E.g. 50% of the team members can’t be top 5% performers. When we shared the feedback with all the managers, it resulted in a common understanding of the model. This helped us to bring uniformity and remove any individual bias. In fact, the model works so smoothly that recent raise recommendations needed no moderation or intervention by the HR department. There is so much transparency that no one is afraid of discussing her pay with others. In fact, a glitch in our payroll software had resulted in many employees getting pay-slips of many of their colleagues which was very embarrassing for the accounts and the HR folks, but it didn’t result in any dissenting or attrition. There was no surprise for anyone there!

We use the same model for making offers to the new hires. That is the mechanism to keep us honest. The fact that most offers were accepted, and less than 1% of the offers were rejected on the grounds of low pay, validates that our model is well synchronized with the market. It also proves that we have successfully avoided having double standards in determining pay for the new hires vs the loyal incumbents. New hires are smoothly on-boarded and accepted by the incumbent teams as there is no secrecy about the pay offered. 

Is this model the silver bullet?

We aren’t suggesting this as a silver bullet to address all the issues related to determining employee compensation. This is a sincere attempt to take on this big challenge instead of turning a blind eye. This is just a modest beginning. Employees, HR, and top management have to engage in a meaningful open debate using popular formats like fishbowl or breakout groups to discuss this topic and come out with a solution that is acceptable to all in the given context. Only then would we reach a decision to accept-

  1. Solutions or partial solutions
  2. “Workaround” in the absence of a solution
  3. The overall agreement that there is no solution or “workaround” likely in the immediate future
  4. Long term changes that need to be implemented to avoid some of these problems

Is this the only way?

There are many consultants who would charge a fat fee to do a benchmarking study and recommend pay structures. Paid studies are good for getting a one time snapshot of pay levels – but it would be unviable to get your company benchmarked every year.

Popular platforms like Glassdoor and Payscale crowdsource the compensation data. Even if we assume that the information volunteered by the users is accurate, these platforms have no control over the sample – making it hard for them to draw statistical inferences.

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.

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.