1) Simple programming challenge (< 30 minutes) by email. To see if they can actually write good code. Resume/age/experience/location mostly disregarded.
2) Casual discussion-style interview to get to know how they think and behave.
3) Short term contract with a predefined project (< 3 months) to see how they work over time.
4) Full time hire with salary + equity.
There are three risks compared to a FT offer - (1) the business goes south and they can't afford to bring you on FT (in which case you might be screwed even if you had gotten a FT offer), (2) you're not a cultural fit (in which case, it's the better outcome for everybody) and (3) you don't meet their standards.
During the 90 day contract, both you and the employer must technically still be "looking" (the company still has an FT headcount to fill, and the dev still doesn't have a job). But the company is inherently better positioned to deal with the uncertainty: companies hire many people simultaneously, and keeping a req open costs them nothing. Individuals, on the other hand, have a very hard time conducting a serious job search and doing their 100% on a full-time job simultaneously.
That is not actually a risk in the FT dev model, where the incentives are structured differently; it is instead very much more like the "up or out!" model of the Big 4 accounting firms or investment banks: you got the shot at the gig, now work your ass off to make sure you can keep it!
If you are a friend of mine and you are staring down the barrel of one of these "contract-to-hire" offers, take my advice: turn it down. We've been hiring nonstop for the past couple years, including for dev, and it is ludicrously, insanely good to hire good people. You hold all the cards, except (tragically) the one labeled "knowing what you're worth".
Now sure, this guy is the rare 10% that is completely honest and pure, I will assume that and he has no ill motive at all. But the other 90% that he has no control over is the real issue with this. Most people with talent that have been around the block a couple times have gotten burned by this scam and avoid these scenarios like the plague. If you are a reputed expert the way you handle this is either handle it as a straight consulting job at your standard rate (which should be something like $180-$250/hr if you are any good at what you do or $120 if you are a newbie) for the 90 days, or you put a big fat penalty in the contract that if they say no at the end they have to pay severance to cover the full cost of both of your relocations, the one out there, and the one back, including losses from the required hasty real estate transactions. Will they agree to these? Usually not, and that's the point. You really only want to do business with people who are fair dealing, not people looking to cheat contractors through false promises.
Another scam is the two day long interview where you work on some serious problem the company is having and it happens that you are known as an expert in that field, your name coming up on some searches. For me it was Windows graphics drivers. Back in the 1990s I would get tons of job interview requests and then would be treated to two days of intense querying to "prove" that I knew how to solve their problems in detail during which they either took a lot of notes or recorded the interview. Lots of other people get this one too.
Another related scam is the programming problem you are supposed to solve which should take 30 minutes, but as an expert it takes a full week. Instead of being a puzzle it is something obviously related to their business.
Just say no to all these! I know the bright eyed and bushy tailed kids won't listen, but this old geezer has to warn them nonetheless.
Personally, I'd rather work at a company that falls into the latter category.
I don't think most people even question how ridiculous it is that companies interview a person for a couple hours and then agree to work with them for many months or years before they will even consider firing them (usually only after additional months of trying to "work it out").
In my opinion the best recruitment tool is having a team that a potential candidate would be really happy (and lucky) to work with. You can only do that if you keep standards up and hire slowly and methodically. A bit of a pain in the beginning, but worth it for everyone involved in the end.
Of course, that is provided that the company would be paying my standard consulting rate for the relevant 3-month period.
This is of course because he said he didn't care about location, so there's no moving costs and so on...
I spent many years hiring and working for companies that did it the way most people do it. The results speak for themselves: most companies suck to work for and most of them suck because of a few (or not so few) bozos and the environment they create.
I agree that three month contracts should be compensated at contractor wages rather than employee wages, unless the company is also paying for health benefits, some sort of portable retirement plan, etc. Otherwise you're giving up those items in return for zero commitment from the company. Not a good deal.
If you work at an excellent company, you can learn much, much more than you do at an average job, and you'll likely make connections with better people. Working with excellent people at a job has many of the same benefits as studying with many excellent people at a university. It's one of the biggest reasons to go to an elite school, and one of the biggest reasons to work at a very selective job.
If it's a great company, I think it's worth giving up some of those things for the chance to work there. If you can show them that you're much better than average, they'd be stupid not to bring you on full time. It's mainly risky if you don't think you can demonstrate that.
Contractors make significantly more money than full time devs partly for this reason. They're compensated for shouldering the risk of keeping a full book of work. Getting a good developer to work as a contractor for what will eventually be their FT wage is almost kind of a scam.
This is a simple, practical issue. You're Sam, a developer with 5 years experience. You have a choice between two roughly equal jobs. One prospective employer offers you a full time job tomorrow; the other offers you a 3 month auditioning contract. Which offer do you pick?
Also if you work 40 hours a week at the employer's place of business, are provided with all the tools you need to work, are paid directly by the employer, and are told what hours to work and how to do the task, the IRS will consider you an employee. Maybe if its only for 90 days you can get away with calling the person a contractor, but I think you're walking a fine line.
Anyways, I don't see why this is a cop-out any more than any other hiring procedure. No company has anywhere near a 100% success rate - this procedure acknowledges the shortcomings of a traditional interview process (namely that succeeding on an interview and succeeding as a developer are two very different animals) and tries to address them.
Agreed. But tptacek's point seem to be that this new process addresses the perceived weaknesses of traditional processes by moving all the downsides/risks to the potential employee. I think the hiring firm can signal their honorable intentions more clearly if they would pay a significantly higher salary during "probation" - something that compensates for lost benefits etc.
Edit: staunch mentions elsewhere on this thread that he is offering higher rates during probation.
Going to work for a company with employees of varying skill is no big deal; every company above a certain size has people who probably shouldn't have been hired. Going to work for a company with shady management, however, is a deal-breaker.
So I accepted a position like that and it worked out fine, but honestly, I will never do it again. I only accepted it in the first place because I was a desperate, inexperienced hire without any alternatives. Now I'm more skilled and have experience that demonstrates at least some ability. Accordingly, I don't need to take those kinds of risks.
Just because I'm good, maybe the boss's wife decides she doesn't like me or I lose some political blame-the-new-guy game, or they decide on entirely different qualities in a hire, or whatever. In this climate that sort of risk is their problem. I also won't do 10 hour programming 'tests' and I'm pretty reluctant to do several full-day programming interview marathon sessions. It sucks, I don't want to take the time off for that crap, and most importantly...
I don't have to.
This means there are places I can't work at, but there are plenty that would be glad to have me, and that suits me fine.
I've always heard that, yet when I look for contract work, it's always at equivalent or less than my hourly equivalent as a full-time dev. Full time was $100k - $115k/yr, contract was $40 - $50/hr, in the SF Bay Area.
I don't know, I don't really consider it "normal" or "market rate" if there isn't an open market for it.
I appreciate your wisdom, though, don't get me wrong. It just makes me question the typical advice espoused by people.
1) It makes it very easy for either party to end the relationship in a natural and simple way. Minimal hurt feelings/embarrassment/harm to morale, etc.
2) The project is at least semi-isolated so it's very clear how skilled the person is. They don't get lost in some "training" mode as a new hire spending 6 months "ramping up" on the primary codebase. They (hopefully) get an early win and earn respect and confidence from the beginning.
But I do agree with the other poster. Most high quality devs I know, worth their weight, won't sign on for that. Their view is that its a slap in the face from day one, and disrespect like that from management never gets better over time.
I haven't worked anywhere that didn't at least have a 3 month probation period.
(Every job I've held has had this in some form or other. I'd wager it's common in countries with termination rules that aren't quite so, uh, "at will" as the US'.)
I'm happy to pay higher hourly during the contract to compensate for the lack of benefits.
I'm happy to pay a (naive) employee more than they asked for because I know what the position is worth and have no interest in tricking them.
This isn't generosity, it's just good long-term business IMHO.