The Talent Shortage Myth and Why HR Should Get Out of the Hiring Business | Hacker News Reader

The Talent Shortage Myth and Why HR Should Get Out of the Hiring Business

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68 pointsvellum64 comments

Reminds me of a comment I had a while ago regarding HR below. Some context - the company had been having problems with hiring good people and was trying to figure out what the problem was - because they never had the problem in the past. So they figured it was related to the HR department and they tested it as below:

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I can't remember which company this story was from (I think it was Lotus Software).

Basically the HR team of a multi-billion dollar startup were given the anonymised resumes of the first 10-20 founding team members.

HR rejected them all. Not one founding team member was accepted even for a short interview.

Tells you something about HR doesn't it?

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Source: https://news.ycombinator.com/item?id=4699673

Same problem as found here: https://news.ycombinator.com/item?id=5470941

It does say something, but do you really want to hire founders in a mid stage company?

Founders are very different types of people, the type of people who while great at starting companies, but different people are required at different stages of a company.

assuming you can tell personality from reading a résumé...

But most positions require more than a particular type of personality. And in many cases, unless the person is totally obnoxious, personality counts for little as long as the person has the required skills. . .and can be isolated in a corner, if necessary.

I would love to get a little more context behind this anecdote, because I have to admit it sounds almost a little too good / bad to be true.

While I have fairly limited experience with BigCo hiring, my poor resume has made it through at least a couple HR filters without any attempt on my part to do any keyword matching.

Even in the cases where HR is literally grepping the resume for certain target words, the requirements themselves aren't conjured out of thin air. Therefore, I feel some of the blame is shared by the department doing the hiring. After all, they know a filter is being applied by a team without domain knowledge and should tailor it accordingly.

My google-fu isn't working, but I definitely remember hearing it from a book or interview. I think it was Microsoft, Apple, or Intel.

This anecdote might seem incredible to much of the HN community, who look upon successful founders as some sort of demigods.

But could it be conceivable that they're really nothing special?

Perhaps HR was right after all.

But could it be conceivable that they're really nothing special?

Affable but averagely talented guys with a few rich pals, most of them.

Not trying to maintain the "demigod" status of the founders, but. . .maybe they are something special - at least some of them - but not a good fit for the hiring company's culture. Or maybe they would be a good fit within the corporate culture but are a poor fit for a particular job and HR is not flexible enough - or not allowed - to say "not a good fit for this position, but may be a good fit for that position. Let's toss it over to that hiring manager."

With out a control group made up of non-HR people, this study doesn't show what you think it does.

I find it disturbing that Ask the Recruiter tacitly assumes that 12 million unemployed versus 3.7 million vacant jobs implies there isn't a talent shortage.

If we have 3.7 million job openings for rocket scientists and 12 million unemployed brain surgeons, then surely we have a talent shortage, no?

This might be a purely semantic argument, but I'd say in the example you provided, you have a skill shortage, not a talent shortage. If you provided training, I'm sure you could find enough brain-surgeons willing to train to be rocket scientists. Of course, that would require you to pay for their training and allow for months of lower productivity while they come up to speed, but that's still a better situation than 3.7 million openings and 0 unemployed.

The problem isn't filling the rocket scientist shortage with brain surgeon retrains. It's finding the unemployed shelf stacker who's really just 6 months of good training from being you rocket scientist. Otherwise you're just creating a shortage of brain surgeons.

It's VERY hard to find quality developers. I agree with the article that HR is a huge problem, but I'm a hiring manager and I still don't see a great deal of quality.

While it's not as extreme as shifting industry, I recently took the advice from a few HN threads I'd spoken up on and while I'm looking for a PHP developer, I didn't insist that PHP be one of the languages you already know.

Did that work? No. I still didn't get an influx of quality applicants.

I also said in the ad that I was more interested in a cover letter than a resume that shows where you've worked or gone to school, and I'm interested in your Stack Overflow or HN profile. In other words: I'd love to hire a hobbyist.

But none of the 5% of this country's unemployed applied.

Well that's the point. Keyword-matching does require that you already know PHP; there's no regular expression for quality.

It might also be that you're looking for a PHP developer. Quality people tend to stay away from PHP.

Unfortunately, I suspect you're correct.

Almost every one of those vacant jobs has a offering price - a salary attached to it. so those jobs are only vacant at a price. That price may be unrealistically low.

There is almost no cost, in any negotiation, to making a lowball offer. So you have to question how many of those jobs actually exist. Just as low-ball offers in a distressed real estate market are unserious, a job that cannot be filled at an insufficient salary isn't really a job.

outs interesting the reverse does not happen. why isn't there any workers posting a salary offer for doing a particular job and then companies select?

Even in a normal economy, we will have about 4 million job openings. People naturally leave their jobs for various reasons creating job openings. Similarly, even in normal economy we will have about 4 million people getting a new job each month.

I generally agree with the suggestion that the line managers who know the work rather than whatever HR department a company has should have the lead role in hiring. The supposed rationale for an HR department is that hiring and firing are hemmed in by various laws that not everyone understands, and a capable HR person can prevent a company from doing something illegal that exposes the company to a lawsuit or criminal penalties. But most of the time, HR departments really keep companies from hiring capable workers.

Definitely learn the law, and don't do anything illegal, but help managers learn how to develop work-sample tests for hiring,

https://news.ycombinator.com/item?id=5227923

and make sure that the main focus of hiring is getting each job done right by new hires who have a capacity to grow into more responsible positions in the company over the next few years.

Of course, in the long term, these anti-discrimination laws really should change, but that is a different matter.

I think HR can be useful at "managing" the talent once the hiring is complete, but agree that their involvement in the actual hiring process should be limited to compliance issues. HR can also be good at helping to identify the roots of any turnover issues. Line managers may be too close to the problem and/or too busy tending to the business to be useful in that area.

I'm sorry, but the talent shortage is a real thing.

We don't have any HR filtering in place - resumes come directly to managers - but we still have a really difficult time filling our open positions.

If you want this claim of yours honestly evaluated, state your company, location, job requirements, and how much the compensation package is.

Absolutely it is. Furthermore, the concept that an applicant should dictate whether he/she speaks to a manager is impractical. Just as dismissing screeners as largely incompetent is silly.

To be clear-he's absolutely correct that automated screening of applications isn't up to snuff.

Counter anecdote:

We don't really have an HR department at all, and we don't have much trouble finding people when we need them. Sure, we get our fair share of chaff like everyone else. Still only takes a month or two to find someone worth hiring. I do not consider that an unreasonable amount of time. For the record, every engineer we have hired since I started, and including me, has been a cold application off a web posting.

*Shortage of talent at the price you are willing to pay.

There are all sorts of legal work and questions I would love to have done if I could get a top-notch lawyer for $10/hr. That doesn't mean there is a shortage of top-notch lawyers, it means that I am priced out by the rest of the market who are offering them better wages. Sounds like you are priced out of the market, if you offer market wages, you will find people by definition of market wage i.e. the price that it costs to successfully hire people, not the price off of salary.com.

One caveat is that "market wages" most likely will need to offer a risk premium depending on what kind of environment, stability, convenience, etc. you offer. It probably isn't going to be "the industry average for all companies (including the big boys) is $X, so I should need to just offer $X". X could be lower or higher, depending on who you manage to find and who you are.

I think there's actually a lot of caveats, all jobs are not equal, there isn't perfect information about all available jobs (hence the need for recruiting), etc.

But on the other hand, this 'shortage' is being used as a political tool to depress engineering salaries, even though if you applied the same logic to other professions you would find there are worse shortages there. Clearly it would be useful from a healthcare cost perspective if we had more doctors but we aren't expanding visa quotas there. Salary is a huge issue and most jobs want to pay engineers as little as possible. Of course they will rant about how competitive their pay is but if it was so competitive they would probably advertise it, instead of trying to use information asymmetry so they can negotiate them down lower. Then of course, they only hire the best, but salary negotiations inevitably revert to 'market wages', then after all this they can't hire people so they need more immigrants who get deported if they fire them.

For some reason, if you can't afford an accountant, you don't get an accountant, if you can't afford a private lawyer, you don't get a private lawyer, but if you can't afford a programmer, there is a talent shortage and we need more skilled immigrants and to subsidize more STEM graduates.

Not to mention the H1B hire -> underpay -> keep them underpaid and shackled with the H1B/Greencard combo.

You would quickly find yourself in trouble with the INS.

Sort of. Unless you can show that they make higher than the prevailing wage. This being regardless of what the H1B applicant could make if they transferred companies (something that's not typically in their best interest until they have a green card, at least from those I've talked to. Being a US citizen, I may be wrong). The prevailing wage, for many people, is not a competitive wage.

Even if/when they aren't underpaid, they are still shackled by the H1B visa.

I posted this above but that's not true at all. If you can find another employer to hire you at a competitive wage with a similar job classification you are free to transfer your H-1B. H-1B holders can even transfer jobs after applying for permanent residency if they follow a few basic guidelines thanks to AC21.

H-1B holders can transfer jobs even after applying for permanent residency. American Competitiveness in the 21st Century Act allows for this specifically. There are provisions:

   New Employment must be the "same or similar" classification
   Form I-140 has been approved or is approvable when filed with I-485
   Form I-485 has been pending for at least 180 days

The employee needs to file a Form I-129 and will need to provide their new employer their original I-94, passport, and Form I-129 filing receipt to properly document work authorization.

Most HR departments fuck this up and many immigration attorneys fuck this up but it's completely possible.

The difference is that many occupations basically are zero sum games. No matter how many doctors you have, there won't be more sick patients. But, the more engineers you have, the bigger the pie becomes, unless there are no more innovations to be made. Many of the people behind SV success stories are immigrants.

No, this is totally wrong. Doctors create wealth too, contributing more healthcare to society is in no way zero sum. There are already plenty of sick patients left over, not everybody gets world class healthcare at affordable costs. If you had more of them healthcare costs would go down and so the capital saved could go to other endeavours. Secondly, you heal people who contribute more to the pie. Finally, healthiness IS the pie, it is itself a type of wealth, arguably one of the most important.

And yes, skilled immigrants create wealth. But the same reasonable arguments that can be made for bringing in skilled tech immigigrants (NOT on indebtured servant visas) could be made for bringing in skilled healthcare immigrants. The reason the former happens a lot more than the latter is because of political representation. Doctors have the AMA carefully controlling the supply of doctors, tech workers have Google and Microsoft doing the opposite.

If you're in California, it's because no American from outside California improves her/his economic outlook by coming to California, where cost of living is easily several times higher than in many other thriving parts of the country.

Moving to California from the East Coast nearly doubled my salary. Cost of living went up, but by around a factor of 15-20%.

Of course, since lots of people are really fucking rich in the Bay Area, it's easy to get caught in the conspicuous consumption game (the biggest part of which is probably housing and location). But if you can avoid that, moving to California can easily mean a whole lot more money, even with taxes + cost of living.

I'm an infrastructure guy. I interviewed with a fairly well known startup in Mountain View. I was making $120K in Chicago, and was offered $110K to move to Mountain View/San Jose.

In what world is that an intelligent choice, when you can make $ITMONIES somewhere where the cost of living isn't going to eat you alive.

$110k plus equity, right? If you got an offer from an established public company, the salary portion of the compensation package would likely be much higher.

Very little equity. Not worth the salary differential.

You should assume that any equity you are offerred by a startup has a value of $0 because the odds are that's what you are going to see from it.

> cost of living is easily several times higher than in many other thriving parts of the country.

Citation required. I doubt its even up to 2X, let alone several times higher.

It's 2X:

http://www.bestplaces.net/cost_of_living/city/california/san...

Funny. The chart shows an overall rating of 199, but the break down is at parity or less than 100. They don't break out housing, which is the only real killer in San Francisco, yet not everyone really needs to be buy a house there to be happy (many can and do with less housing to economize).

Also, the parent post compared SF to other thriving cities in the US, not the US in general. Would love to see how SF is twice as expensive as some place like Atlanta or Dallas (assuming they are thriving, of course).

Real estate—whether renting or buying—is the killer. I moved from the Bay Area to Texas (Houston then San Antonio) and it's dirt cheap here. I pay $500/month for a great apartment in a nice part of town with hardwood floors, air conditioning and a covered parking space. Around 700 sq.ft.

Fuel is cheaper, taxes are lower (when I left CA car registration was over $400/year I recall, mine is $50 here) and housing is much cheaper.

Not sure if this link will still work for you:

http://bestplaces.net/col/?salary=80000&city1=54865000&#...

According to their stats I would need 2.3x the salary I make here for a comparable lifestyle in SF. Now, I'll grant you that could be mitigated by not living in SF but one of the cheaper suburbs. Mess with the numbers and see what it looks like.

I would say SF costs are higher but, not very much, on everything than Texas until housing is considered. I don't think that is a very controversial assumption; even gas might be $4 in SF and only about a $1 cheaper in Texas.

Equivlalent lifestyle is always fuzzy: do I need a car if I live in SF? Maybe but many do well without. If you are into urban living...you wouldn't be very happy in San Antonio. In NYC, this is magnified obviously. You can also move out of SF, and unfortunately, many jobs are in the bay area and not the city anyways (so live in Mountain View vs. SF and work at Google).

For the record, I still think SF is too expensive and would prefer Seattle or Portland for quality of life reasons (but I'm a native PNW). I wouldn't dream of moving to Texas, I didn't even find Austin to be very nice; I don't like driving and haven't owned a car in over 7 years (when I lived in the Bay Area ironically).

That's how I felt. I'm a California native and I thought I'd hate Texas but after living here for seven years I very much doubt I'll ever go back.

I've been out of the states for 7 years. Sometimes I wonder if I'll ever bother going back.

That website isn't worth the electrons it's made of. I've used it in three moves now, and its indices have never been anywhere close to reality.

I just looked up their latest indices for Seattle, San Francisco, and NYC (143, 199, 169, respectively) - all cities I've lived in before, and these numbers bear no semblance to reality.

According to this, living in NYC is ~18% more expensive than Seattle - which is an absolutely laughable statement if you've ever lived in both places - 80-100% would be more like it. Similarly, it claims that SF is ~18% more expensive than New York, which a pretty absurd claim itself. There are places in SF more expensive than NYC, but overall it's still substantially cheaper.

Measuring a bunch of medians that sound like they relate to cost of living, and then throwing them in a blender for a weighted average... turns out the number that pops out the other end is more or less meaningless.

If you're being paid California-level salaries in, say, Chicago or Austin - stay put, the money is better where you are. If you're being paid the standard Chicago-area salary, moving to California may be an overall gain even accounting for cost of living adjustment.

Not to mention that some cities have more scalable living costs than others. There are more than a few software folks here in NYC who are cutting their costs to the bone and exploiting the salary gap to put a lot of money in the bank (for eventual startups, or moving to a cheaper part of the country, whatever). The problem with a median measure in a world with irregular distributions is that it ends up describing no one individual in the set very well.

Where do you advertise? How do you portray your company? Do you get involved in local meetups? Do you contribute to Open Source? Why do the employees that do decide to leave you, leave? What do they say about you? Do you know the going rate for your open positions? How do you know thats the going rate and how are you confident that that is a rate your potential candidates are likely to accept? Is there a big-brand competitor nearby that sucks up your potential candidates? Is your office hard to get to? Is there a local tech scene or is it a tech desert? Is your company in a non-sexy industry that has a common perception of being particularly boring (eg. Enterprise Java billing middleware) or evil (eg. recording industry, patent troll, oil industry)?

And thats before we get to how you are filtering resumes. It can very well be the case that there is a talent shortage in your area/domain. But I think its very hard to conclusively say so on the basis of a lack of qualified candidates flooding through every open opportunity.

Good article a while ago I was at a meeting to discuss the grading / job role system at BT for the Systems engineering division (where 90% of the techies are)

It was a disaster as my colleague commented the only thing they decided was the grade of the hr person who fetches the coffee and biscuits at the Industrial relations meetings with the union.

HR does have a role in making sure the rules are followed though this should be delivered as training to the actual line managers.

I do think there is a talent shortage, but I also think tech companies could learn a few things from other industries that have figured out how to recruit at scale. E.g. at my company hiring is not done by HR. A recruiting department handles the planning and logistics, but evaluations are done by lawyers. A potential recruit will be evaluated by associates at say a cocktail reception, interviewed by an associate or sometimes a partner in a screening interview, interviewed by several associates and partners at a callback, and will be hired or not based on the judgment of a hiring committee of partners. At no point does a candidate answer to someone who hasn't been in exactly that same seat before (even the recruiting people are often lawyers who left active practice). As I understand it, finance, consulting, and accounting work the same way, even in huge organizations.

The downside of this is that it's very time-consuming, and very expensive. But you get what you pay for.

Most good startups do hire this way. At least, at first. As you mention, it's hard to scale. A handful of larger companies seem to know how to recruit at scale... Google, Apple, Palantir, Facebook, etc.

I suppose it depends on how you define "larger." It seems to work well enough for banks with thousands of bankers and 100+ new recruits each year. But it is definitely expensive, and above all requires total organizational commitment. Recruiting becomes a substantial budget item, and very few people in the organization consider themselves "too important" to get involved with it.

I'm not sure I've ever known of a tech company that had a centralized HR department making hiring decisions. Mind you, I've worked for tech companies that had HR departments that thought they had a say in hiring, but that was a self-serving delusion on their part.

I think the tech industry, like most industries, does do hiring by having domain experts evaluate candidates. That's why hoary old books like "What Color Is Your Parachute" focus so intently on getting you to identify the real hiring managers at companies.

I definitely don't think the tech industry does hiring well. I think that's one of the huge, open, lucrative "meta-problems" in the tech industry.

One place I worked had HR do screening interviews. It was like a resume-grep, except in person. They asked me if I knew SQL. I said no, other than the briefest exposure in class. Ultimately got hired anyway, but never came close to working on any SQL. I'm not sure we even had any SQL running anywhere in the company at the time.

Yep. A buddy of mine and a DAMN good Android developer (and overall highly intelligent man) is not getting hired on at my job (a CS research arm of the University) because HR can't accept the fact he doesn't have a Bachelors. He's literally 2 months away from it, and his contract with Tek Systems is up in a couple weeks. It's absolutely fucking stupid.

He in the Chicago area by chance? We're hiring, and need an Android developer. We don't care about education whatsoever, just if you can do the job.

Haha, sounds like the University is insecure about the value of its own product. That's like dogfooding, in some twisted way.

Is Mr. Damn Good Android Developer single? Take his temperature and tell HR he has a Bachelor's Degree in Chemistry w/ Specialization In Mecurial Heat Transfer from the New School of Thought where he completed 98.6 units.

I'm not sure that joke actually made any sense, but it sounded good in my head. Your HR department sounds so thick skulled they might actually by it.

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