You Won’t Believe How Much Money We Wasted On Bad Hires In 2013 | Hacker News Reader

You Won’t Believe How Much Money We Wasted On Bad Hires In 2013

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So if your new employee doesn't give you warm fuzzies- let them go fast? There are lots of great talent that is neither an anti-social asshole, nor a social butterfly; there has to be a some minimal time to "get to know" the new guy. It sounds like this guys is hiring for a frat-house.

Also, Warning signs- Randy mentions "9-5" and "as they say goodbye at what you may not deem not a legitimate end of the day."

I don't think I would want to work for Randy- Maybe this is just my impression and not the case here, but if you think being a startup is an excuse for regularly expecting employees to work more than 8 working hours a day then you are deluded, taking advantage of your employees and hurting them. I would not let my employees work more than 50 hrs/week even if they begged.

Side thought: Everyone in the valley mentions 9-5 as "standard working hours", but a standard work day is 8 hours. So assuming a 1 hr lunch that is 7-4/8-5/9-6... Where I grew up in the upper midwest, there everyone used the term 8-5...

re: side thought - we do 8:30-5 where I'm at, as we generally set aside half an hour for lunch. That said - in the service industries I worked in for many years, you would work an 8 hour shift with one short break, one half hour break and get paid for 35 hours at the end of the week. I know that isn't universal, but it was a very common experience in my work life.

Just one of the reasons service industries suck. (Especially with respect to software industry, but also manufacturing.)

You want to be relaxed about it, so some leeway in the 9-5 is fine (and encouraged, cause who likes being doucheboss). But if they're consistently arriving at quarter past 9, and leaving before five but never 1 minute after it, that's a pretty sure sign they don't give a crap about the work they're doing. That's pretty bad for everyone.

Where I grew up, a paid 15 minute break was standard for every 2 hours work. Heck, it might even be required by law. So, 9-5 is definitely 8 hours, and it includes two 15 minute breaks and a half hour lunch.

25 rockstars, eh? And $70K (fully loaded) on six bad hires who lasted a median 53 days. Let's assume that the salary distribution for those new hires is similar to that for those rockstars. In the absence of other information, we'll also have to assume that the median period of employment for those six is also the average. So we're talking about rockstar salaries (fully loaded) in the range of $84K. Where can I get rockstars that cheap?

Also, he never really says what was wrong with these employees. Vague doubts about "fit"? "Get under your skin"? "Don't mesh"? All sounds like a discrimination or wrongful-termination suit waiting to happen. Anybody who is in any way dealing with HR should know that firing someone requires extensive documentation of actual wrongdoing, not just this weak "feels wrong" crap. I'd be very surprised if that's less the case in Canada than in the US.

This author really needs to worry less about cover letters, and more about why his company is having these cultural-fit problems. Maybe putting "Like to work late?" and "Test your ping pong and foosball skills" on the Careers page doesn't attract the right kind of employees. I'd love to hear what some of those ex-employees found once they got there, especially regarding the little Pocket Napoleon of a COO.

>Where can I get rockstars that cheap?

Not likely on the coasts... at least not that many at one time.

>Vague doubts about "fit"? "Get under your skin"? "Don't mesh"?

Agreed, culture is important, but an absolute fit isn't essential either. For fscks sake, sometimes a good workplace cultural value is tolerance for your co-workers idiosyncrasies.

  sometimes a good workplace cultural value is
  tolerance for your co-workers idiosyncrasies

Very true. At the same time, having a boss with these types of idiosyncrasies is like seeing an exit sign.

There's another danger sign. Just what does a rockstar mean anyway? The rock stars that I know about are not the smartest kids on the block. They seem to end up getting cheated by music producers and hangers-on, then graduate to ruining their health with various drugs and usually die an early death. That sounds like 180 degrees opposite of what you would want to hire in a developer.

Instead look for people who like to tinker and fix and build things. People whose personal lives are stable and sane.

>>Just what does a rockstar mean anyway?

Like you said. Its basically a guy who sacrifices his whole life to make you rich and expects to get nothing in return.

When doing calculations, it is better to use the average of 75 days. So 70K paid for six employees for 75 days (given in the article), which is about a fifth of a year. So 70*5/6 = 58K per employee per year.

I think it was 70k each, surely.

Nope. He said the average employment length was 75 days, so that 70K was total. Also, they're based in Toronto so that's CAN $.

75 * 6 devs = 450 dev-days, or 1.23 dev-years. 70K/1.23 = 56.9K. According to Google, that's $51K USD per year.

Yeah, I can't imagine why rockstars aren't beating a path to his door.

> firing someone requires extensive documentation of actual wrongdoing

In the US? Maybe to help avoid frivolous lawsuits, but barring having signed a contract stating otherwise, you don't need any wrongdoing to terminate someone's employment.

I've actually been involved in the evidence-gathering process that would have led to firing someone - a peer, not a subordinate - if he hadn't taken the offer to quit first. It turns out that avoiding those frivolous lawsuits requires concrete and specific evidence of incompetence, insubordination, misappropriation of company resources, etc. We're talking actual emails, not remembered hallway conversations. Direct refusal to do as they're told, not grudging half-compliance. It's a lot harder than most people think. Maybe some companies don't do their diligence and manage to get away with it, but at most startups the investors are likely to demand a much more comprehensive paper trail for anything that might incur liability. "At will" doesn't provide total immunity to lawsuits.

http://www.expertlaw.com/library/employment/at_will.html http://www.bls.gov/opub/mlr/2001/01/art1full.pdf

My understanding in most locales:

Terminating an employee without cause is acceptable for at will employment, but it means you will be paying them unemployment.

Firing is terminating an employee with just cause and means you don't have to pay unemployment.

If this guys is letting people go because they don't fit into his super-culture, that is the former and not the latter.

That's my understanding as well. I would assume if the termination reasons are as vague as this post, that those people he let go are eligible for unemployment.

Even in non-right to work states, firing in the first 90 days is generally no problem since most put it in the contract as a evaluation period.

Not that I am defending the article, I find the vague cultural fit and sweatshop vibe to be bad. I've watched amazing coders turn to crap after a couple of grind weeks.

$84K isn't cheap outside the Valley

Not in general, but we're talking rock stars here. Top of their profession. Best in the business. Also, that's fully loaded - not just salary. That's definitely very cheap in Boston, almost certainly in Toronto (where the OP is), and many other places as well. Sure, it might work in rural Iowa or in some less fortunate country, but that's not the correct frame of reference.

It's still not cheap - Here in Seattle.

Companies like google cause a salary imbalance here - they pay Bay Wages - in seattle.

You won't believe how we just fucked employee morale in 2014...

Having hired and fired employees as an employer, and having been fired myself, I have two pieces of advice for readers here.

#1: this person is an asshat, and at worst is setting himself up to get sued, and at best, just fucked morale among his not yet fired rockstars who'll rightly wonder "Am I next?".

#2: suck it up. hiring is hard. it's inevitable that you are going to make mistakes. you can either hire people and see how they work out, or you can burn your technical team out doing endless interviews. pop quiz. what's even more annoying to your developers than unnecessary meetings? doing two hour long interviews with yet another not properly vetted by HR candidate, that's what.

I've found its easier to hire people on contract, see how they work out, see how they like the company, and go from there. One of two things happen. Either they really like the work and company and you like them (yay), or they mentally check out, and you both amicably part ways or figure something else out.

Hiring someone at below market pay, and then publicly slagging them like this, that's just low class.

What does Uberflip do anyway? (Never heard of them).

I can only imagine how grating this post must be to those people still in his employ who had developed any sort of relationship with those let go. Or those still employed who worry, every day, if he isn't looking at them with disdain as they walk in the door. In my experience, the "culture" upper management experience is rarely the culture on the floor.

There are so many things that make me think working there must be so many things about abusive startup culture that I hate.

>You get this uncomfortable feeling when you see that hire [...] say goodbye at what you may not deem not a legitimate end of the day.

Come on Randy. I can smell bullshit management speak for "didn't work an unpaid extra four hours every day" a mile off here. Did you actually feel they weren't getting enough done or not putting in the work you paid them for? Why not say that if so?

>our 25 rockstar team members

I think the work rockstar has been hashed over here enough, but seriously. I'm sick of it being used a code word for overworked 20-somethings that don't know any better.

>And it’s definitely not to make it seem like we’re a tough or crummy place to work – pretty sure our Instagram feed would show otherwise.

Ooh, I can almost see the fun jumping off the page. Ski trips for the exec team, office pumpkin carving, #startuplife? There's hashtags so it must be a good work environment.

I thought this was a little snarky, but I checked out the Instagram feed... like you say... executive ski trips versus office ping-pong. Employees working two to a desk that is little wider than their display while the CxOs do photo shoots and get filmed in the office ...

Yeah, total team morale fail.

I'd caution against anyone from applying anything from this article as a universal truth.

For Example:

Changing Jobs every 6 months - The economy has been shit for 5 years - and unless you have spent your whole career in the Bay Area - you're likely to have been job hopping from contract to contract.

Commute - again, this is highly tied to which market you're in. An hour away in Seattle is a doable commute - its either 30 miles (if going to Seattle) or up to 60 miles (if heading away).

Followup to Interview - I used to do this - but after getting no reply 90% of the time, I stopped. I now only do this if I'm really, really interested. Typically something that makes me really interested is a great resume builder, salary or benefits - I try not to apply for jobs that I don't find interesting from a technology level.

On a personal note: Lack of personalized cover letter - I've been in the position where applying for work was more like an assembly line - How personalized should it be? I have a form letter I modify light for each job I apply for - I'd be leery of any employer that expects me to write an essay of ball gargling - The cover letter IMO should exclaim my strengths to the job - not why I want to work for you - I want to work for you, because the work sounds interesting, and for one reason or another, I'm in a the market for a job.

The Good - Listen to your intuition - I think this is great advice - but only listen when its screaming - not just when you meet someone different then you. A warning, intuition is how you judge that 'fit to culture' - If your intuition says too many people are off - the problem isn't the candidates, its your culture.

>>Changing Jobs every 6 months

Regarding this. I am afraid there are some people who just don't stay at any place for a meaningful period of time. And its not like they are getting fired all the time. These people just in their full consciousness and responsibility just keep hopping jobs in hopes of a mythical super career.

In my country(India) its standard to get a ~15% hike on a job change on your current pay. The net result is you have a market full of job hoppers with hardly meaningful experience. It takes some time to come to speed in your new job and you hardly do any work in your notice period. So you essentially do some small time work in the minute period of time you serve at any company.

What's worse is these people are expensive compared to actual genuine contributors, they hardly stay and contribute anything. Since they won't be around in your company in the next 6-8 months why bother hiring them at the first place. And given that, you can't trust them with any long term responsibilities. Or any work of strategic importance.

That kinda wage raise is impressive - at one company I was at we had the "<company name> raise" - which is to say, take a job at another firm, get a 50% pay bump, then come back to <company name> and get another job. The short timer thing though sucks, I've only left one job for a raise - the rest were for layoff, work conditions, and one honest to god firing (I was the wrong person for the role).

I'd personally love to come and work in India for a year, just for the cultural experience.

You'd think there would be a description of what was actually "bad" about these hires, beyond "you get this uncomfortable feeling" and they "simply don’t mesh".

A interpretation is that the criteria they're using to hire, includes a large amount of personality-matching based on their description, could be drawing from a pool stocked more with winning personalities than with competent developers.

He did:

>one of our Bad Hires failed on three of the following items which are usually a make or break for me:

Sounds pretty serious. Let's find out what it is.

>They did not include a personalized cover letter with their resume when applying.

Oh my. No personalized cover letter? The bastard should be shot, or at least unemployed for the rest of his life. Or maybe instead the author should think for a moment why his number one priority (its the first thing he listed) when it comes to evaluating candidates has fuck all to do with anything that an actual adult might care about.

...and to top it all off, he then hired them anyway.

Pretty bad. The only redeeming thing I can find is that as far as the following are concerned, I think "Yeah, it's a bit odd for someone not to do those things." (Not that they're by any means universal.)

> They did not include a personalized cover letter with their resume when applying > They did not create a trial account of our product before the first interview >They did not send a follow up email after the first interview

But I'd have liked to seen a "didn't meet explicit 30 day objectives" rather than the touchy-feely reactions.

I just watched a great movie called "Bromancing the Stone".

"Let’s start with the lost money – $70k. Whether you’re a big business or startup like us, that’s a lot of cash burned on people who added little to no value to your goals."

70k / 6 employees < 12k / employee.

That's a lot of money? That really doesn't seem like that much money, especially if the vetting paradigm allowed the other 13 employees to bring vastly more than that lost 12k / employee to the table.

Not just that, but if that was purely the salary cost (not the fully loaded cost, which he said it was), that'd be a pretty low salary. 75 days on average times 6 employees is 450 days. Assuming that's calendar days, not workdays, that's 1.23 years, or 57k/yr. That seems shockingly low to me, even for a non-SV startup of 25 employees.

Exactly what I came here to type. I'd like to know what the OP thinks a legitimate end of the day is too.

Agreed. When I read that bit, I wondered if part of his "bad hire" profile is somebody who has too much self-respect to kill themselves working >50 hrs/wk for his company at what looks like below-market rates.

hehe, you guys beat me to it

At an average 75 days per, that's 450 days of work, about 2 years of work for $70k, fully loaded. Bargain of the century. I'm not looking for a job but now I know at least one place and one person I can just blacklist forever.

assuming 8 hour days and 2 days a week off they are looking at 82k/year. that's hardly "rock star" level developers that he's expecting. Though, I am not sure what a "rock star" goes for in Toronto so maybe that is "rock star" up there.

Realize too, that's $82K CAD, just under $75K USD.

Yeah, what does this even mean? My fucking computer and monitors cost more than that.

I'm going with my gut here: every sentence I read from this guy makes me hate him more. If I read this article before applying for a job with his company, I would only have myself to blame if he made an offer and I accepted it.

>as they say goodbye at what you may not deem not a legitimate end of the day.

Thanks god I don't work for you. I'd be a bad hire too. 5pm is the legitimate end of the day in US.

I sure hope that's not what he meant by "not a legimate end of the day".

Yeah feel the vibes and listen to your gut. Bad Hires aren't about performance or what they do wrong, it's about meshing and fitting in. Because if the boss doesn't get good warm and fuzzy feelings when you walk by, clearly 100% of your salary is being wasted.

With apologies to John Lennon, "management is what happens while you're busy crushing it."

It's interesting that so much of the article was about this 'fuzzy' feeling the author had about people. While reading I got the same fuzzy feeling about the author. Danger, danger, red alert.

Don't be someone this person doesn't like! With such stringent criteria as "uncomfortable feelings" and avoiding provoking random feelings of "buyer's remorse", I can't wait to submit an application to UberFlop's house of wildly swinging emotions. Every new hire gets a crystal ball to divine this persons emotions and a mood ring to make sure to only think happy thoughts. Are these adults we're talking about here? Holy fuck.

They did not create a trial account of our product before the first interview.

Minor quibble, but given that their two products are ostensibly not consumer-oriented --a content management tool for marketers and a tool for creating branded, flippable PDF viewers--, is it really too unreasonable that some candidates did not sign for their product? Or maybe it's just seen as a sign of lack of curiosity/interest about the company, dunno.

Yes, this.

What the article completely misses is that cost of bad hire is just as high for the employee as it is for the company.

Particularly fire "fast" option, for the employees next job it raises uncomfortable questions of why. So the goal is to not hire bad people. If you did hire a person, own it up and provide them with close performance feedback. Fire people if you have to, but not before they had at least few chances to improve their behavior and were clearly communicated as to what is going to happen if they do not.

Right. Therefore it is better for both the employee and the employer that you fire people in the first few days if you do not feel comfortable with the worker. The employee can just continue their job hunt, and you will not spend so much on getting clear on the fact that this person does not fit.

And if a few days strikes you as being too short, then try a week or two. Personally the only time I fired someone that was just not suited, was after two weeks. But in thinking back on it, I already knew this aftera few days, just needed some time, and some conversations with the employee to convince myself. Of course, part of that decision was that the conversations did not lead to improvements, but the important take away is to act fast on your hunches.

If you don't trust yourself to fire someone after 3 days then at least set up some tests that will provide you with the data to know whether or not the employee will work out.

It is better for everybody that way.

If after few days you can tell employee is not a good fit, maybe the problem is your hiring process?

There's not a lot of self-reflection in this analysis.

> You get this uncomfortable feeling when you see that hire stroll in first thing in the morning… They get under your skin even though they haven’t done anything 'bad' quite yet.

I'm no lawyer, but I wonder whether saying things like this creates legal liabilities related to employment discrimination by implying that the company makes hiring decisions on non-job related criteria.

I guess as an entrepreneur you have to believe that your shitty little lacklustre company is the next big thing, but man. The arrogance!

If they're not building space-ships, robots, or general AI, I'm now officially at the stage of my career where I expect employers to get down on their knees and seduce me.

You won't believe which company I'll never apply to work for in 2014.

This post gives off a really bad brogrammer vibe.

And I hope these aren't developers they were hiring and firing. The average salary of these bad hires was about $57,000 per year. (The total was $70,000, divided by 6 people who stayed an average of 75 days.)

This was actually closer to my calculations as well. I was getting about 60k-70k a hire assuming they worked a 9-6 job for 5 days a week. Feels like these are college grads or junior devs.

Edit: http://www.youtube.com/watch?v=soxnNYT5res Found a video, yep, they look young.

That's quite fluffy, ethereal "bad hire" criteria. Nothing about ability to get the job done, communication with the team, quality of deliverables, reliability, or really anything a reasonable person would use as objective criteria to identify a bad hire. I wish I could read between the lines and understand what the author is really saying here, because we occasionally see articles written like this. What is your magic criteria to be in cool club? Please just speak plainly!

Sounds more like a bad company problem than a bad hire problem. If management is always nervously looking at the clock, then the company is fundamentally rotten. You get what you measure. If you measure hours at work, then you will get people who pad their time while they produce a pile of crap.

Nevertheless, this Canadian employer should know better. In the first three months they can let people go instantly. If they aren't confident in the person after a few days, show them the door.

Its high time this guy should realize that the problem is with him and his company.

Here are 10 crazy reasons I regret reading your link-bait titled post...

Next time spare me the article and just tell me the one weird trick.

I'm not usually one to focus on the meta, but I wonder what the rationale was for killing this story from HN's front page. A friendly favor, or removing a weak post that is so easily ridiculed on obvious points?

I was actually wondering the same thing! It was posted by one of his employees, and he mentions HN in one of the comments of the post. It's likely entirely cynical of me, but I can't help but wonder if the marketing folks are made to submit his blog posts to HN and when this one got traction and negative attention they collectively flagged it.

Isn't the bad hire/good hire feeling that is described here much to personal? If the so called bad hire somehow senses the hostility, no wonder why he leaves the company.

If you inadvertently cross a few red lines as a new hire you can ring a few alarms in your hirer's mind. If those red lines are in the company culture that's fine, you might be a bad hire (or the company culture might suck, which should have the same consequences). But sometimes those red lines are totally hirer specific.

> One of the things I’ve started to do is make one of the interviews over lunch to see the true side of the candidate.

How does lunch help with hiring technical staff?

This guy sounds like a douche.

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