The Best Hires Are Right Under Your Nose | Hacker News Reader

The Best Hires Are Right Under Your Nose

firstround.com

61 pointszt56 comments

It's received wisdom in the valley that your most lucrative pool of candidates is the network of your current employees. I'm skeptical, for several reasons.

* The saying goes that "A's hire A's, B's hire C's". Whether you believe that or not, concentrated network hiring definitely doubles down on whatever selection criteria you used to begin with. That has costs in terms of skills and experience diversity. Some of our best hires at Matasano were complete left-field candidates with radically different experiences than our existing team had.

* Network hiring unavoidably personalizes the hiring process: candidates come in the door with sponsors. It's hard to hire objectively, staying as close to apple-apples as possible, when your candidates are friends of employees who have significant bonuses riding on the selection.

* Network hiring can make company cultures cliquish and, worse, brittle. People who've managed teams long-term have probably experienced the phenomenon where a team member leaves because they're unhappy, and suddenly 1/3rd of the rest of the team "wakes up" and starts to churn as well. When you hire based on employee networks, your whole hiring thesis is that employees "drag other employees along". What I don't see is people acknowledging that it works both ways.

Add to this of course the mildly grasping sensibility behind shaking down your team members as the moral equivalent of an MLM scheme for hiring. I kid, a little --- we pay recruiting bonuses too --- but I'm "kidding on the square".

My sense of it is that the valley believes recruiting to be a "top of the funnel" problem. My experience says that it isn't. My hypothesis is that the inefficiency is in qualifying candidates (deeper in the funnel), and that if you can fix that problem, the top of the funnel can sort itself out without much effort.

> My sense of it is that the valley believes recruiting to be a "top of the funnel" problem. My experience says that it isn't. My hypothesis is that the inefficiency is in qualifying candidates (deeper in the funnel), and that if you can fix that problem, the top of the funnel can sort itself out without much effort.

My sense is, in addition, that Valley conventional wisdom sees missing the left-field successes you mentioned at Matasano as acceptable collateral damage in the name of preventing "bad hires"[1] and finding people who will "hit the ground running"[2]. I think both of those are myopic and misguided, and contributing to the "talent shortage" these companies so frequently complain about.

[1] Quoted because, when pressed, hiring managers almost always define them in terms of their worst-case incarnations. [2] Again, the definition of this phrase is rather nebulous, but seems to conflate having experience with a laundry list of technologies that overlaps with the set of technologies used by the company's current products with having a reduced learning curve on said products.

The irony of this is that virtually any serious hiring manager (ie, hiring more than 1 person per quarter, continuously over many quarters) can tell you stories about bad hires they've made in the last 18 months, despite the norm of "network hiring".

(I can't tell that story, though, partly because I've been really lucky, but more because we've nailed qualification.)

Try paying the recruiting bonus to the friend rather than the in-house staffer.

So, pay a signing bonus? Doesn't everyone do that whether or not they do "network hiring"?

I've never gotten a signing bonus, and no one I know has gotten one since the 90s.

That is weird, because we pay signing bonuses, and sometimes lose candidates who receive better offers. Maybe reality is somewhere in between the two data points here.

It's probably in location. I'm in Orlando which is a 2nd tier IT hub, not a 1st tier like the valley or NY.

I was just offered a signing bonus in Tampa for a Director/VP level IT position. It exists, but I think its role-specific.

I see signing bonuses often issued when a deal is about to potentially sour and the candidate has some indicator that a short-term one-time gain would suffice instead of a raise in salary. Could be a low-cost relo, the loss of a coming bonus to be paid, a claimed raise the candidate would have coming, etc.

Still not as common as in 1999-2000 (when they were almost a given) or the first recovery (when they were about half as common as 99), but making a comeback.

SWEs at Google and Facebook regularly get signing bonuses, but the trick is that sometimes you have to ask for one.

I got one just six months ago from a company that I doubt you've heard of for an IC position. I didn't even negotiate that hard, I just had other offers and didn't need the job. I let them know this, and a signing bonus was added to the offer to sweeten the pot.

As a hiring manager I've given out signing bonuses to candidates as recently as five years ago.

Cashed a signing bonus check less than a month ago. I'm in enterprise Java on the east coast so I'd expect offers to be nicer in SV.

It's pretty common. Every single company(large multinationals) out of college around 2007 offered at least 10K signing/moving. I've heard of friends getting 30-50K in SV.

Network hiring can also run out, due to the same cliquishness: once you've hired the transitive closure of the experts in a given technology area, you may run out of existing experts to hire in that area, and relying too much on network hiring can cause a company to forget about hiring smart people who don't know that area but can learn.

Also, hiring the closure will clique the culture-fit criteria, making it even harder to hire/retain.

I agree, although I think "top of the funnel" issues are important too. I've seen too many examples of poor interviewing process, too many bad hires made, and too many good hires passed over to not put most of the onus on the middle of the funnel. Most interviewers are just not good at understanding the fragility of the process, or in having sufficient empathy to understand the difficulty of getting good data on a candidate. The worst part is that because bad hires tend to be let go eventually and passed over good client don't even register on the radar the whole system is heavily geared toward inadvertent confirmation bias.

All these negatives are true, but I think network hiring endures because it minimizes the risk that you make a completely mismatched, square-peg-for-round-hole, going-down-in-flames hire. Or at least, the perceived risk.

There is this paranoia in the Valley about outsiders ruining everything (also manifests itself in a pathological fear of MBAs or PMs, or criticism of "company culture") that leads to this kind of risk-averse decision making IMO.

"Have your employee log in to LinkedIn and do a "first degree network" search to return all of their immediate connections.

Hah, no, try again--this strikes me as exceedingly scummy.

What's really annoying is when you try to bring in talented engineers from your network, and your company drops the ball: either by not getting in touch with them, or lowballing them, or refusing decent equity.

If I'm referring somebody from my network to you, I want to make sure you treat them well and with promptness--disrespecting them is a sign of disrespect to me as well, and makes me look like an ass to them.

And I know that hiring in small companies is a huge pain in the neck, but that's no excuse for not taking care of this kind of stuff.

EDIT:

Oh wow:

"So, that's LinkedIn. Now we're going to do the same thing with Facebook."

And then:

"Make it a homework assignment for your staffer to fill in as much email contact data for their list as they can. "

I am sick to my stomach with this.

TalentBin sounds super scummy, and I wouldn't want to recommend their services to anyone.

This was absolutely my problem with this strategy as well. "Strip mining" someone's professional network doesn't give the impression that the employee's contacts will be treated with thought and care. The whole reason referrals are valuable is because they leverage the trust between two people. I trust that someone I refer is going to put their best foot forward and perform well, the person I refer trusts that I'm not going to recommend them to a crappy hiring experience or a crappy company. They also trust that I'm not going to spam them or otherwise waste their time.

By putting all of my contacts in the hands of the HR dept I no longer have any control over how or when the company contacts them. That company can easily break the trust I have with my contacts. I wouldn't be comfortable doing that, referral bonus or no referral bonus.

Then there's the section about outsourcing this internal contact mining and impersonating a VP in recruiting emails. If you're starting out the process with outsourcing and fake personal touches chances are you are not going to treat my network with care.

The most important question doesn't even get asked here, does an employee want to refer his or her network to the company. Some people are just not going to feel comfortable with doing that at all, or maybe they don't trust the company enough yet. Being aggressive with someone that feels that way could elicit quite a negative reaction.

I do think working the networks of employees could bear great referrals but I think a delicate and thoughtful touch needs to be applied.

That's the thing. TalentBin is not for engineers. It's for HR and CEOs and recruiters. They don't care if it's scummy.

On a side note, the line about lowballing and refusing decent equity resonates with me.

> At TalentBin, I refined my own approach to strip mining networks for the best possible people. It comes down to three things:

Yeah, so, I have my own personal EPA, and it's banned companies from strip mining my networks, period. No, no, and NO a third time. If you want me to recommend the company to everyone, you have to make this company freaking awesome on everyone's dimension. That's really not going to happen.

Worse, unless it's a condition of hiring, I'm not going to want to sit down with you and let you chew through my social networks for recruiting leads. That's unethical (although I'm not sure quite off how to quantify that).

> Worsee, unless it's a condition of hiring, I'm not going to want to sit down with you and let you chew through my social networks for recruiting leads. That's unethical (although I'm not sure quite off how to quantify that).

Who would you be more amenable to it, or the action be more ethical, simply because its a condition of hiring?

Basically, a condition of hiring means that I know going in what's going to be asked of me. If I'm not comfortable sharing my network, I can back out. If it's sprung on me after I'm hired, it puts me in a really bad position.

I agree that forcing people to open social networks in front of someone from HR (yes, recruiting is part of HR) is very creepy. Is it anyone's business who you are friends with? Opening up someone's facebook opens up so many cans of worms.

The only way this can be done is via opting in. "Email X to open up your social networks, and get a $200 gift certificate to Amazon. If it leads to a hire, get $2000 cash for a non-engineering hire, and $5000-10000 for an engineering hire based on seniority."

> Opening up someone's facebook opens up so many cans of worms.

"Well, if it's really a precondition to employment, I suppose I could give you access to a site which clearly displays my exact age, ethnicity, and sexual orientation. That is, if your HR department says they really need the information in order to make a decision."

"Uh, y'know, never mind..."

Hahaha, yeah, the legal angle is.... interesting. I'd love to see a lawyer's analysis of how many minefields this idea introduces.

It's rather easy to work around from the start if the company is really concerned about it.

Would employers have to provide indemnity insurance for any misuse of your personal network?

It would really suck to be called as a witness in a employment law case and have the opposition barrister rip your personal and professional competence to shreds for facilitating race , sex discrimination.

And yes that is what happens I know someone who used to be an organisations GC Yes would realy suck to be called as a whitness in a employment law case and have the oposition barister rip your presfional comptentance to shreds for facilitating race , sex descrimination.

So, selling out your friends Explicitely? I guess the Devil makes you sign for your soul, why not your employer.

> When someone writes back "thanks but no thanks," be sure to respond with the ask that they pass the details of your open positions to their friends and colleagues.

I don't get enough recruiter spam to be really bothered about it, so I respond with a polite "no thanks" to any reasonable messages. It's common courtesy, and as a bonus helps to avoid the "hey, did you read our previous email?" followups also recommended in this article. This strategy used to work fine, but recently there have been a few cases where the followup then is either a request to pass the job posting along, or (even worse) for me to refer people to them.

"Not interested" means I'm not interested, it's not some kind of a sign of engagement for you to exploit. I really hope this doesn't become a trend.

That is why I just mark them SPAM and don't bother again.

I help make http://yesgraph.com a competitor to TalentBin. Their approach is to get your company's network indexed, and let recruiters search that network.

This doesn't make sense for a few reasons:

  1- you are a better judge of your relationships than a recruiter
  2- it's a bit weird exposing all your contacts to your company's hiring team.

Recruiters spend a lot of time spelunking into these relationships, when there is a much better way.

YesGraph follows the same referral recruiting mission, but gets employees involved. Here is an example job for a software engineer. You can connect to Facebook and LinkedIn to get your network, and then see some contacts to make referrals. No one is contacted in the process, this is just an example job: https://www.yesgraph.com/job/i/r3AG-5-m6bx5CqzsJBFeT0/g

In less than a minute, you can be more productive than a recruiter in hours. That's because you know your contacts much better than they do. Oh, and we don't hand over all your contacts to the company. We only show if you're connected to a referral.

Overall though, I think FirstRound's content is really great. You can learn a lot from the article.

Feel free to get in touch with more questions: ivan@yesgraph.com

Reading this article made me nauseous. Barging past the work-life barrier in this fashion is completely unacceptable.

The only way to ethically "mine" your employees' social networks is to make them so happy with their jobs that they voluntarily brag about it to their friends and family.

This. This. A million times this. I would never expose my personal social network to my job for any price.

If I love my job, then you better believe that all of my developer friends are going to hear about it until I am blue in the face. I also like to work with good developers who I know, so I may try to recruit them if I think they would be a good fit!

As someone in your personal social network, I appreciate that.

> "The key is to make it someone's full-time job to 1) proactively mine staff networks, 2) extract reputation information from staffers about their networks, and 3) execute scaled outreach to the potential candidates that get surfaced."

My personal network is not yours to "mine". If an HR person at my company contacts a friend of mine to pitch a job at the company I work at, trying to use my name as an "in", that is seriously unprofessional.

If you want access to my personal network, you should compensate accordingly.

> "You should definitely offer a referral recruiting bonus. It varies, but generally speaking, $1,000 to $2,000 for non-engineering staff and up from there for good engineers is market rate."

If you get a referral from a recuiter and then hire the referred candidate, you need to pay that recruiter anywhere from 10-30% of the first year salary of that person as a placement fee. For an engineer that could be over $20,000. But you are only willing to pay $2,000 referral fees to your own employees, who can provide much better candidates than a recruiter? This is not a "sweet deal", it is taking advantage.

I was once at a company where the VP asked me for an introduction to someone and I said "how do I know that he'll be treated better than the prior 2 people I referred to the company" and I got a thundering silence in return.

I guess it bothered me more than I thought since I still think of it today.

I hope employees can opt out, though the author doesn't even seem to think of this as a possibility. I would absolutely not want some rabid HR ferret demanding to paw through my private Facebook account.

I certainly wouldn't do it, even if it meant my job.

I don't know, anyone else find it creepy to have someone from recruiting ask you to do a LinkedIn search, then methodically ask you name-by-name if the company should try and poach them? I would think that could kill recruiting.

I just pick the companies/listings I want to work for and apply to them. The more aggressively I see a company recruiting like this the more I think they have a hard time attracting people organically, or the more turnover they have. It never improves my opinion of the company.

The company gets to hire some good engineers who in turn probably get a salary bump and improved job satisfaction, and you get to work with someone you like. Anyone who is not amenable to being poached can easily avoid being contacted. Which part do you find creepy?

The part where they turn around and demand to do the same thing with private Facebook accounts?

I agree. I skimmed the article before I made my parent comment. While I have no problems with my company asking me for selective referrals, I would never let a recruiter sit next to me at my workstation and build a spam database of my contacts regardless of the source.

My information has a cost. If you want to sit down with me and go line by line through my linked in network you'll have to pay me above and beyond my normal compensation just for the leads, more money if it results in a hire. That's basically what LinkedIn is about. You're not going to be going through my facebook for any price. That's akin to inviting over your friends for dinner as a guise for your new multi-level marketing scheme. Not happening.

Every time a C-level has asked a team I'm on if we know anybody who would want a job, it's been the case that a) I just started; and b) my friends are happy in their jobs.

Also c) the bonus is really low

Hold on a second. TalentBin's reason for existing is to help other companies find candidates, but they themselves have to resort to asking their employees for their Facebook accounts?

This is basically recruiter MLM to me: even if it affects the employee's relationships with their friends, family, and acquaintances, a company should try to extract as much value from those people as possible.

The whole benefit of hiring based on recommendations of your technical staff is that nerds generally only recommend people who can do the job. They aren't going to recommend someone who can't pull their weight, because it will hold the whole team back.

If you take the nerd judgement out of the equation, as this article seems to suggest, and just spider their connections? you lose most of that benefit. Yes, if you are a connection, you can spider my linkedin; and yeah, people on that are probably above average. But if I'm in the loop? I can give you more information than a recruiter could possibly understand about the technical abilities of many people on that network.

As an aside, I /really/ need to find an app to keep private notes on my linkedin profile. I have a lot of customers as connections... more, really, than my tiny brain can handle. I need some (private) way of recording what's what (as well as a public way of telling them to mark their relationship with me as a prgmr.com customer)

My company has a pretty aggressive in pool referral program. $2,500 dollars for any low to mid level employee who stays three months and $5,000 grand for any high level employee who stays three months. Recently they threw some fuel on the fire and started e-mailing to remind us which roles were open, and started having an employee to hire of the month program. Finally they've added in things like any referrel which even comes in for an interview gets you entered into a monthly drawing for an iPad.

My only problem is I have no network! I don't have a facebook. I constantly prune numbers from my phone if I don't talk to people. I'm not a loner, it's just I have four or five really good friends I keep in contact with, and I a bunch of friends in the area where I live.

But shit, if I couldn't use a couple grand! A free semester at grad school. Security for my new apartment. A 4k display and keyboard for my new laptop to make doing school work even more enjoyable.

So I guess, if anyone in the NYC area needs a job ;-)

I must say that I have very conflicting feelings with referrals. I totally understand they are a great way of getting great people, and they are probably not used enough. On the other, referral bonuses feels wrong for me. I had recommended people that has been hired in my company, but I've never cared about the bonus (to the point of saying to our recruiter "forget about referral process, just contact him and tell him I'm sending you"), to my eyes I am helping a friend, not making a business transaction.

I understand that referrals have a lot of value, but I don't know how to make them more common without being pushy and uncomfortable...

This wouldn't get anyone very far in my case, I really don't know that many developers outside of work. I don't like them, usually. They have bad senses of humor and annoying personality traits.

People (including me) keep reinventing this concept every few years thinking they are first to market or doing it slightly differently but "right". They all fail. History certainly repeats in building social referral websites for recruiting. Someone should build a list of failed sites that tried do this, hopefully saving future entrepreneurs time and money.

The core of the problem is that it's socially stinky to exploit your personal networks for money. That's the bottom line.

Sorry to say that this one too will be binned or "pivot" to something else.

"reached out" "awesome" "proud" "excited"

Do people really talk like that? They all trigger my weasel words sensor. I'd hit the spam button before I got half way through the email.

The comments on this threat about the OP are cruel, so cruel, so critical, I mean, so negative! :-)!

I mean; I mean; I mean; just what is the problem with raping, pillaging, exploiting, mining, filtering, drilling and blasting, harvesting, clear cutting, etc. each employee's family, friends, fellow school alumni, neighbors, SO, social networks, etc.?

Somehow most of the posts here seem not really to understand: The OP is just writing an article to get publicity for himself, his company, and First Round. What could be wrong with that?

With "right under your nose", eyes, chin, rear end, feet, etc., he is just spinning a catchy title for a catchy story that can get 'into' and get all fired up about, at least until think again in the morning. I mean, what's wrong with that? Since it's 'media', you expected something else?

In particular, I just can't overlook the leading comment by tptacek who threw 10,000 razor blades, 1000 sharp knives, and a full 90 second blast from the main gun of an A-10 right at the OP. Of course all the tptacek remarks were rock solid, but why beat up on some childish writing just trying to get some attention?

Sure, if anyone actually followed the ideas in the OP, then there might be some little consequences such as wrecking their company by some outrageous, egregious managerial incompetence, but isn't that a small price to pay for the thinking in the OP? I mean, where else did you get such ideas?

Besides, after the OP, wouldn't you really like to have First Round helping your company with your recruiting?

I mean, how much do you expect for free? Or, ideas are free. Ideas that won't wreck your company, $1.00. Good ideas are $100. Ideas that are actually useful -- priceless!

Reply on news.ycombinator.com