Towards a new HR

Written on 2008-05-21 17:33:06
It's time to post on something other than code for a change. The last time I posted something non-technical was a music-related post in mid-April. I've had a strong urge lately to say something about this blog's title, "Improved Means for Achieving Deteriorated Ends". I've never really explained what that means to me before. It relates somewhat to a a fairly recent post about my "emerging philosophy" and I definitely have more to say but am still searching for the words to get it out. While searching for those words I've stumbled on an idea that I think is worth discussing and that perhaps serves as a more concrete example of the sorts of issues I'm thinking about.

So, what's the grand exciting topic in store for today? Hiring practices. I'm sure your first thought is that hiring issues are inherently boring. I'd agree if we're talking about staffing a company of 75,000 people. For example, I talked to a Chik-fil-a manager today and asked him for a ball park estimate of how many people worked nationwide at Chik-fil-a. He said that he had a small store with about 25 employees but stores vary between 10 and 100 employees and average about 50. There are 1,300 stores nationwide and then you've still got whoever works at corporate facilities and not in retail.

The truth is, in this setting the product (and your company's success) are not a function of the quality of your individual employees. In fact, if you could sell people Chik-fil-a sandwiches without stores it'd be a huge cost savings provided you could figure out the distribution. You really just need people to fill a non-contributory role. If there were robots that could do the job and customers didn't mind the difference that would be just as good. The point being that the person working the register's chief contribution to the product is handing it over once you ask for it. I'm not generalizing to all retail here but you get the idea.

Now, the difference in the hiring problem occurs when you are looking for contributory employees. Employees whose contributions fundamentally shape the final product that the success of your company rides upon. Careers like architects, programmers, teachers, or journalists. Since these people make or break the success of your firm you can't hire based around basic arithmetic and serviceable grammar. Architects, for example, need to have a sense of design, an understanding of how buildings work, and working knowledge of the tools used to make designs become paper and then reality.

To be as successful as possible you don't just want to hire decent people. You want to hire talented people. To whatever extent possible, you want to hire the best people and this is precisely where we start running into problems. Spotting the best people is very hard and in some ways analogous to The Blub Paradox. That is, I wouldn't trust a person who'd never programmed to hire programmers. Moreover, if an incompetent or only decent programmer is hiring other programmers it's not evident that he'd be able to spot the programmers better than himself. He might not know how to recognize them.

Most companies have two chief hiring practices that I'm aware of, the resume and the interview. The resume process is a screening process. It really exists so that you can weed out candidates based on a standard set of assumptions about the things they need to be successful and whether their qualifications seem to match up with those assumptions. It's pattern matching. This is why it's more difficult to get jobs sans sheepskin. People who pass the initial screen are interviewed by a member of the department with some experience (generally a manager) and evaluated for competency based on the interviewer's (hopefully reasoned and up-to-date) understanding of the job requirements.

One problem with this strategy is that you wind up with false positives in both directions. Any hiring manager has a story about a sure thing hire that turned out to be a nightmare working with the team or the long shot employee that wound up turning around two lagging departments. The real problem, I'll argue, is that current hiring practice is not evolving. You don't learn from your false positives. How would you do that you might ask? I'll tell you how. Treat employee hiring like investing. Companies, especially companies that sell products derived from their employees' creativity, like to talk about how their product is their people or the people are the difference. I say put your money where your mouth is.

If you turn an employee down for a job, I want someone to be able to tell me in two years whether he's gone on to have a very successful career at another company or has wound up working in a different industry. If I hire somebody and they turn out to be a disaster I want to dig up anything I've got on their initial interviews, write the eventual problems on the transcripts in red and put it in a separate filing cabinet for future reference. Do you see anybody going that far to hire good people? No. I won't argue that there's no reason for this. One reason is: it would be a full time job.

Let's take this idea a little further though. Let's say we don't just track our false positives. Lets keep in mind that there are different classes of applicants to begin with and, just to stick with our investment theme, let's call them low-risk, medium-risk and high-risk. Why not? After all, that kid without the diploma is high-risk. At least, that's the reason you gave for not hiring him wasn't it? Oh, that's right. You didn't have to give a reason for not hiring him. Nobody checks up on hiring decisions. There's something else worth thinking about. If you miss a candidate that could've netted your firm an extra 10% last quarter should your ass be on the line or not?

Anyway, what was I saying? Oh, right. A standard reason that most hiring managers avoid candidates without diplomas is the amount of risk. It ties back to a famous IT saying, "Nobody ever got fired for buying IBM." If it seems like a sensible decision to hire a diploma holding guy, hire him. At least if he turns out to be a disaster a bunch of people can say he doesn't look like an obviously bad candidate and they might've done the same thing. If a high school dropout turns out to be a bad employee people will say you should've known from the get-go. So, let's just call the kid high-risk. But keep in mind that high-risk goes in both directions because even though he never got his GED he's been programming x86 Assembly since he was 7.

Now, obviously this isn't practical all the time. It wouldn't work for Chik-fil-a and I'm sure there's some point where it wouldn't work even for a company whose product depends on their creative, contributory employees. You could only scale a process like this so much and whether that's a function of the number of employees or something else I couldn't say. In fact, doing this internally in a firm might be suicide. It might have to start as an HR firm exclusively though what we're describing probably sounds more like a scouting agency. You'd also almost certainly have to stick to a certain industry since, as I mentioned above, you have to be a good programmer to recognize a good programmer. Additionally, you definitely would want to spread your portfolio of hires across risk segments but let's move on before we get bogged down.

About now you might be wondering how this all ties back to my "emerging philosophy". It ties back because of the chain of impact from the corporate world to the academic one and beyond. I think a lot of problems exist in the educational system because we think absolutely everyone has to go through it. Parents are convinced that without college diplomas their children will not find gainful employment or have successful lives. I don't claim that hiring practices alone account for this but they do play a part. More importantly, the overall impact of this is one of waste in society. It's waste of compulsory schooling on those that may not need or desire it and it's a waste of those who excel through nontraditional means. It's time to find as many of these little bits of waste and inefficiency as we can and fix them. I think if we'll do that we'll find that the problem isn't that we need to produce more to satisfy demand but that we need to figure out a more equitable and beneficial distribution of the copious resources we already have.
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Unless otherwise credited all material Creative Commons License by Brit Butler