Management, recruitment

Hiring for Retention – Or how to Suck at Recruitment

Hiring for retention
Unicorns!, 10x Engineers!, We only hire the best!, the War for Talent!

Hiring quality developers is a hot topic, you can’t move for guides on how to get the very best to work for you. In fact it is such a hot topic that many writers on the subject forget why recruitment is on the table in the first place.

In order to be successful, a business needs to be able to build highly productive, durable teams that can adapt to changes to the business of over time. To do this, good recruitment is essential, but is only a small part of the whole.

Start ups pride themselves on disrupting the status quo, reimagining products and processes to gain an edge over incumbents. This has led to rapid innovation in engineering, product and marketing but HR, and relatedly talent management, has for the most part remained static.

What would happen if talent management was re-imagined from the ground up where the only metric to optimise for is retaining quality teams? How would the roles of recruiters, HR and functional managers evolve in response?

I’ll go through four suggestions of what a retention optimised system would look like. The conclusions are counter-intuitive and in some cases directly conflict with current recruitment good practice. Optimising for retention means that a company will undoubtedly lose out on quality staff in the short term.

I should say that every suggestion is something that I have implemented myself in multiple teams. I have run each over a sufficiently long period to believe that it supports retention in the long term. For arguments sake I will consider ‘long term retention’ to mean a company tenure of greater than five years.

Since I’m writing from my own experience, there is a bias towards software engineering organisations in a startup environment. Though I think many of the lessons can be applied more generally.

Before I get there though, let’s just recap on why retention is important.

Why is retention important?

  • Culture
  • Long term Investment in staff possible
  • Get you through the hard times
  • Much cheaper…

Retention is critical for building a strong culture. If you want a culture to persist you need continuity, especially from your most influential staff. I’ll talk about culture in detail later.

Secondly, an assumption of long term retention makes it easier to invest in people. This means that they can improve at their job, also improving the team and subsequently improving retention… It also means that every part of the business is likely to have good industry domain knowledge. So not just an expert on Software Development, but also knowledgeable about the fashion industry or the Telecoms industry (say). This domain knowledge allows the team to make better decisions on a day to day basis.

When everything is going well in start ups, the team can forgive most things, but every company goes through rough patches. Perhaps there is concern over a new direction or growth is slowing. It is at these times when you really need a team to pull together to get the company through.

Also, it’s cheaper. All manner of management consultancies have tried to put a cost on replacing a member of staff, they seem to be landing at between one and two year’s salary – I’ll not argue.

In short, companies that can develop and retain their best staff will have a clear advantage over those that do not.

Hiring for retention

With that in mind, there are four areas that I’d like to discuss further.

  • Embedding recruitment into the culture
  • Sell the company, not the role
  • Hiring exclusively for fit
  • Don’t mess about with money

Embedding recruitment into the culture

embed recruitment into the culture
Every recruiter I’ve ever talked to says that they really benefit when the hiring manager is engaged in the process.  How do you actually go about making this happen? There is only so much a recruiter can do.

Recruitment has to be everyone’s business, and management should make sure recruitment activity is a first class citizen.

This means two things:-

  • Make working in recruitment aspirational, reward recruitment skills like any other skills. If one of the team is spending 20% of their time on recruitment and their peer is spending 0% then comparing them solely for their engineering output sends a very strong message that recruitment doesn’t matter.
  • Recruitment is hard, so you need to find ways to help people improve. This could be as simple as adding a high level of transparency to the process and give constant feedback. Whatever you do, people must feel that they are learning a skill that is valued highly in the company.

To be honest I think that embedding recruitment into the culture is something that is always a good idea, regardless of how you are recruiting. So not especially controversial, it just requires sufficient on the part of management. Onwards.

Sell the company not the role

Sell the company not the role

The role will undoubtedly change, the company will not. If the goal is to focus on retention rather than simply getting the best candidates through the door, it is most important that the candidate is sold on the company.

This can create a conflict since a great way to close a candidate is to help them imagine what their new job will be like. This means going into detail on the specifics of the role, the immediate project etc.

If instead the bulk of the sell is around the company, it is entirely likely that you will lose out on quality staff, though those that you do hire will be that much more durable through the inevitable twists and changes that will occur in coming years.

It is worth noting that this idea is well established. It is relatively easy to do in a startup context, since a company’s mission is likely to be extremely important to the candidate, but it is also possible at much larger organisations. Facebook, for instance, wait until after their 6 week bootcamp before pairing staff up with their eventual teams.

Selling the company not the role will help with long term retention but it will definitely mean losing out on capable staff in the short term. If a recruiter is assessed solely on the number of new hires they can get through the door, it is unreasonable to expect them to do this.

Hiring exclusively for fit

Hire for fit
In 1974 following Mick Taylor’s departure, the Rolling stones were in need of a new guitarist. The Rolling Stones were hot, they could have talked to anyone they liked:- Clapton, Beck … but they went for Ron Wood of the Small Faces. Perfectly competent but the not the best guitarist available. The reason they went for him was that being guitarist in the Rolling Stones was much more than simply playing guitar, just being in the band was a pretty tough gig. Ron got the job because he could handle all the other baggage that came with being in the Stones. A pretty good hire in the end and it is fair to say that the Stones know a thing or two about retention.

So here I want to talk about fit and culture. These are terms that abused quite a lot and different people mean different things by them. So here’s what I mean when I say culture. It is simply what is rewarded, what is tolerated and what is punished and it is the company’s leadership, formal leaders as well as informal leaders that set it and maintain it.

Strong culture is essential for retention because it is culture that bind people together. Life is easy when all the graphs go up and to the right, but it is during the periods of slow growth that you really need the team to pull together and it is culture that will get you through.

The most important thing before starting to hire for fit is know very clearly what culture it is you want to propagate. You don’t get to choose of course you just need to take a look around and look at the traits most likely to be supported by leadership (again I stress both formal and informal).

It is really important to write down what is meant by fit and then live it. If you don’t then fit just becomes ‘people like me, or people I like’ – this has implications for diversity which will likely ruin your business. If you can focus on just a few traits then it should actually help build a diverse team since all that matters is satisfying these specific traits, everything else is open.

So this means that fit needs to be a first class citizen to any other area you are selecting for. As important as coding, as important as architecture.

Through experience, I’ve found was that until you pass on a really good candidate purely on grounds of fit, your team won’t really believe that you are serious. If fit is the reason for rejection, then call it out loud and proud.

Once the team really understand how important a factor fit is, then you need to help them get better at assessing fit through interview. This goes back to training and feedback.

If you hire for fit, and reject those who do not, then you will lose good people. I’m not talking about passing on just really obnoxious, toxic people (though you should). I mean people who are perfectly capable, but won’t help support your culture in the long term.

Don’t Mess About with Money

Don't mess about with moneyThere is nothing more poisonous to culture and therefore to retention than a sense that people are being treated unfairly money wise. You simply can’t afford to mess about here.

What this means is that you need to put the needs of your current staff (who, you know, you’re trying to retain), ahead of someone who doesn’t work for you yet.

It means that if you are bringing in someone to work as a peer with existing staff, their salary must be in line. And sometimes this means you will lose out on good people, either because you assess them at a lower level than they assess themselves, or because you are simply not paying enough. In the latter case, since you care about retention you need to have a serious think about giving everyone a boost. Expensive stuff.

But it is worse than that. You’ve just spent weeks, perhaps months unearthing a unicorn, you’ve sold them on the mission, they’re a great fit, you offered them a package that is realistic and in line with the rest of the team and, quite reasonably, they want to negotiate.

For the sake of a few thousand dollars you could lose this candidate. But if you do so you are rewarding people joining the company not for their skills to do the job but their skills as a negotiator. It is an understatement to say that your best engineers will not be your best negotiators.

Some people say, ‘oh it is fine’, negotiate and then balance things out at the next review. But this means penalising someone who has already worked for you for perhaps a year. Salary doesn’t really work in absolutes, it is much more about relative change.

This is really tricky stuff to get right, and you will certainly lose good people to money if you peg to your current team and stand firm on negotiation.

Conclusions

Companies that can hire for retention have a clear advantage, over those that do not. But optimising for highly productive durable teams, means losing out on good candidates capable of doing the job.

Traditional approaches to recruitment typically do not consider the long term goal of building highly productive durable teams. In fact optimising for this goal would lead to recruiters appearing less effective since they would take longer to hire.

The question at the heart of the article is this. If I’m right about retention being key, and I’m right about existing structures actively encouraging short term gains at the expense of long term retention, then how should organisations evolve to support this need. How should recruiters, HR and management adapt to a world where retention is considered key?

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One thought on “Hiring for Retention – Or how to Suck at Recruitment

  1. Pingback: 1p – Hiring for Retention, or how to suck at recruitment | Profit Goals

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