Hiring for Retention – Or how to Suck at Recruitment

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

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

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

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

There 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?

Identity and Narrative – Managing Change

People hate change, and the reason they hate change is that they really hate change, and that change is hated because they really hate change…….

I’d love to know who said this

All teams are subjected to continuous environmental change, but it tends to be gradual and hard to perceive at a week by week level. I want to talk about the sharp, often unexpected step changes and go into some strategies to guide a team through the worst.

Before diving in, I want to introduce a model for characterising teams. There are two attributes that I consider critical in determining a team’s ability to function.

Identity – Who the team perceive themselves to be, what they value.
Narrative – Why the team exists, what value they bring.

I’m unaware of anyone else talking specifically in these terms but similar thinking appears in Daniel Pink’s ideas of Autonomy, Mastery (both mapping to Identity) and Purpose (narrative) as well as echoes in the higher levels of Maslow’s hierarchy of needs.

Ordinarily, definition of identity and narrative is straight forward. The team will arrive at their own identity over time, while the narrative, for the most part, comes from the commercial arm of the company. In times of change there are no such guarantees. I’ll look at each in turn.

Identity

As an individual, our identity is in part context specific and a function of those around us. The same is true for teams. This means that when the environment changes quickly, it can be difficult for a team to define itself. Definition means identifying the skills and attributes that set it apart and most importantly what it values when compared to those around it.

A manager can help speed this process. They have a birds eye view, they know how their team have defined themselves in the past and have more opportunities to interact with the broader business. The manager ought to be able to spot and highlight specific points that will go and form part of the team’s new, long term identity.

Additionally during upheaval it is for the manager to contextualise the actions and focus of other teams/departments. It’s all too easy to enter into a spiral where ‘everyone apart from us is an idiot’. A team needs to understand how they are different, but they also need to collaborate and work effectively with those around them.

Narrative

Narrative is interesting in that it should be easy to identify. The business is willing to invest in the team for some purpose and that purpose ought to be the team’s narrative.

During times of upheaval this is not a given, and it could take months for a clear narrative to emerge, as the dust settles and the business redetermines the best way for the team to add value.

But waiting months for the new vision is not an option. Put bluntly, if the business cannot provide a compelling narrative quickly then the team manager must arrive at one. Once again it is time to make use of the manager’s elevated view of the organisation to sift through the confusion and draw out something tangible that resonates.

Conclusion

All teams need a sense of identity and a sense of narrative in order to be productive. During times of significant change both of these characteristics come into question. It is up to the team’s manager to act as the catalyst, as the team aims to arrive at new definitions.

Too Much Trust

Trust trust trust trust trust trust trust trust trust trust

Excerpt from the management book I wish someone would write

A central theme in agile software development is that of trust. The agile (small a) movement speaks of openness, collaboration and collective responsibility – none of which are possible without trust. As a manager my team cannot be effective if they do not trust each other nor can I bring about anything but the most superficial change if they don’t trust me.

I’m not the only one who feels this way, turns out I’m in good company 1 2 3

So I like trust and consider it to be a ‘good thing’ but the point of this post is not to talk about how great it would be if there was more trust in the world. In fact I want to talk about situations where increasing trust can actually be destructive.

The total level of trust is undoubtedly important, but equally important is the distribution of that trust. The greater the differential between the relationship containing the most trust and that containing the least the less chance that the overall group can act as effective team.

A good high level example might be an engineering org and a sales org. It doesn’t matter how much internal org trust exists – if org to org trust is low the company will not perform as well. In fact the lack of inter org trust will felt all the more keenly in contrast to the strong internal trust that exists.

Applying this idea to a single engineering team, if a team has high trust for one another and a new member joins then it will take time for that new member to earn the group’s trust and be accepted as part of the team. This healthy and only natural. However if the team is split down the middle with two groups of high internal trust who do not trust one another then strengthening internal group trust will only entrench the distrust of the other group. In this case increasing trust can actually be harmful.

What I’m saying is that the effectiveness of a group to act as a team can be characterised by the weakest trust links in the group. If the differential between relationships is high then increasing trust in already strong relationships can actually hinder rather than help the team.

From a practical perspective, the manager’s job is always to create an environment where trust can grow, but it is important to focus on the low trust relationships since they are the ones that characterise the effectiveness of the team.

‘We only hire the best’ – I don’t believe you

Ask anyone about hiring developers and the advice is always the same ‘only hire the best’. The principle reasons being that

Developer productivity can vary by an order of magnitude between apprarently similarly qualified candidates.
The best people only want to work with the best people. A graders hire A graders, B graders hire C graders.

On the face the face of it this seems like great advice, who wouldn’t want to hire the best? It turns out pretty much everybody.

For instance, how long are you willing to wait to fill the position? What if you are really really stretched? What if you’re so stretched that you worry for existing staff? What if hiring a specific individual will mean huge disparities in pay between equally productive staff? What if not making the hire is difference between keeping a key client or losing them? At some point every company has to draw a line and elect to hire ‘the best we’ve seen so far’.

The difference between the great companies and the rest is how to deal with this problem. Great organisations place recruitment at the centre of what they do. If hiring is genuinely everyone’s number one priority then hiring the best becomes more achievable. For starters you might even have half a chance of getting ‘the best’ into your interview room in the first place.

Of the rhetorical questions posed above, in all cases the impact can minimised (though not eradicated) so long as management understands and anticipates the challenges in recruitment. For example “What if hiring them will mean huge disparities in pay between equally productive staff?” A company that intends to hire the best understands the value of keeping the best. So compensation of existing staff, especially longer serving staff relying on annual raises to ensure market parity, must be at an appropriate level. Doing so can be hugely expensive when multiplied over all employees and this cost comes directly from the bottom line. Companies that put recruitment at the core are willing to make the investment. Yishan Wong’s writing on this subject is brilliant.

If hiring really is everyone’s number one priority then there is a trade off to make, something has been deprioritised or sacrificed to make room. As a result hiring is much more than a partitionable activity, it is a statement of corporate identity. Proclamations like “we only hire the best” are meaningless without an understanding of the trade offs and sacrifices made.

People are not our most valuable resource – a response

Pawel Brodzinski recently wrote a post entitled ‘People are not our most valuable resource’ the point being that people aren’t resources at all , they’re people and should be treated as such.

“Every time I hear this cliché about people being most valuable resource I wonder: how the heck can you say people are most valuable when you treat them as resource? As commodity. As something which can be replaced with another identical um… resource. If you say that, you basically deny that people in your organization are important.”

I’m in agreement with Pawel on this point, but I’d go further. Not only is a statement like ‘People are our most valuable resource’ degrading and counter productive, even if you restate it as ‘Nothing is more important than our people’ it’s still incorrect. The real value had nothing to do with people and everything to do with teams.

The key thing that a team provides is a means to align the goals of its members. These goals need not be for the greater good of humanity, in fact they’re generally much more mundane. It really doesn’t matter who wins the world cup* or whether project omega will ship by next Tuesday, all that matters is that the team succeeds in its common goal. A group all pulling in the same direction is orders of magnitude more effective than that same group working as individuals – a business cannot be successful without effective teams.

The trouble is the word ‘team’ is massively over used, it’s a buzzword that has become so ubiquitous we don’t even notice it. The tendency to assemble a group of disparate people and label them as a ‘team’ devalues the concept. One area where this is especially true is that of ‘The Management Team’, generally comprised of middle management peers from various disciplines this group often have very little in common in terms of shared goals and identity.

And here lies the problem, if management is unused to working in a team themselves, then the value of a team is less visible. Furthermore, since it is generally individuals, not the team as a whole, who complete the component tasks the team effect is not obvious from afar.

I don’t think you’ll find an organisation that is anti team, simply that it’s hard prioritise the tasks necessary to encourage team formation when the value of teams is poorly understood. It’s easy to measure the cost of co-location but much harder to measure the benefit to the co-located team, hence the true value of the team is passed over.

Not only are ‘people are not our most valuable resource’, people aren’t our most valuable anything just on their own, it’s all about teams.

[In this post I’ve purposely avoided the subject of how to form a team. It turns out that it’s quite tricky, I’d recommend Peopleware as a good place to start.]

* Except if it’s England of course.