Thursday, July 28, 2011

How to Recruit Great Engineering Talent

Raiders of the Last Nerd made the front page of Hacker News yesterday and went a bit viral around the geek ecosystem. For good reason. Fueled by accelerating technology innovation, VC money, and even sometimes profit, the job market for experienced engineering talent has been heating up all over the place. In recent months I have received an email or phone call from at least one recruiter per day and I haven't even worked for Google or Facebook or one of those other Golden Names. Last month, out of sheer frustration with the lack of quality, I wrote an open letter to recruiters titled Dearest Recruiter. I'd like to expand on that a bit.

The recruiting industry is broken. I'm not talking about in-company recruiters here, but those outside agencies like the one Mr. Carvajal runs. There is a horde of non-technical, outgoing, sales people trying to court highly analytical, mildly autistic, geeks. After fielding calls and emails from recruiters for the last 12 years I've grown a pretty thick skin and have become very defensive. When I speak to a recruiter I assume everything they say is an attempted manipulation. I know that both myself and the company for which they are recruiting are getting ripped off. I will often just hang up on them. They remind me of the slime I had to talk to every night during dinner before the Do Not Call Registry stopped most cold call telemarketers in their tracks.

But on the other side of the coin, many geeks don't know their value, or don't know how to assert it, and the recruiters take advantage of that. Let's say you are recruited through one of the bigger tech recruiting firms such as TEKSystems or RHI. While you're on contract they'll probably take at least a 50% cut. Expect it to be much more if you're inexperienced and don't negotiate.

When I started out in the industry I was much less jaded. In 1999, after dropping out of my second semester of college, I was referred by a family friend and took my first programming job at a ski boat manufacturing company. School was way behind the curve on technology and utterly boring for me. Like most geeks in my generation, I'd been messing with computers since I was five years old and programming somewhere shortly thereafter (it's a fuzzy memory now). I grew up in a small agricultural town and had no idea what wages should be or how to find out. This job paid a whopping $8/hr when minimum wage was $4.25. By 2001 I was making a stellar $13/hr. My friends though I was rich as I was living above the poverty line. But I got bored at that job so I found this cool web site called where I could post my resume. This was my first experience with recruiters.

They were all very nice people, these recruiters. They saw some fresh meat in me. A sucker. They pitched me to their client as this awesome young rock star. I was paid $35/hr (~$70k/yr). I later found out the company was billed more than 2x that amount. Was I really worth more than double that? And why didn't they tell me? My next position was also through a (different) contracting company. I was paid $45/hr (~$90k/yr) having 3 years of professional experience. I found out well after the fact that they billed about $100/hr. That really got me thinking about recruiters.

If you're a company and have a contractual relationship with a recruiting firm for direct hires, they'll probably take something like a 25% cut of the first year's salary of whoever they refer to your company. Of course it's in the contract. We had one of these at Hive7. On top of that, as a manager, I've only had mild success with talent acquired through recruiting firms. The best hires I've made have always been through my own network via referrals. Ouch!

Transparency is recommended. Us geeks are information and knowledge addicts. We learn and digest everything we possibly can. We embrace transparency. Just witness the popularity of the Open Source Software movement and how much value we place on being a part of it.

Look. We know how the recruiting industry works. This antiquated people-trade reminds me of another slimy role that is currently being blown to pieces. If you tried to buy a new car 10 years ago you'd have to go to a dealership, haggle with someone, get ripped off anyway, and walk away feeling dirty. Nowadays when I buy a car I do so online. I send emails to as many dealerships as I would drive to and ask for quotes. They provide quotes, and many provide a copy of the actual invoice they received when purchasing the car from the manufacturer. Of course they also receive some kick backs on the back end for volume and other special programs, but you can still walk away feeling like you weren't completely ripped off. The salesperson makes a hundred bucks for a few minutes work and you get a car.

I'm sure we'll see this level of transparency and marginalization of recruiters in the next 10 years. Just like the car salesman, technical recruiters are becoming largely irrelevant. Online social tools like Facebook, LinkedIn, Twitter, Google+ are expanding the available talent network one has access to. Up-and-coming geek-oriented job sites like Stack Overflow Careers are putting the tools into the hands of the hiring manager or HR department. All that's missing is a good aggregator of all these that can send me positions that would actually be interesting to me.

I don't know much about the tech scene in NYC, but I have been contacted by recruiters there. They haven't had any more to offer than people over here in the San Francisco bay area. They're all the same slimy salespeople trying to convince you of their golden opportunity. I was going to use a used car salesman analogy here again, but I think something more fitting would be Viagra spammers. It is apparent that recruiters blindly send emails to hundreds of people hoping there will be some sort of a response.

Most of the job reqs that come my way via recruiters are for Developer Lead or Senior Engineer type positions. Salaries are usually in the $100k-$150k range. There is the occasional Director level position, but salaries are roughly the same. After reading an article like Raiders of the Last Nerd, you'd think that we were back in the .com boom with companies throwing sports cars and huge signing bonuses around. But that's just not true. The cases are much more isolated.

In the interview Dave Carvajal stated that “We came from a place over the last two years where people were going to start-ups for below market [rates], People aren’t necessarily going to do that now.” This is partly true. But it really depends. It shows some of the lack-of-understanding of how the geek mind works. Maybe in the financial sector it's all about the money, but to a great hacker it's more about the project.

The best engineers out there do not work for the money. Sure, they'll calculate how much their upside is at various acquisition prices, but they don't really care. Things like solving interesting problems, using new technology, making a visible impact, and working with a fun team are much more compelling for those that would work for a startup.

For startups it's about the equity. We're in the middle of a startup boom. Services like AngelList are making capital more easily accessible to good entrepreneurs, and incubators like YCombinator are teaching young entrepreneurs the ropes. These startups are willing to offer large amounts of equity to early employees in exchange for sub-market pay rates. Any decent founder out there deeply believes her company is going to succeed and thus believes her equity is worth significantly more than any amount of cash. That, and, they don't have much cash to throw around.  There are a lot of very small funding rounds of < $1MM happening. That doesn't give a company without significant revenue much buying power if they want that to last a year.

Do you want to be successful in recruiting someone? Try this on for size.

Show me MY money. On first contact, tell me how much money I will make. The exact dollar figure. If  you would be willing to pay $300k/yr for a role for the right person, just put that amount in the job. Us engineers know that there is a very high variance between the least productive and most productive members of our kind. Why not try paying for that?

Tell me about the project. The project is just as important as the cash, if not more so. Tell me what it is. Don't tell me in weird abstract terms you don't understand. If you can't tell me what it is, don't bother talking to me.

Show me YOUR money. As a recruiter, how much money are you going to make on the deal? In our heads we're already doing the math and assume you're ripping us off. You might as well tell us, and break it down by the hour.

Don't ask how much I make. We know that asking how much a person makes right now is really just gathering negotiation leverage. It's also wasting our time. You'll take that, then go back to the company, then get a new number, and blah blah blah.

Tell me the company you're recruiting for. The abstract job req is useless. Just say the name of the company. I will want to research them. It's more about the company fit than the particular job they're hiring for. Almost never do people do the same thing they were hired for in a company.

Let me talk. Many recruiters all-too-often steam roll conversations. This is super annoying. That's not how you sell.

Don't call me. Oh yeah, and avoid calling me at all costs. Email or LinkedIn or text or something is much preferred. Phones are horrible. I hate talking on them. I'm not alone.

Don't pretend you are technical. You bring up some recent tech news or talk about how you used to make web sites for fun or how awesome "that C language" is. We know you are just manipulating us to try to get us to open up to you. Give it up. Admit you're just a Pimp trying to pick up a new Ho.

Have something compelling. When you're recruiting experienced talent out of a comfortable position you had better have something great. Either that's a truckload of cash (think multipliers on current salary), a first-employee position, a responsibility level-up, or a really freaking cool project. A combination of this stuff is preferred. Mention it upfront and don't dance around the important facts. We do not want to interview without knowing this stuff.

It's a strange world we are living in right now. Jobless rates are insanely high, and here I am complaining about too many people wanting me to interview for jobs. It makes me feel extremely lucky to be in this industry.

About the Author

Wow, you made it to the bottom! That means we're destined to be life long friends. Follow Me on Twitter.

I am an entrepreneur and hacker. I'm a Cofounder at RealCrowd. Most recently I was CTO at Hive7, a social gaming startup that sold to Playdom and then Disney. These are my stories.

You can find far too much information about me on linkedin: No, I'm not interested in an amazing Paradox DBA role in the Antarctic with an excellent culture!