Hack the Hiring Funnel: Organize your path through headcount hypergrowth
tl;dr: A critical part of scaling a startup is the ability to quickly and effectively achieve a desirable headcount to capitalize on breakthroughs and maintain growth momentum. In this article, I am presenting my take on the Hiring Funnel including a frequently overlooked step: Onboarding. Based on Big Tech and startup experience I am sharing best practices on how to structure, measure, identify/mitigate risks, and set up new hires for success.
Intro
“It’s easy to double, It’s very hard to quadruple every year. ” Eric Schmidt
You have found that elusive dragon of product-market fit, secured some sweet new funding and are ready to scale the company from a close-nit Family to a battle-hardened Tribe and beyond.
It’s time to Blitzscale!
How do you approach setting up your first real hiring process in a way that maximizes efficiency, candidate satisfaction and long-term employee retention, using resources you can afford? Having a good framework allows you to look at the purpose of every step of the hiring process, measure and optimize. You can approach hiring without thinking of a funnel as your guiding framework, but this will probably make more of a mess than not. The process tends to be better performed in stages. With the market for talent, especially engineering, having reached searing hot levels, you need to be at the top of your game.
The good will you accumulate during your hiring process will set you up for success, allow you to effectively scale your organization and catapult you to the next echelons of success. If you falter, you will stall your growth momentum and dilute your company culture, while your current workforce slowly starts to burnout and eventually heads for the exits.
A traditional hiring funnel will usually guide you until the employee start date, but in my view this omits one of the most crucial steps: Onboarding. Onboarding is your opportunity to present the best version of your company and inject new ideas in your organization, before the reality of OKRs, deadlines and performance cycles sets in. Onboarding is where you leave the semi-antagonistic nature of the hiring process behind and lay the foundations for a cooperative and hopefully long-lasting working relationship. It’s where both the company and the new employee can be aspirational and more easily reach for the next level of performance.
With that in mind, let’s take a look at the main steps of the hiring process. I have direct experience with most of the hiring process of Big Tech at Uber and Facebook (City & Nation periods based on the Taxonomy below), and have recently started to tinker with the entire funnel at my current job with Connectly: an early-stage startup building an AI-powered, messaging-first business platform to help businesses manage their customer communications. (Family going to Tribe). This framework could be used with other disciplines, but my point of view is heavily influenced by the software engineering market.
Taxonomies
Check the previous article explaining the use of Taxonomies.
Company Lifecycle
See Blitzscaling
- Family: Small & dynamic team, focused on search for product-market fit. Speed is King as well as skill and personality compatibility among early team members.
- Tribe: All necessary business functions and critical skills are covered and some specialists as well. Some operations are still outsourced. Initial supporting processes are now put in place. Company is focused on product launch and engaging customers.
- Village: Full in-house people/teams for supporting the company (Legal, HR, Talent Acquisition, Finance). Metrics driven processes are introduced. Many product teams able to work on parallel threads and projects. Critical specialists secured to lead innovation. Company is focused on product/business scaling and differentiation.
- City: Many product orgs across many regions with entire orgs supporting them. Many specialists are scaling innovation in tip of the spear areas. Highly scalable support processes are put in place. Intense focus on product/business innovation, executing multiple business/expansion opportunities at the same time.
- Nation: Orgs have evolved to mini-companies with the ability to search/execute on multiple product-market fits at the same time, while optimizing and defending the cash cows. Many resources available to design efficient and scalable processes.
Hiring Funnel Overview
Organizing the rest of the article based on these attributes.
- Inputs: Assets that you will contribute when operationalizing the step.
- Outputs: The expected outcome of the step.
- Activities: Sample activities around which you can organize operations.
- Do’s: Best practices to incorporate.
- Don’ts: Pitfalls to avoid during this step.
- Metrics: Track them to differentiate success from failure and iterate on your process.
Hiring Funnel
Lead Pipeline
tl;dr: Start with a purposeful job description. Identify the necessary skills that candidates will need to possess in order to be successful in the role for the first 18 months. Communicate those succinctly. Utilize your strengths to drive as many of them into your favorite applicant tracking system. (You do have some way of tracking your leads right?).
Inputs
- Well-crafted job descriptions.
- Target candidate cohorts and an outreach plan.
- Website & material (employee testimonials, “A day in the life” videos et.al.) explaining company purpose, culture and key processes.
- Continuous effort to increase company reputation and visibility in the workforce.
Outputs
- A list of (hopefully) qualified and engaged candidates on your favorite Applicant Tracking System SaaS platform. e.g. Workable, Lever, Greenhouse
Activities
- Write down job descriptions outlining not only the necessary skills, but also visualizing the role details and potential career progression. Programming languages and tech stack knowledge are a good start, but an engineering job goes much more beyond that, especially in an early-stage company.
- Utilize recruiting resources. There are multiple options here like agencies, contractors, VCs and in-house teams that can help with search, direct outreach and operational help. Use them wisely (e.g. for critical hires) and always evaluate the ROI.
- Be where your potential candidates are! Develop a strong presence in communities through active outreach and participation. For hiring engineers, Hackernews, Twitter, Reddit, Developer conferences, Tech Meetups & Github projects are more impactful than an article on Business Insider or Forbes.
- Maintain an active engineering and company blog: Showcase your strengths, your company and engineering culture, interesting problems the team is working on and exciting business opportunities e.g. “How we make decisions/review code”, “Sample retro from a recent outage”.
- Employee referrals program: Ask employees and company leaders to tap into their networks and incentivize through a referrals program.
- Sourcing hackathon: Get people in a room with drinks & snacks for 1hr where they can source candidates on Linkedin through their networks. Sourcing/Lead generation is a team sport.
Do’s
- Proactively get the word out about what you do as a company and what you stand for. You can’t fill a pipeline within a week, so it’s crucial to have an established presence for the time you need to scale.
- Increase your reputation as an employer of choice. If you reach out to a candidate, you have way better chances if the candidate has already heard of you.
- Hire for raw talent/potential/personal excellence attributes as well. Evaluate your actual job requirements and your capacity to teach skills especially for early-stage engineers. Especially in the Family and Tribe stages you are mostly looking for generalists that can operate across multiple domains and disciplines. You are going to be spending a lot of time under pressure with these people, so definitely value good personal attributes highly.
- Incentivize employees for contributing! Help them out by providing writing resources/training for blog posts. Highest quality of leads come from people you have already hired and have filtered potential peers in previous projects. Make good use of that and reduce the process overhead. (e.g. limited screening process for referrals). If people working in your company don’t want to bring in people they know, you need to root–cause immediately.
Don’ts
- Be mindful of hiring bias as you build your pipeline. Double check your content for wording that would encourage only certain types of personalities and backgrounds to apply (no “ninjas”, “samurais”, “super-pumptilicious” et.al.). Construct your target cohorts to be inclusive by choosing general population criteria and market job opportunities widely. Many problems with hiring diversity start at the top of the funnel!
- Avoid job description word salads the same way that you expect candidates to present you with a well-crafted CV.
- Overly detailed and steep requirements will unnecessarily narrow your applicants or worse, embarrass you. e.g. 5 year experience on a framework that exists for 3 years.
- A complex application process that is too long and tedious. Asking questions that require long answers when the same question can take 1 minute during a screening call. Making people re-enter every line of their resume.
Metrics
- Number of visits on your company career page & relevant blog posts.
- Engagement on your company’s social media.
- Number and quality of reviews on your Glassdoor page or similar.
- Number and percentage of responses in cold outreach messages.
- Distribution of applicants per job post. Bonus points for including source (recruitment channel) breakdown.
- Conversion rate per job post.
- Drop off points and rate for people that start filling out your application.
Screening
tl;dr: Use Simple Rules (example here, but you need to come up with your own!) to allow you to quickly and efficiently trim down your Lead Pipeline to the order of magnitude that you can handle in the Evaluation step.
Inputs
- Well-thought out Simple Rules.
- A process that you can afford, mostly in terms of time spent.
- A 1-pager of set questions to ask/topics to cover during screening interviews.
Outputs
- A trimmed down and ordered version of the pipeline.
Activities
- Review party. Where the team goes through the list of resumes to narrow down the candidates. Make it a team activity and have everybody on the same page. CV & Pizza anyone?
- Recruiter Phone screen. Gauge level of interest, verify and expand on resume points, build rapport and excitement with the candidate.
- Manager/Technical Phone screen. A 360 rapid-fire evaluation best done by experienced interviewers. Assess candidate level of readiness/preparedness to go through the Evaluation step.
Do’s
- Simple and efficient rules. e.g. Candidates must have at least X (25% or 50% usually) chance to pass the Evaluation step. You’d need a basic point system to apply uniformly to order resumes/profiles.
- Scope the screening process based on the resources you have available. In an early stage company you typically have only a few resumes at hand so you may have the hiring manager do the interview screening themselves. This will give you a better signal for the Evaluation step, but when you get too many applicants for each position it can be overwhelming.
- Sell the dream! (see here). “Either people get it and get excited or you move on to the next person”. Family and Tribe stage companies mostly survive based on vision and hardcore “Us vs Them” mentality.
- Let the candidate ease in the process. Initial contact can always feel awkward so have the candidate talk more about themselves in a semi-structured format during any initial screening calls and focus on clarifying hiring process issues.
- Be upfront about some non-negotiable parts of the position like remote vs office expectations and salary ranges. Avoid spending all that effort in the Evaluation step only to discover obvious misalignments in the Negotiation step.
Don’ts
- Overextend the process for the candidate. The clock starts now so it’s better to keep the candidate’s overhead to a minimum. You’ll need to use the candidate’s time in the Evaluation step.
Metrics
- Number and percentage of candidates that meet the basic job requirements indicated by your simple point system. A high percentage of low qualified applicants may indicate that your job requirements need a revision.
- Drop-off rate at screening step with reasoning.
- Latency: Distribution of time needed from initial application to scheduling evaluations.
- Throughput: Number of total applicants reaching the Evaluation step.
- Offer rate per initial point system bucket or other simple rules related breakdown. Monitor and revise!
Evaluation
tl;dr: A range of interviews with each candidate focused on extracting as much signal about the capacity to be successful at the role, followed by a final decision based on that signal.
Inputs
- A process that you AND the candidate can afford.
- A pool of questions to ask during evaluation interviews, ideally on a wiki.
- Consistent training for interviewers.
Outputs
- A Hire or No-Hire decision on each applicable candidate.
Activities
- Interview day/onsite: A “full” day of in-person interviews with the candidate (4–6 interviews overall), typically broken down into several focus areas (Coding, Systems, Behavioral, Algorithms, etc) with at least 1 interview per area. For engineers it includes everyone’s favorite: writing code on a whiteboard.
- Interview day/remote: An attempt to emulate the onsite experience, but through digital means. Coding on an IDE is far better, but digital whiteboards for system interviews are a nightmare.
- Take Home Project: Prepare and submit a coding project over a small time period (about a week) that gets reviewed asynchronously. Sometimes also used for screening purposes.
- Project/Interview hybrid: Prepare based on a project prompt then present and extend your work during a live interview. This can work for both coding, as well as system design interviews and is geared towards a remote process.
- Hiring committee: Assemble feedback from all interviewers and come up with a unanimous decision through discussion. Referring employees may participate, but will usually only be able to sway a borderline decision. Unconscious bias training can help tremendously the same way it helps during performance review, so you should invest in it when appropriate.
- Founder review: Relevant in companies where the founders feel really strongly about certain cultural aspects or personal traits and they may try to review all hiring decisions/packets for red flags. This can work really well in early company stages, but will not scale infinitely.
Do’s
- Have a holistic process to gauge both technical and cultural fit as both aspects are important.
- Have interviewers keep notes including followup questions they would like the next interviewer to gauge / dig deeper into. Share some of this info early (mainly the asked questions and follow ups), but take care to avoid biasing subsequent interviewers. This will avoid repetition, increase efficiency and keep the process professional. Finally have the interviewers write down their conclusions so that they can be shared with the hiring committee or used if the candidate re-interviews in the future.
- Communicate the interview timeline clearly to candidates. Respect their time and your time.
- Make sure that interviewers are sufficiently trained in the process. Utilize the “See one, Do one, Teach One” concept to ensure that interviewers have enough exposure to the process to run it smoothly and professionally.
- Ensure that interviewers have sufficient domain expertise to evaluate the candidate based on his experience. While it may be useful to occasionally have people at lower levels (L-1) interview candidates for level L in general you should rely on interviewers at or above the target level including at least an L+1 to lead the evaluation loop.
- Try to include interviewers from adjacent orgs and teams to provide a well rounded evaluation especially for Staff+ candidates that will end up interacting with multiple teams.
- Be courteous to candidates that are not hired and try to provide them with as much feedback as reasonably (or legally) possible. Many candidates will usually return for an interview down the line.
Don’ts
- Overcomplicate the process. 4–5 direct interviews over 1 day (if you are using the onsite process) should be enough to extract significant signals to enable an accurate evaluation.
- Avoid multiple rounds over a period of time trying to narrow down candidates to the “Chosen One”. Candidates aren’t likely to stay around for a third or even a second round of interviews with the current job market.
Metrics
- Percentage of candidates that get unanimous no-hire recommendations from interviewers. This usually indicates that the screening step rules are too lax.
- Drop-off rate at Evaluation step with reasoning.
- Latency: Distribution of time needed from initial scheduled evaluation to hire/no-hire decision.
- Throughput: Number of total offers going out.
- Offer rate per interviewer recommendation.
Negotiation
tl;dr: Very tricky part of the process due to the dynamics involved. Be upfront and straightforward as much as possible and use proper etiquette and techniques to reach an equitable agreement, which will lead to an accepted and signed offer letter with a starting date.
Inputs
- A hire decision for a candidate.
Outputs
- An accepted and signed offer letter with a starting date.
Activities
- Hiring Manager reverse interview: Make the hiring manager or a company leader available for a reverse interview to address questions about the company, the role, the team and selling the dream. Have a couple of them available to act as ‘closers’ as needed especially for Staff+ hires. Examples: C-suite executives, Board members
- Meet the team: Take the candidate out for a quick lunch/coffee or organize a virtual Meet & Greet or team activity! Get a head start on onboarding and team social aspects.
Do’s
- Be respectful and answer questions truthfully and in a straightforward manner. Senior candidates understand the market too well to hide or obfuscate things. It can be completely demoralizing for a new hire to show up and discover an entirely different reality and you should accept that you can’t hide anything beyond onboarding anyway.
- Find out what matters to your chosen candidate and include it in your offer. It’s not always strictly about monetary rewards. e.g. People may want their start date delayed because they need to take care of a loved one. Others may be huge sports fans and would enjoy good seats at a game.
- Give an appropriate time to the candidate to wrap up his current work and show up on the starting date energized.
- Capture and incorporate qualitative feedback from both people that accept and reject your offers.
Don’ts
- Don’t wait till this step to disclose important aspects of the position like remote/non-remote.
- Similarly, verifying aspects of the candidate’s resume should have been done already.
Metrics
- Offer acceptance rate with reasoning.
- Throughput: Number of total acceptances.
- Capture and incorporate quantitative and qualitative feedback through surveys. Beware of selection bias and try to get an accurate view of your evaluation process from people that are not offered a job as well.
Onboarding
tl;dr: Major opportunity to influence the next generation of employees at their most formative time with the company. Create a thoughtful and deliberate process balancing inspirational long-term vision with short-term priorities and help new hires hit the ground running. Initial investment is worth it to achieve faster and ‘better’ time to value.
Inputs
- New hires with a common starting date.
Outputs
- Engaged, knowledgeable and motivated employees actively contributing to the company’s success.
Activities
- Onboarding package: Material prepared from HR, Legal, IT, etc to introduce a new employee to important company processes, requirements, equipment and enable them to get the lay of the land. Particularly important for remote-first companies is to introduce the cross company communication tools, patterns and etiquette. Have some living documents describing how company communication tools are utilized especially around internal messaging, video-calls, task management and code reviews.
- Onboarding plan: A 2-pager prepared from Hiring Manager outlining the personalized 3 month plan for the new employee with week 1, 30, 90 day expectations and milestones.
- Onboarding tasks/Codelabs: Backlog items or runbooks tailored to allow new team members to acclimate to the tech stack, team processes, tools and codebase.If you can’t commit and maybe ship something on your first day the development process is too complex.
- Onboarding week/University: A full week of activities/talks from leadership and domain specific workshops to enable newcomers to understand current company and org priorities as well as the basics of the current technology stage and solutions. Run it at an appropriate cadence for your company scope & scale (usually every 2 or 4 weeks)
- Bootcamp: A multi-week (6–8 usually) process for new hires that combines elements of the above activities in a cohesive narrative. Certainly a large initial investment, but a very unique and rewarding experience with many cultural benefits.
Do’s
- Customize your process based on the company’s lifecycle, purpose and cultural elements. Remember this is your critical opportunity to delight, inspire and engage.
- Encourage new hires to casually meet members from various teams beyond the immediate team to help them understand cross-organization ties better.
- Organize some format for new hire cohorts to meet with cross-functional leaders or their delegates even if you think a full “University” type process is too much investment. It can be as simple as a 1 hour talk.
Don’ts
- Never allow new hires to drift. Plan frequent check-ins to track progress and acclimation.
Metrics
- Quitting in under 18 months or especially during the first 90 days, indicates a fundamental problem with your hiring process. Are you misjudging your candidates? Are you misrepresenting your culture/work environment to prospective employees? Is your compensation competitive for the market and skillset you are hiring for? Are you setting up your new hires for failure by not onboarding them effectively? It’s time to ask the tough questions.
- Capture and incorporate quantitative and qualitative feedback akin to the rest of your HR processes. You can use an onboarding satisfaction survey.
- First performance rate after hire distribution. Good overall metric that measures your hiring funnel e2e. Bad indicators here should trigger a deep root-cause analysis.
If you want to test drive this hiring funnel @ Connectly I am currently hiring for a number of engineering roles, including job openings for recent graduates!
References
Thanks!
Many thanks to the following people for ideas, comments and encouragement on this write-up. (and Maria Roumpani for being the best partner one could hope for)
