Hiring — The risk management approach — Part I
Since there are a lot of books and great articles about hiring already, I want to cover something that I experienced by being in a fast-paced growing startup.
I remember that during the lockdown, I read a nice book The psychology of money that tells how investments look like in the real world, how people play different games like day-trading or short/long investments in the same environment with the same asset. And also, explore the idea that financial decisions aren’t made on spreadsheets and it’s a world where personal history and biases are all around.
Well, hiring it’s kinda the same, employees at the end are long-term investments for any company, and you’ve probably already heard this sentence too many times: “employees are the most valuable assets an organisation has.”
This article is part of the series Organising work into teams, it covers designing organisations, aligning customers and serving areas, understanding the necessary talent, outputs, roles and responsibilities and sizing teams correctly and why managers and leaders should care about it.
For the ones who haven’t yet read the you can start here!
Managers are investors in the same company, playing different games, which simply means living in different contexts. For example, some managers need people ready to keep the operation running right away; others are fine with hiring junior engineers or even interns. Depending on where you are in the company you, as a leader, can be playing a different game than your peers without even knowing it!
Understanding your game
Context always matters and by knowing where you are standing, it will be easier to make a better decision. This is why I like approaching this problem in three levels:
- Company’s timing (eg. startup early-stage, a mid-size company or a big tech one)
- How close your team is from the business (eg. a front-liner team)
- How much other teams interact with yours (eg. business requests, supporting operations or both)
Let’s use only two levels to simplify the idea, and discuss the startup environment with great momentum where people are excited and the business has a lot of new ideas of how to grow.
For the ones who already had worked in a “startup early-stage world”, you know that there are teams that don’t have too much freedom to do whatever they want.
If you’re a manager in the f*cked zone, you’re definitely playing a different game than the ones in “heaven”, right? Your team is full with requests from other teams, shifting priorities all the time and very tight with the business. Oh I forgot, and of course, shipping shitty code all the time.
As a hiring manager, to make good decisions it’s important to understand where you stand whether it is in the f*cked zone or not, because this will give you ways of thinking of how much risk you’re willing to take for the sake of your team. And when I say risk, I mean there are just a few trade-offs for you to choose.
Preparing your investment
I’ve already been wrong too many times about this, and something that I learned is that managers are always a long-term investments. Failures are good for learning, and since there is no such thing as a 1-year manager, if you lose a manager in less than a year, you probably failed at hiring that person.
Even if you feel good or relieved after losing a manager, it’s not fine at all. Because at the end, that person was occupying a seat of someone you can actually partner for the long-term.
Individual contributors (ICs) are different assets than managers. And managers are always long-term investments.
As a leader of leaders, something that I learned was that you need trustworthy partners, someone that you can trust no matter the moment of the team, aligned with the strategy, and who has bought your vision. But at the same time, challenging you when necessary.
The premise here is that you have good intentions and you're a decent manager. Some symptoms that you probably failed at hiring a manager are i) you’re having too many discussions about strategy, ii) they start skipping 1–1s, iii) you need to think twice before giving them feedback, iv) they’re not connecting their team with you. BUT even if you suck as a manager, that conversation about not being “good” should be candid and open to discussion.
What about ICs? Of course you want them to be long-term too, but to be a little bit out of the “f*cked-zone” you need more hands, but the impact is lower if you fail to do this. In this case, you’re going probably to be more than ok making some tradeoffs to hire faster.
The marketplace problem
There are easy hires that feel good because you’re stealing them from other companies just by throwing a lot of money in front of them. Well the good news is that yes, they will accept. Sad news, since you’re in a marketplace, the newest hot startup (with more funding than you), will pay more and you will lose your engineer in less than 6 months, because you focused only on 2 things: evaluate objectively and pay +20% more.
During the last decade, hiring in the tech market became a marketplace, where the highest bid wins the engineer. Entering into this game will create a culture where the vision, mission, culture and technical challenges of the company became a second-class citizen; and, where bigger titles and expecting more money all the time is the norm.
“Hire missionaries, not mercenaries” — no brainer right?
Here's the problem, depending on which game you might be playing, you're more than ok to speed up hiring by hiring mercenaries, and I don’t see too much harm in bringing this kind of people. But since they're a short-time investment, depending on the proportion of them might harm your teams. It's hard to see people leaving, depending on the frequency and the volume this will have an effect even on you most loyal employee.
I'll leave some questions open for the next part of this post!
- What kind of game are you going to play? — Short/long-term wins based
- How much money are you willing to pay? — Time spending interviewing people
- How diversified is your current portfolio? — Seniority and tenure of people in your team
Thanks! Stay tuned!
