HR Incentives and Unintended Effects on Hiring Engineers

When Harjeet Taggar founded Triplebyte a year and a half ago, he wanted to take lessons from evaluating thousands of startups as a former Y Combinator and Initialized Capital partner into helping companies put together the very best technical teams — regardless of background or pedigree.

He started Triplebyte, a company that does the first pass of evaluating engineers through programming tests and interviews. Since starting last year, Triplebyte has evaluated 12,000 candidates. Of those, Triplebyte has interviewed 2,000 engineers and sent 15 percent through to the final step of being introduced to companies in their network. At partner companies like Dropbox, Cruise and Stripe, Triplebyte is seeing offer rates on candidates that are above 60 percent. (You can read the company’s post about it here.)

As part of the Initialized portfolio, he shared a few observations he’s made over the years at how growth-stage technology companies build engineering teams, and where they can miss the mark in creating incentives for recruiters.

“The metrics of success you give your recruiters or your recruiting team can have unintended consequences that can harm diversity efforts,” Taggar said.

Here are metrics that CEOs emphasize to recruiters that Taggar thinks can sometimes have unintended effects:

• The on-site offer rate: This is percentage of candidates who come to on-site interviews who you ultimately end up approving and offering positions to. Taggar says some CEOs tell their recruiters to optimize for this. But the problem is if you’re trying to maximize on-site offers, recruiters will end up becoming more conservative. They’ll go for safe, recognized engineering schools rather than lesser-known ones that may produce a more diverse engineering team, but a lower on-site offer rate. “Recruiters will dig in, and start making sure they’ve only gone to certain schools, which reinforces their pattern-matching and could hurt diversity efforts,” he said.
• The offer acceptance rate: This is the percentage of offers that are being accepted. Because you’re putting recruiters on the hook for closing candidates, they’ll get penalized or feel bad if few people or no one accepts the company’s offers. When CEOs emphasize this metric, Taggar says recruiters will start advocating for avoiding making offers to candidates that they think won’t accept deals, which means a company could miss out on good potential hires.
• The “culture fit” rationale is probably overrated: When Taggar started Triplebyte, the company made the deliberate decision to only screen for technical skill rather than soft skills or “culture fit” on top of that. Even with this decision, the company still has a 60 to 70 percent placement rate for the candidates it forwards to startups. “For engineering hires, this suggests that the bottleneck isn’t “culture fit,” it’s just getting people who have the skills.”

Here are metrics or practices Taggar thinks CEOs should optimize for:

• Minimizing response time to candidates: “From a procedural perspective, the best engineering organizations never seem to leave a candidate waiting for more than 24 hours,” he said. “Usually, founders have no visibility into this.” Taggar said if he were starting another company, he’d try and monitor response times to candidates through Lever (another Initialized-backed startup) or e-mail. “I’d monitor how long it takes my recruiting team to get back to candidates and relentlessly optimize that,” he said.
• Keeping the hiring process centralized as long as possible: Early on, it’s very easy for startups to have a centralized decision-making process where founders and early team members can have input on every new hire. But this obviously becomes more difficult as a company grows. “When you don’t centralize your process, it’s hard to maintain consistency. If you don’t have consistency, you will be more likely to miss out on good people,” he said. Taggar said Coinbase and Mixpanel still have centralized processes where a single-person has input in end-decisions on hiring.
• Emphasizing the match between candidates and technical projects they’re interested in over selling the grand vision of the company: Taggar says the best engineering organizations pay a lot of attention to matching the personal interests that every candidate has with what they end up working on inside a company. “It’s less about selling the big vision of the company and more about being really specific and getting people to work on something they’re really excited about.”
• The false negative rate: Taggar says growth-stage CEOs could start measuring the percentage of candidates that they reject that go on to get offers at companies whose hiring processes they respect. “This is somewhat tricky to do,” he said. “You can check LinkedIn profiles of candidates, and look for companies they end up getting jobs at and try to get the rate of misses down over time. I think companies just completely overlook this.”