7 ms·

The Talent Shortage Myth and Why HR Should Get Out of the Hiring Business

68 points by vellum 14y ago

nasalgoat 14y ago
I'm sorry, but the talent shortage is a real thing. We don't have any HR filtering in place - resumes come directly to managers - but we still have a really difficult time filling our open positions.
- droithomme 14y ago
  If you want this claim of yours honestly evaluated, state your company, location, job requirements, and how much the compensation package is.
- lightup88 14y ago
  Absolutely it is. Furthermore, the concept that an applicant should dictate whether he/she speaks to a manager is impractical. Just as dismissing screeners as largely incompetent is silly. To be clear-he's absolutely correct that automated screening of applications isn't up to snuff.
- vonmoltke 14y ago
  Counter anecdote: We don't really have an HR department at all, and we don't have much trouble finding people when we need them. Sure, we get our fair share of chaff like everyone else. Still only takes a month or two to find someone worth hiring. I do not consider that an unreasonable amount of time. For the record, every engineer we have hired since I started, and including me, has been a cold application off a web posting.
- ditonal 14y ago
  *Shortage of talent at the price you are willing to pay. There are all sorts of legal work and questions I would love to have done if I could get a top-notch lawyer for $10/hr. That doesn't mean there is a shortage of top-notch lawyers, it means that I am priced out by the rest of the market who are offering them better wages. Sounds like you are priced out of the market, if you offer market wages, you will find people by definition of market wage i.e. the price that it costs to successfully hire people, not the price off of salary.com.
  - hkmurakami 14y ago
    One caveat is that "market wages" most likely will need to offer a risk premium depending on what kind of environment, stability, convenience, etc. you offer. It probably isn't going to be "the industry average for all companies (including the big boys) is $X, so I should need to just offer $X". X could be lower or higher, depending on who you manage to find and who you are.
    - ditonal 14y ago
      I think there's actually a lot of caveats, all jobs are not equal, there isn't perfect information about all available jobs (hence the need for recruiting), etc. But on the other hand, this 'shortage' is being used as a political tool to depress engineering salaries, even though if you applied the same logic to other professions you would find there are worse shortages there. Clearly it would be useful from a healthcare cost perspective if we had more doctors but we aren't expanding visa quotas there. Salary is a huge issue and most jobs want to pay engineers as little as possible. Of course they will rant about how competitive their pay is but if it was so competitive they would probably advertise it, instead of trying to use information asymmetry so they can negotiate them down lower. Then of course, they only hire the best, but salary negotiations inevitably revert to 'market wages', then after all this they can't hire people so they need more immigrants who get deported if they fire them. For some reason, if you can't afford an accountant, you don't get an accountant, if you can't afford a private lawyer, you don't get a private lawyer, but if you can't afford a programmer, there is a talent shortage and we need more skilled immigrants and to subsidize more STEM graduates.
      - hkmurakami 14y ago
        Not to mention the H1B hire -> underpay -> keep them underpaid and shackled with the H1B/Greencard combo.
        seanmcdirmid 14y ago
        You would quickly find yourself in trouble with the INS.
- jjtheblunt 14y ago
  If you're in California, it's because no American from outside California improves her/his economic outlook by coming to California, where cost of living is easily several times higher than in many other thriving parts of the country.
  - scarmig 14y ago
    Moving to California from the East Coast nearly doubled my salary. Cost of living went up, but by around a factor of 15-20%. Of course, since lots of people are really fucking rich in the Bay Area, it's easy to get caught in the conspicuous consumption game (the biggest part of which is probably housing and location). But if you can avoid that, moving to California can easily mean a whole lot more money, even with taxes + cost of living.
    - toomuchtodo 14y ago
      I'm an infrastructure guy. I interviewed with a fairly well known startup in Mountain View. I was making $120K in Chicago, and was offered $110K to move to Mountain View/San Jose. In what world is that an intelligent choice, when you can make $ITMONIES somewhere where the cost of living isn't going to eat you alive.
      - lern_too_spel 14y ago
        $110k plus equity, right? If you got an offer from an established public company, the salary portion of the compensation package would likely be much higher.
        toomuchtodo 14y ago
        Very little equity. Not worth the salary differential.
        ktsmith 14y ago
        You should assume that any equity you are offerred by a startup has a value of $0 because the odds are that's what you are going to see from it.
- polymatter 14y ago
  Where do you advertise? How do you portray your company? Do you get involved in local meetups? Do you contribute to Open Source? Why do the employees that do decide to leave you, leave? What do they say about you? Do you know the going rate for your open positions? How do you know thats the going rate and how are you confident that that is a rate your potential candidates are likely to accept? Is there a big-brand competitor nearby that sucks up your potential candidates? Is your office hard to get to? Is there a local tech scene or is it a tech desert? Is your company in a non-sexy industry that has a common perception of being particularly boring (eg. Enterprise Java billing middleware) or evil (eg. recording industry, patent troll, oil industry)? And thats before we get to how you are filtering resumes. It can very well be the case that there is a talent shortage in your area/domain. But I think its very hard to conclusively say so on the basis of a lack of qualified candidates flooding through every open opportunity.
  - deleted 14y ago
    [deleted]
confluence 14y ago
Reminds me of a comment I had a while ago regarding HR below. Some context - the company had been having problems with hiring good people and was trying to figure out what the problem was - because they never had the problem in the past. So they figured it was related to the HR department and they tested it as below: --- I can't remember which company this story was from (I think it was Lotus Software). Basically the HR team of a multi-billion dollar startup were given the anonymised resumes of the first 10-20 founding team members. HR rejected them all. Not one founding team member was accepted even for a short interview. Tells you something about HR doesn't it? --- Source: https://news.ycombinator.com/item?id=4699673 https://news.ycombinator.com/item?id=4699673 Same problem as found here: https://news.ycombinator.com/item?id=5470941 https://news.ycombinator.com/item?id=5470941
- verelo 14y ago
  It does say something, but do you really want to hire founders in a mid stage company? Founders are very different types of people, the type of people who while great at starting companies, but different people are required at different stages of a company.
  - chii 14y ago
    assuming you can tell personality from reading a résumé...
    - RougeFemme 14y ago
      But most positions require more than a particular type of personality. And in many cases, unless the person is totally obnoxious, personality counts for little as long as the person has the required skills. . .and can be isolated in a corner, if necessary.
- doktrin 14y ago
  I would love to get a little more context behind this anecdote, because I have to admit it sounds almost a little too good / bad to be true. While I have fairly limited experience with BigCo hiring, my poor resume has made it through at least a couple HR filters without any attempt on my part to do any keyword matching. Even in the cases where HR is literally grepping the resume for certain target words, the requirements themselves aren't conjured out of thin air. Therefore, I feel some of the blame is shared by the department doing the hiring. After all, they know a filter is being applied by a team without domain knowledge and should tailor it accordingly.
walshemj 14y ago
Good article a while ago I was at a meeting to discuss the grading / job role system at BT for the Systems engineering division (where 90% of the techies are) It was a disaster as my colleague commented the only thing they decided was the grade of the hr person who fetches the coffee and biscuits at the Industrial relations meetings with the union. HR does have a role in making sure the rules are followed though this should be delivered as training to the actual line managers.
rizzom5000 14y ago
I find it disturbing that Ask the Recruiter tacitly assumes that 12 million unemployed versus 3.7 million vacant jobs implies there isn't a talent shortage. If we have 3.7 million job openings for rocket scientists and 12 million unemployed brain surgeons, then surely we have a talent shortage, no?
- joshAg 14y ago
  This might be a purely semantic argument, but I'd say in the example you provided, you have a skill shortage, not a talent shortage. If you provided training, I'm sure you could find enough brain-surgeons willing to train to be rocket scientists. Of course, that would require you to pay for their training and allow for months of lower productivity while they come up to speed, but that's still a better situation than 3.7 million openings and 0 unemployed.
  - lessnonymous 14y ago
    The problem isn't filling the rocket scientist shortage with brain surgeon retrains. It's finding the unemployed shelf stacker who's really just 6 months of good training from being you rocket scientist. Otherwise you're just creating a shortage of brain surgeons. It's VERY hard to find quality developers. I agree with the article that HR is a huge problem, but I'm a hiring manager and I still don't see a great deal of quality. While it's not as extreme as shifting industry, I recently took the advice from a few HN threads I'd spoken up on and while I'm looking for a PHP developer, I didn't insist that PHP be one of the languages you already know. Did that work? No. I still didn't get an influx of quality applicants. I also said in the ad that I was more interested in a cover letter than a resume that shows where you've worked or gone to school, and I'm interested in your Stack Overflow or HN profile. In other words: I'd love to hire a hobbyist. But none of the 5% of this country's unemployed applied.
    - NoodleIncident 14y ago
      Well that's the point. Keyword-matching does require that you already know PHP; there's no regular expression for quality.
tokenadult 14y ago
I generally agree with the suggestion that the line managers who know the work rather than whatever HR department a company has should have the lead role in hiring. The supposed rationale for an HR department is that hiring and firing are hemmed in by various laws that not everyone understands, and a capable HR person can prevent a company from doing something illegal that exposes the company to a lawsuit or criminal penalties. But most of the time, HR departments really keep companies from hiring capable workers. Definitely learn the law, and don't do anything illegal, but help managers learn how to develop work-sample tests for hiring, https://news.ycombinator.com/item?id=5227923 https://news.ycombinator.com/item?id=5227923 and make sure that the main focus of hiring is getting each job done right by new hires who have a capacity to grow into more responsible positions in the company over the next few years.
- yuhong 14y ago
  Of course, in the long term, these anti-discrimination laws really should change, but that is a different matter.
- RougeFemme 14y ago
  I think HR can be useful at "managing" the talent once the hiring is complete, but agree that their involvement in the actual hiring process should be limited to compliance issues. HR can also be good at helping to identify the roots of any turnover issues. Line managers may be too close to the problem and/or too busy tending to the business to be useful in that area.
bennyg 14y ago
Yep. A buddy of mine and a DAMN good Android developer (and overall highly intelligent man) is not getting hired on at my job (a CS research arm of the University) because HR can't accept the fact he doesn't have a Bachelors. He's literally 2 months away from it, and his contract with Tek Systems is up in a couple weeks. It's absolutely fucking stupid.
- toomuchtodo 14y ago
  He in the Chicago area by chance? We're hiring, and need an Android developer. We don't care about education whatsoever, just if you can do the job.
- lawnchair_larry 14y ago
  Haha, sounds like the University is insecure about the value of its own product. That's like dogfooding, in some twisted way.
- amorphid 14y ago
  Is Mr. Damn Good Android Developer single? Take his temperature and tell HR he has a Bachelor's Degree in Chemistry w/ Specialization In Mecurial Heat Transfer from the New School of Thought where he completed 98.6 units. I'm not sure that joke actually made any sense, but it sounded good in my head. Your HR department sounds so thick skulled they might actually by it.
rayiner 14y ago
I do think there is a talent shortage, but I also think tech companies could learn a few things from other industries that have figured out how to recruit at scale. E.g. at my company hiring is not done by HR. A recruiting department handles the planning and logistics, but evaluations are done by lawyers. A potential recruit will be evaluated by associates at say a cocktail reception, interviewed by an associate or sometimes a partner in a screening interview, interviewed by several associates and partners at a callback, and will be hired or not based on the judgment of a hiring committee of partners. At no point does a candidate answer to someone who hasn't been in exactly that same seat before (even the recruiting people are often lawyers who left active practice). As I understand it, finance, consulting, and accounting work the same way, even in huge organizations. The downside of this is that it's very time-consuming, and very expensive. But you get what you pay for.
- rdouble 14y ago
  Most good startups do hire this way. At least, at first. As you mention, it's hard to scale. A handful of larger companies seem to know how to recruit at scale... Google, Apple, Palantir, Facebook, etc.
  - rayiner 14y ago
    I suppose it depends on how you define "larger." It seems to work well enough for banks with thousands of bankers and 100+ new recruits each year. But it is definitely expensive, and above all requires total organizational commitment. Recruiting becomes a substantial budget item, and very few people in the organization consider themselves "too important" to get involved with it.
- tptacek 14y ago
  I'm not sure I've ever known of a tech company that had a centralized HR department making hiring decisions. Mind you, I've worked for tech companies that had HR departments that thought they had a say in hiring, but that was a self-serving delusion on their part. I think the tech industry, like most industries, does do hiring by having domain experts evaluate candidates. That's why hoary old books like "What Color Is Your Parachute" focus so intently on getting you to identify the real hiring managers at companies. I definitely don't think the tech industry does hiring well. I think that's one of the huge, open, lucrative "meta-problems" in the tech industry.

68 points by vellum 14y ago

I'm sorry, but the talent shortage is a real thing. We don't have any HR filtering in place - resumes come directly to managers - but we still have a really difficult time filling our open positions.

droithomme 14y ago
If you want this claim of yours honestly evaluated, state your company, location, job requirements, and how much the compensation package is.
lightup88 14y ago
Absolutely it is. Furthermore, the concept that an applicant should dictate whether he/she speaks to a manager is impractical. Just as dismissing screeners as largely incompetent is silly. To be clear-he's absolutely correct that automated screening of applications isn't up to snuff.
vonmoltke 14y ago
Counter anecdote: We don't really have an HR department at all, and we don't have much trouble finding people when we need them. Sure, we get our fair share of chaff like everyone else. Still only takes a month or two to find someone worth hiring. I do not consider that an unreasonable amount of time. For the record, every engineer we have hired since I started, and including me, has been a cold application off a web posting.
ditonal 14y ago
*Shortage of talent at the price you are willing to pay. There are all sorts of legal work and questions I would love to have done if I could get a top-notch lawyer for $10/hr. That doesn't mean there is a shortage of top-notch lawyers, it means that I am priced out by the rest of the market who are offering them better wages. Sounds like you are priced out of the market, if you offer market wages, you will find people by definition of market wage i.e. the price that it costs to successfully hire people, not the price off of salary.com.
- hkmurakami 14y ago
  One caveat is that "market wages" most likely will need to offer a risk premium depending on what kind of environment, stability, convenience, etc. you offer. It probably isn't going to be "the industry average for all companies (including the big boys) is $X, so I should need to just offer $X". X could be lower or higher, depending on who you manage to find and who you are.
  - ditonal 14y ago
    I think there's actually a lot of caveats, all jobs are not equal, there isn't perfect information about all available jobs (hence the need for recruiting), etc. But on the other hand, this 'shortage' is being used as a political tool to depress engineering salaries, even though if you applied the same logic to other professions you would find there are worse shortages there. Clearly it would be useful from a healthcare cost perspective if we had more doctors but we aren't expanding visa quotas there. Salary is a huge issue and most jobs want to pay engineers as little as possible. Of course they will rant about how competitive their pay is but if it was so competitive they would probably advertise it, instead of trying to use information asymmetry so they can negotiate them down lower. Then of course, they only hire the best, but salary negotiations inevitably revert to 'market wages', then after all this they can't hire people so they need more immigrants who get deported if they fire them. For some reason, if you can't afford an accountant, you don't get an accountant, if you can't afford a private lawyer, you don't get a private lawyer, but if you can't afford a programmer, there is a talent shortage and we need more skilled immigrants and to subsidize more STEM graduates.
    - hkmurakami 14y ago
      Not to mention the H1B hire -> underpay -> keep them underpaid and shackled with the H1B/Greencard combo.
      - seanmcdirmid 14y ago
        You would quickly find yourself in trouble with the INS.
jjtheblunt 14y ago
If you're in California, it's because no American from outside California improves her/his economic outlook by coming to California, where cost of living is easily several times higher than in many other thriving parts of the country.
- scarmig 14y ago
  Moving to California from the East Coast nearly doubled my salary. Cost of living went up, but by around a factor of 15-20%. Of course, since lots of people are really fucking rich in the Bay Area, it's easy to get caught in the conspicuous consumption game (the biggest part of which is probably housing and location). But if you can avoid that, moving to California can easily mean a whole lot more money, even with taxes + cost of living.
  - toomuchtodo 14y ago
    I'm an infrastructure guy. I interviewed with a fairly well known startup in Mountain View. I was making $120K in Chicago, and was offered $110K to move to Mountain View/San Jose. In what world is that an intelligent choice, when you can make $ITMONIES somewhere where the cost of living isn't going to eat you alive.
    - lern_too_spel 14y ago
      $110k plus equity, right? If you got an offer from an established public company, the salary portion of the compensation package would likely be much higher.
      - toomuchtodo 14y ago
        Very little equity. Not worth the salary differential.
      - ktsmith 14y ago
        You should assume that any equity you are offerred by a startup has a value of $0 because the odds are that's what you are going to see from it.
polymatter 14y ago
Where do you advertise? How do you portray your company? Do you get involved in local meetups? Do you contribute to Open Source? Why do the employees that do decide to leave you, leave? What do they say about you? Do you know the going rate for your open positions? How do you know thats the going rate and how are you confident that that is a rate your potential candidates are likely to accept? Is there a big-brand competitor nearby that sucks up your potential candidates? Is your office hard to get to? Is there a local tech scene or is it a tech desert? Is your company in a non-sexy industry that has a common perception of being particularly boring (eg. Enterprise Java billing middleware) or evil (eg. recording industry, patent troll, oil industry)? And thats before we get to how you are filtering resumes. It can very well be the case that there is a talent shortage in your area/domain. But I think its very hard to conclusively say so on the basis of a lack of qualified candidates flooding through every open opportunity.
- deleted 14y ago
  [deleted]

confluence 14y ago

Reminds me of a comment I had a while ago regarding HR below. Some context - the company had been having problems with hiring good people and was trying to figure out what the problem was - because they never had the problem in the past. So they figured it was related to the HR department and they tested it as below: --- I can't remember which company this story was from (I think it was Lotus Software). Basically the HR team of a multi-billion dollar startup were given the anonymised resumes of the first 10-20 founding team members. HR rejected them all. Not one founding team member was accepted even for a short interview. Tells you something about HR doesn't it? --- Source: https://news.ycombinator.com/item?id=4699673 https://news.ycombinator.com/item?id=4699673 Same problem as found here: https://news.ycombinator.com/item?id=5470941 https://news.ycombinator.com/item?id=5470941

verelo 14y ago
It does say something, but do you really want to hire founders in a mid stage company? Founders are very different types of people, the type of people who while great at starting companies, but different people are required at different stages of a company.
- chii 14y ago
  assuming you can tell personality from reading a résumé...
  - RougeFemme 14y ago
    But most positions require more than a particular type of personality. And in many cases, unless the person is totally obnoxious, personality counts for little as long as the person has the required skills. . .and can be isolated in a corner, if necessary.
doktrin 14y ago
I would love to get a little more context behind this anecdote, because I have to admit it sounds almost a little too good / bad to be true. While I have fairly limited experience with BigCo hiring, my poor resume has made it through at least a couple HR filters without any attempt on my part to do any keyword matching. Even in the cases where HR is literally grepping the resume for certain target words, the requirements themselves aren't conjured out of thin air. Therefore, I feel some of the blame is shared by the department doing the hiring. After all, they know a filter is being applied by a team without domain knowledge and should tailor it accordingly.

walshemj 14y ago

Good article a while ago I was at a meeting to discuss the grading / job role system at BT for the Systems engineering division (where 90% of the techies are) It was a disaster as my colleague commented the only thing they decided was the grade of the hr person who fetches the coffee and biscuits at the Industrial relations meetings with the union. HR does have a role in making sure the rules are followed though this should be delivered as training to the actual line managers.

rizzom5000 14y ago

I find it disturbing that Ask the Recruiter tacitly assumes that 12 million unemployed versus 3.7 million vacant jobs implies there isn't a talent shortage. If we have 3.7 million job openings for rocket scientists and 12 million unemployed brain surgeons, then surely we have a talent shortage, no?

joshAg 14y ago
This might be a purely semantic argument, but I'd say in the example you provided, you have a skill shortage, not a talent shortage. If you provided training, I'm sure you could find enough brain-surgeons willing to train to be rocket scientists. Of course, that would require you to pay for their training and allow for months of lower productivity while they come up to speed, but that's still a better situation than 3.7 million openings and 0 unemployed.
- lessnonymous 14y ago
  The problem isn't filling the rocket scientist shortage with brain surgeon retrains. It's finding the unemployed shelf stacker who's really just 6 months of good training from being you rocket scientist. Otherwise you're just creating a shortage of brain surgeons. It's VERY hard to find quality developers. I agree with the article that HR is a huge problem, but I'm a hiring manager and I still don't see a great deal of quality. While it's not as extreme as shifting industry, I recently took the advice from a few HN threads I'd spoken up on and while I'm looking for a PHP developer, I didn't insist that PHP be one of the languages you already know. Did that work? No. I still didn't get an influx of quality applicants. I also said in the ad that I was more interested in a cover letter than a resume that shows where you've worked or gone to school, and I'm interested in your Stack Overflow or HN profile. In other words: I'd love to hire a hobbyist. But none of the 5% of this country's unemployed applied.
  - NoodleIncident 14y ago
    Well that's the point. Keyword-matching does require that you already know PHP; there's no regular expression for quality.

tokenadult 14y ago

I generally agree with the suggestion that the line managers who know the work rather than whatever HR department a company has should have the lead role in hiring. The supposed rationale for an HR department is that hiring and firing are hemmed in by various laws that not everyone understands, and a capable HR person can prevent a company from doing something illegal that exposes the company to a lawsuit or criminal penalties. But most of the time, HR departments really keep companies from hiring capable workers. Definitely learn the law, and don't do anything illegal, but help managers learn how to develop work-sample tests for hiring, https://news.ycombinator.com/item?id=5227923 https://news.ycombinator.com/item?id=5227923 and make sure that the main focus of hiring is getting each job done right by new hires who have a capacity to grow into more responsible positions in the company over the next few years.

yuhong 14y ago
Of course, in the long term, these anti-discrimination laws really should change, but that is a different matter.
RougeFemme 14y ago
I think HR can be useful at "managing" the talent once the hiring is complete, but agree that their involvement in the actual hiring process should be limited to compliance issues. HR can also be good at helping to identify the roots of any turnover issues. Line managers may be too close to the problem and/or too busy tending to the business to be useful in that area.

bennyg 14y ago

Yep. A buddy of mine and a DAMN good Android developer (and overall highly intelligent man) is not getting hired on at my job (a CS research arm of the University) because HR can't accept the fact he doesn't have a Bachelors. He's literally 2 months away from it, and his contract with Tek Systems is up in a couple weeks. It's absolutely fucking stupid.

toomuchtodo 14y ago
He in the Chicago area by chance? We're hiring, and need an Android developer. We don't care about education whatsoever, just if you can do the job.
lawnchair_larry 14y ago
Haha, sounds like the University is insecure about the value of its own product. That's like dogfooding, in some twisted way.
amorphid 14y ago
Is Mr. Damn Good Android Developer single? Take his temperature and tell HR he has a Bachelor's Degree in Chemistry w/ Specialization In Mecurial Heat Transfer from the New School of Thought where he completed 98.6 units. I'm not sure that joke actually made any sense, but it sounded good in my head. Your HR department sounds so thick skulled they might actually by it.

rayiner 14y ago

I do think there is a talent shortage, but I also think tech companies could learn a few things from other industries that have figured out how to recruit at scale. E.g. at my company hiring is not done by HR. A recruiting department handles the planning and logistics, but evaluations are done by lawyers. A potential recruit will be evaluated by associates at say a cocktail reception, interviewed by an associate or sometimes a partner in a screening interview, interviewed by several associates and partners at a callback, and will be hired or not based on the judgment of a hiring committee of partners. At no point does a candidate answer to someone who hasn't been in exactly that same seat before (even the recruiting people are often lawyers who left active practice). As I understand it, finance, consulting, and accounting work the same way, even in huge organizations. The downside of this is that it's very time-consuming, and very expensive. But you get what you pay for.

rdouble 14y ago
Most good startups do hire this way. At least, at first. As you mention, it's hard to scale. A handful of larger companies seem to know how to recruit at scale... Google, Apple, Palantir, Facebook, etc.
- rayiner 14y ago
  I suppose it depends on how you define "larger." It seems to work well enough for banks with thousands of bankers and 100+ new recruits each year. But it is definitely expensive, and above all requires total organizational commitment. Recruiting becomes a substantial budget item, and very few people in the organization consider themselves "too important" to get involved with it.
tptacek 14y ago
I'm not sure I've ever known of a tech company that had a centralized HR department making hiring decisions. Mind you, I've worked for tech companies that had HR departments that thought they had a say in hiring, but that was a self-serving delusion on their part. I think the tech industry, like most industries, does do hiring by having domain experts evaluate candidates. That's why hoary old books like "What Color Is Your Parachute" focus so intently on getting you to identify the real hiring managers at companies. I definitely don't think the tech industry does hiring well. I think that's one of the huge, open, lucrative "meta-problems" in the tech industry.