5 ms·

What If You Could "Date" Companies?

30 points by mahmoudimus 13y ago

hardtke 13y ago
Another Silicon Valley startup solving a uniquely Silicon Valley problem. It's amazing the amount of effort and investment that goes into the problem of finding engineers, and comparatively how little goes into the rest of the labor market.
- jessriedel 13y ago
  I there a reason to think this couldn't be applicable to a million other jobs? Obviously, not all jobs allow this flexibility, but surely many more do than just coders.
  - hardtke 13y ago
    Labor laws make these sorts of arrangements difficult in other jobs. If the job requires that you go to the office and utilize the employer's equipment, you generally can't work as a consultant. Also, there are issues with workers compensation insurance. Most people also prefer full time work as it has benefits such as health insurance.
SilasX 13y ago
Hm, that's an interesting idea for solving the hard problem of matching talent with orga... Oh wait, the article's just a PR piece for a startup using a deceptive title instead of something more honest like "GT takes the dating model to the recruiting process."
- thestoic 13y ago
  We are using the dating model to the recruiting process. Could not control the title of the article, but thx for pointing that out
wavefunction 13y ago
How about I just go in, work, do a good job, and live a life outside of work.
- andrewflnr 13y ago
  That's wonderful, if you have a decent place to work, but you don't necessarily start off that way. Did you read the article?
  - wavefunction 13y ago
    I guess I'm old fashioned, and the solution proposed in the article is just attempting to resolve a recent problem in a new way, rather than returning to what works in a tried and true fashion.
tptacek 13y ago
You mean, "what if we could consult for companies instead of accepting full-time jobs with them?" The freelancer who works a gig at a company for a couple months before finally accepting a full time job from them is one of the oldest stories in consulting. Done correctly, freelancing tends (strongly) to be more lucrative than full-time work, most especially in markets like this one, where sellers of talent have leverage over buyers. Why would anyone in a market like this concede anything to a company like GroupTalent? Serious question; I'm sure there's some reason.
- colmvp 13y ago
  Exactly. It's not uncommon for design firms (interactive and motion) to conduct a probation period with potential employees by paying them a freelance rate for a few months prior to writing an offer. That's also why I balk at companies that give take home tests to screen applicants.
  - tptacek 13y ago
    FWIW: the practice of having prospective employees do a probation period as a contractor is (take your pick) unreasonable and/or counterproductive.
    - gruseom 13y ago
      It does seem like the mechanisms people have come up with for this so far are counterproductive. But the underlying problem seems to me a real one, and a hard one: how can you tell whether someone will be good to work with? The only way to know is to actually work with them. So (the argument goes) rather than relying on bogus predictors, let's just test the hypothesis "this person will be a good addition to our team" directly. Since you think about hiring a lot, I'm curious: do you think the above is accurate? If no, how would you phrase it differently? If yes, how would you recommend testing that hypothesis instead?
      - tptacek 13y ago
        I think it's very accurate, and I think the idea of temp- to- perm hiring is seductive for exactly that reason. In addition to the argument that the economics of temp- to- perm don't work out in this market for tech talent, there are also fundamental problems with the approach. Most importantly: lots of people can perform well for short periods of time, especially if they don't have to deal with interpersonal conflicts (which take time to develop) or technical design disagreements (which only happen at inflection points in product/service design; ie, it might take 8 months to discover whether someone can "disagree and commit" to work on a team where they disapprove of some technical decision). Also, lots of people can work well on a project for a couple weeks before they get bored, and some of those people lack the ability to kickstart their engagement back up again once they feel "burned out" by a problem domain. I think those are some of the most likely failure modes of new employees, and they also happen to be different from the failure modes that classic interviewing and work-sample testing are likely to suss out; ie, you can cover the non-psychological non-work-ethic concerns about new candidates with a relatively straightforward hiring process, so temp- to- perm might not even buy you much even if you don't assume that the approach is costing you the best candidates.
nawitus 13y ago
How is this good for the employee? So I quit my job and make a contract for few months, what should I do if they don't decide to hire me full-time? There's lots of risk to me, as companies at GroupTalent probably choose to not hire the employees as often as companies doing 'normal' recruitment. In addition, I'm not sure how contract-to-hire for 4 months is different from hiring someone for 'full time' and then firing after the few first months if they don't perform well.
- ghempton 13y ago
  To extend the dating analogy a bit further: rather than putting all your eggs into a single basket, you can date multiple companies and find the best fit for you. In this market, if you are a good developer, the company will most likely want to hire you. In my experience, it is the company that needs to court the developer.
  - nawitus 13y ago
    So do these companies using GroupTalent accept part time contracts? That would be a decent strategy to minimize risk. Even good developers may not be hired after the initial contract.
    - thestoic 13y ago
      some of them do. We have had developers moonlight at other companies while keeping their day job to try out a new company before making a jump. It is less risk indeed
- thestoic 13y ago
  Hi - this is Manny, CEO of GT. If you a try a company and then FT it may be a great outcome for you too. As you may in the long term not be a good fit for that job. Plus in the process of discovery you made a ton of money (contractor payouts are 70% to 100% higher than regular FT salaries even when it includes benefits!) Your point is right in that try-before-you-buy is not a new construct but rather a corollary of being an at-will employment society. So yes, GroupTalent is just a hiring platform that allows tryouts as a perfectly reasonable alternative.
lquist 13y ago
This should be the only way to hire. I've never hired anybody at my startup that I haven't worked closely with for at least a few months, and it seems sheer insanity to do otherwise.
- fourstar 13y ago
  Except this would then: A) Only apply to small "startups" B) Be horribly inefficient. This doesn't scale, but I'm glad for your startup it works. You like it because you don't have to pay unemployment/benefits for someone that you end up firing, probably, so of course you are going to support something like this (being the one hiring).
  - lquist 13y ago
    AFAIK this is how Stripe works as well. I don't care about not having to pay unemployment/benefits. The reason I like it (or rather, need it) is because our organization is little more than the employees we have, and I want to make sure that they are awesome.
jonemo 13y ago
I would use this, if it weren't restricted to people who make smartphone apps [1]. That seems to be an extremely narrow focus, even in Silicon Valley. [1] This might not actually be the case but their info pages only talk about apps.
fecak 13y ago
Every recruiting firm that does consulting has some language in their agreement (with both the consultant and the client) about a cost (fee) for hiring the consultant directly. Try before you buy has been around forever. If they are moving these consultants around to different companies to find a match, that is somewhat unique. Just placing someone into a contract-to-hire role until the not hire/hire decision is made is not new. I like contract-to-hire overall, but one problem is that you get lifetime contractors who have no intention of ever converting to perm roles, and they just stay as long as they can. Companies are more inclined to invest in and train a contract-to-hire employee over a pure contract employee. The brain drain can be a problem. Another issue is contract-to-hire employees usually are paid a premium, and get accustomed to the money, making them less apt to convert. This is particularly troublesome for those that get their benefits through their spouse/partner, where the extra money seems substantial because they aren't paying for benefits or COBRA out of it. Probationary periods are rather useless in any at will employment state (in the US, not sure about international law). Why put "We can fire you in 90 days if you don't perform" in an employment contract when you can simply fire someone on day 2 if you really wanted to? It seems like a decent motivational tool perhaps, but in markets like software it is just another reason for candidates to potentially turn down work, where the alternative (no probationary period and no expectation of even 90 days of work) is better for both parties.
- michaelochurch 13y ago
  The probationary period is to reduce risk of lawsuits because at-will employment is actually very complicated when it comes to subjective evaluation (i.e. all white collar work) and no one wants to cut a severance check for someone who is cut in the first 90 days. "At-will" means that companies have the right to execute strategic layoffs, and also to set performance standards whereever they wish, as long as they're uniformly enforced across that job description. (Both of these, I'd argue, are reasonable.) It doesn't allow companies to vary their performance standards for different individuals, or to fire "for any reason". For example, if you work for a 5,000-person company and you're fired for performance after failing on one project and being denied transfer, and you can prove that someone else was allowed transfer under the same circumstances, you can possibly win a discrimination or harassment case (especially because any negative communication about you by management that impedes your chance at transfer can be construed as harassment; this is why the common practice of making performance reviews Enron-style-- that is, part of the transfer packet-- exposes a company to severe legal risk). If you apply to a 5-person company and get fired in Month 3 because your boss (probably the CEO) isn't feeling it, you probably don't have legal recourse, because as owner and manager of the business, he has the right to select personnel. If it's a 5,000-person company, and you weren't give a few chances to prove yourself on multiple projects, you can raise accusations of personal bias. (That's why companies implement those horrible 18-month policies against internal transfer-- it's to create the impression of a uniform performance standard-- however, those only have legal weight if enforced uniformly, which they never are.) Even if you don't win, you can bring a lot of HR records into fresh air (which a company doesn't want) as they try to prove that you failed according to a set of rules that is enforced uniformly. Companies would rather pay severance than have the courts getting into their HR records. The probation period is generally more "at-will" than regular employment. For most companies, probation means a couple of things. First, it means that a no-show constitutes voluntary resignation and therefore can't require the company to pay unemployment. (This isn't an issue at our level, but most people are not as ambitious and diligent as we are, and no-shows happen.) Second, it blocks the "employee should have been allowed transfer before termination" argument because the going assumption is that no one transfers in a probation period. Third, it often means no vacation is accrued, which is relevant when people are terminated early on (because they usually haven't used it). Fourth, and perhaps most relevant, it means that one should not expect severance if terminated in that time.
michaelochurch 13y ago
I think this is a much better idea: http://michaelochurch.wordpress.com/2013/05/07/fixing-employment-with-consulting-call-options/ http://michaelochurch.wordpress.com/2013/05/07/fixing-employ... Essentially, it's a system that allows people to collect some stability income upfront by selling call options on future consulting services. This would also allow intermediaries (like GT) to arbitrage. For example, I'm damn sure there's someone out there who'd pay $750 per hour for my time (or, at least, could justify that much value) but I can't find that person-- and he probably only needs a few hours of my time, here and there. I'd be happy to sell a call option (strike $100/h) for $150/hour and let the option holder take most of the profit ($500) in order to have him doing my marketing and finding those $750/h high-value clients (which I can't). The one way my consulting call options would differ is that the option holder only gets 95% of the profit; 5% goes back to the consultant. That's to make sure the consultant knows the actual price he or she is billed at. Employment is already a call option, really. Take software engineers. The median of us is worth less than our salary, but the good ones are worth 5x and the great ones are 20-100x. That's hard to predict, because it's not only a factor of the individual, but also project/person fit and being assigned to high-yield work. Many software engineers at large companies could be rendering over $1 million per year in value, but are being held on evaluative Fourth Quadrant Work ( http://michaelochurch.wordpress.com/2013/01/01/fourth-quadrant-work/ http://michaelochurch.wordpress.com/2013/01/01/fourth-quadra... ) while management decides whether or not to trust them with a real project. So there's already a call-option dynamic in place; it's just that right now, it works entirely out of employee favor. I want to fix that.
- yuhong 13y ago
  I was thinking of something similar for blogging for a while now.

30 points by mahmoudimus 13y ago

Another Silicon Valley startup solving a uniquely Silicon Valley problem. It's amazing the amount of effort and investment that goes into the problem of finding engineers, and comparatively how little goes into the rest of the labor market.

jessriedel 13y ago
I there a reason to think this couldn't be applicable to a million other jobs? Obviously, not all jobs allow this flexibility, but surely many more do than just coders.
- hardtke 13y ago
  Labor laws make these sorts of arrangements difficult in other jobs. If the job requires that you go to the office and utilize the employer's equipment, you generally can't work as a consultant. Also, there are issues with workers compensation insurance. Most people also prefer full time work as it has benefits such as health insurance.

SilasX 13y ago

Hm, that's an interesting idea for solving the hard problem of matching talent with orga... Oh wait, the article's just a PR piece for a startup using a deceptive title instead of something more honest like "GT takes the dating model to the recruiting process."

thestoic 13y ago
We are using the dating model to the recruiting process. Could not control the title of the article, but thx for pointing that out

wavefunction 13y ago

How about I just go in, work, do a good job, and live a life outside of work.

andrewflnr 13y ago
That's wonderful, if you have a decent place to work, but you don't necessarily start off that way. Did you read the article?
- wavefunction 13y ago
  I guess I'm old fashioned, and the solution proposed in the article is just attempting to resolve a recent problem in a new way, rather than returning to what works in a tried and true fashion.

tptacek 13y ago

You mean, "what if we could consult for companies instead of accepting full-time jobs with them?" The freelancer who works a gig at a company for a couple months before finally accepting a full time job from them is one of the oldest stories in consulting. Done correctly, freelancing tends (strongly) to be more lucrative than full-time work, most especially in markets like this one, where sellers of talent have leverage over buyers. Why would anyone in a market like this concede anything to a company like GroupTalent? Serious question; I'm sure there's some reason.

colmvp 13y ago
Exactly. It's not uncommon for design firms (interactive and motion) to conduct a probation period with potential employees by paying them a freelance rate for a few months prior to writing an offer. That's also why I balk at companies that give take home tests to screen applicants.
- tptacek 13y ago
  FWIW: the practice of having prospective employees do a probation period as a contractor is (take your pick) unreasonable and/or counterproductive.
  - gruseom 13y ago
    It does seem like the mechanisms people have come up with for this so far are counterproductive. But the underlying problem seems to me a real one, and a hard one: how can you tell whether someone will be good to work with? The only way to know is to actually work with them. So (the argument goes) rather than relying on bogus predictors, let's just test the hypothesis "this person will be a good addition to our team" directly. Since you think about hiring a lot, I'm curious: do you think the above is accurate? If no, how would you phrase it differently? If yes, how would you recommend testing that hypothesis instead?
    - tptacek 13y ago
      I think it's very accurate, and I think the idea of temp- to- perm hiring is seductive for exactly that reason. In addition to the argument that the economics of temp- to- perm don't work out in this market for tech talent, there are also fundamental problems with the approach. Most importantly: lots of people can perform well for short periods of time, especially if they don't have to deal with interpersonal conflicts (which take time to develop) or technical design disagreements (which only happen at inflection points in product/service design; ie, it might take 8 months to discover whether someone can "disagree and commit" to work on a team where they disapprove of some technical decision). Also, lots of people can work well on a project for a couple weeks before they get bored, and some of those people lack the ability to kickstart their engagement back up again once they feel "burned out" by a problem domain. I think those are some of the most likely failure modes of new employees, and they also happen to be different from the failure modes that classic interviewing and work-sample testing are likely to suss out; ie, you can cover the non-psychological non-work-ethic concerns about new candidates with a relatively straightforward hiring process, so temp- to- perm might not even buy you much even if you don't assume that the approach is costing you the best candidates.

nawitus 13y ago

How is this good for the employee? So I quit my job and make a contract for few months, what should I do if they don't decide to hire me full-time? There's lots of risk to me, as companies at GroupTalent probably choose to not hire the employees as often as companies doing 'normal' recruitment. In addition, I'm not sure how contract-to-hire for 4 months is different from hiring someone for 'full time' and then firing after the few first months if they don't perform well.

ghempton 13y ago
To extend the dating analogy a bit further: rather than putting all your eggs into a single basket, you can date multiple companies and find the best fit for you. In this market, if you are a good developer, the company will most likely want to hire you. In my experience, it is the company that needs to court the developer.
- nawitus 13y ago
  So do these companies using GroupTalent accept part time contracts? That would be a decent strategy to minimize risk. Even good developers may not be hired after the initial contract.
  - thestoic 13y ago
    some of them do. We have had developers moonlight at other companies while keeping their day job to try out a new company before making a jump. It is less risk indeed
thestoic 13y ago
Hi - this is Manny, CEO of GT. If you a try a company and then FT it may be a great outcome for you too. As you may in the long term not be a good fit for that job. Plus in the process of discovery you made a ton of money (contractor payouts are 70% to 100% higher than regular FT salaries even when it includes benefits!) Your point is right in that try-before-you-buy is not a new construct but rather a corollary of being an at-will employment society. So yes, GroupTalent is just a hiring platform that allows tryouts as a perfectly reasonable alternative.

lquist 13y ago

This should be the only way to hire. I've never hired anybody at my startup that I haven't worked closely with for at least a few months, and it seems sheer insanity to do otherwise.

fourstar 13y ago
Except this would then: A) Only apply to small "startups" B) Be horribly inefficient. This doesn't scale, but I'm glad for your startup it works. You like it because you don't have to pay unemployment/benefits for someone that you end up firing, probably, so of course you are going to support something like this (being the one hiring).
- lquist 13y ago
  AFAIK this is how Stripe works as well. I don't care about not having to pay unemployment/benefits. The reason I like it (or rather, need it) is because our organization is little more than the employees we have, and I want to make sure that they are awesome.

jonemo 13y ago

I would use this, if it weren't restricted to people who make smartphone apps [1]. That seems to be an extremely narrow focus, even in Silicon Valley. [1] This might not actually be the case but their info pages only talk about apps.

fecak 13y ago

Every recruiting firm that does consulting has some language in their agreement (with both the consultant and the client) about a cost (fee) for hiring the consultant directly. Try before you buy has been around forever. If they are moving these consultants around to different companies to find a match, that is somewhat unique. Just placing someone into a contract-to-hire role until the not hire/hire decision is made is not new. I like contract-to-hire overall, but one problem is that you get lifetime contractors who have no intention of ever converting to perm roles, and they just stay as long as they can. Companies are more inclined to invest in and train a contract-to-hire employee over a pure contract employee. The brain drain can be a problem. Another issue is contract-to-hire employees usually are paid a premium, and get accustomed to the money, making them less apt to convert. This is particularly troublesome for those that get their benefits through their spouse/partner, where the extra money seems substantial because they aren't paying for benefits or COBRA out of it. Probationary periods are rather useless in any at will employment state (in the US, not sure about international law). Why put "We can fire you in 90 days if you don't perform" in an employment contract when you can simply fire someone on day 2 if you really wanted to? It seems like a decent motivational tool perhaps, but in markets like software it is just another reason for candidates to potentially turn down work, where the alternative (no probationary period and no expectation of even 90 days of work) is better for both parties.

michaelochurch 13y ago
The probationary period is to reduce risk of lawsuits because at-will employment is actually very complicated when it comes to subjective evaluation (i.e. all white collar work) and no one wants to cut a severance check for someone who is cut in the first 90 days. "At-will" means that companies have the right to execute strategic layoffs, and also to set performance standards whereever they wish, as long as they're uniformly enforced across that job description. (Both of these, I'd argue, are reasonable.) It doesn't allow companies to vary their performance standards for different individuals, or to fire "for any reason". For example, if you work for a 5,000-person company and you're fired for performance after failing on one project and being denied transfer, and you can prove that someone else was allowed transfer under the same circumstances, you can possibly win a discrimination or harassment case (especially because any negative communication about you by management that impedes your chance at transfer can be construed as harassment; this is why the common practice of making performance reviews Enron-style-- that is, part of the transfer packet-- exposes a company to severe legal risk). If you apply to a 5-person company and get fired in Month 3 because your boss (probably the CEO) isn't feeling it, you probably don't have legal recourse, because as owner and manager of the business, he has the right to select personnel. If it's a 5,000-person company, and you weren't give a few chances to prove yourself on multiple projects, you can raise accusations of personal bias. (That's why companies implement those horrible 18-month policies against internal transfer-- it's to create the impression of a uniform performance standard-- however, those only have legal weight if enforced uniformly, which they never are.) Even if you don't win, you can bring a lot of HR records into fresh air (which a company doesn't want) as they try to prove that you failed according to a set of rules that is enforced uniformly. Companies would rather pay severance than have the courts getting into their HR records. The probation period is generally more "at-will" than regular employment. For most companies, probation means a couple of things. First, it means that a no-show constitutes voluntary resignation and therefore can't require the company to pay unemployment. (This isn't an issue at our level, but most people are not as ambitious and diligent as we are, and no-shows happen.) Second, it blocks the "employee should have been allowed transfer before termination" argument because the going assumption is that no one transfers in a probation period. Third, it often means no vacation is accrued, which is relevant when people are terminated early on (because they usually haven't used it). Fourth, and perhaps most relevant, it means that one should not expect severance if terminated in that time.

michaelochurch 13y ago

I think this is a much better idea: http://michaelochurch.wordpress.com/2013/05/07/fixing-employment-with-consulting-call-options/ http://michaelochurch.wordpress.com/2013/05/07/fixing-employ... Essentially, it's a system that allows people to collect some stability income upfront by selling call options on future consulting services. This would also allow intermediaries (like GT) to arbitrage. For example, I'm damn sure there's someone out there who'd pay $750 per hour for my time (or, at least, could justify that much value) but I can't find that person-- and he probably only needs a few hours of my time, here and there. I'd be happy to sell a call option (strike $100/h) for $150/hour and let the option holder take most of the profit ($500) in order to have him doing my marketing and finding those $750/h high-value clients (which I can't). The one way my consulting call options would differ is that the option holder only gets 95% of the profit; 5% goes back to the consultant. That's to make sure the consultant knows the actual price he or she is billed at. Employment is already a call option, really. Take software engineers. The median of us is worth less than our salary, but the good ones are worth 5x and the great ones are 20-100x. That's hard to predict, because it's not only a factor of the individual, but also project/person fit and being assigned to high-yield work. Many software engineers at large companies could be rendering over $1 million per year in value, but are being held on evaluative Fourth Quadrant Work ( http://michaelochurch.wordpress.com/2013/01/01/fourth-quadrant-work/ http://michaelochurch.wordpress.com/2013/01/01/fourth-quadra... ) while management decides whether or not to trust them with a real project. So there's already a call-option dynamic in place; it's just that right now, it works entirely out of employee favor. I want to fix that.

yuhong 13y ago
I was thinking of something similar for blogging for a while now.