Sunday, August 9, 2020

the business bro is ready to spend

I was excited a few months ago to once again run a hiring round. It had been a few years since my last such project but I found that my enthusiasm and energy for the task remained in abundance. I zipped through the preliminary steps, posted the job on our career board, and sat back in anticipation of a flood of applications. I knew it was important to take a deep breath and get myself ready for the next step, which I knew from my past experience would be the most challenging aspect of the process. After a few different experiments, I had worked out a system where once I had fifty or so applications, I would shut myself in a conference room and pick a few interview candidates. This ensured, among other efficiency benefits, that I would assess candidates while in the same mental, emotional, and physical condition, a consideration that I hoped would reduce any external effects on my choices. I figured that although I was new in my role, my hiring process should loosely resemble what worked elsewhere, so I came back in the next day with the intent to get moving once we reached around fifty applications.

A week later, we had almost ten candidates - some flood - and I wasn't impressed with the quality of the applicant pool. At first, I couldn’t figure it out. Was it possible that I had written something into the job description that turned off strong candidates? Or, perhaps the economy had changed so much since my last hiring round that it was being reflected in the number of applicants - a strong economy by definition means fewer job seekers. Maybe (though surely not) candidates were much more excited about my former workplace than my current one? I couldn't think of a great explanation, so I dug a little deeper, but for the most part I remained confused about the situation.

I came to an odd realization after a couple of days - even if I could think of a way to expand the applicant pool, I probably wouldn't be allowed to support it with increased expenditures. This was because the type of spending dictated the approval process, and like most of my colleagues I wasn't allowed to spend so much as a nickel on a new standing desk without jumping through a series of hoops. This in itself isn't a huge deal - financial controls are crucial - but since I could basically hire whomever I pleased in my function as a hiring manager, I felt the big picture going out of focus. To put it another way, I could spend tens of thousands of salary dollars to fill my open role but I wasn't allowed to freely buy equipment at a fraction of the cost; it never struck me as weird because this is standard process at many a Good Company, but once I refreshed my thinking it was hard to shake the epiphany.

The underlying problem that fertilized the growth of this system is the way people forget that one dollar is one dollar. I think this is a symptom of how workplaces have a special capability of making simple things endlessly complex until otherwise capable adults overlook basic details. Why is my ability to spend money based on the expense sheet category? There is no good reason why $200 for equipment goes through layers of approvals while the six-figure hiring expenditures zoom past the red tape. And yes, I mean six figures - I’ve heard from HR that most new hires cost our organization around two and a half times the annual salary, so anyone paid above $40K per year hits the threshold. Most perplexing of all is that if categories are factored into spending decisions, shouldn't it be easier to spend small amounts on one-time full price purchases, given that new hires are usually more expensive up front and continue to incur costs so long as they remain on the payroll?

The situation I've described so far might be a hidden factor as to why firms so often struggle with hiring. My guess is that most organizations deliberating a new six-figure expense would hold multiple meetings, conduct extensive analyses, and gather input from a wide range of voices; I am confident that hiring decisions do not demand the same rigorous examination. I suspect that most organizations would do much better with hiring simply by applying the same decision process across price points; a $200K expense involves the same level of scrutiny regardless of whether it involves hiring or not. At the very least, I would think that this would involve more senior colleagues in each hiring decision and I imagine incorporating their experience would prove invaluable in the decision.

But it's also occurred to me that perhaps I have this backward. It might be that if an organization regularly involved junior members in big spending decisions, it would become better prepared to make spending decisions in the future. Most people my age are reaching a career stage where they could reasonably hold final say on a hiring decision, but unless they've learned to spend big money in other aspects of their work I don't know why they would be prepared to do so in a hiring manager capacity. (The closest non-work equivalent is probably buying a house, but from what I know these have been borrowing rather than spending decisions.) I like the approach of bringing in more junior people for big spending decisions, even if just as observers, and I like it for many reasons - perhaps the most important of these is the growth and development opportunity in the context of this unnatural skill.

All of these big insights are invaluable, but what did it mean for my hiring round? Regardless of my philosophies, TOA posts, and grand plans for organizational process changes, my immediate responsibility was to fill the open position. The reality is that I found this to be no difficulty at all; I deliberately framed my situation as 'a problem' at the outset of this post. The unintended benefit about my approach was that I had some kind of expectation about the candidate pool, which allowed me to realize I was mistaken about the job market. The 'flood' of resumes that trickled into my inbox suggested that we'd already hired the best candidate, so I took the hint and promoted someone from the team. It could sometimes be the case that a lukewarm response to a posting means a job's qualifications must be reevaluated, but for the most part I find the external response a great benchmark for internal evaluation. I still recommend always thinking about ways to expand the applicant pool but treating this as its own ends risks obscuring the main idea - ultimately, the only important consideration is having qualified and capable people in your organization. A hiring round is an opportunity to make such an assessment not just for new candidates but also for those who are already in the team.