Why Tech Hiring is difficult & 7 ways to get better results
Arindam Chandra
We have heard numerous stories about how it is difficult to hire technology talent referring to filling lateral open positions in software engineering & development.
In this article, I explore the top challenges and reasons why Tech Hiring is difficult with inputs from several HR, Recruitment / TA and Business leaders, as well as recruiters, from start-ups to established companies. And then I present some solutions which have worked for several companies, including recommendations from Founders and Heads of HR & Technology such as Raviteja Dodda [Founder - MoEngage Inc.], Bharat Bhartia [VP - HR at Melorra] and Arnab Ghosh [Head - Newgen Development Centre].
10 Minutes Read
The top three challenges seem to be:
- Candidates do not have the required tech skills [claims made in resumes are not always factual and hence coding tests and assessments are a pre-requisite].
- Candidates are not professional / ethical [they don’t come for interviews after confirming or don’t inform if they are joining elsewhere after accepting offers].
- Candidates have salary expectations which are unrealistic / above market standards, further complicated / fueled by the fact that demand for good candidates outstrips supply.
Truth is, technology hiring is difficult, no doubt. But is it possible to do better? The answer is YES.
Like any difficult task, we need to first understand the underlying issues to be able to solve the problem. Here are some of the main reasons why tech hiring is difficult. And as you can see, they point towards prospective employers as much as they point towards prospective candidates:
1. Prospective candidates do not know you.
Let’s compare two different people - a tech and a non-tech. If you are tech person, you would be aware about technology related to your area of expertise but your market awareness could be generally limited to consumer products or services you consume. Even if you work in a company from the same industry, you may have less awareness about your competitors.
But if you are a non-tech person, be it in sales, marketing, operations, finance or HR, you would be more aware of other companies in your domain, perhaps because your job requires you to.
In essence, prospective tech candidates are not aware about you and hence inbound candidate interest is minimal, unless you are a known B2C brand. B2B companies are lesser known to the general population and hence their brand awareness problem is more severe. So the pecking order in terms of difficulty level is lesser known B2B companies to better known B2C companies.
2. Your reputation (or lack of it) may be an issue.
While it is bad to be not known, it is even worse if your reputation as an employer is not good enough. With most prospective tech candidates looking you up on review sites like Glassdoor or checking Google reviews before they interview, unless you have genuinely taken care of your current and past employees (and they have given favorable reviews), your ability to hire future employees is at serious risk.
Not only that, you need to be also careful about those candidates whom you are reaching out to for interviewing with you. If you don’t treat your prospective candidates with respect, you can be rest assured that it will have a serious impact on your hiring.
3. Your interview process is not friendly.
Tech hiring is not a one-way process of you determining whether a prospective candidate is good or not because as mentioned earlier, the person may not even know your organization. It’s a two way process where a prospect also needs to understand and know you. This is more about building a relationship before determining fitment and starts from your first communication and goes on till the person joins.
If your interview process is not aligned to this two-way philosophy, your hiring will be impacted. For example, if you identify a potential candidate and send him a test / assignment without even having a conversation, the probability of the person taking the test is minimal (unless you are a great brand or the person is really desperate).
4. Potential to learn new Tech skills is less.
Tech candidates grow in their career by learning how to code better, learning new tech skills, getting exposure to different domains, building new & complex products or working for different clients in solving their tech challenges etc.
If your job doesn’t offer any or very less of these, what are the chances of hiring someone inclined to learning oriented growth?
5. Your office or workplace isn’t appealing.
If a prospective candidate comes for an interview and sees that your office / workplace is shabby, dark, gloomy etc. or the bathroom is not clean, there are chances that you won’t be able to attract someone used to or aspiring for a better work environment.
This doesn’t mean you need to spend on swanky workplaces but there is no harm in having a clean, well-lit workplace.
6. Candidate expectations are not realistic.
A prospective candidate wants to maximize earnings while a prospective employer wants to minimize costs. This equation is managed by dynamic market forces - it is mostly a function of:
• The competency of a candidate,• Urgency of a candidate in securing a job,• Urgency of a company in filling a position, and• Demand & Supply of talent.
Ignoring this market reality and blaming candidates for having unrealistic expectations is not going to be helpful because a candidate is only one of the participants in this game. You are competing with other employers who are perhaps more (if not equally) responsible for setting candidate expectations by inquiring about offers in hand and offering a better package to win candidates over.
So what can you do to improve your Tech hiring?
For a hiring leader, it is important to plan the hiring process, have a balanced sourcing strategy, create a pitch document to promote the organization and much more. Choose what works for you, customize it for your tech hiring plans and follow it diligently.
1. Plan your hiring process
Planning is perhaps the most critical aspect of recruitment, yet it is frequently not done, or not done properly. Three aspects of planning are critical:
• How many people do you need to hire?• When do you need them on board?• What is your recruitment budget?
How Many: If you need to hire one tech candidate, you need to be prepared to make offers to at least 2, 3, 4 or 5 candidates, depending on whether your past joining to offer ratio for tech positions is 50%, 33%, 25% or 20%. Many times, this simple equation is missed, resulting in severe delays in hiring. And don’t be worried about the extra offers you made - every offered candidate will not join you if your past joining to offer ratio is accurate.
A HR Manager from a mid-size global Tech & Analytics firm told us that her secret sauce in tech hiring has been to consistently over - hire. Her formula: [No of open positions / joining to offer %] * 120%. So if she has 10 open positions and her joining to offer ratio is at 50%, she would make [10 / 50%] *120% = 24 offers.
When: Add your average time to hire and the notice period of prospective candidates and work backwards to arrive at when you should hire. For example, if your average time to hire is 30 days and average notice period is 60 days, keep at least 90 days in hand. If you had not planned this and suddenly need people, you are limiting your talent pool to those who are already serving notice (which comes with its own set of complications).
Recruitment budget: Depending on your sourcing strategy (see the next section), your recruitment budget could involve fees for job portals, staffing firms, temporary staffing, recruitment software, employee referral program, skill tests, medical tests, background verification, recruitment related travel and printing etc. Be sure to list them in advance to determine their ROI later.
2. Plan your sourcing strategy
Keeping in mind that prospective candidates may not know you, your sourcing strategy for tech talent would be mostly outbound (through your recruiters and staffing firms support). However, since outbound is more expensive than inbound, you should also set-up the following for inbound prospects:
Your Career Site: If you are promoting your company, your website would have visitors. Ensure that your recruitment benefits from such visitors by converting them into prospective candidates through your career site page. Good recruitment software also funnels such prospects directly into your open positions or pipeline for future hiring.
Employee Referrals: Employees play a very critical role in portraying the image of their employer. Happy employees do not shy away from broadcasting about your open positions in their circles. A formal employee referral program provides additional incentive in a cost effective manner.
Social Media: The most popular use of social media recruiting is perhaps to source prospective applicants, including passive candidates. You can also use it as a researching tool to see if there’s information available to verify backgrounds and qualifications or to check if a prospective candidate has a professional online presence.
Keep in mind that simply mentioning ‘We are hiring’ in your LinkedIn profile is not going to get you enough qualified tech candidates. Choose the appropriate social channel for tech talent - Stack Overflow and GitHub are good options.
Bharat Bhartia, VP - HR at Melorra, believes that companies should leverage all their available resources. Since Melorra attracts thousands of customers to their website daily, his top priority is to leverage their Career Site as a key source for talent along with planning for open positions much in advance so that there is a ready talent pool when needed.
3. Answer this: Why would someone want to work here?
This is the first step towards building your Employer Brand which is basically a process of promoting your organization as the employer of choice to a potential target group from which you aspire to recruit. In answering this question, you need to be honest, credible and distinguished in identity - your Employer Value Proposition.
Once you have the answer and captured this in a pitch document, make sure the entire organization is in sync with this and it is prominently featured in your career site as well as in your social media pages.
While established companies may have a solid Employer Value proposition, it may not be that easy for start-ups. In such cases, try promoting the credentials of the Founders / Co-Founders or their key management staff such as Head of Engineering / Technology. To mitigate ‘job security’ risks, highlight the funding raised and the credentials of the funding companies.
4. Make your Interview process humane
Identifying a prospective candidate is one thing - hiring them is another. Your interview process is where the maximum make or break happens. A great interview experience not only gets you better talent, it also significantly improves your conversion rate. Here are some do’s and don’ts:
- Become a talent advisor - create a future roadmap for the candidate with your job being one of the milestones in that future. Be creative but remain honest. After candidates make up their minds, their probability of actively participating in the interview process becomes much higher.
- Do not hurry to test a candidate by asking him / her to take a coding test or complete an assignment without establishing a connection. It is bound to fail more often than succeed. Even a 15 minutes conversation is sometimes enough to increase your probability by 4X.
- As much as possible, make the interview process quick, transparent, personalized and painless. Design your recruitment process to minimize the number of hours that candidates must take off work to interview.
- Create a welcoming environment for candidates - make sure you are prepared when someone comes in for an interview and there is someone to meet and make them comfortable. If your workplace seems unwelcoming and future colleagues do not seem to be friendly, who would want to join you?
- If you are a small company or a start-up with hardly a handful of employees, ensure that a prospective candidate knows about it before coming for the interview. Try to schedule the interview when most employees are present - a small packed office is better than a large empty one.
- If multiple people are involved in the interview process, make sure everyone is on the same page about what you are looking for in a candidate and what is expected from the position. Encourage the candidate to ask questions and answer them honestly.
- For those who are not in your final shortlist, inform them. It’s a wise thing to do because of three main reasons: (a) you will prevent negative word of mouth, (b) rejected candidates understand what you are looking for and can provide relevant referrals if requested, and (c) you will learn whether your interview process is going as planned.
5. Understand before making offers
The general practice in India is to find out the current salary of a candidate and propose an offer in line with a candidate’s expectation if it is about 30% marked-up on the current salary. Else, there are questions such as “Why is the candidate’s expectation high?” or “Is the expected hike justifiable with the years of experience?” etc.
But remember expectations change - if a candidate is holding an offer, his / her expectation will be mostly based on the existing offer unless the candidate has some concerns with the organization or the job.
A better way to handle this is as follows: once you have selected a candidate, gather more intelligence on what the candidate is seeking - it will give you a good insight on making an offer that will convert. Do not assume every candidate is looking for more cash compensation. Prospective candidates will sometimes trade off a lower cash offer if there are other benefits.
But if there is nothing that makes your organization stand out vis-à-vis others and on top of it, if your offer is also not attractive, ask yourself: why would any talented candidate join your organization?
Do remember that hard negotiation tactics seldom work because even if a candidate accepts your offer, chances are that he / she is attending other interviews. Talented candidates eventually land a better offer in most circumstances, increasing your time to hire and opportunity costs. It is pointless to hope that since you succeeded in getting an offer acceptance, your candidate is going to finally join you because most tech candidates have more than one offer.
Arnab Ghosh, Head of the Newgen Development Centre, has this suggestion: “Since demand for good candidates outstrips supply, the really good candidates will work towards and get multiple offers and select one based on (1) Salary, (2) Work content, and (3) Brand. Having an open conversation with them in terms of encouraging them to tell you about other offers or gathering this intelligence through other means can go a long way in fine-tuning your approach towards getting the right people to actually join you.”
6. Keep in touch post offer
It isn’t over till a candidate joins you. Never allow long lapses in your communication with the offered candidate. Set-up a regular check-in process - it can be a simple telephone call, or a lunch with the hiring manager to keep them excited about joining you.
If you’ve treated a candidate well, in most cases, they will tell you what is going on in terms of other opportunities or competitive offers.
Be flexible to re-negotiate the offer if required. If a candidate has better offers from similar employers, it is possible that your salary benchmarks are ignoring market reality about the cost of good talent while your competitors are not.
It is also possible that other employers have higher urgency, but are you prepared to take the chance and start the whole hiring process all over again?
7. Analyze and improve further
Use a data-driven approach to get a complete overview of your recruitment process - time to hire, cost per hire, candidate metrics (such as how many candidates were processed for making an offer), source mix, interview metrics (number of interview rounds & time taken) and conversion rates.
Dive deep into your hiring strategy by going behind the scenes to spot inefficiencies and opportunities hidden within your recruiting process, re-assess which parts of the process were not followed, drive accountability with the recruiting team and the hiring managers and ensure such break-downs are eliminated.
Raviteja Dodda, Founder at MoEngage Inc., says: “One of the main challenges I saw with HR teams is not being data-driven and not being able to drive the pipeline momentum & collaboration with other teams using ATS tools. “ He goes on to add: “Hiring is many times looked as the KRA of the Talent Acquisition team. The owner for the hire needs to be the respective technology / business team, TA team is an enabler. TA teams need to be more data-driven and use technology to drive collaboration & improve based on data."
Yes, tech hiring is not easy, but if you follow the above diligently, you will soon begin to see better results and your efforts would be worth it.