For this latest edition, he shares his insights on finding top talent, ways startups can find success with fewer resources, and what he anticipates the future of work will look like in the coming years.
What are the trends in workforce development that you’ve noticed in the last few years?
The balance between employee and employer markets is in flux right now. We're witnessing various trends where employees are more discerning, outlining their requirements before considering a job. They're now thinking deeply about factors such as job roles, development opportunities, work location, work arrangements, time off, and personal growth prospects provided by the organization.
On the other side, employers are becoming more diligent in assessing candidates due to the varying availability of talent in the job market. Depending on the timing, they might be actively recruiting to find the right candidates, or they could have an abundance of candidates to choose from, requiring them to select from a list of well-qualified individuals who have applied or been recruited for open positions.
The dynamics keep shifting rapidly, which is unusual. Normally, we observe long periods of either an employer's or an employee's market dominating. However, recently, the situation has fluctuated frequently. For instance, we've seen a surge in job postings, indicating a higher demand than supply in the job market. Yet, there's no shortage of candidates due to news about layoffs and tech industry downturns.
It's challenging to predict the short-term supply and demand balance. Nevertheless, both employers and employees are still seeking the ideal scenario. For employers, it's finding a candidate committed for the next five to 10 years, someone who can contribute, work independently, lead others, drive processes, and propel the organization forward.
What needs to change in workforce development to support growing companies?
Smaller, growing businesses, in particular, must improve their hiring practices. Many organizations rely on gut feelings or just one or two interviews, often due to internal growth pressures that lead to hasty and substantial investments.
It's uncommon to make a significant financial decision of over $100,000 based on just ninety minutes of research, yet this happens regularly in hiring. Even if the salary isn't in the six-figure range, the costs add up when considering the time and energy invested in recruitment, especially if the employee doesn't stay for an extended period.
Employers need to adopt more diligent hiring practices. There's a well-known saying that I often reference: "Even a donkey can act like a thoroughbred for three interviews." While that might rub some people the wrong way, it highlights the importance of thoroughness. You can balance efficiency and respect for candidates' time by optimizing the hiring process.
What do you think is the sweet spot as far as the number of interviews goes?
Spending three substantial instances with a candidate is the sweet spot. In our hiring process, we have six steps. I once shared these steps online and got roasted. A lot of people thought that six interviews were excessive and that it would deter top candidates. But they overlooked the fact that three of those steps consisted of brief 15-minute conversations to weed out about 85% of applicants. The others were a reference check and a background check–not actual touchpoints with the candidate.
At the end of the day, this approach benefits both the candidate and the employer. Given the significance of making an employment decision for both parties and their families, investing more time in the evaluation process is essential.
How has the preference for remote work affected your recruitment process?
There's a growing demand from candidates for 100% remote roles, often driven by various life circumstances or personal preferences. This shift towards remote work has been significant. However, many major companies, such as Amazon, Tesla, and Facebook, are now calling employees back to the office at least part-time, citing the benefits of in-person collaboration, learning, and effective teamwork. There's data to support arguments on both sides of this debate.
Reaching a consensus on whether a hybrid, remote, or in-office work model is better is a challenging task. Creating a strong organizational culture in a completely remote setting is difficult, with only a few successful outliers. While some individuals work efficiently from home, there are also examples of people taking advantage of remote work by holding multiple jobs or not working effectively at all.
The diversity of experiences complicates the evaluation of remote work. For our team, we've found that fully remote employees tend to be the least engaged. It's not ideal, but it's what our experience has shown over time.
What are trends founders should look ahead to?
I anticipate that many organizations will streamline their workforce. As mentioned earlier, the expectation is to use offshore teams, automation, and tools to increase efficiency, putting employees in more control to operate at a higher level rather than relying on large numbers of staff.
We may witness workforce consolidation in many organizations. This doesn't necessarily mean the organization's overall size will shrink, but it does imply that fewer people will be needed to perform the work. Elon Musk's recent involvement with Twitter serves as a prominent example of this trend, where he reduced a significant portion of the workforce while maintaining the same level of productivity.
We're witnessing several changes in how businesses operate. Some changes involve discontinuing unproductive products or services and allowing the consequences to play out. Others involve finding more efficient methods to do things. These trends are already evolving, and they're not limited to specific industries. Even traditional "Main Street" businesses are beginning to embrace innovation.
What strategies have you found most successful in identifying and attracting high-quality candidates?
We've observed a strong correlation between interview preparation and long-term engagement. Candidates who invest time in interview preparation tend to show dedication from the initial phone call through their first three years with us.
Conversely, candidates who approach interviews casually and show up unprepared are more likely to exhibit a lack of preparation and commitment on the job. Some candidates claim they don't need preparation, just glancing at their resume suffices. However, those who rehearse interview questions, research the company, and proactively gather information tend to perform better and engage more effectively.
Preparation is the key to success. Whether it's doing high-quality work or excelling in any endeavor, it demands diligence and readiness. Those who demonstrate preparation and dedication from the beginning are often the ones who maintain that commitment and high performance over the course of several years. It's an important perspective to consider.
What initiatives or strategies have you implemented to improve employee retention within your organization?
Effective communication is a foundational aspect of our approach. In the United States, if you were to conduct an employee survey in any organization, the most common complaint you'd find is a lack of effective communication. We've conducted hundreds of these surveys over the years. Our strategy revolves around open, honest, and transparent communication, with a high frequency and velocity.
While people may not always like what they hear, and not all plans materialize at the desired pace, we prioritize open and honest communication with transparency, without creating undue worry. We don't believe in sharing every detail of the organization, as that would be overwhelming.
Beyond communication, culture is paramount. We quickly identify individuals who might not align with the team's direction, as one of the main reasons for someone leaving is often the people around them.
Efficient teamwork is a core value for us, and we believe that "teamwork makes the dream work," even if it sounds a bit cliché. Having positive individuals who prioritize serving the team, followed by the client and the community, is essential for a thriving work environment. Positive people who prioritize the team's success tend to lead to positive outcomes.
We understand that, as a smaller organization, we face resource constraints compared to Fortune 500 companies. Our ability to match their salaries and offer premium downtown office space is limited. To compensate, we strive to create a comfortable work environment and provide additional benefits, bonuses, and competitive pay as our financial situation allows.
One of our key strategies for achieving this is committing to automation wherever possible and eliminating unnecessary tasks. We aim to make the work more efficient, reducing the stress employees experience daily.
Can AI help with that automation?
We have an ongoing initiative within our team called "ADD" - Automate, Delegate, Delete. We make use of various tools, including AI, to ensure that every team member has access to automation. This means automating tasks that can be easily automated, using tools like ChatGPT for quick responses or data analysis, when it's relevant.
We're committed to making our processes more efficient, utilizing automation or even offshore support when needed, to provide our team with the support and tools they need to excel. The goal is to have "super teammates" with access to helpful resources that simplify their daily tasks.
Does your company utilize one-on-one meetings or an ongoing review process?
We firmly believe that annual performance reviews are a complete waste of time. Instead, we've adopted a monthly plan and review process. This process provides a platform for you to discuss what's happening in your life, both personally and professionally, with your leader. It's your meeting to lead, and the leader asks questions to better understand your needs and how they can assist you.
Additionally, we conduct quarterly assessments, involving both employees and managers assessing each team. The idea behind this approach is to avoid situations where there's a significant gap in our perceptions of performance. If, for example, I rate myself a four on a scale of one to five regarding our core values, and you rate me a two, we need to understand where the misalignment is and work towards getting on the same page. We emphasize consistent, open, and ongoing communication to maintain alignment.
Any advice, books, or resources you would recommend for founders on the cusp of growing their team?
I make it a point to read "The 4-Hour Work Week" every year. Interestingly, the book predicted many of the trends we're seeing today, even back in 2007-2008. I'd also recommend "Essentialism" for gaining focus, "Traction" for implementing processes and defining your business operations, and "No Rules Rules" for a fresh perspective on company culture. The latter is particularly fascinating as it delves into the Netflix culture, which operates more like a professional sports team than a family.