April 28, 2008
I can tell you’re bluffing. Good poker players have an ability to “read” other players at the table and get insight into the strength of their hand. While much of this can be learned, the reality is that some people have a natural ability to read the body language, expressions and patterns of behavior in other people. They can easily tell when someone is bluffing. I’ve witnessed the same thing in the recruiting field.
Ever get a bad feeling about a candidate? You meet someone and there’s just something about them you don’t like. You have no reason to dislike them, but you have a gut feeling. Well, gut feelings mean something. Every time I ignore my bad feeling about a candidate, it comes back to haunt me. This is the recruiting world’s version of “reading” a player.
There are candidates holding really bad hands who are very good at bluffing. There are also candidates who do not show a great deal of self confidence even though they are holding a full house. It is a recruiter’s job to help read those candidates properly. Sometimes this is easy. You can tell from a person’s body language when they walk in the room that they are too aggressive for the group or that they are not strong enough to manage difficult employees or they don’t have the killer instinct necessary to survive in a competitive sales group. Other times it is very difficult to read someone and you have no gut feeling one way or another.
Every company should make an effort to determine who within their organization has a natural ability to read candidates and pick winners and losers. Those individuals should be involved in the recruiting process and trained to perfect their talent. Once these poker players better understand what signals are helping to drive their natural instincts, they can also help train others about subtle things to look for in the interview process.
You can identify these good readers by looking at your company’s past hiring history and determining who interviewed the top people at your company and who interviewed the bottom performers. You may begin to see a pattern of people who recommended hiring the top performers and those that recommended passing on the problem employees. (You might also identify people who are very poor at judging candidates and consistently recommend hiring the wrong people. Either remove those people from the selection process or make sure they get adequate training.)
Picking top employees is one of the most difficult parts of recruiting. This is one approach that might help in the selection process to avoid hiring mistakes.
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Posted by Jeremy McCarthy
April 24, 2008
Back in 2004, the Financial Accounting Standards Board (FASB) issued a ruling requiring companies to expense the “value” of stock options granted to employees. What does this mean? Essentially, companies are now required to estimate a non-cash expense on their income statement for employee stock options instead of just accounting for them as equity. I actually filed a short paper with the FASB against their planned expensing, but they clearly ignored me! Many people feared that expensing stock options could kill the goose that lays golden eggs in Silicon Valley and other areas with high growth companies, since expensing would discourage issuing options and make it harder to hire top employees at higher risk companies.
So what has happened since 2004? I wasn’t able to find any studies on the impact this ruling has had on stock option grants. My own non-scientific analysis based on discussions with Silicon Valley companies leads me to conclude that this rule change has significantly decreased stock option issuance to rank-and-file employees. Companies that used to be very generous with options at all levels have cut back not only the amount of stock granted but also eliminated grants to lower level employees. Earlier stage startups don’t seem to be hit quite as hard, but the overall culture has shifted to reducing stock options for employees.
The impact of this cultural change is an increased difficulty in hiring top talent at high growth companies and startups who have limited cash and benefits to offer. In a competitive job market, this puts growing, innovative companies at a disadvantage. Talented engineers weigh the risks and rewards of companies when making career decisions. If higher risk companies can no longer offer high rewards, what impact does this have on the ability of these companies to compete for talent and grow to the next level? I’d be curious if anyone has observed similar happenings with reduced stock option grants in the market.
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Uncategorized | Tagged: compensation, entrepreneur, growth, jobs, startup, stock options, venture capital |
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Posted by Jeremy McCarthy
April 24, 2008
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Uncategorized | Tagged: blog, entrepreneur, growth, job, recruiter, startup, venture capital |
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Posted by Jeremy McCarthy