Thursday, August 14, 2008

Solid hiring advice in any industry

For the past 20 years, my wife has worked for a firm that provides financial software products to the structured finance industry. It’s a great story – a couple of MIT guys working out of modest digs in 1985 are in 2008 the undisputed leaders in the cashflow modeling industry – managing a firm of over 100 people on three continents.

So what’s their secret? I’ll let a long-time employee tell it:

When we hire people, we try to bring in candidates that have some connection to the company – a friend, former co-worker, colleague in a client firm, etc. – and see if they are what we are looking for. A few years ago, I had a friend-of-a-friend who was an assistant to a fixed income money manager before he was laid off so I had him come in for an interview. Our hiring manager told me that he totally bombed on the problem solving questions so they didn't bring him back for a second round.

The candidate called me a couple weeks later for a postmortem but was completely baffled about why the fact that he couldn't answer a question about how to efficiently weight 9 pennies had anything to do with whether he was a good bond analyst or not. I tried to explain that our philosophy in hiring is that we're looking for good generic problem solvers and finance knowledge coming in the door isn't important. I knew that he still didn't get it when we hung up and the next couple times I talked to our mutual friend, she pressed me on it and couldn't get her to understand that one of the keys to our long-term success over the years has been our hiring process. We haven't hired that much dead wood and while we've probably passed on a lot of people who ultimately would have turned into great employees, we've minimized the number of people on board who are useless. She didn't get it and still doesn't.

Makes sense to me, what do you think?


1 comment:

Anonymous said...

When hiring, here are the factors I consider:

1. Interpersonal Communication: There is an old saying that goes, "Hired for technical skills, fired for people skills." You want to make sure whoever you are hiring can communicate well.

2. Ability to fit into the corporate culture

3. Skills for Job

In general, there are always people looking for work (even with the current situation in A/E/C). Look for reasons to say "no" rather than reasons to say "yes."

As a manager, hiring is the most important thing you do. So it should be approached with careful thought.

That's my philosophy.

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