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A Problematic Talent Hiring Cycle in Many Fast Growing Companies

In a fast growing company / (or a fast growing team), the boss always wants to hire more people to make team bigger, and for hiring new people fast, they might offer competitive or bigger amount of salary/remuneration than what existing employees have.

So in many fast growing company, there might be an awful hiring loop pattern, especially in a small country, small market in New Zealand. (Because it lacks of IT Professionals.)

The Awful Hiring Loop

TLDR, this article is from an employee perspective, I tried to make it objective between employers and employees, but it sill might be subjective in some parts.
  1. The salary for the good existing talented engineers becomes not very competitive, (here we use Xero, a fast growing well known NZ based accountant SaaS product company as an example, to see some leaving/quitting feedback from Glassdoor, but surely Xero is not the only one has similar problems in NZ).

These are 3 feedback from Glassdoor, and I sometimes hear some similar feedback offline from other IT professionals during catching up. If you view more in Glassdoor about leaving reasons in NZ tech companies, you can find most of people leaving, it is due to in-competitive remuneration, it will lead to step 2.

  1. Good engineers gradually figured out and felt unfair, started to look for other opportunities. They either get offer from other fast growing companies, or they look for other companies who pay more, and gradually they left with their valued domain knowledge
  2. OK talents/candidates stay, because they have less ambition, or they enjoy the comfort, and they will guide new talents in an OK way, sometime new talents might follow bad practices 🙁
  3. Many years later, good new talents repeat step 2

In Short, the Cycle is like this.

A flow chart for talents decision in hiring process

The Result of this Bad Loop

In the end, a fast growing company will become stable, and all engineers are not super talented, but just OK, and after years, theirs pay gradually increase, some of them might leave, if the company does not pay enough. Others will stay, they get higher titles, senior to principal to lead. THEY WILL DOMINATE all tech related decisions for the company. So the tech related staff will not attract new good talents any more, and ambitious ones keep moving, they either find a good place to stay or they build their own companies.

How to solve the problem, to break the cycle

  • Give more trust for engineers
  • Hire engineer managers who have a real tech background
  • Pay attention to the hiring process, review and change it every quarter
  • Always give more pay raise for good talented engineers, if not, at least give them position promotion in title. Remember a company lose more than money if a good talent left
  • Matching engineers salary or more to either market value or new same level engineers’

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