Why Most Companies Get Hiring Developers Wrong

In my software development career, I’ve been hired and I have hired. Now, in my job of running a Talent Assessment company, I’ve been observing our customers dealing with the precarious nature of software developer hiring. In this blog, I will share my observations about these challenges as well as some solutions.

1. Talent Shortage?

In 2019, 126,066 new Computer Science graduates (at both the B.S. and M.S. level) joined the U.S. workforce, yet vacancies in software development persist. As of May 2020, there were 258,607 Software Developer vacancies in the U.S.. So, is it hard to source applicants for a software development job? No. If you post a software development job today you will have plenty of applicants in your candidate pool. After the most basic screening, however, you’ll be left with few viable choices and the overwhelming impression of a talent shortage. This impression has driven the roughly 240,000 H1B visas that are issued annually to immigrants coming to the U.S. for software development jobs.

2. Compensation

When you make an offer to your ideal candidate, you will be faced with the twin challenges of extending a “competitive enough” offer and hoping that your already generous offer is not used by the applicant as a jumping-off point to negotiate even better compensation with another employer. Ultimately, your software development employees’ salaries may reach the level of senior management salaries, and they keep rising. Oh, and you’re still on the hook for those cool perks.

3. Retention

If you were able to successfully go through the hiring process, it doesn’t mean you can now sit back and relax. Since the demand for qualified developers is so high, your developers will be actively sought after by staffing agencies and other companies who may be offering higher salaries and better perks. All that contributes to Software jobs continuous topping of the highest Turnover Rates list. 

4. Diversity

This topic deserves more attention. If you look at the employee demographics of major software companies, it’s not hard to see that the software development field is a guild composed of mostly Caucasian and Asian men.

Source: https://hackerlife.co/

It is safe to say that the responsibility for such disparity does not lie solely with employers. The candidate pools are far from the perfect picture of diversity. 

Computer Science majors are not even close to reflecting the demographics of the general population. Here are CS major demographics from Stanford University (the Mecca of STEM higher education in US):

Source: https://medium.com/@jcueto/race-and-gender-among-computer-science-majors-at-stanford-3824c4062e3a

Why are women, Blacks, and Latinos so underrepresented compared to the population?

According to these data compiled by Gallop there doesn’t seem to be a dramatic difference in the technology interest in early education for any of these groups. What is happening, however, is a “Catch 22” situation in which women and minorities are not feeling a sense of belonging to the world of Software Development because it doesn’t look anything like them, while companies and universities are failing to change this picture due to the lack of diversity culture.

What Are We Doing Wrong?

It might seem like the challenges with hiring software developers are unique and each requires a unique solution, but I would argue that they all stem from one fundamental misconception: Software Developers must be hired based on hard skills. 

Skills Are King?

Every Hiring Manager of a software development team I’ve ever seen has been really focused on finding people with the right skills: programming languages, frameworks, environments, etc. Here are the top 10 Software Development required skills compiled by ZipRecruiter based 9,000,000 job postings. Today’s software development landscape offers a huge variety of tools. As a result, the likelihood of finding a person with the exact skill set that fits your specific needs is fairly low.

With this in mind, it’s now easy to see why your relatively large applicant pools are so quickly reduced to only a few options — what you are actually screening for is job experience focused on the very specific skills that you need right now. The very few people that you are left with are likely overpaid, not the best performers and lack diversity…

Skills are learnable and perishable. One coding language is easily replaced for another, and the software developers who are good, will pick up a new language without any trouble. Lastly, skills are linked to job experience but not to job performance.

Here is what a typical hiring process for a Software Developer looks like today:

The R-sq number in each level of the hiring funnel is the predictive validity this method has on its own of workplace success.

What’s the problem with this funnel set-up? Typically, methods with lower predictive validity (and higher bias) are used earlier on in the hiring process so by the time you get to the end of the process, you’ve already severely restricted who you have in your pool.

How do we fix that?

1. Start with Soft Skills

The strongest predictor of workplace success is not hard skills — it’s soft skills. With soft skills, you can achieve predictive validity (R-sq) levels as high as 70-75% (roughly 10x the efficacy of resume screening). There are multiple ways in which Cangrade helps you predict success using soft skills:

  1. Pick & Choose. If you are running a small startup company, you must have a pretty good idea about the kind of people you would like to work with. It’s particularly important because you are still in the process of shaping your company’s unique culture and you alone get to define the type of people who fit into your vision. Cangrade gives you a choice of 50 personality attributes. Go ahead and choose around 20 that are important to you.
  1. Big Data. If you don’t know what you are looking for (let’s say you’ve never hired developers before) — no problem. Big Data is to your rescue. It will allow you to take advantage of crowd wisdom and use a Success Model that may not be as specific to your vision but will be able to identify people that generally have the right soft skills for a developer.
  2. Your Data. If you are a big company, intuition is no longer your best guide. You need to inform all your decisions by the data and hiring developers is no exception. What Cangrade does best is use AI and Machine Learning techniques in order to create a Success Model that most accurately predicts employee success based on whatever metrics that you see as important. The metrics can be anything from performance ranking to a number of bugs fixed and number of patents filed.

No matter which option you choose, Cangrade guarantees that your Success Models will have no built-in biases. This is great news for your diversity initiative and removes any artificial barriers towards traditionally non-represented groups having a fair shot at landing the job.

2. Think About Hard Skills Differently

Let’s suppose that your main development language is Python. Does it mean that you have to test your candidates for Python knowledge? No. 

Hiring is a long-term investment. What you want is not a specific language knowledge but the ability to write good code, debug, attend to details, etc. This can be done in any language. If an applicant doesn’t know Python but does know JavaScript (and can perform really well in it), it’s highly likely that they will be able to learn and become proficient in the languages that you need.

Will it take longer to ramp up this person? Maybe. But on the upside, you are opening up your pool to a much wider and more diverse range of candidates. These applicants are likely to have lower compensation expectations, will be excited for the professional development opportunities, and will probably stay longer.

Cangrade has a generic task-based hard skills assessment that can be deployed in a variety of languages to give each candidate a fair shot at success:

3. Use Structured Interviews

Conducting interviews consistently across candidates will create a standardized process that ensures objectivity and keeps bias at bay. 

Cangrade’s auto-generated personalized Structured Interview Guide for each applicant is driven by their strongest and weakest professional competencies. It allows you to take a deep-dive into both and to make sure strengths and weaknesses receive equal time across candidates.

Additionally, a simple rating is requested for each question, creating an instant scoring system that allows for a difference of opinion among interviewers and prevents any one recruiter’s opinion from necessarily taking precedence.

Short on time? Or candidates in a different time zone that makes them tough to schedule? There is also the additional option for an applicant to video-record their response.

How will it help?

You will see three main positive impacts of these efforts:

  1. By focusing on the soft skills first and changing the way you think about hard skills, you will be able to consider a larger and more diverse candidate pool. 
  2. By focusing on personality fit and professional development of hard skills, you will increase the retention rate of your hires.
  3. By making your assessment tailored to performance metrics, you will ultimately hire developers who produce more value to your organization.

Here is what your process should look like:

Click here to schedule a call with a member of the Cangrade team to learn more.

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