The Changelog – Episode #464

This insane tech hiring market

with Gergely Orosz

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This week we’re joined by Gergely Orosz and we’re talking about the insane tech hiring market we’re in right now. Gergely was on the show a year ago talking about growing as a software engineer and his book The Tech Resume Inside Out. Now he’s laser focused on Substack with actionable advice for engineering managers and engineers, with a focus on big tech and high-growth startups. On today’s show we dig into his recent coverage of “the perfect storm” that’s causing this insane tech hiring market.

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Changelog

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Well, Gergely, you’re back on the Changelog, a year later, basically, so I think this might be our annual thing, if you’re down for it. I’m down for it.

I’m totally down for it. It was fun the last time as well.

Last year, November 4th recorded, published December 2nd. Why would there be 28 days roughly between recording and publishing? I don’t know… But just call that the end of the year blitz that happens right here at the Changelog, so it gets pretty crazy.

Last year we were just off the tail of a backstage show; not our Backstage podcast, but a backstage episode with Spotify. You listened to that show, loved it… I think you reached out, I reached out, something happened on Twitter, you came on the show, we talked about your book, and things you’re doing, and you starting your blog, and now you’re on YouTube, and you’ve got a newsletter, and you’re making money doing this stuff… So 1) congrats as a content creator…? What do we call you these days?

Yeah, I think they call it content creator. I don’t like the term too much, because I feel it just means that you’re just creating content for the sake of it… But yeah, I was just telling my daughter the other day that – well, I don’t know what she’s gonna do when she grows up, but I guess a year later I’m doing something that I didn’t even know existed a word for it… So technically, I guess, content creator/writer, for the time being, at least.

I had this mini epiphany, I would say… I was thinking about my son’s future and what he might do, so similar to your daughter… And I was thinking like “What is he gonna do as a profession when he grows up?” and I was thinking at least one version of it could be doers who can do well, can showcase how they do. And that’s essentially what you do, right? You’re looking at a market, you’re analyzing it from your expertise, you’re an ex Uber systems engineer, you were involved in the hiring process in many ways, so you can really showcase how to get hired well, the process to evaluate candidates, what gets hiring managers’ attention… And you’re a doer who’s just showing how you do, and you’re analyzing that market.

I like that.

[04:06] That’s kind of the future of employment.

It’s definitely gonna be one of them. You can already see people doing it. I think it’s down to the expertise level, on how much expertise you have it when you do it… Because I do see a lot of people doing what I’m doing right now, on the side and whatnot, especially people who are a bit more fluent with going on YouTube and TikTok. They get a job at Facebook and some other company (it could be anywhere) and they talk about how they did it. The difference that I have is I did this for about 15 years (a little bit less), and now I’m talking about things – and one of the reasons I started doing this basically full-time now is I just realized there is a big demand for it. I have a lot of fun doing it, because I used to get – so after I left Uber, I would get a lot of requests for mentoring, for feedback, and I did some of those things, but I didn’t really like doing it just in private, just for the benefit of that one person. I do like to have a lot of people benefit from it, and I get to meet really interesting people.

Since I’ve left Uber, I’ve actually met a lot more people in the industry than while I was at Uber, not counting the people that I met at Uber. So it’s been a really interesting year.

You were too busy doing, man. That’s why. You were just doing. You weren’t a doer who does and then shows other people how you do.

A doer and a talker.

That’s when you transcend. That’s when you go beyond simply someone with skill; you showcase how you have that skill, and then you showcase what’s behind there. And I think your Twitter is pretty active, too. I can’t help but like almost every tweet or thread, recently, of yours. I agree, I think you’ve got a lot of insights into an industry that does have a vacuum that needs to be filled, and I’m happy to see you out there filling that void.

Well, I’ll be honest. What I’m seeing - and this is my example, as well. I became an engineering manager at Uber after I was an engineer for like 8 or 9 (something like that) years. And I think Uber was a great place, in the sense that we had a training program. We had an apprentice management program. I had access to mentors. But I couldn’t help but think that I didn’t really know what I was doing as a manager at Uber. And I think this is the case of tech in general. Most people - they’re not gonna admit it, at least not on air, but I can now say, they will be uncomfortable and they don’t know exactly what they’re doing. They know roughly directional… But this is the state of tech. And this is normal, because everything is changing. So if we look back at how we’re doing software development today in 2021, and let’s say ten years ago, in 2011, before Stack Overflow, before those things, it was a very different model. Everyone was adopting. Literally, we just had a boom in remote work thanks to Covid. People don’t know how to deal with this. I talk with managers, with vendors - everyone’s just winging it… So I do think there’s a need for people to have their opinion; again, I’m not gonna be right or wrong about this… And there’s definitely a lack of just decent resources you can do.

The reason I started up a newsletter, for example, is when I became a manager at Uber, my manager told me “You can expense whatever you want. Get some sort of resources to help you become a better manager.” So I looked online, and I looked for engineering management; I found some blogs where people publish one or two per week, but I couldn’t find anything regular… And I subscribed to Harvard Business Review. It’s a management magazine. Every month I got multiple articles, and I got the magazine as well… It was completely useless. It did not talk about software engineering management. It talked about this generic – I mean, there were some good ideas there, don’t get me wrong, but it didn’t talk about the stuff that I wanted to talk about… Tech debt, people writing code not being motivated, the project being late in tech… And I feel tech is a little bit different from the rest of the world, so I’m interested in this, I’m actually really enthusiastic about it, and I also feel being outside of a big tech company allows me to peek into a lot more companies.

When I was at Uber, I couldn’t just share a bunch of stuff that happened inside here. I’m outside of Uber, so now if I get some information about Facebook, about this startup, I can kind of give my opinion and just share “Here’s what I know that is somewhat public.”

Was it you or someone else that had this tweet - “Now that I’m outside of X, I can say X.” I think it was your tweet.

[08:01] That was me. That was me talking about promotion-driven development, which –

Can you reference the tweet real quick? What was the tweet, what did it say?

Now that I’m outside of big tech and Uber, I can talk about some of the negative things I’ve seen… And this is promotion-driven development - how there are a lot of products being built for the sake of getting a promotion. I’ve seen it first-hand at Uber; it happens at every major company. But you can’t really talk about this when you’re in there, because it would have no benefit.

This is the negative, by the way - people talk about this inside the company, but this is like a fun thing to go on about. But if I talked about it publicly, while I was let’s say at Uber or another big company, it would just be a negative… Like, why am I airing out some dirty laundry that people are kind of aware of, but what’s the point of talking about it?

And it happens at every big company after a while, it’s not just big tech. But at big tech it’s very visible. We have a typical “Why does Google have so many chat applications?” And there’s a lot of reasons. It’s a bit more nuanced, but if we take a step back - well, it’s because you don’t really get promoted for fixing an existing chat application, or kind of making it grow 10%. You do get promoted if you start something from scratch and you show a hockey stick for a year or two; you get those promotions. Once it slows down, you just move on to the next team. Internal mobility, literally. There’s no incentive at some of these companies to act as a founder. Your interests go for usually about four years maximum, with your equity grant… But things are a bit more abstract, so your output does not directly influence the stock price when you’re working in a larger place.

Is that a fixable problem, or is it just inherent in large companies? Is there a way to attack or approach your company so that does not happen?

It’s so hard… And companies do wanna fix it. Google wants to fix it, for example. The interesting thing - if Google cannot fix it, is it really fixable? Because I think you have two forces that go against one another. One of them is the best companies know that if you don’t give people internal mobility, they’re gonna quit. So if it’s easier to change your job, you’re gonna leave. So a lot of the best companies - Google, Facebook - and I’m talking world culture; let’s not get into – like, some people have thoughts about these, Stripe as well for example, they wanna have a great working environment, so they empower people. They want people to make an impact, and they make really easy internal mobility.

Now, the downside of this is that – and they promote based on impact. Every company says “If you’re impactful, we’re gonna give you a fat bonus, and you’re gonna go ahead, because you’re helping the business.”

Now, the incentive that this creates is people do go chasing impact; the smarter people will chase easier impact, the stuff that in a year it shows… And as soon as they see that - there’s a lot of work that would take blood, sweat and tears, it will take multiple years, let’s say 3-4 years to get out there… Let’s say for example the Kindle at Amazon. It’s a project that if you kicked it off and the sales were initially low – it took years to pick up. If there was not a founder there, Jeff Bezos, who actually invested in this and said “We’re gonna do it regardless of the impact”, I don’t think it might have happened.

So to summarize your question - it is fixable by having a founder or someone with a very long-term incentive; ten years incentives. A CEO who does not give a 4-year grant but a 10-year grant. For example, like Tim Cook did at Apple. He had a 10-year grant and he made tons of money. I don’t know what other companies give 10-year grants… And have these long-term incentivized leaders kind of give air cover, rewards for things that might not be impactful in the short-term. I think from my observation this is missing at Google, for example. It’s missing at most tech companies as well. The ones that are doing well, there are one or more founders.

I’ll give you an example… At DoorDash, for example - they have multiple founders there. Their evaluation just surpassed Uber. I don’t really know exactly how or why, but I can tell you that the people I talk with, they felt a little bit more connected to the company and to the founders than, say, Uber, which does not have a founder anymore. The founder is not at the company. So it’s a different dynamic, and it’s a hard one.

[12:01] I don’t know if this speaks to DoorDash’s success, but I’ve spent a lot of money this year on DoorDash. I have DoorDash more so in 2021 than 2020, than I ever had before… For obvious reasons. That could also lean into their success revenue-wise and growth-wise… But I would say that this short-term thinking is a problem systemic to maybe even capitalism at large. Maybe not capitalism at large, but maybe at least IPO-ed companies focused on the quarter, focused on current – there’s a lot less long-term thinkers out there, and I don’t understand… I guess I can kind of understand why, but it’s a challenge, because if you only think about what can have an impact this year, or… And I guess if you make employees think “Well, the only way for me to get ahead is short-term thinking”, you’re gonna have short-term thinkers.

I think slow and steady does not win the race in tech. It’s fast and delivers results. This is a result. And by the way, we talk about “Is this a problem?” I also referenced it in another tweet, but this is one of my thoughts… Like, is it really a problem that let’s say Google (or any tech company) launch a project that they will abandon in two years if it doesn’t pick up as much. Is that a problem if another startup can go in there who does have the long-term thinking, they’re playing the long game… Let’s take for example Calendly, which the calendar integration where you can schedule stuff. Google Calendar could have done that if only some of the teams talked there. They didn’t do it, so a startup was born.

So I’m kind of thinking that the ecosystem evens out, because those long-term thinkers are the founders, those founders are there, these days they can raise a lot of capital as well, and they’re gonna fill the gaps. We look at Zoom, we look at some of the recent successes from Robinhood etc. So at an ecosystem-wise, I don’t think we have a problem. And also, let’s go back to the companies – does Google have a problem with this? Are their revenues going down? No, they’re seeing all-time record highs. So maybe we’re just kind of spinning cycles around “Well, could it be a little bit marginally better?” Sure. Does it matter? Nah…

How do you define a founder then? Let me throw out a couple of ideas that might be the definition of a founder, and you can narrow in on one you agree with or disagree with, and share with why. But I would say that some people would think of founders just as somebody that is there when the company begins. Or somebody could be anointed a founder or a co-founder years later, to take it in a new direction. So how do you define “founder”? Is it like original members of a company, or is it you get anointed at some point to have a founder role, and you have substantial equity and a long-term thinking employed to the company?

I would think of it as long-term thinking. Obviously, most founders are the people who start the company, but some of them burn out or they leave. I think they key thing here is having someone who has a long-term vision… And that can be either because of their incentives, typically when you bring people in later… But they really need to believe it; they need to not care about the shorter-term wins or optimizing for some of those things.

I think a good example might be the Vimeo founder, a female founder who came in. She was one of the youngest founders of some of the big companies… And she turned the company around. She was the CEO, she was not a founder.

Right.

But she came in, and it felt to me from the outside that she had a founder mindset, which is thinking long-term. She executed a complete shift, taking the company for a very different one. So I think as long as people at the top of company, and kind of trickling down, have a long-term mindset, that works. And one company that is interesting, I think, still does it pretty well, and I’m always amazed by how efficient they are, is Amazon. They do a couple of things really interesting to actually stimulate some of these things.

If you look at a lot of their products, it’s long-term thinking. They don’t mind taking early losses. And when you look at how employees are motivated - well, they do two things. First of all, at Amazon every unit has a general manager. Engineering and product would report to them. It’s not like a chain that goes up somewhere; it’s that product, however small it is.

[16:08] And the second one is they’re stockvesting. It’s very back heavy vesting which means they really incentivize you to stick around for at least two years… Unlike a lot of Silicon Valley companies where you can stay for four years, but after a year you don’t have much upside. Amazon also sees quite a larger churn in the first two years from what I understand from the industry, but they do have a lot of these longer-term leaders. At Uber, for example, I had leaders join Uber who were at Amazon for 10+ years, executing multiple long-term initiatives.

So I would say for a lot of companies, and founders, and even just models, do look at Amazon on how they’re able to – and I’m not saying copy it, but they’re doing something that seems to be working a little bit better than some of the rest of the industry. Than, for example, I would say Google, or even Uber, or some of these other companies, from my vantage viewpoint, now that I’m outside these companies.

Yeah. So it’s hierarchy and vesting, to some degree. Hierarchy in terms of who you report to, how insulated are you or how autonomous are you to make your own changes, your own thoughts… And then vesting, which leads to sort of ownership. There’s also this other term out there that I think about a lot - owners versus renters. Even though somebody might be a contractor or an actual employee, they have an owner mindset or a renter mindset. And that’s what makes me think of that, too - if you give somebody an owner mindset, they think and they’re incentivized to think long-term.

Yeah. And Amazon does this really well. And the reason I know this - I read this book from Twilio founder…

Ask Your Developer.

…he basically spells it out. This book is super-honest. He actually shares that most of the great ideas about Twilio came from Amazon, and most of his ideas at Amazon came because he was the general manager of this really small product; it was not even a product. In most companies you would put a team of four or five people on it, and you would call an engineering manager and say “You’re the engineering manager.”

He was the general manager of that product. And what Amazon does is once a small product does well, they’re gonna move you to the next one. And one thing you’re gonna notice is Amazon rarely hires external leadership, because they have about a thousand leaders inside the company that keep kind of bubbling up as they succeed, to higher and higher levels… And actually, companies are hiring away from Amazon those leaders, because they just do a wonderful job building it up by giving ownership… And it is equity, it is giving real ownership and calling them general managers and telling them “You’re responsible for everything, for the whole budget of this unit. And once you succeed, you get a bigger unit.”

So I think this is really simple stuff, but I don’t think anyone has done it in tech at scale as Amazon has, and I think we’re still kind of downplaying it. We’re just like ignoring the fact that this is one of the reasons they’re successful. We mock how AWS has their org chart shipped, but do you see how quickly that org chart changes, and they ship new and new things?

They’re a force.

It’s very interesting, and I keep coming back to it, because I keep thinking about “Is there a better way to do this?” and I haven’t found a better way just yet.

Jeff Lawson is who you were speaking about with the book…

I haven’t read the book yet, I’ve just heard about it recently… It came out earlier this year. A future episode of Founders Talk with Zach Smith, co-founder/founder of Pack, acquired by Equinix… Basically where the internet lives, Equinix Metal, Equinix at large, data centers across the entire world… So I heard about Jeff’s book. So I’ve talked to Jeff forever ago; I don’t even know Jeff would remember me potentially, but a long time ago we had the Twilio founders on a show called “The Web 2.0 Show.” It’s still on the internet…

…we’ll put a link in the show notes… But this is like super-old Adam and podcasting. I don’t even think I knew what the heck I was talking about. So I can’t even recommend it as good listening, but just for nostalgia, at best.

So Jeff Lawson, one of the founders at Twilio. We know what Twilio is these days - massive recent acquisitions… Just a juggernaut. Really great at developer marketing, really great with developers in general; a phenomenal brand with developers. He wrote this book that you mentioned, “Ask Your Developer.” I didn’t know he was prior at Amazon though.

[20:13] And I think it’s really interesting to see his background, and that can also speak to anyone who’s thinking for starting a company. And by the way, if you’re a senior engineer right now, and you’re not thinking about starting a company one day, the next couple of years is gonna be a wonderful time. It’s relatively easy to raise capital, there’s still a lot of opportunities…

So the background of Jeff and how he did it - he was a CTO or an early employee at a startup that was a skateboard shop, and they did a website, and he kind of went through the whole small startup that didn’t go anywhere. He had that experience. For three years he worked hard, and he saw how hard startups were… Then he went to Amazon, where he just learned the ropes. They put him in charge of this really small unit, and he learned the Amazon way, pretty much. He was there when the API started, and his team started doing it. I think he was also promoted; I might be incorrect, but - he was there for a few years, and then he started Twilio.

So when he started, he had the startup experience, and he had the large company experience. And my personal take on the book - you should get Jeff on the show to talk about this, but my feeling was that he was able to fall back on tons of stuff on what he saw at Amazon, and what worked; he put very similar structures in place early on. He also had the software development know-how, so he was able to call BS on stuff. And he is one of the good examples of how a software engineer building a software company is often very successful. Twilio is massive in terms of market capitalization, developer love, all of those things. He always protected his team, in terms of he didn’t ask unrealistic things, he didn’t do the things that non-technical founders do, who I now talk to a bunch these days, and it’s a very different world… So yeah, I think it served him well.

So what my take-away is if you wanna build a startup that can be a unicorn one day, work at a large company, work at a startup, and you now have the skills. You literally have the skills. Work at a decent large company… Amazon is a good example for this. Google might not be the best one, because if you start to copy whatever Google does in your tiny startup - yeah, it’s a coin toss. I wouldn’t trust that fully… Because Amazon was still very scrappy; they built out all their things very independently. They didn’t have central things to fall back on.

Break

[22:21]

So I’ve been following your Twitter handle quite a bit lately… I really have been enjoying the threads, and the storytelling… Here in the break I had to clarify if a recent tweet I thought I read from you was about a bonus being withheld from somebody because they didn’t ship a feature on time… And I just love the way you’re tweeting about this stuff, and just showing the insider baseball of just hiring, and the process of being an employee, investing, incentivizing employees, and all that kind of stuff… I’ve really been digging it. So what’s that story though? What’s the bonus being withheld?

Yeah, so this was a story that happened in an actual company. The name is less important; it’s a startup… It’s a unicorn that is doing really well, and from the outside – this could be many of these companies, but from the outside you think it’s an amazing place, and you probably wanna work there, because you read the articles, you read the interviews with the CEO, and it’s awesome. They’re talking about how they’re disrupting everything.

And the story is that when I worked at Uber, someone interviewed at Uber who was working at this company… And I always ask the people, “So why are you looking to potentially leave your company?” And I’ve heard it all. It’s from the “I’m not actually looking to leave, I’m just looking around”, to “I don’t like my boss”, “I’m bored”, “I want more money…” There’s a couple of variations of that.

But this person really shocked me, because they said “It’s because I didn’t get a bonus.” And I was like, “Okay… Well, that’s new… Can you elaborate?” Because in my book I cannot make a note saying that is bad sign; like, come on… Who would want it. So here’s a story… At my company, bonuses are tied to goals. And each team has to set a goal, and we’re kind of actually handed the goal down, because it’s a company where you need to set super-ambitious goals. If it’s not ambitious enough, they’ll set one more ambitious for you. So ours was not ambitious enough, and they wanted to ship this product in (I think) six months… And the leadership team came down and said “You’re gonna do it in three months. That’s your goal.” And they said it’s impossible.

The engineers looked at the estimation, at the work… Not gonna happen. But leadership said “This is your goal, and you’re not gonna get a bonus if you’re not gonna do it.” So this person was like, “Alright, as a team we’ll decide, we’re gonna do it.” So for two months or three months they worked through the weekends, they didn’t see their kids, they worked extremely hard to hit this impossible goal, and then they did. They actually were ready with the product a few days before; they had time to beta test it… It was all there. And the launch date was supposed to be first of March, or something like that; let’s say 1st of March. And then they couldn’t launch because the legal team did not get a sign-off, because this is a financial product, to launch it on the market. And the legal team also worked their butts off, and they actually were able to launch it on the 5th of March or 6th of March. No one got a bonus. They literally put in an extreme amount of time for a project that they said could not be done/delivered. And by the way, the product was a success, but they didn’t get a bonus, and the story ended, “Well, this is why I’m interviewing, and this is why the whole team is interviewing.”

And I just could not believe how you can run a company – like, you are pushing people away who are doing great work, they were very motivated, and the bonus was not really the most important thing. It was respect. It was hitting those things and getting the feedback, and they felt that they got the feedback that “You did a terrible job.” Which they did not.

So this stuff is happening, and I wanted to call this out. I actually named the company in the tweet, because I think it’s a bad example for any founder to follow. What I’m kind of worried about is, you know, if these founders talk and they said “Oh, it’s worked really well. Dangle the carrot and take it away. It worked for me”, I kind of wanna be clear - it didn’t work. Those people left. And the company is still very successful. They’re now a decacorn, despite all this. Imagine what happened if those people stayed. They probably would have been even more successful.

Well, you’ve gotta just tell us the company name, right? I mean, come on…

You’re making us look it up on Twitter.

I’m dying over here. I don’t have Twitter available.

Yeah… So this was Revolut, a few years ago. And the interesting thing is – I said the company name, because I did wanna mention it. It’s a real story; I’ve also checked with employees, they also said similar crazy stories happened… And I do wanna have both sides, because all the ex employees, they messaged me and they said “Yeah, it’s spot on. That was what the culture was like, and that’s why I left.” And then I said “Hey, if someone’s working there, just message me as well.” I don’t wanna just badmouth the company just for the sake of it… So current employees messaged me, and someone even said “We actually like working here. It’s not like this. We heard these stories…” So I added that as well, because companies do change over time…

[28:10] But I will be the best to know. I worked at Uber - there were a couple of years where everyone thought that Uber was the worst place to work in tech. From the inside, this was not actually true. We got payrises, suddenly we had equal pay introduced, for example, in the company… The things that happened before at Uber, people being discriminated wherever they were - they happened later on as well, but people got immediately fired, for example. So there was a big change, and you could only see it from the inside.

So I think companies do change, but I think it’s important to call out - it’s not okay even to do this when you’re a small and growing company, and I think it’s a fair game to call it out. This is what it was like. I hope they change for the better.

Well, I think bad behavior should be called out tactfully, for sure. You shouldn’t, like you said, badmouth anybody, but tell the truth. Put the truth out there, if it’s a bad actor or a bad situation. You don’t want other founders to be like, “That was a good thing to do. I should try that.” I mean, I don’t know who would do that, unless they were just scum, or something like that. Maybe they are. Maybe they’re scum, who knows…?

Who knows…?

It seemed like a bad thing to do though. Why would you incentivize somebody with a bonus, give them a lofty goal… They set a goal and it’s not good enough, so you set a larger goal, they go back and deliberate, “Yes, okay, we’re gonna do this”, and then sacrifice the thing that is the worst thing to sacrifice, but some do it seasonally, if you want to, or have to, is time away from your family, or your kids. You don’t get that time bad. I look at my kids and I can’t believe my youngest is X right now, or wherever they’re at. It’s like, he’s a little boy now, or whatever. Those years, or even those few months where they’re just that for a brief moment, you sacrifice that for what you think is respect, and financial opportunity for your family, or for yourself, or whatever, only to be in that kind of situation… Which is interesting to look at, because you have – you tweeted about this at first, it’s on your newsletter, you have a very successful Substack newsletter, The Pragmatic Engineer - so I guess you went from blog, to Substack, because last time you were on the show you were just starting up with your blog; you were getting excited about it, you were just finishing up a book, and really deep into the writing thing… And now you’ve gone and Substacked, and you’re in the top ten, I believe, you’ve got some great revenue… You’ve just started in August or something, but - the thing that kicked off this call was 1) to get you back on the show, but then 2) this idea of the perfect storm causing, in your words, an insane tech hiring market. So despite this kind of rug pulling, we have an insane market out there.

Yup. I have been writing on and off on my blog, about like one article per month, and I was thinking “Well, I might wanna turn that up, because I really enjoy writing about interesting stuff.” It does take time to research, so I actually came up with a compromise where I still write about once a month, a lot more detailed articles for anyone to read… So there’s a free tier where you can subscribe - and it also goes on my blog you don’t even need to sub to a newsletter although you do get it in your inbox. And then for people who are engineering leaders, I write about some more insider details that you don’t really see. So if you’re an engineering manager or a senior engineer at a high-growth startup or a big tech, it’s the type of information that you’re gonna look out for.

And a good example was the insane hiring market, which - I basically write about open secrets in the industry. If you’re in the right circles, you know this already; you’ve been talking about this with people. But a lot of people don’t… And a hiring market is a very crazy one, because – everyone was talking about a crazy market, but I actually did the research; I talked with hiring managers, recruiters, job seekers, I actually helped a lot of people negotiate their packages… And the crazy thing is that it has never been this crazy. When I say “never”, I’m not exaggerating. There was a dotcom boom where the hiring market was insane, and most of us were not even working. There were some people who were, and I talked with them, and that was a crazy market. This market is even more crazy for experienced engineers… And a lot of people think it’s because of remote work, and Covid, and people start to work remotely, and now we can hire in different areas… But it’s actually just one of the many elements.

[32:12] What actually happened is there’s just a huge amount of money being poured on the market, that’s coming from a couple of sources. The first one was – and everything starts with Covid; Covid was this tick started a lot of parallel things happening. The one thing that it started, which is very interesting - I talked with a couple of heads of engineering and heads of mobile at some large retail banks in the U.S, and some more traditional companies… When Covid started, people stayed home because of the lockdowns, and they started to use online services more. For example, on mobile, one of the biggest U.S. banks told me that what they saw is they saw a bunch of user complaints, and their user numbers went up because people above 70 started to use their mobile apps, and they didn’t know how to use it. These people always went to the bank… And now they’re actually at risk of losing these customers if they couldn’t do this, so they suddenly started to build features to make it easier for these people to do… And also, what they noticed is it’s a huge profit if people use the mobile app. Whoever uses the iOS app for this bank churns a lot less, they basically spend more money… So it’s their goal to get them on there. And it’s not true for people who only use web, or only use some other platform.

So this bank started to – they actually reallocated a massive amount of budget mid-year to hire more mobile engineers. They couldn’t hire fast enough, so they actually are retraining some of their web engineers. And they are one company. So this is a traditional company; it’s not a Facebook, it’s not a Google…

Then you have some of the other side of the money coming in, where some of the large tech companies also realize with Covid the game is on, the competition is fierce, they are pouring more money… And the capital markets are going very strong, so startups are raising more money than ever. There’s this joke that the seed in 2021 is the new series A five years ago… And I’m advising a couple of startups - I’m in some of these groups, and I’m seeing pre-seeds, people getting 4 million dollars and a 12 million evaluation for a pre-seed for an idea, a product.

So there’s all this money coming in… And basically, everyone has realized that there is now a limited time, the next 3-5 years the winners will be decided in the global digital market… Both in traditional companies who need to become more digital, they realize they need to compete with Google or Facebook… So the likes of Macy’s, for example, IKEA - some of these companies are hiring executives from the big tech, from Google, from Facebook, from whoever they can. The banks are doing the same thing. The VPs of engineering at Google went to Goldman Sachs, where they’re probably gonna build some consumer-facing thing.

So everyone has arrived, and everyone wants the senior people, so the market has literally exploded for senior people, and it’s everywhere. So in California, offers are – year-on-year, offers are up about 20%-30%, depending on where you are… But this is in California. In lower-cost regions, because of remote, it’s even higher.

The craziest thing about this market - it’s a booming market if you’re an experienced technologist/engineer. It’s also spilling over to all these engineering managers, technical program managers, to some extent to designers as well… The one group that is not feeling any of it and is the worst market for them is junior or entry-level engineers. No one wants to hire them. Because of remote, every company knows they don’t really know how to onboard them… And what everyone is spending money on is they’re building more complex systems; large, scalable systems. They need that expertise.

And to top it off, the cherry on the top, which just shows how absurd it is - there’s actually fewer senior engineers on the market. Usually, in a booming market people will come out of their hiding holes, if they’re doing something… The opposite is happening, because people are burning out because of Covid, they’re quitting with nothing lined up to just take a break for a couple of months, from 3 months to 12. They’re changing careers, like myself… I have a bubble where I know some senior engineering managers who are now becoming coaches and whatnot… And this data point is a bit anecdotal… I have data points in my newsletter for all the other ones, but…

[36:03] So it’s a crazy market, where demand is going up, supply is going down, and we’re not going to have more senior engineers in the next year or so… And it’s a race to the top, basically. So the likes of Google, Facebook, Apple - they’re still able to hire, but crazy stuff is happening that I had never heard before. For example, Apple is known to not negotiate too much. They give you an offer; it’s Apple, you accept it.

I now have multiple cases where I was advising people on their sal negotiation where Apple not only negotiated, they bumped people up an extra level. So someone was offered a senior engineering role, and they got a staff. And they didn’t even have a competing offer; they said they were talking with other startups where they might have a competing offer, and Apple just said “Alright, we’re bumping your comp with 30%. You’re getting a higher level without any interview.” And this just shows how even those companies are having trouble both hiring people, and also retaining people. A lot of people are leaving.

So yeah, it’s never been a better market to look around and change jobs, if you’ve got the skillset to interview, if you’re experienced… And if you’re starting out, it’s super-tough. Just get your foot in, it’ll get better, but it’s really interesting, that market.

So if you’re a senior engineer right now and you’re happy where you are, you should at least be thinking about maybe renegotiating, or looking for a promotion, because you have leverage.

So renegotiating is also a big one. Usually – and this is where I think… I mentioned how I didn’t like the advice that people give you, the non-software engineering advice; usually, the advice that you will read up is if you get a counter-offer, should you take it? And the intern tells you do not take the counter-offer, because they quote some statistics. I know multiple people who went out to interview, some of them didn’t really wanna leave, but they went out because they were hoping for a counter-offer, because they loved their company… Especially with remote, they know what’s there. They got a great counter-offer, 40% extra, or something like that… They took it. They were super-happy. It’s great for the company, it’s great for the person…

So if you’re at a company, I think you should talk with your manager and mention to them like “Hey, I heard the market is hot. Are there any plans for budget increases? Because I don’t necessarily wanna interview, I really like what I’m doing…” Because at the end of the year most companies will have to do massive increases. A lot of companies are doing it right now. The people who got the message - you know, some people who read my newsletter, also in other circles, they’re giving out these increases now to hold on to people. Because if you give someone a 20% raise, they’ll probably not – a lot of people, they don’t wanna risk it in this environment. It’s still risky, going to a new company etc. Basically, the cost of building complex software, hiring senior software engineers has just gone up, again.

So is it here to stay? Is this a boom that you think will be busting anytime soon? Or do you feel like this is just the rising waters, and it’s just gonna be this high.

This is the interesting one, because with the dotcom boom we had a dotcom bust… And I don’t think we’re gonna have a bust. I think the market will go higher, so the pay levels, the demand for these experienced engineers will stay where it is… I think it’s hitting the level that it is; I don’t think it’s gonna go much higher… But it’s not gonna bust, because there’s a very real demand. The dotcom boom busted basically because there was a hype. People thought the internet would be here, and people will be buying online in a web van, expect that they would get millions of customers and they got 100,000… But it’s different. Now there are customer. They are long-term. And these investment that these companies are making are long-term.

I’ll give you an example… I’m talking with a pharmaceutical company who has a five-year plan on how they’re gonna pump billions of dollars into their – they call it IT, but they’re gonna turn it into tech, to actually be able to compete with some of these big people. It’s not a budget for like the next year, it’s the next five years, that they just go approved… And they’re gonna spend it, and they’re not the only ones. So people are in it for the long-term… So no.

I think the other message is like - if you’re kind of worried, like “Am I gonna miss on a pay rise as a senior engineer? Do I need to go out right now?” No, you don’t. Take your time. This is gonna be here next year as well, it’s not going anywhere. The only thing that might change is once companies figure out how to onboard junior people, like people with less experience, some companies are just gonna hire less seniors, because they will not be able to afford them in the current levels.

[40:11] Yeah…

Yeah. What are the data points you are paying attention to to bolster this idea of the perfect storm? One thing I think about is in 2008, the housing crisis, there’s a lot of talk about a housing bubble/not a housing bubble, or just a real estate bubble… We have a lot of other metrics out there. Do you pay attention to other ancillary data points that might – they seem like a perfect storm based upon your title, because maybe you’re shielding from them… But I’m just curious, what other data points do you pay attention to, that might influence your thoughts and opinion?

So I pay attention to capital markets and IPOs, because whenever companies go public, the returns on investors – whenever investors have a massive return, they reinvest it in the startup ecosystem… And I think what we’re seeing right now is we’re seeing so much money go into startups, and a lot of that money will be lost. So we’re exiting a cycle where about 5-10 years ago a lot of capital was invested in promising companies that did go IPO - Coinbase, Robinhood, all these… They worked out great, and now a lot more money is going into the likes of crypto, and electronic vehicles, and a creator economy, and all these things. My personal take is we’re not gonna see as crazy returns in ten years’ time… But you know, it’s great to start a company.

The other data point that I look at, which is just a very basic one, but it’s a great one, is the Ukraine job market… Because there is one company called Djinni, who basically owns that market. Most people get hired through that portal, and the people there actually share – they’re very honest, they actually share how much they get… And they publish it almost like every couple of months. So you can see the levels go up.

And Ukraine is a very interesting market, where it’s a little bit cutthroat… So if you wanna get a project done, you go to Ukraine, because if you pay enough, you get it done. Because people have zero – not everyone, obviously, but a lot of people don’t have strict job loyalty. If someone pays them more, they will literally stop their project and go to the next one. So it’s a super-liquid market.

They actually show it almost real-time on how the number of jobs posted on their platform - the first time there were fewer people and more jobs posted was in January 2021, at the beginning of this year, when all the budgets were approved for all the massive, big companies who decided “We’re gonna spend on tech.” So that’s an interesting data point that I track together as well. And then I just have some of the – I’m building a salary portal, and I’m getting a sense of where the offers are, but those are the main ones.

I think you need to look at some of the data points that are around you, but I wouldn’t over-emphasize on some of these… But these two data points - the stock market, obviously, and just thinking through on how that money will exit and where it will go… And job markets where we have data on, and it doesn’t have to be Ukraine, but it can be some other markets… But for example, U.S. is too big to have just one data source, and they’re kind of skewed… So yeah.

It’s like, everybody in the U.S, at least as an investor, almost every founder I’ve met with - a decent exit, or liquid because of their recent raise, or something that provides them extra, let’s just call it F money; not F U money, but just some money. They’re putting it back into the market, because they’re bullish, because they’re in the market. They can see the tea-leaves and read them themselves. It’s an interesting take.

What’s the website you were talking about? You said Djinni was the Ukraine company… What’s the URL for that? Call it out here on the show.

Djinni.co. We can put it in the show notes. And they publish a report - we can link to it as well. They did a great job of just being really public, and I think it’s a great indicator, because that market is so liquid… So you’re gonna be – with a few months’ delay, you’re gonna be able to see where Ukraine is going. And the interesting thing is that a lot of the U.S. companies who need to build stuff go to Ukraine, so it kind of indicates the U.S. market as well… Because it’s so easy, because you don’t need to worry too much about IP. You’re just contracting; you’re typically not hiring full-time. You don’t need to worry about IP in that sense. And the U.S. companies are pushing up the price.

[44:04] And the talent in Ukraine is known to be very senior. So people are going there because you know you don’t have to train them; you just tell them, “Alright, here’s what I have”, they’re gonna get it done, if you have the money. And the interesting thing is Ukraine rates are now almost hitting Canada rates, which is incredible.

Like salary rates, right?

The hourly contractor rates, yeah.

Okay. Why the comparison to Canada? I guess because Canada is next to the U.S, or…?

Well, because it’s no Eastern Europe, pretty much… And it is close to the U.S.

And it might be Canada rates are higher but we don’t have the liquid data but some of the more senior talent in Ukraine or like staff-level engineers are going for about $80/hour… And the crazy thing is that in Ukraine, because of taxes, they actually keep most of it. 95% of it.

So it is a pretty good deal right now. People, as far as I know, they’re not leaving; they’re enjoying this situation.

Break

[44:56]

So now that we’re all insiders on this open secret, and we know that it’s the hottest engineering job market perhaps in history - at least in modern history - how do we take advantage? …especially – we’ve been talking, I think, supply-side quite a bit, but most of our listeners are probably supply-side. We’re engineers, we’re seniors, maybe we’re juniors… We’re out there, slinging code, to a certain degree… But we also have people on the demand side, trying to get new hires, trying to retain the people that work for them currently… What’s your advice to these folks?

[47:58] Yes, I love that you mentioned retaining, because I think a lot of people think about hiring. Most hiring managers I talk to are saying “I cannot hire.” The reality is you probably cannot retain, but you don’t know it yet. So my first advice would be to prioritize retaining. Because if half your team leaves, you have now two problems - you can’t hire, and you cannot even backfill. So I will start with that.

And the number one thing is that the market has gone up. You need to make a compensation adjustment. If you’re smart, you’re gonna do it before the end of the year, because at the end of the year, everyone’s gonna do it… But if you do it earlier, you get some goodwill, you’re gonna need to spend the money anyway. And to do this adjustment, just get some good, quality data. A lot of the data sources are out of date, so use your network, or whatever you can.

The other thing – like, the money is one thing, but it’s not everything… Not by far. This is a time where you do – just be flexible. Be flexible on forcing people back into the office, don’t force them too much, or just figure out what people care about, at least for the coming period… Be more flexible in promotions. If you have someone who’s a high performer and they’re up for a promotion, either don’t put them up for promotion if they might not be up for it, but if you’re gonna reject a promotion, in this market I’m pretty sure they’re gonna get out there and they’re gonna get a different offer… And by that point you’ll lose them.

Reduce work stress is another one. A lot of people are just burnt out. They really are. So ideas of just giving the whole company a week off, or certain days off for like a month every Friday, something like that, will do it. And then finally, one thing that companies are doing, especially if you’re a public company, or people have equity, or you’re a startup, is if you see someone close to burning out or leaving, offer them a sabbatical on good terms. For example, their vesting continues, you keep paying their insurance… A lot of people will come back. Some people will leave during the sabbatical, but most companies don’t even think of this. So that’s kind of on the retaining side.

Now, for the hiring side, it’s super-hard to hire, a lot of people are same but most people just hire the exact same way they did, which is “We have the same process, we expect candidates to come in, they go through this five or six-step interview…” First of all, if you’re struggling to hire, revamp your interview process; make it a lot easier, and start to prioritize onboarding. Until now, almost all companies were like “Alright, we’re gonna hire the perfect candidate, and then we’ll forget about them.” Well, maybe change it around - hire them easier, don’t be as hard on the hiring criteria, and then have a lot better onboarding, help them, but also be more strict. Pay attention - are they working out well? And I’m gonna also plug in another thing that I haven’t talked about, but remote work will have this very unique challenge that multiple founders have been telling me - a senior hire is not really working out. It’s kind of slow… Interesting, because they did so well on the interview. And as they dig in, they find out they have a second job as well. With the full remote work, it happens. And the reason I’m saying it - I talk with founders who have like a team of 12 people, who they all know personally, they go back, and two people have been pulling this thing off… So there’s gonna be that part as well. So that’s another reason – pay attention after onboarding. I’m not saying micro-manage, but if you’re fully remote, you do need to verify, are they focusing their attention on you?

Hard to pull that off without some micro-management. I wonder how you sleuth without being sneaky or creepy, but you wanna know what’s going on… You also wanna have them report everything they do, but you don’t wanna have a webcam in their office… I mean, it seems like a difficult problem.

It is a difficult problem. And this is the thing - I was never a fan, for example, of things like Pluralsight Flow or Velocity in the sense these were tools that report tools like commit history, and just show you trends; they’re actually getting better… But I do think you wanna start using these things, get a sense of like, for example, is someone only – and what a founder did, for example… They paired with some of these people, managers paired with them for a day and saw how they’re working as they’re pairing, how often they commit, and these people just committed ten things a day. Then they noticed that, interestingly, the next week they only committed at like 7 PM, every single day. One commit, 7PM. That’s kind of weird… And as they dug in more, in many cases they found that they were doing a second job during the day.

Again, don’t get me wrong, it will not happen to everyone, but I’m now hearing this happen at an alarming rate, especially when it’s people who don’t have a strong connection to that company, especially when there’s no in-person events. Anyway, I think this is more of a headache thing, just think about it.

[52:22] But going back to things that you can do on hiring - you need to sell a lot more. The candidates are not gonna come as much; you need to tell them why you’re interesting. Equity - it’s a bit of a no-brainer for U.S. companies, but if you’re a startup in Europe, companies are now starting to have to offer it; they didn’t use to, but now they cannot compete without it.

And finally, once someone has signed an offer, it’s not over. A lot of companies kick back, and what happens is they get another offer that’s 20% or 30% higher, and they’re gonna say “That one.” Or maybe just a better team. What the best companies do is as soon as someone signs an offer, they have the whole team reach out to them, they send them swag, they call them up on a video call with the whole team being there, that they’re so excited… They start to create that connection.

So basically, as a hiring manager, you need to work a lot harder than before, you need to be more creative… And I think as long as you’re aware that you’re not the only person in town hiring, you’ll be fine. A lot of companies still have the “Oh, we’re doing you a favor for offering you a role, a job.” Yeah, well, that was a big thing two years ago, but now it’s just every day.

Yeah. And remote is par for the course now. It’s a given, especially in the tech scene. I know that there’s a lot of jobs that have more challenges… I think there was actually some sub-tweet, that was actually not a sub-tweet, on Twitter (obviously, because that’s where sub-tweets happen) about Space X, and having to come to the office to build rockets… It’s like, obviously, if you’re gonna build a rocket, you’ve gotta go to the office. But there was some sort of revolt… I don’t know what I’m speaking of, but there was something I saw on Twitter…

[laughs]

Tell me if you caught it, in the comments. It’d be kind of funny. But it is an interesting space… I think that kind of speaks to caring more, and if you didn’t have to show up so hardcore for a new candidate or a new hire, you didn’t, which seems just odd. You should just show up anyways.

Because if you really wanna hire the best people, it’s because you want them to be connected to your team, it would just be natural. But I think we’re in a more competitive market, and also you have to do, as you said, more creative things. Think more creatively. Swag seems like the Easy button to push… I think the next easy to button to push is have the team reach out, but… I’d be curious to read more about what you find out about what they’re doing more of to make that connection… Because you’re right, if you sign the offer, another offer comes in later that day; it’s like, “Well, you know, I took that one instead. Sorry.”

I think what happens in these situations is who is selling whom just changes; that little power dynamic changes, to a certain degree… Because when you are a well-qualified software engineer, with multiple offers, and great opportunities wherever you pretty much wanna work, that hiring manager has to sell you on working for them… Whereas if you’ve been beating the streets for eight months and applying whenever you can, and you can’t find anything, and you finally have someone who’s interested - you’re selling that company pretty hard on why they should hire you.

So people who are in the buy-side of this relationship at this point - and Gergely’s advice I think is all solid - you’ve really gotta be thinking about ways they can stand out from the crowd, and sell you on why you should be working with them, versus all these other opportunities that are right there for you.

Now, there’s a blog post that I’ve read recently by Curt Corginia, I believe is how you say his name. Says, is answering the question “If software engineering is in demand, why is it so hard to get a software engineering job?” And this is one that I think comes up often. And Gergely, you touched on it, but it seems like a lot of the hiring processes suck, and have sucked… And one thing that you said which maybe we should focus on for a minute is take time to improve your hiring process, and remove the sucky parts.

[56:01] First of all, onboarding can be faster, so you can move faster, but it sounds like the whole matchmaking process with a company and a potential hire has been fraught for years with, like you said, many interviews, oftentimes there’s whiteboard-style performance things, or take-home tests, or… They’ve tried lots of things, and it seems like maybe a good way of setting yourself apart is by fixing whatever process you currently have… Or at least improving where it is.

This surfaces every month or every week, how the hiring process is broken… And I’m gonna challenge those people who say the hiring process is broken - talk with people in other industries, any industry, and you’ll see there’s two types of hiring processes. There’s the engineering hiring process, let’s say mechanical engineers, chemical engineers, which is pedigree-based. “Do you have a degree?” and “Where have you worked before?” and the actual interview itself is not that much. But it works great. It does lock out people who don’t have that pedigree… And it works because there’s not an increased demand; it’s kind of a stable supply, and it runs from like people start their internships at university etc.

And then there’s the other type of jobs, which are let’s say marketing, sales, some other white-collar jobs, which is completely subjective. You just show up and there’s no documentation on how to pass the interview, because it’s just completely dependent on the whims of the people who are there.

Now, tech is in-between these, because I think the interviews are very well documented, you know what to expect… It’s stressful, that’s true, but you don’t need a pedigree, you don’t need a degree from MIT… I mean, if you have it, it probably helps a little bit, but not by that much, because they’ll still put you through the same process… And you know what to expect.

So actually, when we’re complaining about this, whenever we suggest how to fix the interview, the two ways to fix it is first of all some people say “Hey, I’m a senior engineer, I did all this stuff… I shouldn’t have to do this text.” “Sure. Let’s hire you, because we know your buddy. They tell you are good”, which means you’re hiring based on references, which means the other person who has the same background, but you don’t know them, or they don’t have open source contributions - you won’t hire them, and your process is now more biased. So actually, this is one of the reasons why all the large tech companies have the same process. It’s like a cookie-cutter, it’s documented, you can prepare for it, because it’s the same for everyone.

But what companies can and should do right now is they just actually relax the hiring process. Yes, they make it less sucky but they’re gonna hire people who are not gonna work out. By removing some of these steps, you will have people come into the company who you might have rejected on the previous bar. Some people will also come through who will work out, but my point is that you need to onboard them better, you need to pay attention to how they’re doing, and basically, you need to have a trial period that is a couple of months (one, two, three months), where you actually make the call, like “Is this person working on the job?” So it’s kind of like a paid – by removing steps, you can turn this a bit more into like a paid internship.

And what I see with the hiring process - there’s always a trade-off. So it’s not good or bad, it’s kind of a trading off of how much does the company invest in their time, how many candidates that could work out do you reject… Because you’re gonna reject some, more or less… And how many people do you hire who just don’t work out? And it’s this triangle.

For example, a lot of entry-level engineers will complain about the automated call test… Well, it’s about experience; I totally agree with that. I used it at Uber. You know why I used that? I didn’t use it for hiring software engineers, like full-time software engineers… I did it for interns. Because for an intern application, we’ve got about 500 qualified applicants. And if we interviewed all of them after the resume screen, we still had at least 100 who looked really good, really strong. If we did 100 interviews with them, my team would have been doing interviews for two weeks; no product work.

So it’s a trade-off… Yes, it was a worse experience; we were able to give a shot for a lot more people, we were able to let 100 or 150 people take that test, and unfortunately we couldn’t hire – we didn’t have that head count…

[59:58] So this is the part where I think it’s good to bring some hiring managers, by the way, ask about this… Because it’s super-easy to complain about when you’re not on the outside; but once you’re on the inside - a founder, a hiring manager - you start to see that you’re kind of stuck. There’s physics involved. It’s a bit like, you know, we’re complaining “Why do airplanes only go with 700 miles an hour?” or something, and you realize after a while, when you look into it, that there’s the sound barrier, and if you break that, there’s this big explosion that can wreck all the windows…

Your example at Uber is lopsided in the other direction. You have thousands of people applying. So in a hot demand market, where everybody is expensive and you can’t find someone to hire, it’s going the other direction, right? I think at that point it behooves you to simplify and make it suck less. Get those people in the door. I think you agreed with the fact that maybe having some sort of an easier on board and then maybe a trial period is a nice balance. There’s definitely trade-offs, but it seems like you’re optimizing in that case for a high supply market, not a high demand market.

Yes. So what I was saying - I was just giving a bit of a example with a trade-off but right now, what everyone needs to do is first of all they need to make the process suck less, they need to remove automation, because it doesn’t help… You should invest your team’s time. You should take people off doing product work and having face-to-face interviews, because it’s a better experience, you have a connection… You’re giving people the respect as well, let’s be honest. When you give someone a coding exercise or an automated thing, it’s not respectful. And in a high demand market – so when I was at Uber, and when we did get 500 applicants for four positions, we could do that. But this is not the market anymore. So I’m totally with you, Jerod…

It seems too that, to your point, there’s churn of those that get hired; they may not work out. Almost, like you said, you would let some through the door that you would normally turn away, because of some sort of criteria… It almost seems like you could take in more knowing that some will churn, and some don’t fit… But if they’re – and maybe this is sort of a bad thing; it sounds even icky to say it, but… Hire more than you should, so that you know some will leave, almost so you can take them off the market to know if they’ll fit for you. And if they don’t fit for you, they’re gonna leave anyways.

Yeah, it’s an interesting one, because I think this is the one where this market might challenge us. We always thought that the people who are not doing that great on day one, like in the old school days, where you had a lot of people, you would just fire them. A lot of companies would; depending on the country, it might be difficult… But here’s an idea - what if they do work out? What if the better onboarding process makes all the difference?

I’ll give you an example - Amazon has partnered with Lambda School; they’re taking bootcamp grads who have never coded in their life, they do a few-month bootcamp, and then they designed – they didn’t just take them in; they designed this six-month partnership program, where they basically train them, they work with them on Amazon projects, and then they’ll be ready. And I’m pretty sure that the majority of those people will work out, because they have an onboarding investment.

I think most people who will come in with less experience - they will wanna succeed. So this might be the wake-up call for the industry to actually change things around and throw away some of those things, because the one thing that the whole industry has been terrible at is onboarding. It’s been an afterthought, we kind of expect that people come here. That’s why everyone wants to hire seniors; they know what to do.

Yeah, it seems like the baller move is what you’ve just described there… Everyone’s trying to hire seniors. It’s expensive, it’s difficult, I’m having a hard time competing in that market. Why don’t I just be the one person who’s willing to onboard juniors at a higher clip and take a chance on some people? And yeah, I’ve gotta train them up more than I would have to train up a senior, but then I can train them in the ways that we do things, and maybe instill a little bit of our corporate culture in a younger mind, or a more agile, available mind… And that might pay dividends down the road. Maybe it’s the long game that is actually a real solid move in this market, if you can take on that risk.

It’s like in the words of Ben Affleck on – what’s that movie called again?

Boiler Room.

Boiler Room, yeah. “We don’t hire brokers. We train new ones.”

That’s right.

[01:03:53.12] There’s so many more junior opportunities, too. In a shrinking market of seniors, the newcomers or those that are newer into a field, or even transitioning from web to mobile, for example - they’re a better bet. There’s more of them, too.

Yeah. It’s the baller move. And these are the companies who are gonna do well. Because don’t forget, once you do this, you are not just solving your problem for the next 6-12 months when the market is hot, you’re solving it for good, for as long as you want to. And if you can combine it with a win/win – you know, I talk with founders, and they all tell me the same thing, “But what if we hire them and we train them and they leave?” Well, first of all, there’s a lot of what-ifs in that sentence. Second of all, people are typically grateful when they get feedback… And some will leave, for sure, but not as many as you think, in my opinion. And people underestimate the morale impact. When you have a new joiner who’s enthusiastic and they have a lot of energy, they bring up the morale of the team. They actually make the seniors better. So when a senior mentors – I actually had my wife who told me she’s mentoring her first new-joiner, and she said “It’s making me a better engineer, explaining stuff.” So it actually levels up your existing people as well.

And again, I think it’s another open secret; it’s a bit harder to pull off, but it is there. This is how you’re gonna win in this market. And obviously, don’t just do – this is just one thing that you should do. Obviously, keep hiring seniors and try to not lose them… But this way you don’t have to hire 20 seniors, you just have to hire like five, and 20 people with less experience.

Also too, going back to the long-term versus short-term viewpoint - that’s a longer view on the market. It’s just incentivizing “Let’s take a chance on a longer-term process”, and that junior developer, even if they do leave, they’re gonna be impacted so deeply by that opportunity – it’s gonna be a story they tell, especially if the onboarding is right, and the culture is right, and the treatment of people in the company is right, which is culture - if that all is right, then that experience is never gonna leave them, even if they make a choice to go somewhere else, for whatever the reasons are.

They’re gonna take that story with them and share it. And that’s what you call brand. It’s not your identity, it’s not your logo, it’s what people think about you when you’re not in the room.

Yeah. And then just one final thought that I kind of mentioned in my newsletter as well - if you’re a hiring manager or someone who’s in charge, you’re hiring people, if you pull this off, you’re gonna know something very few people know… How to create a program that onboards juniors. And you’re gonna be so much more valuable. So your career prospects will open up. If you say “At this company I introduced this program, where we started to onboard juniors, we had lower churn rate, it actually worked out great…” Because most people don’t know how to do it. Most people don’t try. This is the crazy thing - you just need to try, and you’re gonna become more like just being really selfish; you’ll be more valuable on the market. It’ll open opportunities both at the company, when the next promotion comes up… Who’s gonna be promoted? The person who shipped yet another project, or the person who actually just solved the long-term problem of “How do we hire engineers?”

The same thing when you’re moving companies, you’ll have a great shot at moving up the – if you’re an engineering manager, to get that director level, because you just did something really strategic, and something that is difficult to do.

Who’s the example you point people to? If they say “How do I interview right? How do I onboard right?” Who are the standards you point people to now, that seem to be doing it right, or clearly are doing it right?

It’s tough, because I think it depends on your size of the company. This is something I’m gonna look up later as well, to have a better answer… When you’re a larger company, I do look at – a company that does it really well at large scale is Facebook, but they have the advantage of the brand. But they designed a really unbiased process; they have a really, really strong, diverse hiring ratio, which means not just white men, compared to the rest of the industry… And they do it because they prepare the candidates well, they work a lot with them before the interviews, and they have a super-transparent process. So when they interview, let’s say, an engineering manager or an engineer, they will literally stand out exactly how – like, they have their whole process defined and they share it with candidates as well, so they’re open about it.

[01:07:55.09] The downside, the reason I wouldn’t recommend them for anyone small - it’s a heavyweight process and they have the brand that can pull it in… But they’re an example of how to hire a diverse group, and their onboarding is exceptional.

One thing that Facebook does amazingly is when you start – let’s say as an engineering manager, because it’s a position that you typically have no onboarding… For a year they hold your hand, and they make you successful. Same thing, obviously, with interns, with some of those things as well… There isn’t too much why they advertise – I’ll have to look into some example; this is a good topic for me to also research, so thanks for that.

There you go. That’s a good reason to subscribe to the newsletter, even if you’re not paying yet…

Subscribe and get the free version, and you could tease at least… That’s good though, because when somebody asks you a question, you feel like you always have to have the answer. And I think saying, “You know what - I don’t know exactly yet, but a future newsletter entry will. I’ll showcase this. I’ll do some digging.” So I like that answer.

This is that.

Here at the end of the show, Gergely, let’s call out some URLs. Where’s the best way to get people into your link funnel? Where would people find you at, and then your newsletter? Are you on YouTube, are you on TikTok? Where can people pay attention to your content creation?

Well, hit up one or two places, whichever is your favorite. If you’re on social media, Twitter, @GergelyOrosz, my name. You’ll find all the links to the newsletter, to my website… And then there’s my website, pragmaticengineer.com. It has all the links to YouTube, Twitter, LinkedIn, the newsletter… I also do another newsletter, which is interview preparation. This is completely free. Whenever I have time, I write about senior engineer, engineering manager interview preparation, advice to get into high-growth startups and big tech; it’s kind of my way of giving back as well, especially in this job market.

One thing that people will find is – they decide “Alright, I wanna get out there. I obviously wanna level up, I wanna get an even better culture, a better-paying job” - those interviews are a bit tricky, especially if you’re not used to them. So there’s this thing - the easiest way to get into Facebook is first get into Google. Then it’s easy. The point being is when you’re going to a place where you’ve never been before. That’s there. So I also just give some advice there.

Obviously, most of the insights will come from my newsletter, both free and paid, at newsletter.pragmaticengineer.com. This is for anyone in tech. If you’ll have feedback or content suggestions, feel free to drop it there as well.

Is there anything we haven’t asked you about yet, that you’re just like “You know what - I’ve got one minute, two minutes to call something out”? Is there anything that we haven’t asked you that you wanna tail off the show with?

I’m actually good, so…

You put it all out there?

Alright. You heard it here first, it’s all out there. PragmaticEngineer.com. We’ll link everything up in the show notes, check those out. Gergely, thank you for coming back again. It’s been a year, but hopefully we can have you back on next October, next November, something like that. We’ll make it an annual thing. I like catching up with you. It’s been a lot of fun, so thank you.

I think it’ll be a busy year. I’m doing something new… I can tell you, I’ll talk with a lot of people, I’ll get a lot stronger opinions on some parts in the industry, and I’ll probably have a few more Twitter threads that you might like, who knows…

I’ll like them, I’ll bookmark them, I’ll earmark them for a future conversation… Thank you for putting it all out there. I really appreciate your storytelling style, and I just, I’ve leveled up by just paying attention to some of the things you’re paying attention to, so I appreciate just following you on Twitter alone, let alone your newsletter as well. Thank you so much.

Thanks, Gergely.

Thank you.

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