In a market where competition over top tech talent is fierce and top companies don’t think twice about poaching developers and engineers from other companies, it’s incredibly difficult for startups and small businesses to attract the type of employees who will make them successful. Netflix, the world’s leading television network with over 83 million members in over 190 countries, managed to do exactly that.
“At Netflix I worked with colleagues who were changing the way people consume filmed entertainment, which is an incredibly innovative pursuit” says Patty McCord, Netflix’s former chief talent officer. “There’s no reason the HR team can’t be innovative too.” That sort of thinking is what has made Netflix’s hiring process an industry example.
When John Ciancutti joined Netflix in 1999, he joined a small team of four engineers with a shared dream. By the time he left in 2012, as the VP of Product Engineering, he had hired hundreds of great engineers and helped transform Netflix into the industry leader that it remains today. At a First Round CTO Summit, he shared the four phases that define his successful recruiting process. Here’s Ciancutti’s formula for successful recruiting.
Phase 1: Sourcing Candidates
Ciancutti says it is a mistake to hire a recruiter and think that means that you, as the hiring manager, are absolved of responsibility for sourcing. While recruiters can help cast a wider net than you could alone, some of the most invaluable sourcing comes from looking within your own network, within the networks of your employees, and within the company’s network.
A good ATS (applicant tracking system) will allow you to maintain oversight of who has applied to your company in the past. While a candidate may not have been the right fit in the past, an additional six or twelve months of work experience and growth elsewhere could make the same candidate the perfect fit for a position that you are trying to fill now.
To make the most use of your networks, work on constantly expanding them. Ciancutti recommends talking to as many people as possible, whether it’s at industry and career events or by asking your friends to connect you with their friends.
Of course, at some point you will reach the limits of your networks. At that point, many hiring managers look at competitors and broadly contact relevant employees at those companies. Ciancutti cautions against this broad approach. Instead, he recommends a more strategic approach for better results.
Think carefully about exactly what skills the person you want to hire needs to have, what companies exemplify those skills, and who the best people at those companies are. You aren’t interested in hiring unqualified applicants or mediocre workers, so don’t waste your time (and theirs) by sourcing them. This more targeted approach takes a bit more time in the beginning, but results in an overall more qualified, already more refined talent pool that saves you time that would otherwise have to been spent sifting through clear mismatches.
Once you’ve found the candidates you would like to connect with, it’s time to make the initial contact. Especially if you are recruiting for a startup, and can’t lean on an impressive corporate and employer reputation, the initial contact should come from you, the hiring manager, and not a recruiter, says Ciancutti.
Doing your homework increases your chances of getting a response. Look through the candidate’s history and identify any connections that your company has to the individual. For example, if you’re an education startup and the candidate did Teach for America, you will want to identify that shared passion for education in your initial outreach.
It is critical in the first contact that you make it clear that you are a person and that you are specifically interested in the candidate that you are reaching out to, out of all of the other candidates you could have reached out to, because of x, y, or z from their past.
Wrap up the first message with an offer of a call or coffee to discuss how they might work out with your company. Ciancutti says that almost all, if not all, candidates will choose a call over coffee, but he still considers that a success. Even a ‘no’ is a success, because it opens a dialogue and creates potential for future engagement. The only response that you don’t want is no response. Track your messages and response rate. If your response rate is low, tweak your messages until it rises.
Now that you have set up a call, use the fifteen minutes that you have with them on the phone to find out what they’re currently working on at their job and why they’re excited about it. Ask what impact it is making for and within the company, as well as why they chose to work on that project. Ciancutti stresses the importance of this to allow you to identify the candidates who are passionate and knowledgeable about their work.
If the candidate seems less than enthused or less than informed about what they’re doing and you aren’t sensing a match, end the conversation there and be honest about them not being a fit for the position. Don’t lead the candidate on and waste your time and theirs. If the call goes well, however, and they are also interested in continuing the conversation, set up a casual coffee meeting to talk more.
Phase 2: Coffee Dates
Walk into the coffee meeting with the idea that the candidate you are meeting is the candidate you want to hire, advises Ciancutti. While not every candidate you meet will be the one you want to hire, hopefully at least one will be and building a strong relationship from the beginning makes it far more likely that the candidate you want will accept an offer later on than if their early impressions of you were as a cold and critical person.
“As a hiring manager, you are the most important factor in the candidate's decision,” says Ciancutti. “If they don't think you're great and that you're going to be a great manager, partner and support system, it doesn't matter what they think of your company. They won't join you.” Be friendly, be respectful, and position yourself from the beginning as their ally in the process.
To start the coffee meeting on a good note, be punctual. This shows that you are professional and that you respect their time and appreciate the meeting. Keep the tone of the meeting friendly, light, and casual, but also ask the questions you need to ask to see if the candidate is the sort of employee you are looking for.
Find out if the candidate is making good choices in their career, if they’re learning from the choices they make, if their goals have been reasonable, and if they have been ambitious. While you learn about them, you simultaneously want to tell them about your company, so that they are excited about you and your company by the end of the coffee meeting.
If you are not interested in the candidate at the end of coffee, be honest about not continuing the process and explain why. This transparency will earn you a much better reputation as an employer than if you say something noncommittal about following up and then never do. If you are interested in the candidate, however, invite them to your office to meet a few members on the team. Key here is to keep the invitation fairly casual and low-pressure, says Ciancutti, in order to get more acceptances.
Phase 3: Interviewing Candidates
At this point, you are a familiar face to the candidate. When they come in to interview, regardless of how casual you’ve made the day sound, they are probably nervous. Therefore, you should be the first person to greet them when they come in. Make them feel like you’re on their side by giving them an idea of who they’ll be talking to and for how long, as well as answering any questions that they might come in with.
For efficiency’s sake, Ciancutti always has the first interview for engineers be a coding exercise. Though culture and fit are important, even the friendliest, most well-liked candidate isn’t a good hire if they can’t do the work well. If it is clear at the end of the first interview, or at any other point in the day, that the candidate isn’t a good fit, end the process. It might feel awkward at first, says Ciancutti, but candidates appreciate you not wasting their time. Ending the interview early when it’s not a match also saves you and your interviewers valuable time.
If the candidate does well in the first interview, continue the day with a primarily culture-focused second interview. If the candidate seems like a fit, move on to a third interview that is technical again. This interview should test the candidate on their supposed area of expertise. At the end of the exercise, someone more senior than the first interviewer should walk through the candidate’s work with them and look for mastery. If it’s there, end the day with a fourth interview, focused on fit. This fourth interview should identify leadership qualities and help you learn how the candidate approaches taking responsibility for assignments and problems.
If the candidate makes it all the way through to the end of the day, you, the hiring manager, should meet with them again. “Answer any questions they have and take your time” says Ciancutti. “Don't have a hard stop. Make them feel like this is the only thing in the world you need to do.” Get a sense of how the candidate feels about your company, what excites them, what else they’re considering, and if they’re at the offer stage with anyone else. Ciancutti also recommends finding out their desired compensation and salary history at this point, though asking those questions will soon no longer be legal in some parts of the United States.
When the interview is over, get all of the interviewers’ opinions on the candidate. Ultimately, however, you as the hiring manager need to be accountable for making the final decision.
Phase 4: Closing Job Contracts
If a candidate is the right fit, move quickly. “If you can, do it the day after the interview,” says Ciancutti. “Be detailed about why you want them and why you think it's a great fit. Explain the relationship between the role and the mission of the company. Speak to their motivations. You know why they want to make a move.”
If a candidate is great, there are competitors out there who they could work for instead. Acknowledge that by candidly laying out the differences between your company and competitors’ companies, without speaking badly of anyone else.
Also be upfront about the compensation you are offering. “Before you pick up the phone to make an offer, make sure you know exactly what the offer package will look like and don’t be vague about it” says Carlie Smith, Senior Talent Manager for Sales & Marketing at OpenView.
If you offer equity, explain how it works and why you imagine it will be worth Y dollars in X years, backing up your projection with real math on a spreadsheet. “Lay out what the percentage is, the current valuation, what the expected multiple is, and tell them why” says Smith. “This is another opportunity to get a candidate excited about being a part of the company, your mission, and your growth.”
If the candidate turns you down, remain friendly and maintain a relationship. They might change their minds in the future.
Alternately, if something at the offer stage makes it clear that the candidate belongs elsewhere, don’t be afraid to change your mind. “It's happened where I'll find myself saying, 'You know what, based on what you said, I actually think you should go to Snapchat. Based on everything I know, I think that's the right choice. It's too bad for us, but let's stay in touch.'” says Ciancutti.
Developing relationships is important, but another key part of Netflix’s success is not being afraid to end relationships, even at the offer stage or later. "At most companies, average performers get an average raise," says Reed Hastings, Netflix founder. "At Netflix, they get a generous severance package." By not being afraid to rescind a job offer, Netflix hiring managers can save the cost of letting an employee go.
At the end of the process, analyze your results. “You've got a healthy process if people are sharing recruiting emails with each other, and organically talking about what worked and what didn't amongst each other” says Ciancutti. “In the end, the overarching goal is to get better and better at hiring as a team as you grow.” Taking the time to reflect on what worked and what didn’t helps you refine your process for the next time around.