Violin Memory Inc. seems to have everything a potential new hire could want. Located in Mountain View, Calif., the heart of Silicon Valley, the company has raised $172 million from private investors. The company's executives say they plan to issue an IPO before year's end, an event that could make employees holding company stock rich.
Violin Memory, in fact, has had little trouble finding new recruits. Since the beginning of 2012, they've added around 100 new employees to the 350-person company and plan to hire 200 more by the end of the year. Where the company does sometimes run into trouble, though, is in keeping new hires. Some employees just can't sustain the long hours and stress that comes with working at the maker of flash drives. About 5% of new hires quit or are fired within two to three months of their start date.
"It sucks people in, and it takes away from your family life," says Vice President of Engineering Kevin Rowett. "We have to figure out, can people tolerate that level of intensity?"
For today's tech companies, hiring the best talent is a tough and time-consuming challenge. Given that a company is only as strong as its weakest worker, taking on the wrong employee can hurt in more ways than one. So companies use a variety of methods--some of which may be extreme--to ensure they the hire the best workers.
Avoiding the `Bozo Factor'
It's something of a cliche to say there is a shortage of technical talent in Silicon Valley. It is true companies are engaged in a "war for talent" that is driving up salaries, stock awards and perks. It is also true many of the Silicon Valley's most popular tech companies virtually have a line of talented and qualified technologists knocking on their doors for job interviews.
Technology advancements, too, have lowered the number of employees that it takes to operate a tech company. Cloud storage services like those of Amazon Web Services have cut down on infrastructure costs, and software development tools like Ruby on Rails can get functioning websites up and running in a fraction of the time that it took in the past.
For instance, when Yahoo reached $1.62 billion in revenue in 2003, it did so with 5,500 employees. When Facebook hit a comparable revenue figure with $1.97 billion in 2010, it had just 2,127 employees.
And not only are companies able to achieve more with less people, they're also wary of hiring anyone but the best engineers. This is sometimes called the "bozo factor." The late Steve Jobs often talked about the importance of hiring nothing but "A players."
The former Apple chief executive said to an interviewer in 1998: "You're well advised to go after the cream of the cream. That's what we've done. You can then build a team that pursues the A+ players. A small team of A+ players can run circles around a giant team of B and C players."
To avoid hiring less than A players, companies can go to extremes. At Violin Memory, managers can spend up to half of their time on screening and interviewing candidates. Reference checking alone can eat up large portions of the day. Candidates typically provide three references, but hiring managers will then tap their own networks to make contact with up to five people who have worked with the person. "Your reputation follows you," said Vice President of Marketing Matt Barletta.
Landing a position at Kaggle, a San Francisco-based start-up that crowdsources data analysis problems, is considered such a score that the company is able to have potential candidates move to San Francisco for one to two weeks and audition for a job. So far, 11 candidates from locales ranging from New Jersey to Ecuador to Australia have done tryouts. Kaggle pays for travel and lodging expenses, plus a stipend. For other high-profile candidates it wants to attract, the company can have some of its famous investors, including PayPal co-founder Max Levchin (also the company's chairman) and Sun Microsystems co-founder Vinod Khosla, make recruiting calls on its behalf, says Kaggle Chief Executive Anthony Goldbloom.
The Weakest Link
Jay Fulcher (pictured above), chief executive of online video technology start-up Ooyala, says he's "never fired someone fast enough. By the time you know that it's time for them to go, it's already too late." Still, it can sometimes take up to three months to gauge whether an employee has oversold their skill sets in the interview process and can't deliver.
"Companies are literally as good as their weakest links," Fulcher says. "Individual contributors who are C players, that are sort of drone-like, do what they're told to do, and are not thinking about new and different ways of adding value to what the company is all about."
Dan Siroker, the chief executive of Optimizely, a San Francisco start-up that does A/B testing for websites, made the mistake of hiring an early employee whom not everyone else in the company felt 100% certain about hiring. "He's good, but he's not the greatest I've ever seen," was the consensus among Siroker and his staff members, he says.
A month later, it was clear the engineer couldn't keep up with the pace of his co-workers, and made too many mistakes. Siroker and his co-founder had the employee come in at 9 a.m., an hour and a half earlier than the rest of the staff. "It's not working out anymore," Siroker told him. The employee received a month's severance pay.
Since then, Optimizely has been more circumspect in extending job offers, doing so only if every member of the 13-person team agrees that it's a good choice. Siroker estimates the company could have been twice as large by now if he hadn't been so conservative when it comes to hiring. Seeing the negative impact that a subpar employee had on his team, though, taught him to never make the mistake again.
"I could tell that he was bringing everybody else down," Siroker says. "People are like, 'Oh, he's not really contributing as much, why should I work my ass off if I'm sitting next to a guy who's not working as hard.'"
Write to Joseph Walker at Joseph.Walker@dowjones.com