

What If You Could "Date" Companies? - mahmoudimus
http://www.fastcompany.com/3013349/innovation-agents/what-if-you-could-date-companies

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tptacek
You mean, "what if we could consult for companies instead of accepting full-
time jobs with them?"

The freelancer who works a gig at a company for a couple months before finally
accepting a full time job from them is one of the oldest stories in
consulting.

Done correctly, freelancing tends (strongly) to be more lucrative than full-
time work, most especially in markets like this one, where sellers of talent
have leverage over buyers. Why would anyone in a market like this concede
anything to a company like GroupTalent? Serious question; I'm sure there's
_some_ reason.

~~~
ghempton
Despite what you might think, it is still very difficult for a talented
developer to break into freelancing.

Simply put, GT gives developers deal flow.

~~~
tptacek
My whole career I've worked with freelancers at both big firms and small firms
and my general ambient belief is that the market is full of people quietly
beating the returns they'd get from being FT by doing freelancing work
instead.

I'm not suggesting that you need to be Patrick McKenzie to execute this
strategy.

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hardtke
Another Silicon Valley startup solving a uniquely Silicon Valley problem. It's
amazing the amount of effort and investment that goes into the problem of
finding engineers, and comparatively how little goes into the rest of the
labor market.

~~~
jessriedel
I there a reason to think this couldn't be applicable to a million other jobs?
Obviously, not all jobs allow this flexibility, but surely many more do than
just coders.

~~~
hardtke
Labor laws make these sorts of arrangements difficult in other jobs. If the
job requires that you go to the office and utilize the employer's equipment,
you generally can't work as a consultant. Also, there are issues with workers
compensation insurance. Most people also prefer full time work as it has
benefits such as health insurance.

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lquist
This should be the only way to hire. I've never hired anybody at my startup
that I haven't worked closely with for at least a few months, and it seems
sheer insanity to do otherwise.

~~~
fourstar
Except this would then: A) Only apply to small "startups" B) Be horribly
inefficient.

This doesn't scale, but I'm glad for your startup it works. You like it
because you don't have to pay unemployment/benefits for someone that you end
up firing, probably, so of course you are going to support something like this
(being the one hiring).

~~~
lquist
AFAIK this is how Stripe works as well.

I don't care about not having to pay unemployment/benefits. The reason I like
it (or rather, need it) is because our organization is little more than the
employees we have, and I want to make sure that they are awesome.

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fecak
Every recruiting firm that does consulting has some language in their
agreement (with both the consultant and the client) about a cost (fee) for
hiring the consultant directly. Try before you buy has been around forever. If
they are moving these consultants around to different companies to find a
match, that is somewhat unique. Just placing someone into a contract-to-hire
role until the not hire/hire decision is made is not new.

I like contract-to-hire overall, but one problem is that you get lifetime
contractors who have no intention of ever converting to perm roles, and they
just stay as long as they can. Companies are more inclined to invest in and
train a contract-to-hire employee over a pure contract employee. The brain
drain can be a problem.

Another issue is contract-to-hire employees usually are paid a premium, and
get accustomed to the money, making them less apt to convert. This is
particularly troublesome for those that get their benefits through their
spouse/partner, where the extra money seems substantial because they aren't
paying for benefits or COBRA out of it.

Probationary periods are rather useless in any at will employment state (in
the US, not sure about international law). Why put "We can fire you in 90 days
if you don't perform" in an employment contract when you can simply fire
someone on day 2 if you really wanted to? It seems like a decent motivational
tool perhaps, but in markets like software it is just another reason for
candidates to potentially turn down work, where the alternative (no
probationary period and no expectation of even 90 days of work) is better for
both parties.

~~~
michaelochurch
The probationary period is to reduce risk of lawsuits because at-will
employment is actually very complicated when it comes to subjective evaluation
(i.e. all white collar work) and no one wants to cut a severance check for
someone who is cut in the first 90 days.

"At-will" means that companies have the right to execute strategic layoffs,
and also to set performance standards whereever they wish, as long as they're
uniformly enforced across that job description. (Both of these, I'd argue, are
reasonable.) It doesn't allow companies to vary their performance standards
for different individuals, or to fire "for any reason". For example, if you
work for a 5,000-person company and you're fired for performance after failing
on one project and being denied transfer, and you can prove that someone else
was allowed transfer under the same circumstances, you can possibly win a
discrimination or harassment case (especially because any negative
communication about you by management that impedes your chance at transfer can
be construed as harassment; this is why the common practice of making
performance reviews Enron-style-- that is, part of the transfer packet--
exposes a company to severe legal risk).

If you apply to a 5-person company and get fired in Month 3 because your boss
(probably the CEO) isn't feeling it, you probably don't have legal recourse,
because as owner and manager of the business, he has the right to select
personnel. If it's a 5,000-person company, and you weren't give a few chances
to prove yourself on multiple projects, you can raise accusations of personal
bias. (That's why companies implement those horrible 18-month policies against
internal transfer-- it's to create the impression of a uniform performance
standard-- however, those only have legal weight if enforced uniformly, which
they never are.) Even if you don't win, you can bring a lot of HR records into
fresh air (which a company doesn't want) as they try to prove that you failed
according to a set of rules that is enforced uniformly. Companies would rather
pay severance than have the courts getting into their HR records.

The probation period is generally more "at-will" than regular employment. For
most companies, probation means a couple of things. First, it means that a no-
show constitutes voluntary resignation and therefore can't require the company
to pay unemployment. (This isn't an issue at our level, but most people are
not as ambitious and diligent as we are, and no-shows happen.) Second, it
blocks the "employee should have been allowed transfer before termination"
argument because the going assumption is that no one transfers in a probation
period. Third, it often means no vacation is accrued, which is relevant when
people are terminated early on (because they usually haven't used it). Fourth,
and perhaps most relevant, it means that one should not expect severance if
terminated in that time.

~~~
dragonwriter
> "At-will" means that companies have the right to execute strategic layoffs,
> and also to set performance standards whereever they wish, as long as
> they're uniformly enforced across that job description. (Both of these, I'd
> argue, are reasonable.) It doesn't allow companies to vary their performance
> standards for different individuals, or to fire "for any reason".

This is somewhat misleading. It definitaly allows them to vary their
perfomance standards for different individuals (just not to discriminate on a
set of specific prohibited bases) and to fire for any reason _except for set
of specifically prohibited illegal reasons_. Having consistent standards (both
in theory and in documentable enforcement practice) for everyone isn't a
requirement, it just helps you _prove_ that the firing was _not_ for a
prohibited reason, and that the standards you were applying to that particular
person were not discriminatory on one of the specifically-impermissible bases.

Many of the things that people perceive as "legal requirements" aren't
actually legal requirements, they are things that are common practices
designed to _demonstrate_ that the actual legal requirements are being met.

~~~
michaelochurch
What you say is technically true, but those procedures also exist because it's
better, from the company's perspective, to have such demonstration in place
than to have to prove, in court, that it did nothing wrong. Companies don't
want HR data of any kind (even if it will prove the firm's case) seeing fresh
air.

For one example that can be played (by employee) to a win, the most common
case of a good person being fired seems to be one in which he's seeking
transfer to another team, and the manager decides to punish the "disloyal"
report, often with negative reviews and "performance improvement plans" that
block transfer outright. In that particular case, it's arguably retaliation
(over a legitimate use of internal mobility procedures) and harassment
(negative communication interfering with job performance) for the manager to
be doing so.

Technically, if a manager interferes with a report's ability to transfer, that
_is_ harassment, and bad performance reviews qualify in companies that use
Enron-style reviews (i.e. reviews that are part of the transfer packet).
That's why Google has secret calibration scores: it's a CYA move. Managers can
give positive verbal feedback and annotate it with a smear that the employee
never sees. This makes it less likely that a report's lack of mobility will
result in a lawsuit.

That's why if you _ever_ see a PIP, you should _never_ sign it, and in fact
leave the room immediately. "I have to go to the bathroom". Then you start
your internal mobility search immediately. If you do it properly (this
includes that you were never there to see the PIP) then the pursuit of
transfer happened _before_ the PIP, which hints at a retaliatory context.

This move doesn't work under a probationary period because anyone who seeks
transfer when on probation is (reasonable man standard) deemed unwilling to
follow workplace policies-- or, more informally but to the point, a flake.

~~~
dragonwriter
> What you say is technically true, but those procedures also exist because
> it's better, from the company's perspective, to have such demonstration in
> place than to have to prove, in court, that it did nothing wrong.

No, its because having those procedures in place is _how_ they prove in court
that they did nothing wrong. If you can prove that you did it for a specific
legitimate reason, that proves that you did _not_ do it for a specific
_illegitimate_ reason.

Now, its true that that also means that a case is less likely to end up in
court, but that's _because_ the evidence exists for use in court, its not some
feature of the process independent of its evidentiary value in court.

~~~
michaelochurch
Companies don't want the case to go to court at all. Even if it wins, it looks
bad and a lot of embarrassing stuff is discovered. So much of the process is
also around making the employee perceive that there is no recourse, or that a
case should not be pursued.

For example, most of the time, a person will pursue a case if he or she
perceives moral superiority over the other party. So the employer's goal is to
equalize that difference, either by bringing itself up or by bringing the
employee down.

Severance payments are there to make the employee feel good about the company.
It didn't work out, but the company was fair and everyone can move on to a
better arrangement. This is a decent way of doing because, after all, most
people _don 't_ want to sue ex-employers. They want to move on with their
careers.

A PIP's purpose is to make the employee feel bad about himself. PIPs actually
make it _easier_ for employees to sue, but are justified on the basis that
they will be less likely to do so if they _think_ they have less recourse. I
have no idea how this works out empirically.

~~~
dragonwriter
> Companies don't want the case to go to court at all.

That's not in dispute. The point you are missing is that the value of the
practices I was addressing (which weren't, you'll notice, PIPs) is still the
evidentiary value those practices provide in court, because that evidentiary
value is itself the mechanism by which they prevent disputes from ending up in
court in the first place.

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nawitus
How is this good for the employee? So I quit my job and make a contract for
few months, what should I do if they don't decide to hire me full-time?
There's lots of risk to me, as companies at GroupTalent probably choose to not
hire the employees as often as companies doing 'normal' recruitment.

In addition, I'm not sure how contract-to-hire for 4 months is different from
hiring someone for 'full time' and then firing after the few first months if
they don't perform well.

~~~
thestoic
Hi - this is Manny, CEO of GT. If you a try a company and then FT it may be a
great outcome for you too. As you may in the long term not be a good fit for
that job. Plus in the process of discovery you made a ton of money (contractor
payouts are 70% to 100% higher than regular FT salaries even when it includes
benefits!) Your point is right in that try-before-you-buy is not a new
construct but rather a corollary of being an at-will employment society. So
yes, GroupTalent is just a hiring platform that allows tryouts as a perfectly
reasonable alternative.

~~~
fecak
I hope it works out for you. I do like the model, particularly if you allow
some rotation between clients for the developers (negative impact on short-
term productivity, positive impact on long-term fit).

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SilasX
Hm, that's an interesting idea for solving the hard problem of matching talent
with orga...

Oh wait, the article's just a PR piece for a startup using a deceptive title
instead of something more honest like "GT takes the dating model to the
recruiting process."

~~~
thestoic
We are using the dating model to the recruiting process. Could not control the
title of the article, but thx for pointing that out

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jonemo
I would use this, if it weren't restricted to people who make smartphone apps
[1]. That seems to be an extremely narrow focus, even in Silicon Valley.

[1] This might not actually be the case but their info pages only talk about
apps.

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wavefunction
How about I just go in, work, do a good job, and live a life outside of work.

~~~
andrewflnr
That's wonderful, if you have a decent place to work, but you don't
necessarily start off that way. Did you read the article?

~~~
wavefunction
I guess I'm old fashioned, and the solution proposed in the article is just
attempting to resolve a recent problem in a new way, rather than returning to
what works in a tried and true fashion.

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michaelochurch
I think this is a much better idea:
[http://michaelochurch.wordpress.com/2013/05/07/fixing-
employ...](http://michaelochurch.wordpress.com/2013/05/07/fixing-employment-
with-consulting-call-options/)

Essentially, it's a system that allows people to collect some stability income
upfront by selling call options on future consulting services. This would also
allow intermediaries (like GT) to arbitrage. For example, I'm damn sure
there's someone out there who'd pay $750 per hour for my time (or, at least,
could justify that much value) but I can't find that person-- and he probably
only needs a few hours of my time, here and there. I'd be happy to sell a call
option (strike $100/h) for $150/hour and let the option holder take most of
the profit ($500) in order to have him doing my marketing and finding those
$750/h high-value clients (which I can't).

The one way my consulting call options would differ is that the option holder
only gets 95% of the profit; 5% goes back to the consultant. That's to make
sure the consultant knows the actual price he or she is billed at.

Employment is already a call option, really. Take software engineers. The
median of us is worth less than our salary, but the good ones are worth 5x and
the great ones are 20-100x. That's hard to predict, because it's not only a
factor of the individual, but also project/person fit and being assigned to
high-yield work. Many software engineers at large companies could be rendering
over $1 million per year in value, but are being held on evaluative Fourth
Quadrant Work ( [http://michaelochurch.wordpress.com/2013/01/01/fourth-
quadra...](http://michaelochurch.wordpress.com/2013/01/01/fourth-quadrant-
work/) ) while management decides whether or not to trust them with a real
project. So there's already a call-option dynamic in place; it's just that
right now, it works entirely out of employee favor. I want to fix that.

~~~
yuhong
I was thinking of something similar for blogging for a while now.

