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Hiring in a Time of Scarcity

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Hiring in a Time of Scarcity

Scarcity is always inevitable in every market. How do companies deal with hiring new employees in the middle of a problematic period?

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I’ve never understood the hypergrowth mindset that’s guided the tech industry for the last few years, and part of me is happy that the investment bubble has popped. I’m not interested in throwing around money to solve problems; my experience is this creates more problems than it solves, and then you have twice the problems to solve when the money dries up!

You can see how lean companies like Toyota deal with economic troubles compared to their historically gluttonous American counterparts. Toyota has been able to take problems in stride. More wasteful companies, who were making large profits due to a booming market rather than their own ingenuity, were in turmoil. This is obviously not unique to car manufacturing.

Scarcity requires hard decisions. Let’s say you have 12 months of runway, and each new hire brings in runway 2 weeks. Do you keep your runway as long as possible, so you have the longest time to experiment and learn? Do you hire a few people immediately, so they can get ramped up and begin making an impact as soon as possible? Or do you need to hire for easier to fill positions, and defer the hire to as late as possible to keep yourself open to opportunity? There’s no single answer because every situation is different. But these are the tough conversations you are forced to have when money is scarce. You really analyze what you’re doing, why, and how to improve. I want scarcity to drive ruthless efficiency, effectiveness, and innovation.

I was talking to someone from a public company recently who said they knew they wouldn’t be able to fill all their dev spots, so they are using one of those spots to fund open source work. Brilliant! But how many companies are just looking to put butts in seats?

(Just something I want to clarify — I’m speaking only about taking a critical eye to management decisions like hiring and firing. Another startup mindset, of constant crunch and low pay as a proxy for “scrapiness”, is another one I don’t like!)

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