How to hire a real tech team

TLDR: Test and verify. Get someone technical to setup, administer and run technical coding tests. Hire people motivated by coding challenges, not money. Don’t rush.?Have a technical manager that can code. Putting a technical team together is hard.

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Energy Action has been around for 20 years. Our mission is to simplify energy, lower its costs, and reduce their costs for our customers. We offer business customers an energy buying service and an energy management service.

To deliver these services we collect and transform different data feeds into processes and reports. The data sets are large, and the analysis complicated.

For most of its lifetime Energy Action hasn't built a solution based technical architecture. Technology investment has been a cost of doing business. Rather than a reason for being in business.

That's now changing because we're now building an enterprise grade, web-application for energy expense management. But unlike a start-up that needs to burn cash to find out what customers want. Our business has existing customers and existing products. Our unique challenge is to transform our existing ways of doing things into a SaaS product.

Energy Action is building an energy spend management platform as a start-up inside.

Early this year we finally went live with a four-year technology project. The project had exhausted us and hollowed out our technical capability by out-sourcing talent.

But the project's go live allowed us to reset our technical team. To move from a power-point led strategy to building a team of software engineers. People who love coding. Want to build a product our customers are telling us to deliver. And most importantly can build in real time, code to solve business problems.

The hiring process is a trade-off of three things: quality, money, and time. For Energy Action the thing we didn't compromise was quality. This has meant that building a high-quality team has taken time.

The process we followed for every applicant was the same.?We benchmark each CV against pre-defined criteria. Asked candidates to take a technical coding test. Had them complete a technical interview where they code. And lastly, we have a social interview.

It's the approach Joel Spolsky's takes when hiring developer talent and it's worked for us. But Joel has an advantage because he can code. To hire technical talent, you've got to have a high-quality developer help. Without technical tests you're hiring based on CVs and charm and those are poor measures of coding ability.

Our attrition rate in each step is high so the key input to hiring success is to have a high number of applicants. That's easier when you have a brand. As a no-name tech company it's challenging.

To find candidates we've tried online public job boards, recruitment agents, and lastly and incredibly successfully, approaching possible candidates directly using a candidate search function on the public job board.

Posting an advertisement on an online job board would result in 100 to 200 applicants. We'd then shortlisted about 5%.

Using a candidate search function on the same job board resulted in about 25% of those contacted replying and taking the test. Recruitment agents have not worked well for us because the volume of candidates they find isn't enough to get past our online testing.?

After CV review and candidate selection, we use HackerRank to test our technical candidates. Our tests usually take 120 minutes and have around five or six questions that start easy and get really, really hard.?

We get pushback from developers to having to take a test. Comments from candidates included "To be honest with you I do not think it's appropriate to ask CTOs to do tech tests! I leave that to developers." and "to be honest I think the HackerRank servers need to be C4'ed out of existence".

The advantage of an online test is that self-selects candidates who are confident about their coding ability.??Candidates prepared to invest in your process are the candidates you want to hire. All our hires passed our coding tests.?Out CTO successfully passed the same test that all our developers take.??

8% of candidates pass our coding test. The disadvantage of testing is that it slows down hiring people. But makes sure of candidate quality. To the rest of the business it looks like you're setting impossibly high benchmarks and not running an effective process.

And we got a lot of organizational pressure to hire quickly. We've had offers of getting interns and temps to help the tech team. But when your software developers are people who speak multiple languages, play musical instruments, and contribute to the community - short termism does not help.

Joel Spolsky's videos and blog talk about how to run technical interviews, so I won't cover that here. But for the social it's all about whether you think the person (because they've moved from being a candidate) will bond in your team and make your team better.?

It's taken Energy Action nine months to build a high-quality software engineering team of 11 people. With nine new recruits.?The team is an asset and took time to build. For Energy Action it allows a pivot back to being the software business it once was.

Our team is now self-reinforcing. We've set capability benchmarks that mean every new person from now on will be a high-quality candidate.?

The result below. An excited CTO, Clint Irving and a happy CEO, John Huggart.

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Bruce Macfarlane is a Non-Executive Director of, and a significant investor in Energy Action (EAX.ASX) an energy procurement and energy management platform. He was previously co-founded BidEnergy (now called Bill Identity)