Optimise For Efficiency, Not Hiring

Absorption Rates in Technical Recruitment

Have you ever heard of the concept of an absorption rate in hiring? An absorption rate for hiring is the highest number of people that can be onboarded into a team or organisation during a given period without significantly impacting the organisation's performance. Too high a rate and bad things happen. Think of Mr. Creosote, the restaurant patron in Monty Python’s “The Meaning of Life”, who is offered “a wafer-thin mint” and explodes. Your company does not want to get close to putting that “last mint” choice to the test.?

Unfortunately, most hiring is measured by output, not outcome. It is counterproductive. Few recruiters trying to meet a hiring target consider the time it takes for a new hire to become productive. When recruiters are measured on the number of hires instead of the long-term benefits of those hires, you have a potential “last mint” problem. The number of engineers hired is a dumb metric. That may shock some. "No, not us", they'll cry. "We care about attracting the best people to our company." Their actions, however, often say the opposite.

Senior leaders in the C-suite and Recruitment Directors claim that hiring the right people is one of their primary concerns. They are probably sincere in thinking that. But, the reality is often far from the claim. Attracting even the right person at the wrong time or failing to onboard that talent effectively will not achieve the desired results. Part of that concerns a failure to understand that having the best engineering talent only sometimes results in producing good software. Instead, software quality is best predicted by how teams organise their work and how much they trust each other. Integrating talent into an existing organisation can quickly destroy trust if mismanaged. Not respecting absorption rates is as unhealthy for existing teams as for newly hired engineers. It results from an over-emphasis on optimising hiring instead of focusing on improving the efficiency and productivity of existing teams. Tech companies are so used to relatively high levels of turnover, especially when compared to more traditional industries, that they invest in recruitment at the expense of sound engineering practices and retaining talent. While the latter can bring about as much increased productivity as multiple new hires, CEOs and recruiters invariably fall into the trap of thinking more engineers will produce more (and better) software when the opposite is usually true.?

When a software or operations engineer is transferred into a team, there is a period of adjustment while the new person acclimates to the ways of working in the new team, and the team learns to trust the new joiner. When the new joiner is a new hire, there is an added burden of having to learn the ways of working and the tech stack of the company as well. Often, the team will assign someone to assist the new joiner, who can introduce the recruit to tools and systems and act as an informal coach during onboarding. The time it takes for a new joiner to come up to speed and become productive varies according to skill, experience, and company and can take anywhere from 1 week to 1 month or more. The more senior developer - in terms of tenure or skill - will necessarily contribute less code during this period as they will be focused on their work in addition to the new joiner.??

So, what is an absorption rate, and why is it essential to recruitment in tech? Most people are familiar with the concept, if not the term. How fast can we take on new people without risking a significant reduction in productivity or impacting delivery? Since there will always be a negative impact on short-term productivity when one or more engineers onboard new hires, the question is how much short-term disruption the business is willing to accept for potential mid- to long-term gains from having an additional person in the team.?

Two factors are involved in this calculation: the impact the onboarding process may have in the short term and what adding a person will have on the team’s mid-to-long-term productivity (including quality).

1. Short-term impact will the onboarding process have in the short-term
2. Adding additional people to a team can harm team output as the communication channels reach a saturation point.?

Both of these concepts were described by Fred Brooks in his book, The Mythical Man-Month, in 1975. It takes time for people added to a project to become productive. Brooks also argued an additional reason that adding people to a project team when the project is already late will delay the project even further. When n people have to communicate among themselves, as n increases, their output decreases, and when it becomes negative, the project is delayed further with every person added. Excessive communication overhead is why an optimal software development team size falls between 5 and 9 people, but your mileage will vary. This number can vary depending on the kind of work, who is in the team, how long they’ve worked together, etc. I do not intend to debate that in this article, so for now, we’ll assume that some number between 5 and 9 is optimal.?

A team's productivity will be impacted when the onboarding model requires someone (usually a senior developer) to mentor and onboard the new joiner. And, importantly, the loss of productivity will not be made up for by an additional pair of hands, at least not in the short term. This model is acceptable, and most teams will accept the short-term degradation of one of its contributors in return for the added help later. What does not work, however, is when an incumbent onboards a new joiner, then, immediately after, is assigned to onboard another, then a third, and so on. In this example, not only will the senior developer begin to lose touch with their counterparts in the team and become divorced from critical issues, but the onboarding quality will also suffer.??

When a recruiting team is tasked by leadership with filling positions (and measured according to this metric), there is little calculation beyond raw numbers: We need to hire 200 people this year, or the target is to add 50 new people every quarter with little or no consideration of how to make these new hires productive. Of course, there is also the “hidden” cost of hiring at an accelerated rate: interviews. Interviewing also falls heavily on senior developers, often those who will be expected to onboard new joiners later. This activity consumes their time and reduces the time they spend developing software. For every hire, there are multiple candidates interviewed but not hired. This adds to the workload of engineers. Engineers who are interviewing are not developing.?

Senior developers are rightly concerned with the time they spend interviewing and onboarding instead of developing software. Their concerns are more than just usual complaining; HR and the CEO should take them seriously and optimise for efficiency, productivity and quality instead of hiring and growth. The constant focus on hiring to deliver features is, in the long run, an ineffective response to an ever-decreasing software development speed. In fact, it is one of the it is one of the primary causes for much of that slowness. Companies need a way to reverse this trend despite what external consulting agencies may be telling them. It does not help any executive function to promote hiring alone as a strategic priority. In some ways, the most efficient Talent Acquisition departments already understand this. The rest of the IT world is still learning, and? One needs only to survey bloated Engineering departments in many companies to surmise that there is a lot of room for improvement in hiring.