Why Do Companies Actually Hire?

Seems like an incredibly stupid question, right? Because they need people to do things, duh! But in reality it’s a bit more multi-tiered and complicated than just that, and I think it’s worth 1–2 minutes of exploration around why companies actually hire.

The utopian reason

They are growing and they’ve strategically looked at where they need solid performers in order to grow more or better support existing operations in the name of client/customer success.

I would guess this happens in maybe 3–5% of hiring scenarios.

The more common reasons

A partial list:

• A hiring manager felt busy.
• The company could get x-percentage tax break if they deliver y-amount of jobs in a new or existing location, so they rapidly create jobs to avoid taxes.
• A hiring manager wanted more direct reports to feel relevant or important or get closer to the power core themselves.
• An executive looked at numbers and thought they were trending in the wrong direction, convened some panels/committees to discuss the bad trend, and they decided to hire more of a certain role, i.e. BDR or sales manager or key accounts.
• Someone yelled the loudest in meetings where extra money was up for grabs.
• The company wants to prove “growth” to investors, but still isn’t making money on their own, so they show “growth” not financially but with hires, henceforth they can include a 200% headcount growth slide in their next investor round deck.
• It was a role that truly needed to be another, more comprehensive role — but someone thought they could find a multi-skilled person on the cheap, i.e. 17 skills for $35,000/year.

These scenarios probably make up 80% of hiring, I’d reckon.

Why does this happen?

I’ve written about bad hiring for years. This is maybe my best thing about why the process is broken. In short answer, it’s because of subjectivity, bias, analysis paralysis, and the human need for relevance in chaotic, layoff-driven times. We’ve been trying to throw tech at hiring for decades; that hasn’t really made it much better, and candidates are resentful (think “upload the resume” then “retype the resume into fields.”) Humans are subjective creatures. We’re all prone to multiple types of bias. We like people who come across like us or have similar backgrounds. We put halo effects on those people. And we sometimes make people go through 10–12 meaningless interviews because everyone wants to “weigh in,” which is the relevance portion of the equation. Remember: a lot of managers spend most of their week justifying their jobs, not being productive.

Why does your job need to exist?

Important question. I’ve been burned by this in numerous jobs — you start with all this passion to do a good job, and then realize you’re basically sitting at a desk, checking a box, and some days are busy but many are comatose-inducing. Job role is very important, and companies aren’t very good at it. It’s for all the reasons above: busy busy busy culture, hair-on-fire management, tasks instead of strategy, relevance, bias, subjectivity, someone yelling louder than someone else about what they need, etc.

I’d say that in most places I’ve gone and worked, be it full-time or 1099/contract work, I can find 3–4 completely overlapping roles within a day or two. Usually I’m one of them. (LOL?) But you’ll see 3–4 BDRs working the same leads and territory, or 10 people that do niche content when two people could do all of it, or six “marketing specialists” when it would be an above-average workload for one person, etc. It’s all very common, actually.

And that’s because there’s a good chance your job is the result of a relevance posture or a tax situation more than a truly productive need.

Takes?