Sunday, November 25, 2012

Perceived value of a company

"Hiring is the most important decision a manager can make"
That is if you can attract enough people to interview, filter and finally hire. When the number of CV you receive doesn't even meeting the number of vacancies you are having, your decision is highly constrained.

Now that I have set foot in the software industry of Vietnam for a while, I learned a couple of things. The job market in Vietnam is abundant in quantity yet desperately low in quality. The situation keep improving over the years with the coming waves of overseas students and local international colleges. But that hardly meets the thirst of this growing country (for many years, Vietnam has been one of the countries with highest growth rate). Despite of this huge demand on high quality workforce, a majority of college programs is sticking with impractical knowledge. The sad fact turns the middle to senior job market in Vietnam really really competitive. Big corps and small startups, both local and multinational, are drawing from a small talent pool and there are obviously not enough fishes for everyone.

Companies of all sizes are positioning themselves different to take advantage in the head hunting game. Hilariously, the ones who are winning the game are the preys, the talented engineers. With an overflowed number of offers and a few mainstream technologies choices that ensure the engineers to be useful in any firm (iOS, Android, Django, RoR, etc..), how are they making their decisions is a very interesting topic. My view point as an engineer is different from that of a professional recruiter and might turn out to be entertaining.

The story of Tèo

Tèo is a well-trained software engineer that has been living in Ho Chi Minh for the last few years. He was an active student that won several merit awards and found a club for hobbyists in his school of computer science. He is the new generation of Vietnamese that every recruiter loves. An hour of Tèo drawing class diagram and slamming the keyboard with customer worths $10. That means Tèo should nod his head at an $3200/month offer, assuming he generates value to the company for every hour he works.

Of course that assumes that Tèo is a rational, decision-making machine that economists love. In fact, Tèo is flesh-and-blood irrational human being who doesn't price his time and calculate the costs and benefits. He has a perceived value of an offer which may or may not be linked to its objective value.

The perceived value of an offer may be higher than its objective-value. Just look at how many people want to be a Apple genius in comparison with the wage. But the perceived can also be lower than its objective value. MailChimp is a successful company and can make good offer, but worried that its PHP developer is not as appealing to others as it actually is.

Back to Tèo, if a recruiter wants to get his nod, then changing the offer is an option, but she can also change his perception.

How people set their perceptions

For a start, it is extremely hard for them to do so in a vacuum. Isolate a fresh grad from the rest of the world and ask him the offer he wants. If he somehow manages to find the question make sense in the situation, the answer is probably derived from his monthly expense during college years, not the value he can possibly generate for the company.

People base their perceived values on reference points. Whenever an offer arrives, Tèo is making sequence of subconscious and intuitional calculation that scans through what his friends are earning, a relative comparison of their capability and employment history.

Software industry of Vietnam is not so young that reference points are hard to find. The industry of Vietnam is pretty outsourcing-centric. Big outsourcing firms, the trend-setter a decade ago, have all stabilized and paychecks are standardized. These references are pretty well-known, like FPT with its own education system and Japan-centric business, VNG with the tendency to localize Chinese games or TMA, the popular first stop for all students from HCMUT. If a new company wants to break through the circle, there is a chance that it is triggering an arms race and the winning chance is equal for one with either deeper pocket or better local relationship. This is the minefield that no startup ever set its foot in for years.

That doesn't mean one needs to copy the reference point. If the company is genuinely positioned higher than its competitors in term of career development, growth potential, working environment or any other unmeasurable factor, a new reference point is set.

The value people perceive an offer to have can depend on their taste. By the time I was a student, I struggled with the question of being a small fish in a big pond or a big fish in a small pond. Some might like it this way, others like another. However, the tribe people belong to can affect their taste. It is not a surprise that there are so many startup and tech companies in Silicon Valley. There have been students coming to the area for un-related programs such as philosophy or geography and end up being engineer in a very ad-hoc way. They are essentially the same people, the changes were in the expectations and sense of value of those around them.

Knowledge is yet another factor influencing people choice. "An intense, self-motivated environment" might sound innovative and exciting to someone who spent a few years in a big bureaucratic corp. The same sentence sounds like extremely stressful workplace for team members of an unfortunate startup. Over the years I have found some other mismatches in wording and what actually happens.

"Our fast-paced company" - We have no time to train you. 
"Must have an eye for detail" - We have no quality assurance
"Good communication skills" - Management communicates, you listen, figure out what they want and do it

So many factors are getting between Tèo and his right employer. In this competitive market, how can one company stand out to catch Tèo attention while not being an attention ho? Stay tuned. Here are some inner thoughts