> The best thing you can do for employees—a perk better than foosball or free sushi—is hire only “A” players to work alongside them. Excellent colleagues trump everything else.
> Most companies spend endless time and money writing and enforcing HR policies to deal with problems the other 3% might cause. Instead, we tried really hard to not hire those people
> Netflix didn’t pay performance bonuses, because we believed that they’re unnecessary if you hire the right people.
Oh, so that's what you're supposed to do! Of course, you must mean you have a foolproof system for finding "A" players in your candidate pipeline then, and then it's just a matter of selecting only the best!
Sorry for the snark, but these things are practically truisms. Everybody wants to hire the very best people. Everybody wishes they didn't need incentive structures, because in an ideal world everybody is always incentivized to just do great work all the time because they're such an "A" player.
But really, unless they back it up with any real evidence that they've actually solved the hiring problem and found a reliable way to determine who the good candidates are, I'm more apt to call the whole thing luck.
Or maybe, just maybe, all the things Netflix is doing (lax vacation policies, no bonuses, easy to fire people) are just things companies should be doing regardless of how supposedly good at hiring they are.
> We also believed in market-based pay and would tell employees that it was smart to interview with competitors when they had the chance, in order to get a good sense of the market rate for their talent
Oh god, so it is true! We've had a few Netflix candidates interview, seem a great fit for a position, made them an offer, and they just reject it and never talk to us again. A rumor got around that Netflix candidates are all just using the interviews as leverage instead of being actually interested in the job. As a result, we no longer interview candidates who are currently working at Netflix, because we can never believe that they're serious about it.
It's a huge risk to your employees to do something like this, because once word gets out about it, it becomes seriously difficult to explore other jobs while you're still employed.
We've had a few Netflix candidates interview, seem a great fit
for a position, made them an offer, and they just reject it and
never talk to us again. We started developing a theory that
Netflix candidates are all just using the interviews as leverage
instead of being actually interested in the job.
Have you considered that you're offering them less than Netflix is currently paying them? Netflix pays a _lot_.
And that range is likely a shade low -- not because Netflix treats H-1Bs as cheap labor (I work at Netflix and we don't, we treat visa workers very well) -- but because I would guess that the more senior visa workers who are paid more are more likely to be on green cards by now, and are no longer part of the public H-1B disclosures.
As for the parent comment: I do wonder... I'd hazard a guess that sometimes recruiters have dropped the ball, and not discussed salary ranges with the Netflix employee (and maybe they aren't allowed to), leading to an offer that's 1/2 or 1/4 what they are making.
And as for the parent topic... I couldn't bring myself to go interview _just_ to get salary intel, knowing I didn't want the job. And I can't see many of my coworkers doing it either. There would have to be a chance that I'd take the job.
It's not. Netflix has a revenue per employee figure in the $2m+ range. That's investment bank levels of revenue, and $400k is about what you make at an investment bank 5-7 years out.
Software companies are making investment bank levels of money these days, so why should it be surprising when software developers are getting paid like investment bankers? What should be more surprising is software companies making $1m+ per employee where developers aren't paid like that.
You can easily get 300K after a couple of years at a big company (e.g. AmaGoogAppBookSoft as patio11 likes to put it). You do not need to be an especially talented engineer at such places to draw those salaries.
I certainly wouldn't turn down a higher salary, but it's one thing to say that higher salaries ought to be normal, and quite another thing to say that $400k "is not a jaw dropping amount" - based not on software industry practices, but on one's expectations about what software salaries ought to be, coming from practices in some other, unrelated industry.
In the software industry, no matter what one thinks the situation ought to be, the current fact of the matter is that a salary of $400K would be very unusually high, and so I am taking issue with rayiner's assertion that "it's not jaw dropping". It might be reasonable to say "it shouldn't be jaw dropping", based on the principle you're describing above, but that would be a different claim.
But $400k of $2m calls for 20% profit margin for salaries alone. So unless the average (accounted for C level compensations) is much lower, we are easily looking at 50% profit margins when business costs are added. I would not call that competitive
This has got to be one of the most ridiculous, out of touch things I have ever read on HN.
You can't on one hand go on about market forces etc etc and say that because Netflix's RPE is high its employees should be paid for. RPE has absolutely no bearing on the value individual employees bring to Netflix.
I have no doubt that there are developers at Netflix making $400k+. To imply that it's not a jaw droppingly large amount of money for a software developer to make is borderline insanity.
As a software developer, I find your comment to be the most ridiculous.
Yes, it's on a higher end compared to what you would normally see but I would say that the regular salaries are too low. As a software developer, we have the capability to generate tremendous amount of value. Currently, most of the value is captured by C level executives (getting paid millions). Why should software developers not getting more in proportion to the value they add?
Compensation is based on competition for the limited supply of top developers. High RPE businesses are, by definition, ones that can make a lot of money with a limited number of people. More importantly, they are businesses in fields where their competitors can do the same. Accordingly, it is totally unsurprising that high RPE businesses pay their employees lots of money, whether we are talking about software companies or investment banks.
GP here: that doesn't explain it then. We've made offers to candidates that have been very comparable to that, but only if you include stock, which it looks like Netflix doesn't offer.
I wasn't involved in the salary negotiations of the Netflix candidates so I can't tell for sure whether they had similar offers, but I would have no reason to believe otherwise, because since then I've been involved with other candidates and I now know what our guidance is.
But this was a year ago. This was a guy that was at Netflix for a while, so my guess is his salary hasn't grown to keep pace with the "new hire salary inflation" the whole industry has been experiencing, so he went to his manager and asked for a raise, which is when this quasi-policy of theirs starts to kick in: "go interview some places, bring us your offers and we'll match it!" And that's what happened. In all likelihood we gave him an offer higher than he made (new-hire salary inflation and all that), he took that back to Netflix and lived happily ever after.
But after a couple times more of that happening, and you read stuff like this, you no longer take Netflix candidates seriously.
I think it's obvious you've won that argument, but I just wanted to chime in so you hear it from someone else.
1) Netflix has confirmed they recommend this "non-serious interview" approach, and
2) The candidates are just going silent after an offer. If you were simply not offering enough, or the wrong kind of compensation, you would expect to hear back something from some of them.
Really scummy of Netflix to encourage this. Why not just ask an internal recruiter about expected compensation packages? There seem to be a lot better options than just burning up their time like that.
Totally agree. If the salary offered at the end of a successful interview is not going to be high enough, a lot of time has been wasted on both sides. But it seems to me that a salary discussion at the beginning of the process is quite rare.
That is why I like companies like Hired.com where you can see what salary is being offered by various companies. It gets that step very early in the process.
It's possible, sure. I haven't been involved in the negotiation phase of any of the candidates so I couldn't tell you for sure how much back-and-forth there was. I can only tell you that the company I work for is very competitive here (think top 5 bay area companies.)
But when you see that it's literally Netflix's message that employees should go interview somewhere and bring in the offer to get their salary bumped, it starts making you not trust that the candidates are actually serious.
(Also I edited my comment after, but before I saw yours: We didn't just develop a theory about it, but there was a rumor that Netflix had this internal policy. I didn't believe it at first but here it is.)
Encouraging people to interview elsewhere isn't just about salary - it's more comprehensive than that. We only want to have people on our team who really want to be there. So people often leave their roles at Netflix to pursue other things. Many move to startups as early employees or founders so it's not at all just a question of compensation.
Of course, you must mean you have a foolproof system for finding "A" players in your candidate pipeline then, and then it's just a matter of selecting only the best!
It lists all the people who were drafted ahead of Stephen Curry, "arguably the greatest basketball player in the world right now". Curry was drafted seventh. The others were:
1) Blake Griffin, 5 all star games
2) Hasheem Thabeet, 0 all star games
3) James Harden, 3 all star games
4) Tyreke Evans, 0 all star games
5) Ricky Rubio, 0 all star games
6) Jonny Flynn, 0 all star games
Even in the very limited domain of professional basketball, it's impossible to predict who will be the superstars and who will quickly wash out of the league.
A.) The 7'+ guy - because being able to chew gum and walk at the same time is rare at that height, and deserving of a number 2 pick - see Sam Bowie in 1984, over MJ.
B.) Minnesota inexplicably picking two point guards back-to-back. Dumb, dysfunctional teams frequently make poor draft decisions.
C.) All six players were drafted into the Western Conference, which has been consistently more talented and more competitive than the East since Jordan retired the second time. Tyreke Evans could probably have gotten a couple All-Star nods in the East - after all, he did win Rookie of the Year, gunning for an awful Kings team.
D.) Curry fit the archetype of the mid-major/small school high-usage gunner coming into the draft. He put up incredible numbers, but against second and third-tier competition, as pretty much the only scoring option on his teams. This doesn't often translate to the NBA level. See Jimmer Fredette, or Adam Morrison, or Doug McDermott.
Everyone say they want to only hire A players, then crappy people interview, and they get an offer anyway because "they had so much potential!", "we can train them where other companies didn't", and "I didn't think he sounded THAT much of an asshole". Oh, and the ever popular "I think we have enough easy shit to do for this guy to be useful!".
> Oh, and the ever popular "I think we have enough easy shit to do for this guy to be useful!".
I knew a guy who was hired for similar reasons: the company needed a warm body to do some really basic scripting, so their sole criteria was "does this guy have a beating heart and working hands?".
They ended up hiring the 17-year-old high-school dropout who was working in the coffee shop (owned by his father) at our office building, because the head of software is a coffee fiend and he makes good coffee. Since they just needed a warm body, why not hire him? Over the next year or so, I accumulated so many stories about his antics.
The one that tends to shock people the most involved him playfully threatening a co-worker with a knife in the elevator because his co-worker snarked at him for pushing all the buttons. No, he didn't get in trouble for it, but when the co-founder found out (well after the fact), he told him not to ever bring the knife to work again (he said he would've just fired his ass if he actually witnessed it, but he didn't even find out about it until a couple of weeks after it happened). And I have plenty more stories where that came from.
He was finally let go when, a year and a half later, he took a second job as a waiter (his dad had long since fired him from the coffee shop), and he focused so much on his new job that he simply stopped showing up at this one or even so much as calling in to tell us he can't make it. After a month of that, he removed himself from the company's Skype groups (yes, we used Skype instead of Slack) because "they were making [his] phone blow up" with stuff he found useless, so the company removed him from the payroll. Even before he stopped showing up, everyone agreed he was a useless do-nothing. It took him three months to return his company laptop after that, and the co-founder was on the verge of filing a police report over it. He only returned it because I walked down to the coffee shop and told his dad the co-founder was so pissed he'd set a deadline on when he'll go to the police, and his dad promptly called him and made him return it that day.
His biggest contribution to the company was providing me with enough material to shock and entertain anyone I meet.
Wow, that's really messed up. So they're encouraging their people to waste other companies time?
That also is really unfortunate for people actually trying to switch jobs from Netflix because I would also ban them from interviewing if I saw that kind of behavior.
> Most companies spend endless time and money writing and enforcing HR policies to deal with problems the other 3% might cause. Instead, we tried really hard to not hire those people
> Netflix didn’t pay performance bonuses, because we believed that they’re unnecessary if you hire the right people.
Oh, so that's what you're supposed to do! Of course, you must mean you have a foolproof system for finding "A" players in your candidate pipeline then, and then it's just a matter of selecting only the best!
Sorry for the snark, but these things are practically truisms. Everybody wants to hire the very best people. Everybody wishes they didn't need incentive structures, because in an ideal world everybody is always incentivized to just do great work all the time because they're such an "A" player.
But really, unless they back it up with any real evidence that they've actually solved the hiring problem and found a reliable way to determine who the good candidates are, I'm more apt to call the whole thing luck.
Or maybe, just maybe, all the things Netflix is doing (lax vacation policies, no bonuses, easy to fire people) are just things companies should be doing regardless of how supposedly good at hiring they are.
> We also believed in market-based pay and would tell employees that it was smart to interview with competitors when they had the chance, in order to get a good sense of the market rate for their talent
Oh god, so it is true! We've had a few Netflix candidates interview, seem a great fit for a position, made them an offer, and they just reject it and never talk to us again. A rumor got around that Netflix candidates are all just using the interviews as leverage instead of being actually interested in the job. As a result, we no longer interview candidates who are currently working at Netflix, because we can never believe that they're serious about it.
It's a huge risk to your employees to do something like this, because once word gets out about it, it becomes seriously difficult to explore other jobs while you're still employed.