Thursday, September 1, 2011

A Better Way to Hire?



The labor market has been a challenge for years. A part of the problem is that the market one of the least efficient markets out there. Many transaction opportunities are not advertised, limiting the flow to a small network. And even the more widely advertised positions often have a gatekeeper: HR or recruiter whose short attention span (and, often, lack of ability to discern quality) means that only the "best-branded" resumes get a priority. Like in the supermarket, going for the brand makes the buyer feel more secure and reduces time spent on making decisions. This is a part of the larger credentialism problem that we have as a society.

So is there a better, more meritocratic way to hire? There is a good recent example of that. A NYC-based hedge fund manager, Aram Fuchs, was looking for a junior and a senior analysts to work for him. Instead of playing the "resume game," as he calls it, he managed an open forum, the Capitalist Collective, where anyone, regardless of background, could submit stock ideas, discuss others' ideas or engage in general discussions. Mr. Fuchs recently announced four "finalists", and the process will culminate in a day-long investing conference on September 9th, 2011, featuring speakers, stock speed-dating, and, of course, the grand finale. Along the way, Mr. Fuchs hosted a couple of socials and had calls with some of the participants.

While obviously longer and more involved than the traditional route, the process draws from a much larger audience and the hiring person can observe and interact with the applicants over weeks, thereby developing substantially more valid views on suitability and other important factors. The forum format also allows a lot more contact points with people who are currently working elsewhere. There are unlimited opportunities to show and defend ideas rather than the regular 1-2 stock pitch approach. Finally, the participants know that the opportunities advertised are "real", unlike the phony "openings" that collect stock ideas without any intention to interview or hire.

Let's hope that this approach becomes more widespread with time.

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