Many EA orgs say they place a lot of financial value on their previous hire. What does that mean, if anything? And why aren’t they hiring faster?

In our 2017 and 2018 sur­veys of EA or­gani­sa­tion lead­ers, the me­dian re­spon­dent re­ported be­ing will­ing to forego very large amounts of ad­di­tional dona­tions to hold on to their re­cent hires—sev­eral hun­dred thou­sand dol­lars for a ju­nior em­ployee, and mil­lions for a se­nior one.

How­ever, com­menters on this fo­rum and el­se­where have pointed to two ob­ser­va­tions that seem to be in ten­sion with these figures:

  • Th­ese or­gani­sa­tions typ­i­cally aren’t hiring a large num­ber of peo­ple, opt­ing in­stead for a more grad­ual ap­proach (though it’s some­thing like 30-50 over the last year, so more than it might seem).

  • Can­di­dates who on their face seem qual­ified are some­times turned away af­ter they ap­ply.

How can this make sense?

One pos­si­bil­ity is that the sur­vey re­sponses are wrong. We list weak­nesses with the method­ol­ogy in the ar­ti­cle about the sur­vey. But there are other pos­si­bil­ities.

Below we offer a po­ten­tial ex­pla­na­tion of what is go­ing on. In the pro­cess we hope to clar­ify that the an­swers to the above sur­vey ques­tion are far from a de­ci­sive con­sid­er­a­tion in favour of work­ing at those or­gani­sa­tions.

Most im­por­tantly, we asked the or­gani­sa­tions to value typ­i­cal re­cent hires. So this is a an ex post es­ti­mate of the value of re­cent hires, rather than an ex ante es­ti­mate of the value of fu­ture hires.

Fu­ture hires need to be searched for, se­lected, trained and come to be trusted. Th­ese are large ad­di­tional costs, since they con­sume se­nior staff time. Even if you do ev­ery­thing right, there’s a good chance that new hires won’t work out. The or­gani­sa­tions also have a limited num­ber of man­age­ment slots in which to add new staff. Read more in this great post by GiveWell.

Th­ese fac­tors mean both that ex­ist­ing staff are very valuable, but the ex­pected re­turns of hiring new staff may not be high—and in par­tic­u­lar, may not beat the re­turns of other ac­tivi­ties.

What does this mean for whether you should try to work at one of these or­gani­sa­tions? If you’ve already got an offer (or could eas­ily get one be­cause they’re already fa­mil­iar with your work) then work­ing there is po­ten­tially very im­pact­ful. It also means that it’s valuable to find out if you could get one of these roles, so long as it’s not too ex­pen­sive to learn. But it doesn’t nec­es­sar­ily im­ply very much at all about the like­li­hood of ad­di­tional jobs open­ing up at these or­gani­sa­tions, or the com­pet­i­tive­ness of op­por­tu­ni­ties.

We pro­pose that these jobs be seen as great roles to aim for, but with a high risk of not work­ing out. If you think you might be a good fit, then look for cheap ways to test them out, but do this with a solid back-up plan, so you can eas­ily switch to some­thing else if it doesn’t work out. If you do get an offer, and you’re mo­ti­vated to take it, then it’s likely a top op­tion.

More broadly, we recom­mend us­ing the pro­cess here to gen­er­ate the best op­tions for you. Ul­ti­mately we should all be aiming for the best thing we can per­son­ally do.

Below, we go into some more depth on the rea­sons for the above.

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If an or­gani­sa­tion’s pre­vi­ous hire is re­ally worth hun­dreds of thou­sands of dol­lars, let alone mil­lions, shouldn’t they be snap­ping up more staff mem­bers by the pound? Here are some pos­si­ble rea­sons that they aren’t:

  • The stan­dard ad­vice most new pro­jects get is to ‘hire slowly’ and only when you’re con­fi­dent it’s the right de­ci­sion. That’s what 80,000 Hours was told dur­ing Y Com­bi­na­tor, and we have stuck to it. Hiring quickly can cre­ate many prob­lems, such as greater difficulty co­or­di­nat­ing a team, con­fu­sion about how the or­gani­sa­tion works and what it’s try­ing to do, plus fac­to­rial growth in pos­si­ble sources of in­ter­per­sonal con­flict.

  • To get around these grow­ing pains, or­gani­sa­tions must in­vest in train­ing, re­la­tion­ship build­ing, and so on—but they can only do this so fast. The groups sur­veyed are all fairly small (un­der 30 peo­ple). If an or­gani­sa­tion has set it­self a max­i­mum per­centage growth rate, we can imag­ine it as hav­ing a limited num­ber of ‘hiring slots’ each year. In that cir­cum­stance, i) a *bet­ter* hire within that given num­ber of slots is very valuable, ii) a hire who has already made it past these bar­ri­ers is even more valuable still, but iii) many rea­son­able ap­pli­cants who aren’t one of the top few can­di­dates will have to be turned away, sim­ply be­cause they can’t on-board so many peo­ple si­mul­ta­neously.

  • A sin­gle ‘bad hire’ who be­comes a dis­grun­tled em­ployee, or ex-em­ployee, can de­mor­al­ise a team, and tem­porar­ily undo the work of sev­eral good hires. This rightly makes man­agers con­cerned about down­side risk. Even in well-run pro­jects, a sub­stan­tial frac­tion of hires usu­ally don’t stay for the long term, and end up be­ing a net drain to a pro­ject once the costs of find­ing and man­ag­ing them is ac­counted for. A de­gree of risk aver­sion can mean that even if the ex­pected value of new hires is high, you might still want to hire slowly.

  • “Trust bot­tle­necks” can be sig­nifi­cant and take a long time to re­solve. Many pro­jects don’t trust new staff mem­bers to do high-stakes tasks with­out a sub­stan­tial pe­riod of train­ing and men­tor­ship. Even some­one who usu­ally performs well could se­ri­ously screw up from time to time due to lack of ex­pe­rience. An or­gani­sa­tion may highly value some­one who knows enough that they trust them to ‘hit the ground run­ning’ with­out much over­sight, but place much less value on some­one who can’t.

  • Our ques­tion asked about re­tain­ing some­one who is already work­ing for you. The costs of find­ing those folks and con­vinc­ing them to work with you have already been paid and can’t be re­cov­ered. But when an or­gani­sa­tion looks for­ward, they know that hiring some­one else will be a difficult and time-con­sum­ing pro­cess that will have to in­volve se­nior staff. While an or­gani­sa­tion may place great fi­nan­cial value on good hires, it may place similarly great fi­nan­cial value on other things its man­agers alone can do—like mak­ing grants, writ­ing up re­ports, meet­ing gov­ern­ment offi­cials, and so on. If they de­cide to hire, then it’s very valuable for them to get bet­ter ap­pli­cants. But they might rea­son­ably de­cide it’s not worth the op­por­tu­nity cost of do­ing so.

  • An or­gani­sa­tion may not know what to do with ex­tra dona­tions, and so not value them very highly. This can blow out the num­ber of dona­tions they’d be will­ing to give up to re­tain some­one, even if they don’t value that ex­tra hire very much in ab­solute terms. (This is avoided if the sur­vey re­spon­dent con­sid­ers the op­tion of re­grant­ing the money, but we ex­pect they of­ten ne­glected this pos­si­bil­ity.)

  • An ap­pli­cant may in fact have the abil­ity to do a good job, but not yet be able to demon­strate it. Or­gani­sa­tions can only hire based on their per­cep­tion of how likely some­one is to work out.

  • Some­one could have the par­tic­u­lar abil­ities you’re look­ing for, but be ruled out for some other rea­son—for ex­am­ple, a poor abil­ity to re­solve in­ter­per­sonal con­flicts.

  • Some of the or­gani­sa­tions sur­veyed take pretty un­con­ven­tional moral or epistemic stances. This raises the im­por­tance of value al­ign­ment, be­cause they can’t count on com­mon-sense to keep some­one in sync with the rest of the team. This can un­for­tu­nately force them to turn away peo­ple who look suit­able on pa­per.

  • Read more in this ar­ti­cle by GiveWell, Why We Can’t (Sim­ply) Buy Ca­pac­ity.

The up­shot of the above is that:

  • An or­gani­sa­tion re­port­ing be­ing ‘tal­ent con­strained’ doesn’t nec­es­sar­ily in­di­cate that they are about to hire a large num­ber of peo­ple.

  • An or­gani­sa­tion can be held back by hiring and still have a high bar to hire any­one.

  • The fact that a given pro­ject places high value on their pre­vi­ous hire, doesn’t im­ply that most read­ers should re­ori­ent their ca­reers around try­ing to work there. In­deed in one re­spect that in­for­ma­tion points in the other di­rec­tion: the rea­son they value that per­son so much may in fact be that there are very few pos­si­ble sub­sti­tutes, be­cause what they know or can do is es­pe­cially rare. Rather peo­ple should aim for those po­si­tions if do­ing so might be their com­par­a­tive ad­van­tage within the com­mu­nity.

We think our ar­ti­cles about the sur­vey and tal­ent gaps haven’t high­lighted the above as much as they should.

The num­bers in the sur­vey are most rele­vant to some­one who is offered a job at one of these pro­jects, and is de­cid­ing whether to do that, or earn to give, or do di­rect work el­se­where. Added: Though even then, in­so­far as they are only part way through the dis­cov­ery and train­ing pro­cess, the num­bers will still be in­flated.

One way around the bot­tle­neck de­scribed above is sug­gest­ing that our read­ers go work for larger es­tab­lished or­gani­sa­tions which have the ca­pac­ity to ab­sorb many more peo­ple si­mul­ta­neously, thanks to more ex­ist­ing staff or scale­able train­ing pro­cesses. Ex­am­ples of this could be gov­ern­ment agen­cies, ex­ist­ing foun­da­tions, or some forms of earn­ing to give. That is some­thing we will be try­ing to do more of over the next year.