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?


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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.