nobody likes job interviews they waste a lot of time and they waste a lot of company time every hour you spend in an interview the company must pay the person interviewing you so why the is it becoming so common for profit-driven companies to ask for multiple rounds of interviews for even the most basic of jobs when most of the time they are just going to ghost you anyway competing against a smaller pool of people now you only have maybe three or four of the people you are fighting to win the job scheduling interviews sometimes those
interviews have got multiple rounds maybe one two three four rounds of interview if you spend any time looking for a job in today's job market you probably realize how broken most major corporations hiring processes are filling a position is an expensive process that companies are only making more expensive for themselves some companies sit down with hundreds of people through as many as 17 rounds of interviews that's hundreds of man hours spent finding one person for one job when just 20 years ago it was rare to do more than two rounds of interviews according to a
report by the Harvard Business review this trend is also leading to worse outcomes for employers High performing employees are pulling out of job applications after being asked to come back for round after round of interviews so companies are being left with only the most desperate applicants that are willing to jump through their hoops this is wasting people's time costing businesses lots of money and creating worse outcomes for everyone but there are four reasons why businesses don't care and will probably keep increasing the number of interviews they make new applicants do the first reason is that
it increases their leverage in the negotiating process proc according to a report by the Bureau of Labor Statistics it now takes the average person 24 weeks to go through the hiring and interview process to get into a new job if you are unemployed and looking for a new job then after 24 weeks of interviews you are going to be desperate to accept anything and you won't risk losing the offer by negotiating a better salary or benefits that's smart if you do have a job this strategy can still work for you a current employer is only
going to be so patient about you taking time off to attend interviews so going through this process once will be hard enough so you take the job or stay at your current employer that is angry at you for missing so many days according to the same report the number one reason that people turned down a new job was because the offered wage was too low and in 2023 people are also turning down jobs that don't offer work from home flexibility about a third of the managers want employees to return in order to monitor them and
about a quarter of those managers want employee to return to ensure that they take shorter breaks respondents were much more likely to overlook this though if they had gone through an extended hiring process employees are also less likely to leave a company if they believe it was a real challenge to secure their job in the first place so management can use a difficult interview process as a staff retention technique before people even become staff psychologists call this the sunk cost fallacy if you have already spent so much time pursuing a job opportunity you don't want
it to be a waste by not accepting it if you get an offer hiring managers just call an effective negotiation technique for the employers this is a calculated ated expense the hours that they need to pay HR and a hiring manager to sit in an interview room will be paid for by forcing you to accept a lower starting salary for your entire career with that company other companies and hiring managers are not this smart but getting the upper hand over your pay and benefits is just the first reason so it's time to learn how many
Works to find out why you have to sit through so many interviews to get a job now this week's lesson was sponsored by my newsletter compounded daily there are lots of interesting stories happening every week that I can't share with you all because they just wouldn't do well with the YouTube algorithm but by signing up to my totally new totally free email newsletter you can get interesting stories like how NATO started a VC fund this newsletter will cover interesting Finance business and economic subjects so if you're interested in what I post here I'm certain you'll
like what I post there in my opinion it's fun to read and you'll walk away every time learning something new from the perspective of me a former investment banker signing up is easy use the link in the description to go to compounded daily.com and then sign up with your email that you use the most the second reason that companies have started to ask you to come in for multiple interviews is because they think it will magically make them a better company most business managers do not read Workforce surveys from the Harvard Business Review they only
hear about companies like Google meta and apple requiring multiple rounds of interviews for even so much as a summer internship roles in big Tech require a lot of hard skills and because they offer such competitive salaries benefits and career opportunities they have far more applications than jobs to give out Google received 3 million job applications in 2021 and hired only 7,000 people a former senior vice president of product management with Google told CNBC that quote hiring took 6 to 9 months and people sat for 15 to 25 interviews it was an awful experience that's a
quote from the person that did the hiring so it's even more stressful for the people that are seeking a job Google and other large tech companies need to do this though so they get the best employees from the huge list of app applicants they receive a single good developer could make the company hundreds of millions of dollars and a single weak developer could cost just as much what we're doing as a consequence of being in this period is we're being very deliberate on our hiring that means we're continuing to hire but not everywhere in the
company are we hiring engineers at these companies can also make seven figures a year before they are 30 so even the most outstanding applicants are willing to jump through multiple rounds of interviews because there is nowhere else that they can reliably earn this much money in my own personal experience I did 10 interviews with the firm that offered me a job as an investment banking associate each interview covered something different so there were clear meetings to test Financial technical skills another for market knowledge and I had a one-on-one meeting with an MD to test interpersonal
skills and a panel with senior Bankers so that I could ask my own questions for these jobs firms both have a greater need to interview candidates rigorously and they get away with doing it because they will pay successful applicants life-changing amounts of money regular managers at regular companies interviewing for regular jobs with regular salaries have ignored those details and just seen that prestigious companies that everybody wants to be like have lots of interviews so they should have lots of interviews too the third reason that you are being forced to do so many job interviews is
that it's not their time they are wasting hiring managers and HR departments rarely have any direct ownership of the business they are hiring for and they get paid for the time they spend doing interviews if they can fill up their own calendars with interviews they can even justify to their own managers that they need additional Manpower on their teams to share the workload a bad hire can also be detrimental to the business and make the actual job of the managers in charge of hiring a subordinate much harder on a daily basis leaders want these very
uh elaborate hiring processes just so that if it goes south there's blame to go around the cost benefit is clear to managers looking out for their own interests they need to be extremely careful about who they hire and if that takes a long time then so be it managers assume safety and numbers if they do lots of interviews they will filter out bad potential hires but it doesn't work some people are just better at interviewing than others and apart from roles like sales or Team Management there isn't any overlap between interview skills and job performance
you may have noticed that this has only become worse as companies have started relying on recruitment agencies to fill more jobs thirdparty job recruiters make their money by placing candidates they find with companies they sell their services to the hiring company will pay the recruiter a commission for role they fill usually paid out in three stages one when an applicant first takes the job a second at 6 months and a third once the applicant has been with the company for a full year you win according to an industry report produced by LinkedIn the demand for
recruitment Services has increased by over 25% since the start of the pandemic as companies have had to adapt to a changing job market and the changes that came with online interviews the hiring manager for a company looking to fill a role doesn't actually pay the recruiter until they hire someone so they have an opposing incentive the recruiter wants to fill the job as quickly as possible with someone who is just good enough to hold the job for 12 months and the hiring manager wants to sample as many candidates as possible before taking the risk of
hiring someone and paying a commission good recruiters will normally interview candidates before they recommend them to one of their clients that's looking for a new employee so the rising popularity of recruiting firms means that you are likely to end up doing at least one extra interview when you start looking for your next job the fourth reason that you need to sit through so many job interviews is because a lot of companies want a reason to reject you the US Department of Labor mandates that before an immigrant can be offered a job in America the company
employing them has made every effort to ensure that the admission of foreign workers to work in the United States on a permanent or temporary basis will not adversely affect the job opportunities wages and working conditions of American workers this is not a they took our jobs thing sometimes companies will want a foreign worker because they are the best person for the job but the only way to offer them a role is to show that they made every effort to hire an American First and the same goes in other countries as well more often than foreign
workers companies just want to hire internal candidates or people they already know but company policy dictates that they must advertise the role externally unfortunately for you that at least once in your career you are going to go through a series of interviews where the company just needs to tick a box before they give the job to the person they wanted to in the first place this is also the reason why most of the time if you are unsuccessful applying for a job you just get ghosted if a company gives any reason for not hiring you
over someone else there is a potential that they expose themselves to Legal liability if they say nothing they are safe in the past 12 months the job market has been defined by Trends and buzzwords like the great resignation quiet quitting quiet hiring quiet firing rage applying loud quitting and my new personal favourite Resenteeism most of these all meant the same thing nobody knew what the was going on and that is the fourth reason why company started to love doing multiple rounds of job interviews it let them hedge their bets on the future companies simultaneously didn't
have enough talent and also had too many employees announcing layoffs or hiring freezes sent a bad message to investors and existing employees especially in businesses where a portion of employee compensation is paid out in Company stock options as a way to force employees to stay loyal Tech and finance companies paid big bonuses but they pay them as restricted stock units shorten to rsus that the employees are not allowed to sell for a period of time the industry average is 2 years if the employee leaves the company before their rsus are released they lose them so
anytime an employee quits they will be giving up 2 years worth of bonuses that they have already earned psychosocially people are much more motivated by loss than gain so restricted stock is a great way to force staff loyalty it's a scummy tactic but normally these bonus structures are only given to employees that are very valuable to their companies and are already making a lot of money other companies also offer signing bonuses to compensate new hires that they poach from their competition for the rsus that they will never be able to Cash Time stock bonuses only
work when a company's Workforce thinks that those options will be worth anything once they are allowed to sell them if a company stops hiring that's a good sign to everybody that they are no longer growing and if a company is not growing its Shares are not going to be worth as much to the employees waiting to cash them out so it becomes a good time to leave even if companies are not trying to avoid scrutiny a hiring process is a good strategy to see if the role was really needed at all if someone quits their
work can be delegated to their co-workers on a temporary basis if the company takes a few months to hire a replacement they can assess if tasks are still getting completed by the team with a lower headcount if they are they just cancel the job search if they are not they can just pick from one of the candidates that they have running through multiple rounds of interviews and is desperate to accept any job they get offered the bonus reason that companies are making you do so many job interviews is because they know that even if they
don't end up hiring many people just the act of looking like a job Creator can lend them significant political influence go and watch my latest video over on how history Works to find out how the Dupont family used this shrewd tactic and others to go from a penniless family making watches to a 300-year-old billion dollar Dynasty that makes everything if you want to watch these videos a day early and get articles that will never be made into videos for YouTube then subscribe to the email newsletter compounded daily to keep on learning how money works
