Microsoft's personnel puzzle

As rivalry for talent heats up, company tries to address its reputation for arrogance in recruiting.

Tech Culture
Arthur Sorkin has been courted by Microsoft on several occasions, but the computer scientist keeps saying no to the software giant's overtures, at times finding the company's attitude arrogant.

Sorkin, who holds a doctorate in computer science from the University of California, Los Angeles, said he first received an unsolicited invitation to Microsoft's Redmond, Wash., headquarters in about 2000, on the recommendation of a senior Microsoft manager.

But rather than attempt to win him over as a prize prospect--Sorkin specializes in operating system design and computer security, among other areas--Microsoft interviewers challenged him with a technical "pop quiz," he recalled. No one tried to sell him on either the company or the job, he said. He withdrew his application.

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What's new:
Microsoft has attracted a reputation for arrogance in its personnel practices, which has put off some would-be job candidates.

Bottom line:
Now that the software maker finds itself competing for talent with a host of new start-ups and established rivals, it is working on its recruiting.

More stories on recruiting

Then, during the past year, Microsoft called Sorkin to say it had scheduled a phone interview with him for another job. He hadn't applied for it, and no one had asked if he was interested.

"It displayed a certain degree of arrogance and presumption," Sorkin said. The approach also backfired: The consultant, who splits his time between Los Gatos, Calif., and Mesa, Ariz., didn't join the software maker.

Microsoft won't comment on Sorkin's claims. But he is one of many observers within and outside of Redmond who's raising questions about the way the company recruits and retains its work force. The issue has come to the fore in part because of comments made by internal Microsoft recruiter Gretchen Ledgard, who blasted some of her company's managers as "entitled, spoiled whiners" who assume that everyone wants to work for Microsoft.

Ledgard's comments also lifted the curtain on a broader debate about personnel practices at Microsoft, which now finds itself competing for talent with a host of new start-ups, and established rivals such as Google, IBM and Sony.

Microsoft employee location

Among the charges leveled at Gates, Ballmer and crew: Job candidates have been turned off by Microsoft arrogance, and the company's extensive interview process works against hiring fresh thinkers.

The company is working to change its long-standing reputation for haughtiness in hiring, said Abilio Gonzalez, general manager in charge of recruiting. He said Microsoft is trying to convince job seekers that the world's biggest software company is a great place to work, "instead of assuming that everyone would want to work at Microsoft." Microsoft boasts that about 90 percent of those offered jobs these days accept them--a higher rate than in past years.

Redmond in a bigger boat
Of course, Microsoft, which is seeking to defend its turf in operating systems while expanding into newer areas such as desktop search, isn't alone in facing a tougher climate when it comes to competing for employees.

Big tech companies in general are up against challenges that include diminished interest in the computing field on the part of American students, who have seen the tech industry falter and offshore outsourcing emerge. Chairman Bill Gates himself recently took to the road to persuade students to consider computing careers.

Another shared difficulty for established tech players is a revival of the start-up scene. In the wake of the dot-com collapse, big companies had an easier time attracting and retaining talent, suggested Jonathan Visbal, the managing director of the Silicon Valley office of executive search firm Spencer Stuart. After so many start-ups turned belly-up, "many people chose to stay with stability," Visbal said.

Venture capital investment is rising again, meaning there are more opportunities for those with a taste for greater risks and smaller employers. The amount of venture capital invested last year was just a fifth of that plowed into start-ups during the dot-com peak. Still, there's evidence things are getting harder again for tech's big guns.

"People are definitely jumping ship from the Oracles and Microsofts to move to the small and medium-size companies," said Tim Farrelly, president of San Francisco-based recruiting firm Coit Staffing.

Microsoft work force

Then there are talent challenges specific to Microsoft. Among them is the company's reputation among some as the tech world's "Evil Empire." That reputation was forged in part by court findings that the software maker abused its monopoly position, as well as by Microsoft's antipathy toward the open-source software movement.

Though Microsoft routinely is ranked as one of Fortune's 100 best companies to work for in America, its ranking slipped this year to its lowest level ever. After placing eighth in 1998 and ranking in the 20s from 2002 to 2004, the company fell to 57th this year.

Its executives have acknowledged the recruiting headaches in recent months. For instance, Microsoft's Windows chief, Jim Allchin, conceded that Google had lured away some of the software giant's talent and said Microsoft's magnetic pull among college students may have weakened, according to a Seattle Times story late last year.

In addition, the company's attrition rate has been climbing. It rose from about 8 percent for the year ended June 2003 to 9 percent the following year, and it is on pace to climb slightly higher this year, Gonzalez said. The figure isn't worrisome, though, unless it gets into the 12 percent to 15 percent range, he said. Farrelly said Microsoft's attrition rate is probably about average for the tech industry.

Going after brain gain
Hiring "smart people" is critical to the company's success, Gates has said. And Microsoft does a lot of hiring. Microsoft had 59,950 employees worldwide as of April, up from 39,150 in June of 2000. There are roughly 2,800 open positions in the company, Gonzalez said.

What stands out in the company's standard practice for hiring its "core technology" workers is the large number of individual interviews a candidate may have and the type of questions asked.

"The strategy they have now is ambitious. It requires coordination among most of its businesses."
--Rob Horwitz, CEO, Directions on Microsoft

Microsoft usually flies top candidates to Redmond for a day or two of interviews. There they are quizzed by a procession of Microsoft people, possibly nine in a row. Interviewers can include people who may eventually be supervised by the job candidate.

Rob Horwitz, chief executive of analysis firm Directions on Microsoft, defended as wise Microsoft's policy of many interviewers.

Horwitz, a former Microsoftie recruited by Ballmer himself, also suggested the company might not be well-served right now by hiring renegade personalities. "Guerilla warriors" could end up confusing customers, given the way many Microsoft products work together, Horwitz argued. "The strategy they have now is ambitious. It requires coordination among most of its businesses," he said.

In the past at least, a candidate might have been asked to solve an abstract brainteaser or riddle. Gonzalez said he hasn't witnessed that practice in the roughly two years he's been at Microsoft. But candidates can be asked for examples where they have used their computer science skills to solve a technical problem.

The company sometimes decides whether to make a job offer the same day interviews are held. More senior positions, though, may require two trips to Redmond.

Rival Google also has become famous for its recruiting tactics, which have included coding contests and a mysterious billboard.

But such rigor in recruiting can sometimes backfire. Recruiter Farrelly argued that Microsoft loses some of the freshest minds by involving too many people in the hiring decision and taking too long. "They just can't pull the trigger quickly enough," he said.

Former Microsoft employee Edward Mitchell says he was once on a team that left a position open for a year as it interviewed candidate after candidate. "Most had Ph.D.s in almost exactly the area we wanted, but one person would always overrule everyone else, finding one little thing that was not 'perfect,'" Mitchell wrote in response to Ledgard's blog. "It would have been far more cost-effective to hire any of the many great people we interviewed, and if absolutely necessary, paid to train them for a few months!"

"Most had Ph.D.s in almost exactly the area we wanted, but one person would always overrule everyone else, finding one little thing that was not 'perfect.'"
--Edward Mitchell, former Microsoft employee

Farrelly, who says he's heard feedback about Microsoft's recruiting tactics from more than 50 people, says candidates can return from interviews at Redmond "feeling used and abused." He recommends the company make its process "more welcoming, instead of the arrogant 'who are you, and what can you do for us?'" attitude.

Gonzalez, though, says the vast majority of those interviewing at Microsoft say the experience is better than at other companies, and he argues that the company may be misunderstood. What some might see as arrogance on the part of Microsoft interviewers may in fact be the serious approach company managers take to hiring, he said.

Ledgard's blog may have rekindled talk of Microsoft arrogance, but blogs by her and others at the company could eventually soften that image. Plenty of self-criticism about Microsoft can be found in these public writings. What's more, they serve as a way to reach out to potential job seekers.

Gonzalez concedes that hiring managers may make some short-sighted decisions and miss out on good talent. But he says Microsoft was able to hire about 950 people out of college this year--evidence to him that Redmond is bringing in new perspectives.

Microsoft's effort to become more humble in hiring may be paying off, judging from Arthur Sorkin's experience. Once again, a Microsoft recruiter contacted him via e-mail about a job at the company's research division. This time, Microsoft did not come across as presumptuous. "After chatting with her and asking some questions, I decided I was not interested," Sorkin said. "But the way it was handled was in keeping with normal industry practice."

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