37signals, which is now known as Basecamp, was co-founded in 1999 by Jason Fried, Carlos Segura, and Ernest Kim. 37signals was a privately-owned American web application company until about mid-2004 when the company shifted its focus from web design to web application development. The company started with four people in the beginning and are now a company of about 50 that spreads across 32 different cities in the country.
Jason Fried’s hiring methods may seem a little unorthodox to some people but I believe that he is on the right track. As small as his company is his approach shows him exactly who he wants in his company. I believe that his approach does lead him to good hires because his employee turnover rate is very low, only two people have left the company in the first 11 years of the business and that is an outstanding achievement for both the business and the employees.
I think the best feature of his approach to hiring employees is the fact that he ignores the resumes of his job applicants because I do not believe you see the true individual when looking at resumes and applications. Also, his test drive approach seems to be a really good idea, I think it shows him the true nature and experience of the employee and also gives him an idea of whether or not that applicant will be a good fit with the company and other employees.
Passing on “perfect” candidates when no attractive job is open at the moment and letting talented candidates get away. I think it is good business to pass on “perfect” candidates at times when he does not have an attractive job open for them at the moment because it shows his current employees and possible future employees that he has their best interests in mind. He is giving that “perfect” candidate a chance to find a job elsewhere when he does not have the job they are currently interested in or one that meets their qualifications. I think it is smart of him to let some talented candidates get away by refusing to create more suitable positions to keep them because, again, it shows that he has their best interest at heart and he knows what jobs he has and wants, adding additional jobs just to hire someone is probably not the best move because it makes other employees feel that their jobs might be unstable. Employees may start thinking that if he can create a job so easily for this candidate than can he end my job just as easily.
If Fried were to use a behavioral interview format, I think some good questions that might help him find a suitable employee would be:
The only recommendation I can think of for his hiring practices is to be sure he is ready to let that”perfect”, talented candidate go because if the competition gets that candidate then later on down the road Fried may end up regretting that he did not hire them. I do think that his hiring practices are very well thought out and there is really not much I would change about them.
My conclusion is Fried should continue his hiring process as he has done for the past 20 years, it has not harmed his company and has only seemed to help his company continue to grow. More privately held businesses should look at their candidates in such a way and their employee turnover rate may actually decrease which will help their business grow.