Game theory of job interviewing.
Why is the interview conducted? It is for the benefit of the employer to try to optimize the utility of the resulting employee that fills the position. But what does this mean?
Let’s start with a hypothesis test to explain it.
Null hypothesis: Employee contributes zero intended results to the desired position, but gets paid full for the time. Result: salary paid out is full loss.
Alternate hypothesis 1: Employee contributes zero intended results to the desired position, but gets paid full for the time. However, they also cause additional damages not requested along the way. Result: salary paid out plus cost of damages is full loss.
Okay, now let’s cover the remainder of the hypotheses in dimensions, since multiple can apply.
Dimension: Employee contributes partially or completely to the desired position. Result: salary paid out for corresponding results.
Dimension: Employee contributes bonus materials: although they were not originally requested, they are found to be desirable and beneficial in ways not originally imagined.
Okay, let’s evaluate dimensions.
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Salary cost, negative value.
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Damages, negative value.
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Results of requested contributions, positive value.
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Training cost, negative value, fixed cost subset of salary.
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Training value: undefined value. It’s up to the management to ascertain the value of training another person just for that sake.
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Bonus results, undefined value. It’s up to the management to ascertain the value of bonus results.
So, the sake of interviewing adds a third dimension.
- Interview cost: the cost of the time spent on interviewing.
Okay… so at face value, we can see that the cost of interviewing is basically nil compared to the null hypothesis. How many interviews must you conduct before interviewing is not worth the cost for the interviewer. That is, the amount spent on the interview equals the amount (value) gained from the position.
2 hours total in interviewing for a 6 month contract to hire, 40 hours a week
Total position cost: 960 hours.
Break-even interview cost (time only): 480 interviews.
Okay, so this states that interviews are pretty cheap at the outset. Even with terrible odds of getting a good candidate, an interviewer can schedule a barrage of 100 interviews and still have a high confidencce of getting a good candidate.
Now, how about the interviewee? What is the cost to the interviewee to work through interviews? Well, they have a baseline living expense that is being consumed when they are unemployed, so each interview has a clear cost to them. And actually, because the terms of employment remain the same, they’re operating in a negative debt cost territory as soon as they take the first interview. The question is not what value does the position provide, but what cost it will take to get any employment at all. Unless, of course, they are already employed and have alternatives.
But still… to the interviewee, the total cost is the total time period of interviewing plus hired work, and the total benefit is any payout at al that comes from a hire decision at the end of the time period.