Hackathons help firms recruit at less cost, save time

Bloomberg Businessweek 

May 21–Hiring is no longer just about tedious rounds of interviews — it’s also about demonstrating real-time expertise. Adobe Systems Inc.’s India unit, which had planned to hire cyber security specialists for its software products early this month, did not hold traditional interviews. Instead, it organized a 12-hour session of coding and problem-solving where programmers from across the country scoured for vulnerabilities in a Web application for a shot at the job.

Adobe and other technology-driven firms such as Amazon Inc.’s Indian arm, payment services company PayTM, mobile advertising firm InMobi, and e-commerce site IndiaMart.com now routinely host hackathons — marathon sessions of coding and problem-solving — to spot the right talent, at half the cost and time of traditional ways of hiring.

Hackathons as a concept have been used internally by many companies to gets programmers excited about finding the next big idea (the “like” feature in Facebook was the result of a hackathon) or simply to sort out the kinks. But what was once seen as an event for geeks is now being used as a mainstream hiring tool, especially of freshers.

“Hackathons are a simulation of the work environment and help assess not only the coding skills, but also the group dynamics and culture fit of a potential candidate,” said Raj Raghavan, director of human resources at Amazon India. “They aid in fast-tracking a candidate’s application since data points on the candidate’s skills are captured during the contest as a work sample.”

While hundreds of thousands of engineering graduates emerge from the country’s colleges every year, there is a limited pool of talented programmers, companies say.

“Only 50% of the hires you make fit the bill through the traditional hiring process. Also, it takes about three months to know if you made the right hire, resulting in a drain in resources. Through hackathons, you don’t over-hire, hence you don’t overpay,” said Dinesh Agarwal, founder of IndiaMart.com.

Another big draw for companies is that people hired through this process are ready to deploy. “Usually we need to train people for three-six months and we can’t expect any output before that. Here, that is reduced to three-six weeks,” added Agarwal.

Companies usually use a platform like HackerEarth, which hosts online hackathons, designing problems according to companies’ needs. In the last six months, the platform has helped hire programmers for about 30 companies. It also has a database of more than 10,000 programmers, which can be leveraged by companies when they hire.

Sachin Gupta, co-founder of HackerEarth, set up the platform to demonstrate that top talent can be anywhere and not just within the hallowed precincts of premier institutes.

Companies such as PayTM Mobile Solutions Pvt. Ltd have hired people from Bokaro, Ranchi and Jodhpur, where they don’t usually go for campus recruitments, said the firm’s founder Vijay Shekhar Sharma.

Also, hackathons conducted by HackerEarth help save companies more than 50% of hiring costs. Usually recruitment firms charge 12% for placing someone with a salary of Rs.8 lakh (Rs.96,000), while HackerEarth charges a flat fee of Rs.50,000.

Also, as Amazon’s Raghavan pointed out, virtual hackathons are a great avenue to tap international candidates without much investment and get high returns.

“The time required to hire is also reduced from two months to two days,” said Gupta of HackerEarth.

Companies such as Amazon, Freshdesk Inc., a cloud-based customer support software provider, and InMobi use hackathons as a way to promote themselves among colleges. “Programmers want to join organizations that have challenging assignments. Through hackathons, they can have a real-time experience of the things they’ll be working on,” said Mohit Saxena, co-founder and vice-president of technology at InMobi.

Together with hiring, Amazon uses its contest “Amazon Ninja Coder”among the student community to build its brand, which sees participation of over 4,000 contestants. “We have successfully made high double-digit offers through this model,” said Raghavan. And he expects to see an upward trend in the number of hires made through the hackathon channel.

The investor community too is taking notice and hosting hackathons to not only help the companies they fund, but also to find new ideas. GSF Accelerator — which funds about 25 companies in a year, is looking to hold a quarterly hackathon to find new talents to fund.

“We are always looking for breakthrough ideas, and hackathons are emerging as a good platform for us to find ideas worthy of backing,” said Rajesh Sawhney, founder of GSF Accelerator.