The 2020 Interview Gap report

The Interview Gap manifests in different ways for different stakeholders.

The Interview Gap makes it harder for organizations to reach their software engineering hiring targets. The Interview Gap places artificial constraints on the number of candidates that a company can interview, and limits the quality of those interviews. When interviewing isn’t given the time, structure, and focus it deserves, bias and inconsistencies degrade the hiring signal.

For candidates, the Interview Gap limits access to interviews, which serve as the bridge between people and jobs. On average, just 5% of direct applicants to engineering jobs in the tech industry are invited to interview. The candidates who lack robust professional networks are often excluded, and this disproportionately impacts underrepresented minority candidates, and at its worst, it can lead to significant, persistent discrimination against Black and Brown candidates throughout the hiring process.

The 2020 Interview Gap report

In January, we partnered with Harris Poll to conduct a survey of 253 engineering leaders and hiring decision-makers. We used those results as benchmarks to compare to a second survey of 100 additional leaders last month to gauge the impact of COVID-19 on hiring trends.

You can read the full 2020 Interview Gap report here (no signup required).

Key findings

Engineers are more valuable than ever, but traditional hiring processes fail to achieve hiring goals or accurately predict on-the-job-performance.

90% of engineering leaders agree that “software engineers are more valuable than capital.” Almost half (47%) agree that a strong software engineer is worth at least 3x their total compensation, and a quarter (25%) agree that they are worth at least 4x total compensation. Yet, despite that premium price tag, just 50% of engineering leaders are “very satisfied” with the performance of their engineering teams.

Why is that?

• While nearly 9 in 10 engineering leaders (87%) agree that expertise in technical interviewing is critical for a successful hiring process, 72% of leaders think that  “very few people at my company know how to conduct interviews.”
• Nearly 3 in 4 (73%) say that the typical interview fails to predict the performance of software engineers.

The Interview Gap exists as an organizational tradeoff that prioritizes product goals over hiring goals.

• 87% of engineering leaders agree that reaching hiring targets while delivering product features is challenging.
• 61% of engineering leaders now agree that “interviews are a financial drain on my company” compared to 48% in January, and 64% now strongly agree that “time spent interviewing is a drain on morale” compared to 48% in January.

But at a time when the strongest organizations are accelerating software engineer hiring to capitalize on a favorable job market, it’s a short term-tradeoff that many organizations cannot afford.

The COVID-19 downturn has increased the supply of candidates, making it harder to find the right talent.

For years, organizations experienced a shortage of software engineering talent, but the sudden economic downturn has shifted the dynamic. As more software engineers look for work and there is less competition from companies that have paused or frozen hiring, the most resilient organizations are adapting and hiring software engineers aggressively. They are also feeling the strain of a growing Interview Gap.

• 74% of engineering leaders agree that it is “easy to identify potential software engineering candidates” today, versus 65% in January.
• 45% strongly agree that “while there are a lot of software engineers available, it is hard to find the right ones,” compared to just 25% in January.

The most successful organizations are closing their Interview Gaps by improving interview capacity, consistency, and measurement.

Dedicating valuable engineering time to interviewing candidates is a significant investment.

Engineering leaders who are very satisfied with their team’s performance and very confident in reaching hiring targets are more likely to increase interview capacity, emphasize consistency, and measure results more intentionally.

• Capacity: Based on our initial January findings, very satisfied engineering leaders conduct nearly twice as many first-round interviews compared to their somewhat or not satisfied peers.
• Consistency: 85% of very confident engineering leaders use a structured interview process compared to 73% of less-satisfied engineering leaders.
• Measurement: 73% of very satisfied engineering leaders track hiring funnel metrics compared to just 57% of others.

The human cost of the Interview Gap

Engineering leaders are feeling the impact of the Interview Gap — both financially and personally. It’s harder to hire and ship new product features, plus team morale is suffering, but the organizations that are aggressively hiring and taking advantage of the current situation will accelerate growth.

This will create a long-term competitive advantage and increase the divide between the software engineering haves and have-nots. Catching up will be a steep hill to climb for companies looking to hire the right engineering talent to complete digital transformations and reignite growth.

Sadly, it’s not just businesses that will face an uneven playing field, because the Interview Gap hurts candidates by constraining access.

Access to interviews is essential for economic empowerment. In a world where the most vulnerable among us are frequently the last ones in and first ones out, underrepresented minorities are too often the first victims of the Interview Gap. Resume screens, referrals,  and automated code tests perpetuate biases that filter out potential candidates from non-traditional backgrounds, and we’ll be diving deeper into these issues in future reports.

At Karat, we believe in filtering in. Interviews shouldn’t be obstacles, they should be opportunities. Closing the Interview Gap means more interviews and more access to great jobs. And it’s our mission to make every interview fair, predictive, and enjoyable.

For more about Karat’s commitment to providing interview access to more Black software engineers, see our company statement: https://karat.com/karats-commitment-to-the-black-community/