Protocol | Workplace

Facebook's hiring crisis: Engineers are turning down offers, internal docs show

"All of you are now starting to experience that major imbalance between supply and demand — and it doesn't feel good," a recruiting leader wrote in an internal memo.

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Facebook cannot find enough candidates to meet engineering demand, especially in the Bay Area, and has struggled and failed to meet early 2021 recruiting goals, according to a detailed internal memo outlining recruitment strategy and hiring pains.

The company also failed to meet hiring goals in 2019, which frustrated CEO Mark Zuckerberg, and it built an ad-hoc team of leaders to create an emergency plan to address the painful shortage, according to disclosures made to the Securities and Exchange Commission and provided to Congress in redacted form by Frances Haugen's legal counsel. A consortium of news organizations, including Protocol, has reviewed the redacted versions received by Congress.

In an internal memo called "Why hiring is hard right now" written at some point in 2021, a recruiting leader at the company described how engineering teams are fighting a massive imbalance between high demand for new recruits and low supply. The memo, published in full below this story, provides detailed insight into how Facebook calculates its recruitment needs and explains how the company is deeply dependent on successfully recruiting thousands of engineers every year to meet its product development and content goals. The memo also shows Facebook was determined to invest in engineers outside of the Bay Area, but that managers often failed to do so because they were more interested in hiring quickly.

"This was a standard hiring update given to our organization back in May, likely similar to ones shared in companies everywhere. As mentioned in our earnings call yesterday, we ended the quarter with over 68,100 full-time employees, up 20% compared to last year. We remain committed to expanding our hiring efforts in the US and globally," a Facebook spokesperson wrote in a statement to Protocol.

Facebook's hiring problems are far from unique. Tech industry surveys indicate that talent shortages and hiring difficulties for engineers and developers are among the biggest concerns for companies right now, and the labor market has grown exceedingly tight across almost every sector in the United States over the last year.

"All of our tech sites are under pressure right now since we maxed our recruiting feasibility. All of you are now starting to experience that major imbalance between supply and demand — and it doesn't feel good. We are experiencing growth pains," the unnamed leader wrote in the memo.

Facebook struggled particularly to recruit Bay-Area based engineers who are designated IC5 level and above in late 2020 and early 2021, according to data in the memo. Just above 50% of engineers accepted job offers for those roles in the first quarter of 2021 — 171 of 320 offers — compared to a median above 65% in 2020. "We've dropped to pre-2020 levels on the offer accept rate for IC5+ Bay Area engineers," the unnamed leader wrote in the memo. "We're seeing a bit of downward pressure in (Seattle) as well. Why? We're still figuring it out."

The memo speculates that while Facebook was able to take advantage of other companies pulling back hiring in 2020 because of COVID-related uncertainty, those same companies are now "flush with VC money" from pandemic-era growth, and they are using that money in 2021 to accelerate hiring the same candidates Facebook seeks for itself. And while the Bay Area offices have had the most difficulty with hiring, every Facebook engineering site experienced pressure in the first quarter of 2021, according to the memo.

"When we miss our hiring goals, we don't end up building all the things we planned to build, or they move a lot slower. Missing our engineering hiring goals was a big problem, and Mark made it clear he didn't want a repeat performance in 2020," the unnamed leader wrote.

Facebook's internal recruiting plans have changed significantly over the last few years to address the company's regular failures to meet its big-picture goals. The company uses a formula to calculate the desired headcount for every team that considers, among other variables: the number of managers, directors and engineers at different levels; attrition rates; ratios of junior to senior engineers; intern conversation rates; and talent progression forecasts. Using that formula, Facebook would in the past provide a desired recruiting headcount to every team and let teams alter the levels and locations for those engineers based on their immediate needs.

But that strategy failed in 2019 because every individual change contributed to a massive shift from the overall "long range plan," according to the memo. The engineering teams badly failed to meet their 2019 hiring goals.

"The core issue was the incentive to 'do the right thing' for Facebook Inc engineering (i.e. invest more outside the Bay Area) wasn't always strong enough to outweigh the imperative managers felt to hire wherever or however they could to meet the immediate needs of their team," according to the memo. Efforts to address the issue with internal nudges or communications "never worked consistently and many fire drills were run," which then angered Zuckerberg.

Mark made it clear he didn't want a repeat performance in 2020."

In 2020, the adjustments made to address that issue put restrictions on the head counts given to hiring managers for every team. It was painful for hiring managers, but it worked so well for early and mid-2020 specifically that it seemed to be a successful change. Recruitment in London and New York was especially above par, according to the memo.

But in 2021, the team realized that the previous year had been a massive anomaly. The company had capitalized on the business and recruiting success to add even more recruiters and proposed head count across the board, and suddenly every site was facing a decrease in yield on its offers and an increase in headcount. In the conclusion to the memo, titled "What can we do about it?" the writer acknowledges that Facebook needs to become better at recruiting remote talent, that it needs to hire more recruiters (but is facing a similarly competitive market there) and that a group was created to address the short-term imbalance in supply and demand.

Just under two weeks ago, Facebook announced that it planned to hire 10,000 engineers in Europe to help build, among other tools, its planned "metaverse" (an announcement on those efforts is scheduled for Thursday). In Frances Haugen's testimony to the United Kingdom Parliament earlier this week, she said that she was "shocked" to hear that news. "Do you know what we could have done with safety if we had 10,000 more engineers? It would have been amazing," she said.

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