But Facebook’s people problem isn’t limited to executive retention. The hot startup with over 200 million users also has a surprisingly hard time recruiting new employees — from top executives to college grads to star Googlers.
Sources familiar with the situation tell us Facebook’s “close rate” on new employees it wants to hire hovers around 80%. One former Facebook employee — who like many former employees, might have an agenda — puts the rate below 50%. Either way, for a company with the potential to mint hundreds of millionaires in a rare Silicon Valley IPO, both numbers seem low.
“It’s never been as high as we wanted it to be,” says one source.
After an unsuccessful search for departed CTO Adam D’Angelo’s replacement, Facebook finally elevated VP Mike Schroepfer to engineering lead. Facebook lost out to Twitter recuiting highly-respected algorithms engineer Pankaj Gupta. Facebook has had trouble finding a director of monetization.
After speaking with a range of industry sources — including former Facebook executives — there appear to be three main factors contributing to Facebook’s challenges with recruiting and retention.
- There’s stiff competition from companies like Google and Microsoft, which are willing to pay through the nose to retain their own talent. Sources familiar with the company’s practices say Google will sometimes double an employee’s salary and stock to keep them from going to Facebook. These companies will also play on prospective Facebook employees’ fears, reminding them of the startup’s non-existent profits, executive turnover, and valuation questions.
- To a lesser extent, Facebook’s senior management team has a maligned reputation in Silicon Valley. This may or may not be deserved, but it exists.
- Finally, Facebook only recently “professionalized” its recruiting efforts.
Perhaps no case embodies Facebook’s difficulty attracting new talent more than the case of Qi Lu, the former Yahoo search scientist who, in Fall 2008, agreed to join Facebook as its CTO only to renege and become Microsoft’s online boss instead.
Sources disagree on why this happened.
Some say Microsoft made Qi an offer he couldn’t refuse. With its financial wherewithal, “Microsoft has the ability to make an offer almost impossible to walk away from,” a source familiar with Microsoft’s recruiting practices tells us. Sources familiar with Qi’s thinking confirm that finances as well as the opportunity to run a business the size of Microsoft’s online operations played a major role in his decision. This is certainly understandable–the Microsoft opportunity was a bigger and more high-profile job.
Still, these same sources — including former Facebook employees — say the reputation of Facebook’s management played a role.
“Qi Lu is a guy with the highest ethics,” one source said, “For a guy like him to accept an offer and then back out, something has to be f—– up.”
Likewise, another source familiar with Qi’s thinking says he caught wind of a “toxic” workplace:
“It’s not a tight close-knit team. They fight each other and the strain shows throughout the organisation. If Facebook had a mature, seasoned CEO, it might be a very different environment. I have lot of respect for Mark, but he’s not a CEO. He doesn’t know how to groom a team. The execs just don’t trust each other. To the extent there’s mistrust in the organisation that’s really toxic.”