Range of possibilities

After I wrote about “love and arranged jobs” last week, an old friend got back saying he quite appreciates the concept and he’s seen it in his career as well. He’s fundamentally a researcher, with a PhD, who then made a transition to corporate jobs.

He told me that back in his research days, he had many “love work relationships”, where he would come across and meet people, and they would “flirt” (in a professional sense), and that could lead to a wide range of outcomes. Sometimes they would just have discussions without anything professional coming out of it, sometimes it would result in a paper, sometimes in a longer collaboration, and so on.

Now that he is in the corporate world, he told me that it is mostly “arranged jobs” for him now, and that meeting people for this is much less enjoyable in that sense.

The one phrase that he used in our conversation stuck with me, and has made it to the title of this post. He said that “love jobs” work when people meet with a “range of possibilities” in mind.

And that is precisely how it works in terms of romantic relationships as well. When you go out on a date, you are open to exploring a range of possibilities. It could just be an evening out. It could be a one-night stand. It could result in friendship, with or without benefits. There could be a long-term relationship that is possible. Gene propagation is yet another possible result. There is a rather wide range of possibilities and that is what I suppose makes dating fun (I suppose because I’ve hardly dated. I randomly one day met my wife after three years of blog-commenting, orkutting and GTalking, and we ended up hitting the highest part of the range).

Arranged marriages are not like that – you go into the “date” with a binary possibility in mind – you either settle into a long-term gene-propagating relationship with this person or you wish you never encounter them in life again. There is simply no range, or room for any range.

Job interviews in an arranged sense are like that. You either get the job or you don’t – there is one midpoint, though, where things don’t temporarily work out but you keep open the possibility of working together at a later date. This, however, is an incredibly rare occurrence – the outcome is usually binary.

It’s possible I’m even thinking about this “love jobs” scenario because I’ve been consulting for the last 8 odd years now. In all this time I’ve met several people, and the great part of this has been that the first meeting usually happens without any expectations – both parties are open to a range of possibilities.

Some people I’ve met have tried to hire me (for a job). Some have become friends. Some have given me gigs, some several. Some have first given me gigs and then become friends. Others have asked me to write recommendation letters. Yet others have become partners. And so on.

And this has sort of “spoilt” me into believing that a job can be found through this kind of a “love process” where a range of possibilities is open upon the first meeting itself. And when people try to propose the arranged route (“once we start this process we expect to hire you in a week”) I’ve chickened out.

Thinking about it, that’s how a lot of hiring works. Except maybe for the handful of employers which are infamous for long interview processes (I love those proceses, btw), I guess most of the “industry” is all about arranged jobs.

And maybe that’s why so few people “love” their jobs!

Love and arranged jobs

When I first entered the arranged marriage market in early 2009, I had done so with the expectation that I would use it as a sort of dating agency. Remember this was well before the likes of OKCupid or Tinder or TrulyMadly were around, and for whatever reason I had assumed that I could “find chicks” in the arranged marriage market, and then date them for a while before committing.

Now that my wife is in this business, I think my idea was a patently bad one. Each market attracts a particular kind of people, who usually crowd out all other kind of people. And sort of by definition, the arranged marriage market is filled with people looking for arranged marriage. Maybe they just want a Common Minimum Program. But surely, what they are looking for is a quick process where after two (or maximum three) meetings, you commit to someone for life.

So in this kind of a market you want to date, there is an infinitesimal chance of finding someone else who also wants to date. And so you are bound to be disappointed. In this case, you are better off operating in a dating market (such as Tinder, or whatever else did its job ten years ago).

Now that this lengthy preamble is out of the way, let us talk about love and arranged jobs. This has nothing to do with jobs, or work itself. It has everything to do with the process of finding a job. Some of you might find that I, who has been largely out of the job market for over eight years now, to be supremely unqualified to write about jobs, but this outsider view is what allows me to take an objective view of this (just like most other things I write about on this blog).

You get a love job through a sort of lengthy courtship process, like love marriage. You either get introduced to someone, or meet them on twitter, or bump into them at a networking event. Then you have a phone chat, followed by a coffee, and maybe a drink, and maybe a few meals. You talk about work related stuff in most of these, and over time you both realise it makes sense to work together. A formality of an interview process happens, and you start working together.

From my outside view (and having never gotten a job in this manner), I would imagine that this would lead to fulfilling work relationships and satisfying work (the only risk is that the person you have “courted” moves away or up). And when you are looking for a sort of high-trust relationship in a job, this kind of an “interview process” possibly makes sense.

In some ways, you can think about getting a “love job” as following the advise Dale Carnegie dishes out in How To Win Friends and Influence People  – make the counterparty like you as a person and you make the sale.

The more common approach in recruitment is “arranged jobs” (an extreme example of this is campus recruitment). This is no nonsense, no beating around the bush approach. In the first conversation, it is evident to both parties that a full time job is a desired outcome of the interaction. Conversations are brisk, and to the point. Soon enough, formal interviews get set up, and the formal process can be challenging.

And if things go well after that, there is a job offer in hand. And soon you are working together. Love, if at all, happens after marriage, as some “aunties” are prone to telling you.

The advantage of this process is that it is quick, and serves both parties well in that respect. The disadvantage is that the short courtship period means that not enough trust has been built between the parties at the time they start working together. This means “proving oneself” in the first few months of getting a job, which is always tricky and set a bad precedent for the rest of the employment.

In the first five years of my career, I moved between four jobs. All of them happened through the arranged process. The one I lasted the longest in (and enjoyed the most, by a long way, though on a relative basis) was the one where the arranged process itself took a long time. I did some sixteen interviews before getting the job, and in the process the team I was going to join had sold itself very well to me.

And that makes me think that if I end up getting back to formal employment some day, it will have to happen through the love process.

Investing in dabbil-dabbi startups

So the wife has come up with this new concept – “dabbil-dabbi startups“. Check out this scene from yedurmane ganDa, pakkadmane henDthi where miser Shashikumar is looking for the money that he has stored inside a series of boxes (watch at 3:48 here).

So the wife’s point is that startups nowadays are not adding value by themselves but instead simply offering an additional layer around an already existing product/idea. This, she says is similar to Shashikumar in the above scene putting one box inside the other – basically no real value is added.

I take this analogy further, perhaps distorting it in the process, like any analogy taken too far. Basically in the above scene, Shashikumar, after opening all the boxes inside boxes, retrieves money from the innermost box and rhetorically cribs that the money hasn’t grown.

Similarly, when an investor invests in a “dabbil-dabbi” startup, his money meets the same fate as Shashikumar’s in the movie – there is no growth!

So think twice before investing in a dabbil-dabbi startup.

Finance is boring, once again

So IIMB goes to placements this week. Two months back, though, in the first class I taught there, in an attempt to “understand the class”, I asked my students to tell me their “most preferred employer”. The intention was to tailor the course in a way that would be more suitable for their prospective careers.

Thinking back at that class, there is one thing that hits me – very few want to do finance (again that’s no indication of how many of them will end up in finance jobs this week). I initially thought it was a biased sample – there was a course of the same name offered to the same batch in an earlier term, and those that had taken the course then were not eligible to take the course now. Given the primacy of spreadsheets in finance, I thought students more inclined towards finance would have taken the course in the earlier offering. But then thinking about it (without data to back me), that so few want to do finance doesn’t surprise me at all.

When I tried putting myself in the shoes of my students and thought of what jobs I wanted to take, I realised that there weren’t any finance jobs that I could think of. With the derivatives world having undergone several downturns in the last decade, no one recruits for derivative sales and trading from IIMs any more (if my information sources are right – they could be wrong). And if you were to take out derivatives sales and trading, there is very little that excites about the other finance jobs that recruit MBAs.

There is investment banking (M&A, Equity/Debt Capital Markets) of course, but the job is insanely fighter, and while it is ultimately a finance job, finance forms a small portion of your day-to-day activities there (secondhand information again). Venture capital and private equity are again ostensibly finance but again there is very little finance you use in decision-making there – other “softer” stuff (such as evaluating “quality of founding team”, etc.) dominate.

Then there is commercial banking, which is finance only in name, for most jobs for which they recruit MBAs (data from a decade back) are in the realm of sales or business development. There is the odd treasury or risk management job, but those jobs are small in number compared to the others. And corporate finance jobs see excitement very rarely (when there is M&A or related activity). You have asset management and research roles, but they are again not the kind that you would call as “exciting”.

In short, finance has become boring, again. Most jobs on offer to fresh MBAs nowadays are for roles that are fairly routine and “boring” for the most part, and while finance still pays well, there are no adrenaline-pumping jobs on offer there as there used to be a decade ago. And from the macro point of view, that is a good thing.

Because finance is fundamentally a boring job, and is supposed to be a boring job. If finance had become “exciting”, it was because finance people were doing stuff that they were not supposed to be doing! Like taking highly levered bets for example, or concocting derivatives so complicated that nobody – not even most traders – would be able to understand it.

I had written recently that people have stopped considering coding “cool”, and that we should do something about it. A similar thing is happening to finance, where MBA students are not finding it “cool” any more (but people will take up the profession since it pays well). However, this is not a problem, and nothing needs to be done about it. This is how things ought to be. Finance is supposed to be boring!

Anyway, this might be biased opinion since if I could roll back nine years and were asked to pick a job, I couldn’t see myself working at ANY of the companies that had come to recruit from IIMB back when I graduated! So perhaps my hypothesis about finance jobs being boring now is a result of all typical post-MBA jobs being boring! Perhaps that explains why I’m doing what I’m doing now – a “job” so atypical it takes a lot of effort to explain to people what I’m doing.

Oh, and coming back to finance, I’m four weeks though with my Asset Pricing MOOC, and have been totally enjoying it so far!

On getting fired

On Capital Mind, Deepak Shenoy has a great post out on the TCS layoffs. TL;DR: TCS could have handled it better, but getting fired is a part of corporate life. And 3 months’ severance is generous. He also adds that we should hedge – build your brand, build savings, build skills so that getting fired won’t hit you so hard.

An argument that is being bandied about in relation to the TCS layoffs that if you need job mobility, then job insecurity is a related price you have to pay. For example, check out these tweets from Raj:

So the basic argument here (which I completely agree with) is that you can’t have one-way optionality. A generation ago, there was almost no optionality. You couldn’t get sacked, and it was very difficult for you to leave. That was the way the world worked back then.

Soon, the economy expanded, and you started seeing mobility. You started seeing optionality – the job was a one-way option. You could choose when you wanted to leave, but given the high growth and general shortage of skilled talent back in the days, companies couldn’t sack you. That sweet spot existed for a short while.

In the last decade or so, though, this has started changing. Companies realised that keeping deadwood on the books is a lot more expensive than their financial cost-to-company. A “no firing” policy sends out the wrong incentives – people without motivation are more likely to stick around than the ambitious. And that can never be good for the company. So now companies want optionality both ways. And as the TCS episode illustrates, people are not liking that the optionality exists both ways now. It seems like they were used to the one-way optionality street that existed for a short while during the rapid expansion of the IT sector.

The problem with the above argument (encapsulated in Raj’s tweets, which I agree with), however, is that it assumes that employees have a choice. When you say that “if you want mobility, you get insecurity as part of the package”, the subliminal message is that it there exist jobs where you can choose to forego your mobility in order to save yourself from insecurity. Unfortunately not too many such jobs exist. And it is a matter of liquidity.

Yes, there still exist plenty of jobs where there is strong two-way commitment. However, they are nowhere as numerous as jobs where there exist two-way optionality. The simple matter is that the “market has moved”. Most people are comfortable with the “latest” arrangement, where you can leave easily but also get sacked easily. Given that most people are comfortable with this arrangement, companies are also comfortable with this and have moved to this arrangement. And that has led to a virtuous cycle and the number of companies and number of people who like this arrangement have hit a critical mass.

In other words, if you want an “optionless” job, that is like living in the world until yesterday. But it is not enough that you want to live in that world. The world as we know it is social, and for us to live a certain way, we need other people to agree to live the same way. In other words, we can’t live our chosen lifestyle in isolation without counterparties living that way too.  And when most employers have moved on from the optionless regime to the two-way optionality regime, even if you want to live in yesterday’s world, there aren’t too many companies that still live that way. So you don’t have a choice!

So you need to learn to adapt to live and thrive in the new regime. And it is not that this regime will last forever. I’m sure people will innovate and other regimes might supersede this regime. Some people are slow to react to change, but liquidity makes the world ruthless, and punishes you badly for not adapting. That is the hard truth that some of these people who are cribbing about getting fired from TCS need to digest.

Studs, fighters and spikes

In a blog post yesterday I talked about the marriage and dating markets and how people with spikes which can be evaluated either highly positively or highly negatively were more likely to get dates, while in the arranged marriage market, you were better off being a solid CMP (common minimum program).

The question is how this applies for jobs. Are you better off being a solid performer or if you are someone who has a quirky CV, with some features that can either be heavily positively or heavily negatively by some people. How will the market evaluate you, and which of them is more likely for finding you a job?

The answer lies in whether the job that you are applying for is predominantly stud or fighter (apologies to those to whom I mentioned I was retiring this framework – I find it way too useful to ditch). If it is a predominantly fighter job – one that requires a steady output and little creativity or volatility, you are better off having a solid CV – being a consistent 3 rather than having lots of 5s and 1s in your rating chart. When the job is inherently fighter, what they are looking for is consistent output, and what they don’t look for is the occasional 1 – a situation where you are likely to underperform for whatever reason. Fighter jobs don’t necessarily care for the occasional spike in the CV – for there is no use of being extraordinary for such jobs. Thus, you are better off being a consistent 3.

If it is a stud job, though, one where you are likely to show some occasional creativity, you are more likely to get hired if you have a few 5s and a few 1s rather than if you have all 3s. If the job requires creativity and volatility, what the employer wants to know is that you are occasionally capable of delivering a 5 – which is what they are essentially hiring you for. Knowing that people who are good at stud jobs have the occasional off day, employers of stud jobs are okay with someone with a few 1s, as long as they have 5s.

So whether you should be looking for a stud or a fighter job depends on what kind of a professional career that you’ve had so far – if you’ve had a volatile career with a few spikes and a few troughs, you are much better off applying for stud jobs. If you’ve been a steady consistent performer you are better suited for a fighter job!

Of course you need to remember that this ranking as a function of your volatility is valid only if you were to hold your “average rating” constant!

Value of skill in rural India

Earlier today I had blogged about wage rates for unskilled workers in rural India. Now, we will use the same dataset and see what premium people pay for skills. The same data gives wages for certain occupations – carpenters, masons, cobblers, blacksmiths, etc. There are also wages given for various types of farm labour, and for the purpose of this exercise I’ve used ploughing to be representative of farm labour.

The following plot shows the wage rates for different skills in different states. A note on how to read this graph. The x axis represents the state and the y axis represents the daily wage for that particular skill. The skill itself is represented in text form. So for example a carpenter in rural Kerala gets about Rs. 600 per day while a sweeper in Bihar gets about Rs. 100.

Source: Labour Bureau. Numbers for April 2013
Source: Labour Bureau. Numbers for April 2013
  • Notice that even skilled jobs in other states don’t fetch as much as an unskilled job in Kerala. Tamil Nadu and Punjab come closest
  • The skills most in demand in rural areas across states are carpentry and masonry, if you go by this data
  • In most states, cobblers earn lower than “unskilled workers”. This is interesting because there is skill involved in making and repairing shoes. The low wages for cobblers indicates a caste bias. It is also possible that since cobblers are mostly self-employed their wage rate is inaccurate
  • Blacksmiths are again not too highly valued in villages
  • The high numbers for Kerala could be a function of the state’s lower urban-rural divide compared to the rest of India. Kerala is generally described as a semi-urban continuum with no strongly delineated urban and rural areas. Rural workers could be expensive since they are in demand for urban jobs also, unlike in other states.

 

 

The same caveats that apply to the previous post apply to this. We don’t know the sample size or the accuracy of the survey. Nevertheless, some interesting insights come out.

US MBA Admissions

B-schools based in the US use a unique self-selecting mechanism to filter out applicants who might be a bad fit for a management job. This they achieve by making the application process more complicated, but in a way that the kind of people they hope to attract find it simple.

Let me explain. Like most other graduate programs in the US, B-schools also require applicants to get a set of letters of recommendation. Unlike other programs, though, these are not simple letters of recommendation. Rather than the recommender simply writing out one essay where he/she extols the virtue of the candidate he/she is recommending and requests the university to grant admission, here he/sh has to answer a bunch of questions that the university is asking for. These questions might range from the mundane sounding (I’m told there’s a catch, though) “How do you know the applicant?” to some high-sounding stuff like “What is your opinion of the leadership qualities of the applicant? How can that be improved?”. World limit for all questions put together comes to 1500 words.

So now, if someone comes to you asking for a recommendation, unless you are really invested in their careers you will not want to put the enthu of putting so much effort. If you like the candidate, you might be willing to put in some time into it, but you are likely to wholeheartedly produce four good essays for each school the applicant is applying (note that no two schools ask the same question) only if you feel really invested in the applicant’s career, the probability of which is really low.

By having such a complicated system of soliciting recommendations, the schools ensure that all candidates fall into one of two categories. Either they should have done so well in one of their jobs that their boss or client feels invested enough to spend a few hours of their time writing recommendations, or they should have the necessary people management skills to go to bosses and clients and professors to get them to write the recommendations. Of course, irrespective of how good your people management skills are , it is unlikely to get someone to spend so many hours on your recommendation letters. Still, the minimum you require is to convince them that you will write the recommendation yourself and they should rubber stamp it. No big deal, that.

This way, all applicants to US B-schools are people who have a knack of getting things done. The age at which application happens (mid to late twenties) also minimizes parental participation in the effort. Apart from the self-selection and filtration, the amount of time and effort required for application also helps weed out frivolous candidates (remember those that “wrote CAT just as a backup”?).

I don’t know what to name this bias

So yet again I’m at that point in my life when I’m pondering about my career, pulling up my socks and asking myself uncomfortable questions. I’m asking myself what it is I really want to do, what it is that I really enjoy, what is the best way I can monetize my skills and the like. I’ve been pondering between radically different alternatives – from staying on in Wall Street to becoming a hippie; from becoming a professor to starting a company. I’ve been thoroughly confused and have been talking to a number of people about this.

The one common strand I extract from my conversations with all these people is that most people give you advice that is aligned with what they are doing. When I talk to the prof, he talks to me about becoming a prof, and about why I’m suited for it. When I talk to the corporate whore, he tries to convince me that there’s no way out from corporate whoredom and that I must simply embrace and accept it. When I ask the hippie, he thinks it’s no big deal if I keep switching jobs, and that I’m being dishonest with myself continuing to do something I don’t enjoy. And the entrepreneur tries his best to push me into becoming an entrepreneur.

Given my thoroughly confused state of mind, all this has been mostly adding to the confusion, but now that I’ve managed to extract this common strand, I been able to add the appropriate amount of spices to all the advice I’ve received, and making more sense of it. While I continue to figure out what’s the best course of action for me, I wonder what it is that makes people want other people to be like them.

I must mention that this is not a recent phenomenon. Back when I was in college, I remember talking to a senior who went into consulting, and he convinced me that I should do that, too. The banker talked about how banking is perfect for my skills. Till I was in 10th standard, I had no clue about the existence of IIT until a rocket scientist uncle told me about it, and about how going there would be the best thing I could do.

Of all the people who have given me career advice, perhaps the only person who didn’t clearly show this kind of bias was my father. He was an accountant, and he used to work as a regulator. And right from the beginning he made it clear to me that I should neither become an accountant nor should I work for the government.

And I’m trying to think of what kind of advice I dish out. Perhaps because I don’t have one clear “career axis”, I don’t really show this kind of a bias. Or maybe it’s hereditary.

Two kinds of immigration

There are fundamentally two kinds of immigration – local job-creators and local job-competitors. The former are primarily middle and upper middle class people, who create jobs locally in terms of employing people (directly) to provide services for them – like maids, cooks, drivers, laundrymen, etc. The latter are primarily working class people who migrate in order to provide local services. They work as maids, cooks, drivers, etc.

Already existing local service providers welcome the immigration of job-creators. That means they now have the opportunity to push up their asking prices, since there is now more competition for their services. There is little economic opposition to the immigration of job-creators. The opposition to them is usually cultural – witness the rants of middle class “native” Bangaloreans like me against “koramangala people”.

Job-competitors, on the other hand are not so welcome. While they usually don’t contribute too much to the “culture” of the city, they compete directly economically against already existing local service providers. There is a clear economic rationale for local service providers to oppose the entry of more such providers, and since the local service providers are usually numerous and politically active, it is easier to oppose the entry of such job-competitors.

In the 1960s, for example, Shiv Sena started out by targeting South Indian middle class people. However, that campaign didn’t last long, since the “masses” (mostly local service providers) realized that it was economically counterintuitive for them to target middle class people. Hence, gradually over time, the rhetoric changed and the targets are now immigrant job-competitors. So you have Shiv Sena guys beating up Bihari taxi drivers, etc. And since this targeting of immigrant job-competitors is economically advantageous to the “masses”, it is likely to be more sustainable than the targeting of immigrant middle class people.