Comment author: AGB 13 October 2018 09:37:58PM *  1 point [-]

In that simple model, it appears to me that marginal hires are worth $1m minus the counterfactual use of senior staff time (hypothetically, and relevantly, suppose all the possible hires for a position decided to earn to give instead overnight. It would not be the case that the world was $1m worse off, because now senior staff are freed up to do other things). If there are in fact even more important things for senior management to focus on, this would be a negative number.

More realistically, we could assume orgs are prioritising marginal hiring correctly relative to their other activities (not obvious to me, but a reasonable outside view without delving into the org particulars I think), in which case the value of a marginal additional hire would simply be ~0.

So again, I appreciate the attempt to boil down the area of disagreement to the essentials, and even very largely agree with the essential models and descriptions you and Rob are using as they happen to match my experience working and recruiting for a different talent-constrained organisation, but feel like this kind of response is missing the point I'm trying to make, namely that these ex post numbers, even if accurate on their own terms, are not particularly relevant for comparison of options.

Comment author: Ben_Todd 18 October 2018 08:45:00PM 1 point [-]

Hey Alex,

I agree with the thrust of your point: if hiring is very costly, then that's reason against working at EA orgs vs etg.

It still seems like there could be a world in which hiring is high return but often (but not always) lower return than some other marginal activities. This will mean both that (i) recent hires are valuable (ii) the orgs don't hire many people (iii) hiring is sometimes worthwhile. I was just trying to show how these could be consistent.

Going back to the overall issue of why the dollar figures are high, I don't think the "hiring is costly" point is the main thing going on, and think this post might have emphasised that too much. The post was more trying to answer the question of why the orgs don't hire more often despite the high dollar figures. The broader question of why the figures are high and what to do based on them is discussed briefly in the original article about the survey, but hasn't yet been tackled in depth.

With your first two paragraphs, I just want to step back and point out that things get pretty confusing when you include all opportunity costs. When you do that, the return of every action except the single best action is zero or negative. Being close to zero is actually good. It's probably less confusing to think in terms of a ranked list of actions that senior staff could take.

I also expect the orgs partially take account of the opportunity costs of staff time when reporting the dollar value figures, though it's hard to be sure. This is why next year we'll focus on in-depth interviews to better understand the figures rather than repeating the survey.

Comment author: RomeoStevens 13 October 2018 06:49:44AM 3 points [-]

Recruiting is a thing and an EA org with the funds should be willing to consult with the best in the world if it's a one time cost to do so and you can do judgmental bootstrapping on their models and techniques.

Comment author: Ben_Todd 18 October 2018 08:27:09PM 0 points [-]

Just FYI we're doing this at 80k as part of our new headhunting project, and have also sought advice on hiring in the past from people like the partners at YC.

Comment author: Denise_Melchin 13 October 2018 10:37:03PM 13 points [-]

Personally, I still think it would be very useful to find more talented people and for more people to consider applying to these roles; we just need to bear in mind that these roles require a very unusual skill-set, so people should always have a good back-up plan.

I'm curious what your model of the % value increase in the top hire is when you, say, double current hiring pools. It needs to be high enough to offset the burnt value from people's investments in those application processes. This is not only expensive for individual applicants in the moment, but also carries the long term risk of demotivating people - and thereby having a counterfactually smaller hiring pool in future years.

EA seems to be already at the point where lots of applicants are frustrated and might value drift, thereby dropping out of the hiring pool. I am not keen on making this situation worse. It might cause permanent harm.

Do you agree there's a trade-off here? If so, I'm not sure whether our disagreement comes from different assessments of value increases in the top hire or burnt value in the hiring pool.

Comment author: Ben_Todd 18 October 2018 08:25:54PM 2 points [-]

I agree there's a tradeoff. We're pretty unsure about how much to encourage people towards these roles at the margin.

We've seen cases of people on the other side who said they didn't apply for these roles since they assumed they were too competitive, but were found later and ended up doing really well. We've seen lots of cases of people who ended up getting the job but said they almost didn't apply for the same reason. I suspect we still miss a lot of great applicants.

To avoid this, we could encourage more people to apply, but that will result in more people getting demotivated when they don't succeed. Finding the ideal balancing point seems really hard.

I do agree with Khorton below, though, that we should try to find more "win-win" approaches, such as encouraging people to consider and find out if there might be a good role for them, and providing people with clearer criteria.

Comment author: Peter_Hurford  (EA Profile) 10 October 2018 11:47:59PM *  14 points [-]

I’d really like to hear more about other EA orgs experience with hiring staff. I’ve certainly had no problem finding junior staff for Rethink Priorities, Rethink Charity, or Charity Science (Note: Rethink Priorities is part of Rethink Charity but both are entirely separate from Charity Science)… and so far we’ve been lucky enough to have enough strong senior staff applications that we’re still finding ourselves turning down really strong applicants we would otherwise really love to hire.

I personally feel much more funding constrained / management capacity constrained / team culture “don’t grow too quickly” constrained than I feel “I need more talented applicants” constrained. I definitely don’t feel a need to trade away hundreds of thousands or millions of dollars in donations to get a good hire and I’m surprised that 80K/CEA has been flagging this issue for years now. …And experiences like this one suggest to me that I might not be alone in this regard.

So…

1.) Am I just less picky? (possible)

2.) Am I better at attracting the stronger applicants? (doubtful)

3.) Am I mistaken about the quality of our applicants such that they’re actually lower than they appear? (possible but doubtful)

Maybe my differences in cause prioritization (not overwhelmingly prioritizing the long-term future but still giving it a lot of credence) contributes toward getting a different and stronger applicant pool? …But how precise of a cause alignment do you need from hires, especially in ops, as long as people are broadly onboard?

I’m confused.

Comment author: Ben_Todd 13 October 2018 06:31:51PM 0 points [-]

Personally, I see large differences in the expected impact of potential new hires. I'm surprised you don't, especially at the startup stage, and am not sure what's going on there. I would guess you should be more picky for some of the reasons listed in Rob's post.

I also feel very constrained by management capacity etc. This drives the value of past hires up even further, which is what the survey was about (as also in Rob's post).

Comment author: RyanCarey 13 October 2018 03:49:54PM 4 points [-]

Is it fair to summarize the thesis as: there is heaps of super-valuable talent out there but the main reason we can't cash it is that it can't be absorbed into existing managerial structures?

If so, then shouldn't we be advocating aggressively for absorbing the talent through greater funding of and more infrastructure for new EA orgs and EA contractor roles?

Comment author: Ben_Todd 13 October 2018 06:23:11PM 1 point [-]

No, I don't think it's that simple. I think it's sometimes true that the main issue is absorbing talent, but there are also situations when the top hire is much better than the second best, so generates a large excess value. This is because many of these roles require a very unusual skill-set.

I think the message to take away is more like "it's hard to infer what to do based on the survey figures".

Personally, I still think it would be very useful to find more talented people and for more people to consider applying to these roles; we just need to bear in mind that these roles require a very unusual skill-set, so people should always have a good back-up plan.

Comment author: AGB 12 October 2018 11:06:33PM 7 points [-]

Thanks for making the ex ante versus ex post distinction. But it makes me confused about the penultimate paragraph; if I am offered an job at an org and am comparing to earning to give, shouldn’t I be using the (currently unpublicised) ex ante numbers, not these ex post numbers?

The risks of bad personal fit, costs of senior staff time, costs of fast hiring in general, and time taken to build trust are all still in the future at the point, and don’t apply to the earning to give alternative. As far as I can tell, the only cost which has already been sunk at that point is the cost of evaluating me as a candidate. In my experience of working on the recruiting side of a non-EA org, this is far smaller than the other costs outlined, in particular the costs of training and building trust. I’m curious if the EA orgs feel differently.

In general though, I don’t think attempting to save these numbers by pointing out how hiring is subtly much more expensive than you would think interacts much with my objection to these numbers, since each additional reason you give me for why hiring is wildly expensive for EA orgs is yet another reason to prefer earning to give, precisely because it does not impose those costs! All these reasons simply mean the numbers should be lower than what you get from an ex post phrasing of the question, at least insofar as they are being used for what appears to be their intended purpose, namely comparison of options.

Comment author: Ben_Todd 13 October 2018 06:13:28PM 1 point [-]

Hey Alex,

A quick note on another aspect that I think Rob might have underemphasised:

Hiring could generate very high returns to the organisations but often not as high as other marginal activities.

Here's a simple model: If you think that many EA orgs spend about $1m per year and generate $10m per year of "value" (as rough orders of magnitude), then even if a marginal hire generates $1m "excess" value to the org, that's only a 10% increase in impact for that year. This is good but there could easily be even more important things for senior management to focus on.

This would explain why the orgs don't hire many people.

However, it would still be consistent with the idea that marginal hires are valuable and can have more impact by working at the org than by earning to give, since each generates $1m.

It would also mean conditional on an org running a hiring process, it's better for that process to go as well as possible and get the best possible applicants.

Comment author: Ben_Todd 08 September 2018 03:49:09PM 1 point [-]

See our new article about this topic: https://80000hours.org/articles/comparative-advantage/

Comment author: vollmer  (EA Profile) 08 August 2018 03:27:57PM *  4 points [-]

The sources you quote seem to suggest more like 5% in real annual returns (or 7% nominal), and you wrote "2-7% nominal returns". If you're investing $2m, that would be $40k-$140k per year. I'd expect this to cost maybe one week of staff time per year, so it might easily be worth the cost. (Mission hedging and more diversification would push this up further; fees and risk aversion would push it down. Overall I don't expect these factors to be very strong though.)

To me it seems that the difficulty of explaining this to the users is the stronger reason against implementing this. (Unless the users themselves can choose but that would cost more staff time again.)

Comment author: Ben_Todd 09 August 2018 03:20:14AM 2 points [-]

Sorry, I was thinking 1-5% of real returns rather than nominal, though I agree for these purposes nominal might be more relevant.

There's a lot of room for different figures depending on how mean reverting you think valuations are. I think we should expect them to be somewhat mean reverting, so my best guess is more like 3% real.

I was also partly thinking that valuations are much higher again since I wrote that post, so I think that article is a bit optimistic today. http://www.multpl.com/shiller-pe/

With costs, I'm more thinking about the set-up cost. I wouldn't be surprised if this took several person-months, which could be used to add features that would add much larger proportional gains.

I also guess the on-going costs would be quite a bit more than one week per year, due to the reasons Rob lists.

And then there are also the costs of explaining this feature to users, which seem pretty significant - e.g. even if you write up a clear explanation of why you're doing this and speak to a bunch of people about it in-person, you'll still end up with lots of misunderstandings.

Comment author: Eli_Nathan 07 August 2018 07:09:53PM 4 points [-]

Thanks Marek,

I remember some suggestions a while back to store the EA funds cash (not crypto) in an investment vehicle rather than in a low-interest bank account. One benefit to this would be donors feeling comfortable donating whenever they wish, rather than waiting for the last possible minute when funds are to be allocated (especially if the fund manager does not have a particular schedule). Just wondering whether there's been any thinking on this front?

Comment author: Ben_Todd 08 August 2018 06:04:37AM 4 points [-]

I agree that would be ideal, but it doesn't seem like a high priority feature. The risk-free 1yr interest rate is about 2% at the minute (in treasuries), so even if the money is delayed for a whole year, we're only talking about a gain of 2%, and probably more like 1% after transaction costs.

You could invest in the stock market instead, but the expected return is still probably only 1-5% per year (as I argue here: https://80000hours.org/2015/10/common-investing-mistakes-in-the-effective-altruism-community/). Plus, then you have a major risk of losing lots of the money, which will probably be pretty hard to explain to many of the users, the press etc.

I expect the staff time spent adding and managing this feature could yield much more than a couple of percent growth to the impact of the funds in many other ways (e.g. the features Marek lists above).

Comment author: RandomEA 06 August 2018 09:48:35AM 2 points [-]

I'm aware of this and also planning on addressing it. One of the reasons that people associate the long term future with x-risk reduction is that the major EA organizations that have embraced the long term future thesis (80,000 Hours, Open Phil etc.) all consider biosecurity to be important. If your primary focus is on s-risks, you would not put much effort into biorisk reduction. (See here and here.)

Comment author: Ben_Todd 07 August 2018 04:21:43AM 2 points [-]

I agree the long-term value thesis and the aim of reducing extinction risk often go together, but I think it would be better if we separated them conceptually.

At 80k we're also concerned that there might be better ways to help the future, which is one reason why we highly prioritise global priorities research.

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