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Joel Spolsky, co-founder and CEO of New York-based Fog Creek Software, has found a way to consistently hire the nation’s top talent at his firm — by focusing his recruiting efforts on rising stars still in college, instead of people already in the job market.

Spolsky auditions his potential employees during a paid summer internship program, wooing them with generous perks and pay. Nearly half of the developers at Fog Creek were hired as college interns and then recruited for full-time work. Here’s a look at Spolsky’s philosophy on “full-court-press recruitment.”

Spolsky puts potential intern candidates through a rigorous interview process. First, they are interviewed over the phone. If they pass the phone interview, Fog Creek flies them out to New York to be interviewed in person. When they arrive, a uniformed driver pulls up in a limousine and whisks them away.

Ideally, the candidates will be staying in the coolest hotel they’ve ever seen — in the heart of the city. After a long day of interviews, candidates are invited to stay in the hotel for two more nights at the company’s expense. Even though only one in three applicants who make it to this stage will be hired, there is no skimping on the perks.

The idea is that kids who don’t get the internship will return to campus thinking Fog Creek is a classy employer — and will spread the word.

Waiting in the hotel room is a company T-shirt, a suggested walking tour of New York, and a DVD made about the 2005 intern group. The hope is that after their expense-free stay in the Big Apple, potential candidates will go home and tell their friends how much fun they had and encourage them to apply for an internship the next summer — if only for the free trip.

By the end of the summer, most of the interns will have convinced Spolsky that they are great performers — and they will receive a job offer before they leave. The offer is for a full-time position with a starting salary of $75,000, conditional on their graduation from college. When the interns go back to school, Spolsky wants them to compare notes with their friends and realize they are getting a higher starting salary than their peers. He doesn’t consider $75,000 overpaying because hiring an intern is less risky than hiring someone based on an interview.

Inc