There are a lot of 'hiring is broken' posts and this is a decent one, but I don't think I'm alone in feeling that none of them convincingly identify the problem, let alone solve it.[1] So I'll do that here.
Hiring isn't broken because people use the wrong interview questions. It's broken because firms are engaging in a zero-sum battle for talent. But if what you're doing is worth a damn, it should be worth a damn when ordinary people do it. If what distinguishes your company is that you've managed to hire smarter people, maybe your company isn't so great.[2][3]
The proper hiring criterion is pretty simple: do the people who will be working with the candidate like her? In Blink, Gladwell presented good evidence that formal interview process isn't any more objective than this. And when you think about it, what would "objective" even mean?
There's also an issue with the labor market -- in particular, the difficulty of firing. You're much better off hiring liberally and firing candidates that don't work out. If all firms did this, the labor market would be more efficient and firing wouldn't be so bad.
Apple is a good example. Their profit per employee is second only to Netflix among large tech companies, and this includes a significant fraction of retail personnel. Apple's profit per engineer is probably higher than Netflix's, and that's remarkable considering they're over twenty times bigger.
Does Apple achieve this with some optimized interview format? Higher salaries? Onsite massage? No, they do it with better products (and a command and control governance model...).
It means that the software industry isn't nearly as innovative as it thinks it is. This is actually so obvious it's the subject of popular jokes ('like airbnb for pet food' etc). It's also obvious when you consider the ratio of effort spent building tools to products. All the latest frameworks but... Where are the apps? Where are the apps that are even half as feature-rich as a typical Windows application from the '90s? Google Plus still can't keep which things I've +1'd straight.
[1] It reminds me of the situation with essays claiming to explain why privacy is important even if you 'have nothing to hide'. See https://gist.github.com/clumma/414f0c9a8fedf9ba9db5
[2] https://twitter.com/clumma/status/139082596587012096
[3] Or worse, that you've managed to deprive your competition of smart people. Google has done this -- hired people without having work for them to do, on the reasoning that something might come up and at least they won't be working for the competition.