FORTUNE -- When a San Francisco-based job recruitment software firm called Gild was looking for a programmer this summer, it had to compete with tech companies in Silicon Valley also chasing local developers with stellar pedigrees. So Gild CEO Sheeroy Desai and his team decided they were going to try to hire someone less known and more affordable. They used the software they're trying to market, which ranks developers based on the quality of their free, open-source code.
Gild executives searched for a developer versed in a coding language called Ruby on Rails. Based on Gild's ranking system, Jade Dominguez was one of the best in the Los Angeles area. Dominguez has no formal post-secondary education and taught himself to code using free tools available online. Now he is a web application developer for Gild.
Dominguez exemplifies a problem that Desai wants to solve -- great coders without killer degrees get buried in the resume pile. "The system today is totally biased," says Desai. "Discrimination is rampant in this industry. We are trying to bring meritocracy back into recruiting." Gild, he says, has found a way to pinpoint talent without getting hung up on traditional credentials.
Desai, at first, seems like an unlikely leader for this crusade, given that he has a degree in electrical engineering from MIT, which he admits gave him a big boost early in his career. But he's seen talented coders passed over for jobs for questionable reasons, he says, and he wants to change that.
Ultimately, Desai wants to upend the way recruiters and jobseekers connect online. "LinkedIn is doing great work collecting resumes, but what hasn't been solved is the problem of who is good and how good they are."
Gild is taking some steps to address this problem, at least for developers. The company officially launched a software product on Monday that scans code that developers submit to free, open-source platforms such as Google Code or SourceForge. Then, it ranks developers based on the quality of the code they produce. The idea is to sell the ranking system to companies looking for developers.
Granted, it can be difficult to tell what makes some code better than others. One key indicator is simplicity, Desai says. People who solve a problem using relatively few, elegant lines of code are generally considered good. Gild also looks at how well-documented the code is -- how many other people use it, and whether it's been accepted to a high-profile open-source project, such as Linux. More
|November jobs report: Unemployment falls to 7%|
|Where should you put your money now?|
|Fast food worker: Protest didn't cost me pay|
|2 million Facebook, Gmail and Twitter passwords stolen in massive hack|
|Sick days: A luxury many hourly workers don't have|