Key Takeaway
Ann Roberts, Group HR Director at leading social discovery network Badoo, tells us why she thinks the metrics of measurement for success in the HR field need to change, and why this should start at the top.
The HR industry has been in the media quite a bit lately as one that is ripe for disruption. There are a number of startups leveraging AI to offer innovation in the field – from Headstart who is using machine learning to improve the candidate screening process, to Saberr whose Coachbot tool is working to improve employee engagement and team performance via AI-driven coaching. Automations are helping to make the process more data-driven, leaving recruiters to focus on more qualitative elements.
For Ann Roberts, Group HR Director at Badoo, while many of these tools are helping to augment much of the process, human judgment and decision-making still remains essential when it comes to hiring.
As the demand for talent continues to become increasingly competitive, those making recruitment decisions must remain aware of what’s happening in the wider industry and how needs have changed in terms of the skillsets required in a growing company.
“What we will need increasingly more of – and what is increasingly found in companies that are really successful – are T-shaped people. We’ve made significant leaps in terms of innovation in development infrastructure. Today there are tools that can automate many of the deeper technical skills that were once required in fields like front end development, for instance, which has moved more toward a specialism in user experience and interface. Here you need to be more of a generalist – having a UX and UI understanding, in addition to a mastery of particular tools.”
The real value of human capital
Roberts looks at the hiring process the same way a developer looks at building a product. You have sprints, you have long term goals and you have iterations along the way. A company, like a product, is a living, breathing and changing thing. And at the center of the organism should be the people function.
“I think HR has moved closer to the center of the business in the last 30 years,” Roberts said. “Most businesses that are high growth, high margin are completely built on their human capital. As people become less replaceable, HR needs to pick up its game to make things more attractive. To do that, the function needs to become a lot more business centric. It’s not about just demanding a seat at that table, but realising it needs to be earnt.”
Which brands are getting this right? “Companies that start with no HR teams present, because they don’t come with the baggage,” Roberts ventures. “For example, Slack and Basecamp are often lauded as tech-startups with an inspiring culture. They had no HR people at the beginning, so they did what made sense from the ground up. So much of the way we do things is still lingering on from the 1960s and is no longer relevant.”
Companies like Basecamp, Netflix and Slack are famous for their perhaps uncommon approaches to company culture and the business of people. Basecamp, for instance, follows a “no limit” policy on employee expenses, giving every single US employee an AmEx card upon hiring to use ‘within reason’. Employees also enjoy significant autonomy in terms of where, when and how they work – something increasingly valued among younger talent.
These brands – all of whom are arguably among some of the most successful in tech – regularly encourage non-conformity and personalized work experiences. This is in part their competitive edge in the people market, particularly given the immense pressure tech-oriented businesses face today when it comes to finding the best talent.
Competitive benchmarking and measurement of internal success
In such a competitive market, it’s essential to consistently monitor what’s working and benchmark how your brand is performing against peers. Roberts agrees companies should be looking out at what others are doing. “Especially with the labor market being liquid, this helps because people move around a lot more now. You then see a diffusion of good practices, so everyone’s baseline increases.”
Current methods of benchmarking, however, simply aren’t cutting it. “These 86-page employee engagement surveys that you fill out and give to the Times Best Places to Work, for instance, feel very staged. It’s not fluid; it’s a marketing exercise – If you pay to participate you get to be named.”
Existing processes that look to measure the success of people practices internally are also in need of a significant facelift. “Take performance reviews – these are often lingering, dreaded conversations happening twice a year that no one enjoys. A lot of companies like Netflix, IBM and Oracle proudly stopped the forced-curve corporate review cycle in favour of manager-led development conversations.”
This very public outcry against performance reviews as a measure of HR success made a splash a few years ago. But now, according to Roberts, these companies are quietly bringing them back because we’ve not yet found anything better to replace them. “You can’t turn one tap off without having something else. It turns out people do like certainty, and they do like some sort of framework that they can show them where they stand. So it’s about adapting to something that works.”
The metrics that matter
For Roberts, the idea of looking at things like completion rate of performance reviews as a primary metric of success is antiquated and backwards-looking. “It’s all looking backwards, ticking boxes, chasing people to complete reviews. What are you measuring? Are you measuring clarity of direction? Motivation? Communication? Are we all aligned? Start not with data you have, but by identifying the firm’s unique position in the market, and what contributes to and sustains your competitive advantage. Then focus on improving on those elements that have the greatest impact. Only then figure out how you can measure weather you’ve moved the needle.”
The same goes for metrics like employee happiness. “It goes back to this controversial dilemma in the industry: What is the people function there to do – is it to make people happy? It’s too naive to say that people practices are all about keeping our people happy. There are also difficult business decisions that sit behind this curated happiness that are all about organizational design. Are we fit for purpose? Why are we in the countries we’re in? Can we anticipate future trends? These all have real implications for your people. How happy you made them feel is irrelevant then.
“It’s infamously difficult to prove that happy people are in any shape or form more marginally productive than not. There are so many assumptions in that function. Lots of perks = happy, happy = productive, productive = good for business. These are all assumptions.” The same goes for employee retention. According to Roberts, there are a number of reasons companies might experience churn, and many can be positive.
So what is moving the needle?
A study from Harvard Business Review last year suggested employee engagement and experience might be the metrics that matter. The study looked at those companies investing millions into improving their employee engagement scores. According to Gallup, only 32% of US employees registered as ‘engaged’, and this drops to 13% worldwide. However, according to HBR many of these initiatives are very focused on the short-term, and look too closely at these fickle survey numbers rather than thinking long-term.
“When organizations make real gains, it’s because they’re…going beyond what engagement scores are telling them to do in the moment and redesigning employee experience, creating a place where people want, not just need, to work each day.”
Evidence of success lay not in engagement surveys, but in the financial data. “Compared with other companies, the experiential organizations had more than four times the average profit and more than two times the average revenue. They were also almost 25% smaller, which suggests higher levels of productivity and innovation.”
Why we should be looking out
For Roberts, rather than relying simply on surveys or what she considers backwards-looking metrics, we should also be looking out to the brand’s perception in the market. If we can see how well a brand as a whole is faring compared with competitors, this can be used as an indicator of that brand’s perception when it comes to potential employees.
“From a marketer’s perspective – externally it’s about your brand. For a consumer brand, a good measure is often awareness, which is binary. This can be divided into prompted or unprompted. Unprompted awareness is quite significant. I would use a similar metric in the labour market for employer brand – either a proxy measure or derivative measure. It’s all about awareness of the company as an employer, and then applying sentiment to that – is the feeling positive or negative?”
The measure of sentiment is one of the most useful tools when it comes to creating a strategy around improving or changing that perception within the demographic a brand is targeting. Just as the product space itself may be competitive, so too is the landscape for attractive talent. “If you have high awareness, but negative sentiment, that’s a different fix than if you have no awareness at all. Sometimes no awareness is better as you can build positive awareness from the ground up, rather than fixing negative perceptions.”
External data and the future of HR
While in many ways the HR function operates on the same principles it did 50 or 60 years ago, the playing field has changed substantially. Today, companies are competing not just on market share or IP but on acquiring the talent that will best place them for success. Just as those driving business strategy look to competitive data and customer feedback to inform next steps, it’s vital that HR teams become more business-centric and data-driven, look at what’s working in their wider industry, evaluate metrics that really move the needle and iterate accordingly, earning their place as vital decision-makers contributing to their company’s future success.