The evolving conception of business management in the 21st century acknowledges the increasing value of human capital for large international companies. The ability to adapt, make unorthodox decisions, and demonstrate excellent technical skills is not something that could be taught in a short span of time. These qualities comprise a great number of personal experiences that have a very high intrinsic value to an organization. At the same time, losing employees due to burnout and turnover is an extremely costly process.
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Economic losses from having to replace an employee are estimated at 2-5 monthly salaries for the position, while non-economic losses from idea theft and employee poaching can climb even higher (Boswell, Gardner, & Wang, 2017). Thus, evaluating the strategies of successful companies to recruit and retain talent represents a critically important avenue of academic inquiry. Google is one of the largest and most successful companies that sport a remarkable turnover rate for the high-tech industry, standing at 94% in retention and 6% in turnover (Antoun, Zhang, Conrad, & Schober, 2016). The purpose of this paper is to analyze their measuring, identifying, and retaining strategies and provide potential solutions for improvement. Google’s existing system is overly long-winded and does not use the full plethora of performance metrics to accurately identify and retain talent.
Talent is identified by the majority of businesses as the ability of an individual to perform above the average in a specific role or vocation. It represents a variety of personal qualities that contribute to the quality, productivity, and timeliness of the provided service. Competencies constitute a list of qualities that an employer considers the most valuable for a position. The eight key competencies that can be applied to almost every company or business are as follows (Hickman & Silva, 2018):
- Leadership and decisiveness. Stands for the ability to exercise leadership over oneself or a group of people.
- Support and cooperation. This competence represents social cooperation and supportive behavior toward others. Examples include showing respect, mentoring, and putting other people first.
- Interaction and presentation. Stands for communication skills and the ability to present a point to others in an efficient and accurate manner.
- Creation and conceptualization. The ability to accept and generate new ideas. Receptiveness to change.
- Analysis and interpretation. The ability to assess information from many different sources and applying critical thinking skills to a working situation.
- Organization and execution. This competence stands for the capability to organize oneself and others in order to achieve specific tasks in a disciplined and orderly manner.
- Coping skills. The ability to manage stress, change, and high workloads.
- Performance and enterprise. The ability to align one’s personal goals with company goals. Deep understanding of business processes.
Typically, these qualities are measured either through a series of key performance indicators (KPI) or through open-ended interviews.
In order to recruit potential talent from the stream of possible candidates, the company needs to be able to grade individuals and identify the ones most suitable for the task. It could be done through a variety of measures, which are as follows (Noe, Hollenbeck, Gerhart, & Wright, 2017):
- Interviews. This method of identifying and selecting talent is one of the most popular in modern HR practices. At the same time, it is one of the most inaccurate, as it relies on the recruiting officer’s personal experience to distinguish talents, while the candidate is actively working to sell themselves for higher than they’re worth. Is prone to numerous biases as a result.
- Resumes and referrals. While often implemented by recruitment agencies and HR departments, recommendation letters are the most inaccurate and unreliable forms of detecting talent by far. This is due to a lack of uniform standards in providing recommendations and the tendency to oversell their significance.
- Work examples. This method is useful for estimating individual performance. It is appropriate for testing engineers, programmers, writers, and others. However, it is useless for grading individuals that provide services. Assessment centers. This is the most holistic method of assessing talent in a candidate. It involves psychometric tests and physical evaluation of performance over a period of time. However, assessment centers are a lengthy and costly venture.
As it is possible to see, identifying talent is a complex experience that has to be done without access to many of the employer’s metrics, making the process of hiring one a tedious and inaccurate task.
Retaining individuals that were hired recently or grew up as professionals in a particular company is very important, as failure to do so results in expenses, financial and production losses, and the so-called “brain drain.” There are several ways of retaining talent in a company (Turner, 2018):
- Provide monetary and non-economic remuneration. Many individuals are motivated to overlook the various stressors and unpleasant situations surrounding their workplace for compensation.
- Reducing the negative sides of work. Instead of paying employees to endure work, the goal is to make them like it.
- Corporate culture. Integrating a person into a team and forming social connections makes it less likely for them to leave.
- Provide further opportunities for growth.
Companies that have high turnover rates tend to fail in one or more of these critical dimensions, while organizations with low turnover provide a good overall working climate.
Problems and Strategies of Google
Google started out as a small, innovative, and entrepreneurial company that created a product that had no equals on the market at the time. There is a reason why the company’s name has become synonymous with search engines. The fact that the company managed to gain success so quickly also meant that it had to expand significantly in order to cover various products it offered, such as big data, search and analysis, mail, text redactors, analytics, YouTube, gadgets, and many others (Sutton, 2014). The mindset for recruiting talent for this burgeoning company remained the same, however. They wanted to hire individuals who could provide creative and unconventional ideas while working with limited resources. The company relied on “wisecracker” questions to determine the creativity of individuals (Sutton, 2014). This strategy proved to be flawed, as the analysis of employee performance indicated that the wisecracker criteria did not have any correlation with overall performance.
The company also prioritized a wrong set of metrics to determine the potential of all applicants in the company. SAT scores and university grades were considered prevalent for a long time to determine the knowledge ceiling and professionalism of employees in technical professions (Sutton, 2014). However, a different set of evaluations of employee performance indicated that performance does not correlate with higher or lower SAT scores and grades, meaning that the core competencies required to work in Google are not informed by formal education to the degree it was initially assumed to be.
Google realized its lack of systematic approach to these issues relatively quickly and had to switch its recruitment process to that similar to large companies, such as Microsoft. It focuses on detecting creativity in both interested and non-interested parties, independent evaluation of skills and parameters by a commission of decision-makers not present at the interview, and the introduction and promotion of a culture that inspires teamwork, colloquially referred to as “Googleyness” (Sutton, 2014) These measures helped reduce turnover and facilitate company growth, keeping it at the top of data brokering industry. Their current rate stands at 94% in retention and 6% in turnover in 2017 (Antoun et al., 2016).
Effectiveness of Implemented Measures
Based on the low turnover rate presented during the last several years, it could be assumed that the company managed to succeed in retaining talent. The average turnover rate for the tech industry is 23%, which is roughly 4 times higher than that of Google (Johnson, 2017). However, these numbers cannot help evaluate the performance of every individual member. The efficiency of employees and managers is measured by a special team of individuals called People Analytics. Project Oxygen, launched in 2009, also helped inform the qualities needed in a good manager, which were identified as the following (Sutton, 2014):
- Good coaching skills
- Good communication skills
- Good technical skills
- Empowerment vs. micromanagement.
Nevertheless, the company cannot say for sure which employees perform better and which do so worse. Significant metrics, such as KPI, were still not introduced en-masse, and there are no points of comparison between Google’s employees and competing organizations (Camelia & Oana, 2018). The effectiveness of retention can be attributed to a generous employee benefits package as well as an aggressive anti-poaching policy employed by the company.
The company realized that the use of limericks and brainteasers, as well as the overemphasis on SAT scores, was not the right way of choosing candidates (Sutton, 2014). These methods were either completely eliminated from the interviewing process or reduced insignificance. In order to reduce the bias of the interviewing process, the analysis and decision-making were placed in the hand of members that did not conduct the interview. This measure supposedly eliminated the issue of personal opinions towards the candidate based on race, gender, manner of speech, and other similar factors. The commission simply reviewed the answers and recordings of the interview dialogue.
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A series of agreements exist between Google and other large tech corporations, such as Facebook and Microsoft that prevent the hiring of former Google employees by any of these companies (Davis, 2017). While illegal, such measures effectively discourage people from leaving. Lastly, Google’s corporate culture ensures freedom of expression and makes it very accommodating for employees to work in. To summarize, the company learned how to keep talent but experiences difficulty with identifying and recruiting it.
Recommendations and Further Actions
There are three major problem spots for Google’s current recruitment and retention strategy. These issues are as follows:
- Lack of metrics in the employee evaluation process. For a company that is comprised of technicians and mathematicians, the lack of numerical parameters of efficiency is severely lacking (Kumar, Chebolu, & Babu, 2016). The company must develop and adopt a KPI based on the following parameters: lines of code per day, function points per day, story points per day, units per hour, average handling time, revenue per employee, labor productivity, and overtime hours. Other metrics may be added based on the peculiarities of the position.
- Long approval processes. The multi-step process of evaluating candidates, while efficient, takes too much time to implement. An individual will not wait for several weeks unemployed, while his application is being evaluated. In addition, the distanced evaluation model, while eliminating biases, would also miss out on important psychological cues discovered during the interview (Keeble & Wilkinson, 2017). The proposed solution is to abolish the three-step interview process and replace it with a single-step interview and a probation period. The lack of bias checks can be mitigated by retaining experienced recruiters.
- Abolish Googleyness from the list of requirements. This suggestion is possibly the most radical out of the three. However, it pertains to the concepts of diversity and inclusion that the company seeks to promote. Best ideas are generated as a result of a clash of competing ideas (Harvey & Allard, 2015). Competition helps individual employees to grow and thrive. One of the downsides of recruiting individuals with similar mindsets is that they tend to agree with one another on nearly all matters and not produce an opposing point of view. It also limits the company to hire like-minded individuals rather than specialists and professionals in the field, whose views might be considered “unconventional.”
These measures and actions should help Google identify and recruit talent quickly and more efficiently as well as evaluate the existing workers and their levels of performance.
Potential Benefits and Drawbacks
The proposed measures would help improve the quality of Google’s hiring and evaluation process as well as remove certain aspects of the company culture that are holding it down. At the same time, each of the proposed solutions has certain drawbacks the company must be aware of. The implementation of KPI metrics, while useful, cannot guarantee the absolute accuracy of results. Certain parameters, such as lines of code, can be artificially inflated by increasing the number of actual lines through redundancies without giving substance (Ott, Tolentino, & Michailova, 2018). Thus, while the numbers would look impressive on paper, the quality of the product would suffer.
The simplification of the recruitment process has the potential to backfire as well, as, without an independent evaluation of the candidates, Google’s recruitment systems would become the same as that of many other companies (Astakhova, 2016). While it would lose its weaknesses, certain advantages would be forfeited as well. As a result, the recruitment process would gain in speed but lose in quality. Lastly, the removal of the concept of Googleyness from the list of requirements would create dissonance within the existing workforce. Google’s employees have already shown a lack of tolerance towards individuals with different views on gender, privilege, and political affiliation, which has resulted in numerous class action lawsuits. Introducing new individuals without regard for certain parameters of their culture and personality would create turbulence within the normally homogenous workforce and may cause an increased turnover rate in the short-term perspective (Turner, 2018).
Application in Other Industries
The proposed solutions are unique to Google’s situations and were based on academic literature as well as information provided by the case study. They cannot be applied to other industries or companies due to the peculiarities of their respective situations. The concept of Googleyness is unique to Google and does not exist in other tech companies, such as Apple or Microsoft, to the same level. However, the lack of metrics and the oversaturation of the recruitment process can potentially be found in other industries (Turner, 2018). Using KPIs and reverting to traditional recruitment practices can be considered a universal solution for these problems. At the same time, the metrics to be used in KPI should be specific to the industry. For example, while measuring programming productivity in lines of code may have potential drawbacks, doing so for physical production, repair, and customer service is still a valid and useful strategy, as these numbers help evaluate individual performance and project production values for the future.
Google is considered to be one of the most successful tech companies in the world. It is notorious for its creativity, corporate culture, and low turnover rates. The company’s recruitment and retention strategy changed significantly over the years, as Google transformed from a dynamic and expanding young company into a behemoth with over 10000 active employees. The initial strategy revolved around the perceived notions of creativity and the capacity to work with limited resources. However, an objective analysis showed that such a framework did not produce results. The company then changed the recruitment process to include a very rigorous selection, analysis, and hiring of employees. However, while certain metrics were introduced into the system, the decisions remained informed by incalculable measures, such as Google news. The company retains its employees through a combination of economic and intangible measures as well as anti-poaching agreements.
The proposed interventions would help Google identify and evaluate existing talents better by using solid metrics rather than incalculable parameters. While each of the proposed solutions has its inherent drawbacks, adopting them would benefit the company in the long-term perspective. The ideas featured in this paper could also be applied to other companies in a limited manner.
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