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Bold and Outrageous HR Practices That May Indicate Your Approach Is Too Conservative (Part 1 of 2)

by Aug 20, 2012, 5:46 am ET

In the corporate world, HR leaders are frequently considered some of the most conservative and risk-averse. Running HR in a conservative manner might have served your company well in the 1990s, but unfortunately it may be inappropriate and even damaging today. This fast-changing and highly competitive business world has caused senior executives to now expect innovation not just in their product lines but also in all of their business processes.

As a result, it’s time for HR leaders to realize that in a battle to attract and retain top talent and innovators, your firm has to act differently with superior talent management approaches if your firm is to develop and maintain a competitive advantage in the talent marketplace. In fact, from an employer branding perspective, your firm needs to do a few unique things in HR if it is to stand out as a great place to work.

As a professor, I am fortunate to have the time to track and give corporate presentations on the array of leading and “bleeding-edge” programs that a handful of firms have had the courage to implement. Almost by definition, bold HR programs are new, controversial, and full of risk, so don’t be surprised when you don’t agree with many of the listed approaches. I suggest that you compare them to your own programs in that functional area in order to see if perhaps your firm is being too conservative and is falling behind the leading edge.

The Top 10 Bold and Outrageous HR and Talent Management Practices

Here are my selections for the top 10 bold approaches that define the current “bleeding-edge” of HR practices.

  1. Outrageous benefits – Google recently revealed that it offers amazing death benefits to every U.S. employee. Should any of its U.S. employees die, their surviving spouse or domestic partner will receive 50% of the employee’s paycheck each year for the next 10 years! With a young employee base, fortunately not many will likely take advantage of this benefit, but it still sends a powerful message that benefits at Google are different.
  2. Limited-term employee contracts – even though most managers have the right to fire weak-performing employees, most never get around to it unless the employee does something truly outrageous. In order to force managers to weed out weak performers, the Revel casino and hotel required many of its new hires who interact with customers to sign employee contracts with a limit of four to five years. After their contract expires, employees must formally reapply for their job. Hotel management argues that eliminating the guarantee of a permanent job will pressure employees to remain productive and customer-friendly throughout their employment term. They also believe that top performers won’t be discouraged with the lack of job security because their performance level will continue to make them desirable.
  3. Meetups for recruiting — Edelman, the powerhouse PR firm, combines social media and “meet up” events to attract and build relationships with the very best. It uses employee social media contacts to invite candidates to mingle and to build relationships at social events held at popular restaurants. Candidates are offered unique snacks and drinks, while senior executives give a brief presentation. At the events, employees wear name tags with their Twitter handles on them. Attendance has reached as many as 300 and the events have resulted in more than 25 hires.
  4. A recruiting TV show – the Chinese are learning how to be bold in recruiting by offering a TV show entitled “Only You” where candidates are interviewed and hired by executives in front of a live TV audience.
  5. Outrageous recruiting videogame creator Kixeye put together an outrageous recruiting video that pokes direct fun at its competitors. The video literally mocks the age of EA’s approach to gaming by including the logo “EAARP Games” (A reference to the AARP senior group) and an aging executive with an oxygen breathing tank. They also mock another competitor, Zynga, by transforming its famous dog logo to a logo showing one dog literally humping another. To most, this mocking would definitely be in bad taste, but to candidates in the gaming industry, it may be considered cool and bold.
  6. Bold employer branding – Amazon recently placed a letter containing information about its employee educational reimbursement benefits directly on its customer homepage. Although a letter about benefits might startle shoppers, it also sends a message to everyone who interacts with Amazon that employee welfare and development is important. Placing HR and recruiting information in the middle of a firm’s primary homepage is certainly unique.
  7. Unlimited vacation policies – a major role of the HR department is to track absenteeism and vacation days. However, foursquare, Netflix, and several startups have begun to offer unlimited amounts of vacation and sick leave. This bold approach treats employees like mature adults who know how to manage how much time to spend away from work. By offering compelling work, tightknit teams, and performance-based pay, the firm offers enough positive incentives to drive employees to work more hours.
  8. Outrageous referral practices – the quality-of-hire results provided by employee referrals has encouraged firms to redesign their programs. While many firms discourage nominating friends as referrals, Tata Consultancy Services of India did the opposite. It developed a program that was specifically designed to encourage buddy referrals by making “your friends your colleagues.” Its slogan “what if all your friends worked with you at TCS?” is a powerful one. The pressure to increase employee referrals has become even stronger now that employees can use social media to make more contacts so DNAnexus raised the reward bar by offering a $20,000 referral bonus … plus a free DNA screening for referring a software engineer who was hired.
  9. The worst-place-to-work ranking – for years there have been a variety of best-place-to-work rankings, but now the magazine The Consumerist is sponsoring a new “worst place” ranking. It conducted and published a poll asking readers to rank the worst companies in America to work for. Obviously making the list would severely damage your employer brand and recruiting. This year EA beat out B of A with more than 64% of the vote. In addition, the increasingly popular employee feedback site Glassdoor.com now allows contributors to rank a company’s CEO. In one case this year the CEO of Visa received only a 20% rating while the Apple VP received a 97%. Obviously, a bad CEO ranking can now damage your recruiting and employer brand image.
  10. Keeping the job a secret – smart firms periodically peruse the job postings of their competitors in order to use the required skill sets to aid in predicting their upcoming products and initiatives. The “inside Apple” blo, reports that some candidates at Apple are being kept in the dark throughout the hiring process about the specific role and job that they are being recruited into. In a company well known for secrecy, the premise for this approach is that the information about what new hires will be working on is valuable and it must be kept from competitors. Obviously this approach can frustrate some candidates and it could even turn them off if they didn’t fully understand the reasons behind it.

Final Thoughts

If you’re going to provide a competitive advantage for your firm in the talent marketplace, you by definition have to do things that are different and that produce superior results to your talent competitors. Even though budgets are tight, now is not the time to be conservative in HR. Most major corporations that I advise need to be much more aggressive in the area of talent management. If you’re going to be a business leader as opposed to a business partner, you have no choice but to lead by going first.

 

Note to readers: if you know of other recently implemented bold and outrageous corporate HR approaches, please post a brief description of them in the comments section following this article on ERE.net.

This article is provided for informational purposes only and is not intended to offer specific legal advice. You should consult your legal counsel regarding any threatened or pending litigation.

  • http://punkrockHR.com Laurie Ruettimann

    Some HR practitioners/analysts took a second look at the Google death benefits. Unless the analysts have missed something, it’s a 5x life insurance policy paid out over 10 years. So you get your deceased spouse’s salary, yes. What’s unclear is if this is addition to company-paid life insurance.

    Anyway, it’s good (*but unfortunate) marketing for an aging workforce. And they are aging — just like Microsoft and Oracle. There may be slight advantages to the payment structure but — as most working HR generalists know — death is expensive and most surviving families prefer 5x life insurance paid out in a lump sum when a spouse dies.

  • http://www.brandemix.com Jason Ginsburg

    I believe that, at the end of orientation and training, Zappos offers new hires $2,000 to quit immediately. The idea is that the “wrong” sort of person would take the money and leave, while a person who’s right cultural fit would rather stay than make a quick buck.

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  • Keith Halperin

    Thanks, Dr. Sullivan: A corporate definition of “bold and courageous”:
    An action which will probably get you fired if it doesn’t work (and maybe if it does).

    I think the list has mildly interesting ideas, not “bold and courageous” ones.

    I call and raise with two of my own:
    1) Re: your limited contract idea: Instead of giving a no more than 4-5 year upper limit on employment for new employees, you give some new employees 3 year, guaranteed-raise, no-lay-off-without-cause employment contracts. That should reduce attrition.
    2) As a benie: you offer to assume the new employee’s student loans for as long as they work with the company, or until it’s paid off. (Have HR figure out the tax implications to make it work.) That should really interest the grads from the most expensive schools that hiring managers love….

    Cheers,

    Keith “Bold but not Courageous” Halperin

  • Martin Snyder

    Revel will do well to survive themselves for five years, but like the life insurance, the “employment contract” does not likely alter the “at-will” nature of the job- so it’s like a “Contract with America” contract; ya know, illusory. I think they went to lengths to avoid unions (i.e. contracts) in the first place !

  • Jerry McBrayer

    Dear Professor – you really should do your homework before referencing garbage like the ‘worst place to work’ survey, which turned out to be nothing more than misguided and misinformed gamers piling onto EA. At EA we’re used to the hate, and understand where it comes from, but to see you citing the survey as though it were a legitimate source is disappointing. On the other hand, we had a good laugh at the Kixeye video, but again, although it was a really well done piece, it also piled on an unfair stereotype of who EA truly is and the makeup of our workforce. You should come by for a visit sometime…
    Best,
    Jerry.

  • http://drjohnsullivan.com Dr John Sullivan

    Jerry

    Thanks for the invitation to EA but I am no stranger to your firm. I have been there many times and I have also known several of your VP’s of HR quite well. The point wasn’t to label EA or B of A as bad companies. It was to send a message to TA leaders like yourself that if a group of active Internet or social media users don’t like your firm, there are now more avenues (including glassdoor.com that is guided by one of your former VP’s) for them to express their dislikes. Whether their voting or their negative comments are accurate or inaccurate, the message will be seen and probably believed by many others.

    Using your logic that the EA’s #1 worst ranking was a result of “misguided and misinformed gamers”, then B of A’s coming in #2 must’ve been a result of a horde of colluding wild and crazy bankers simultaneously flooding the voting. The fact is that any company’s employer brand is now in the hands of the public. Whether you like the public’s perception or even whether it’s an accurate perception won’t change its negative impact on recruiting. Incidentally, I wouldn’t recommend that any leader label their current or potential customers as “misguided” in a public forum.

    John

  • Jerry McBrayer

    John

    Agree that the perception of the brand is in the hands of the public (never was a more obvious statement made), but do you really expect any TA leader worth his/her salt to sit on their hands and fail to respond to a poorly formed argument based on a flimsy survey with little basis in reality? You wouldn’t if you did your homework and looked at how the survey was created and published. If you had you would have seen that branding darlings such as Apple, Google, Facebook and Netflix were also in consideration, yet tobacco companies, weapons manufacturers, and oil companies did not make the list. Nice of you to send a message to TA leaders. I sure hope they’ve learned their lesson here, that there are more avenues these days for public discourse. Who knew?

    Jerry.

  • Keith Halperin

    @ Jerry: “a poorly formed argument based on a flimsy survey with little basis in reality”:
    Jerry, you’ve just described a large portion of ERE articles and comments (except Dr. Sullivan’s of, course).

    Cheers,

    Keith

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  • A D

    haha. Love Jerry McBrayer’s attempt to dispel the image of EA as bad place to work by coming off as a hothead who hates his customers. Where do I sign up? *ironic smile*

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