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A Case Study of Facebook’s Simply Amazing Talent Management Practices, Part 1 of 2

by Sep 9, 2013, 6:32 am ET

Screen Shot 2013-09-05 at 10.33.24 PMAlmost everyone is aware of Facebook. Usually that knowledge comes from either using its social media product or by reading about its CEO. However, the unique aspects of the firm that almost no one is aware of are its distinct and powerful talent management practices.

In most cases, it takes literally several decades to develop an exceptional company that has a unique set of talent management practices that produce phenomenal business results. But occasionally there are exceptions. Apple became exceptional again in little more than a decade after the return of Steve Jobs. Google developed exceptional people management practices and business results in much less than a decade. But Facebook has gone from a college dorm room idea to an undisputed social media dominance in literally less than a handful of years. I’ve previously done case studies on the amazing talent management practices of both Google and Apple ) and now it’s time to cover the amazing talent management practices at Facebook that result in breathtaking workforce productivity levels.

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Here within 15 months of its IPO, the average employee produces over $1.3 million in revenue and $120,000 in profit each a year. The firm’s global product reaches over 1.2 billion users, its stock price has been on a tear, and it has successfully shifted from an exclusively PC web-based platform to one that instead relies on the rapid growth of the mobile platform. Glassdoor has rated the firm No. 1 for employee satisfaction and its employees rate its CEO No. 1 with an almost perfect 99 percent approval rating. If your firm would like to learn from what I can only call simply amazing and results generating talent practices, read on.

The Top 45 Most Unique and Exciting Talent Management Practices of Facebook

I’ve been visiting and studying Facebook since 2008 (I have no financial relationship with the company). During that time I’ve compiled a list of management and talent management practices* that it has implemented. Most are unique and many have clearly not been directly copied from talent competitors like Google, Twitter, and Apple. My primary contribution in this case study is to provide insight into the business reasoning behind each of its unique practices. The 45+ features are separated into 10 different categories. As you scan through these best practices, see if you don’t agree that they are unique in that they push the envelope.

Employees are a high value corporate asset

  1. A powerful business case – of all of the things to remember about Facebook, it is that someone in HR or lower management convinced executives to fund and implement each one of the “crazy” and unique things that you will read about in this case study. Remember that Facebook is no different than any other firm; crazy ideas go nowhere unless a compelling ROI business case is first made to executives.
  2. Quantifying the value of employees – nothing spurs executives to focus on talent management like quantifying in dollars the added economic value of having top-performing versus average ones. Facebook (along with Google and Apple) has taken the time to put a dollar value on its employee assets. For example, Facebook’s Director Of Corporate Development Vaughan Smith has estimated that when recruiting, “Engineers are worth half a million to one million” (each). When a single engineer is worth up to $1 million, you strongly invest in recruiting and in increasing their productivity, and you certainly don’t focus on the relatively miniscule cost per hire that it takes to recruit them.

WOW features that provide employees’ amazing choices

  1. Extended six-week boot camp onboarding with a choice – most corporate onboarding is a relatively simple and often boring one day “form filling out” exercise (Facebook instead provides the needed paperwork to the employee before they start). Its approach is unique because it is extended over an industry-leading six weeks. And during that time, rather than watching videos and hearing lectures, employees actually work on teams that spend their time working on multiple real projects. And to demonstrate its trust in new hires, during this time boot campers have full access to the complete computer code behind Facebook. Each employee is assigned a mentor. But the most powerful part of the onboarding is that at the end of the process, each employee is asked, “Which team and project within Facebook would you like to join?” This is powerful because when you apply for a job, you really have no way of knowing which team or project would be a best fit for you. I know of no other organization on the planet that gives new hires a team choice.
  2. Hackamonth self-directed internal movement – at most organizations, getting approval to move to a new job is a complex often political process where the employee has little control. However Facebook’s Hackamonth process is the opposite because it is a self-directed internal movement process. It allows employees who have worked on a project for a year to select their own next project team and after working with them for a month, if they like it, they can stay.

* Note: just like at any firm, benefits and features are continually changing; however, unless noted otherwise, those listed here were current at its headquarters as of August 2013.

It doesn’t just have free food, it offers amazing food

  1. Free ice cream and cookies is a life-changing experience – Google is justifiably famous for publicizing free gourmet food, but Facebook wins the award hands down for the most compelling food. With a relatively young and healthy employee population that doesn’t have to overly worry about its weight, what could be more compelling than a free ice cream store and bakery? A dozen varieties of ice cream, low-fat yogurt, milkshakes, sundaes, as well as cakes, pies, and the absolutely essential cookies, all unlimited and for free. After one visit and without hesitation, I classify this as the No. 1 most compelling “fun” company features on the planet.
  2. Free barbecue — even though the Silicon Valley isn’t in Texas, who doesn’t love barbecue? Facebook’s open-pit barbecue is particularly compelling because it is centrally located, and as a result, the smoke from the barbecue waffles throughout the campus making employees think of barbecue. You simply can’t miss it. Of course the barbecue is free but the best feature is that the BBQ shack is in the middle of an open courtyard, where employees can collaborate while in line and then sit in the California sun and eat on picnic tables and chairs.
  3. A global array of food keeps employees on campus – because its 3,000+ employee population includes a large number of younger people from all over the world, it makes sense that it offers food day and night that fits every “global fast food group.” The last time I was there I had sophisticated French food that was as good as I eat in Paris, and like the French it also bakes all of its own bread on site. But it also offers hamburgers, pizza, and tacos as well as an espresso bar and unlimited snacks throughout the day. Being in California, it of course also offers health food including a salad bar, a juice bar, and sushi, as well as vegetarian and vegan options. Employees clearly take advantage of the free food because its roughly 2,400 employees at headquarters eat an average of 7,200 meals a day. The Facebook Culinary Team accepts food requests from employees and it lets employees know what’s on the menu, using of course a Facebook page.
  4. Happy Hour every Friday – one of the features that seem to startle most corporate people outside of the Silicon Valley is the availability of alcohol at Silicon Valley firms. At Facebook it is available on Friday happy hours and during employee-generated special events. A reason for allowing it at firms is that management simply can’t be credible when it says that it “trusts its employees” if it doesn’t trust its employees to be reasonable in the use of alcohol.

Its management approach focuses on speed and risk-taking

  1. Speed is essential, so “move fast and break things.” — Facebook isn’t unique in that speed is critical to being first to market. At Facebook, management proactively encourages employees to move incredibly fast, even though it will obviously result in some failures. Many firms have slogans, but Facebook goes to the extreme of painting corporate culture slogans larger-than-life on walls throughout the facility, and one of Facebook’s most prominent slogans is “Move fast and break things.” The concept follows the CEO’s idea that “If you never break anything, you’re probably not moving fast enough.” At Facebook, “We’re less afraid of making mistakes than we are of losing opportunities.” Another slogan emphasizes the importance of getting things finished and implemented rather than waiting until they are perfect, and that slogan is … “Done is better than perfect.”
  2. “Be Bold” and take risks — most corporate cultures are risk adverse, and in many cases, to the point where everyone is afraid to fail even once. Facebook is the complete opposite; its culture encourages bold decision-making and risk-taking. Its approach is illustrated by these less-than-subtle slogans: “The riskiest thing is to take no risks,” and “We encourage everyone to make bold decisions, even if that means being wrong some of the time,” and “In a world that’s changing so quickly, you’re guaranteed to fail if you don’t take any risks.” In a world where going first and being innovative is of course full of huge risks, you have no choice but to find a way to convince your employees to avoid the more common and natural conservative approach.
  3. The strong culture enabled a 180-degree shift in direction — the real strength of any company culture is its ability to change and shift the focus of its employees when the market requires it. The Facebook product has always been a website-housed product that was accessed through a PC. However you have to credit the CEO and the company culture for quickly realizing that the smart phone would eventually become the dominant platform. And in a period of less than two years, the company made a successful shift so that its product is now primarily accessed through the mobile platform and the smart phone. To make the 180-degree shift even more impressive, the advertising revenue from the mobile platform is now becoming a larger part of Facebook’s profit. The culture has also survived the loss of significant revenue from the decreased popularity of Facebook-based games from Zynga.

A focus on excellence in recruiting

  1. It is ranked the No. 1 employer brand – Facebook excels at spreading its “best place to work” employer brand image. In 2013 Facebook was listed as the No. 1 employer brand by Glassdoor for having the most satisfied employees. It was No. 1 because its employees are “Challenged every day to do your best work” and “The company’s leadership truly believes in Facebook’s mission to make the world more open and connected.” My research reveals that “doing the best work of your life” and “changing the world” are the top two factors that attract and retain innovators and top performers at any organization. They received an amazing 4.7 rating out of 5, where the next closest employer is rated a 4.5 and talent competitor Google received a 4.3.
  2. Acqui-hiring is a unique corporate practice – I haven’t found a single firm that can match Facebook’s signature recruiting practice of acqui-hiring. Acqui-hiring is where you acquire (usually smaller firms) primarily for their talent, rather than for their products or customers. Until its recent Instagram purchase, almost all of Facebook’s acquisitions had as a primary goal to acquire technical talent. The added advantage of this practice is that you get a whole “intact team” that if integrated correctly, can be productive almost immediately. “Acquiring the firm” may be the only way to capture “startup/hacker mentality” talent that wouldn’t on their own ever consider applying for a job at a large corporation, even one as exciting as Facebook.
  3. Obviously it can’t require a college degree – because its obviously successful CEO is a college dropout, it would be glaringly inconsistent and perhaps a little embarrassing to require a new hire to have a college degree. As one of the recruiters put it, “It would be weird for us to require a college degree.” So instead, its recruiting focus is “If you can build awesome stuff and have big impact, that’s all we’re really looking for.” Not requiring a completed degree gives it a chance to land top talent long before other firms, which must wait until after they graduate.
  4. Contest-based recruiting reveals what a prospect can build – Facebook, like many other Silicon Valley firms, relies heavily on Internet-based technical contests to find hidden or “non-obvious” talent from around the world. These relatively inexpensive contests have simple names like “The Facebook Hacker Cup” but they allow the firm to find people based on the problems they can solve, and what you can build is a major corporate focus. Because contestants are initially anonymous, the winners who are targeted for recruiting are selected because of their work and not as a result of their degrees, experience, gender, or where they reside. Facebook also recruits at algorithm coding contests sponsored by others including TopCoder and Kaggle.
  5. Hackathon college recruiting – each year Facebook visits more than a dozen college campuses and while there, challenges self-selected teams to come up with solutions to real technical problems. The finalists are brought to the Facebook headquarters for “Camp Hackathon,” where their solutions are judged and the winners get a small prize and an offer of a summer internship. The students get to keep their ideas in case they want to develop their own startup around it.
  6. Its CEO as its chief recruiter — most organizations dream of having its CEO occasionally involved in recruiting but Mark Zuckerberg takes it to the next level. He assumes the role of chief recruiter by periodically speaking publicly about the firm and by visiting college campuses in order to directly attract potential recruits from among faculty and students.
  7. Employee referral “Ninja Hunts” — Facebook, like most other Silicon Valley firms, relies heavily on employee referrals to identify top recruits. One of its creative approaches for generating names are called “Ninja Hunts,” where recruiters typically ask a gathered group of employees to think about all their friends to see if some of them would be great engineers for Facebook (where Ninja is their name for an exceptional engineer).
  8. Overall recruiting and retention success – overall, Facebook seems to excel at recruiting as a result of a combination of its powerful product and employer brands. In fact, Mark Zuckerberg recently stated that “We’re doing really well against the hiring goals that we have.” My sources also tell me that Facebook has been able to largely protect its staff from raiding, resulting in a single-digit turnover rate.

Economic rewards and employee benefits

  1. Facebook offers unlimited sick days – most firms would never even consider offering unlimited sick days, but if your work is truly exciting, your teammates count on you, and you are rewarded for performance, there are few who want to miss much work for frivolous reasons. There are also few better ways to demonstrate your trust in your employees than to offer them unlimited sick days. Facebook also offers 21 days of paid time off each year (essentially a month off) for even new employees.
  2. Amazing benefits for new parents – Facebook, like most tech firms, struggles to hire and keep women engineers. So it offers close-in reserved parking spaces for those who are pregnant. It also offers “four months paid parental leave for both spouses, reimbursement for some daycare and adoption fees, and $4,000 “baby cash” for a new arrival.
  3. Rewards are based on performance – the goal is for employee rewards to be differentiated based on performance results and from data from its comprehensive coworker feedback process. One internal source estimates that the reward differential between a bottom and top performer at the same level can be up to 300 percent. Nothing sends a clearer message to employees that performance matters (over status and tenure) than a large percentage differential between top and average performer rewards.
  4. An opportunity for wealth — although the firm appears to offer competitive salaries, the prime economic incentive are Restricted Stock Units, which keep employees focused on producing business results. And that business results focus also encourages cooperation and sharing with among employees. Everyone seems to agree that employees get generous RSUs as part of their regular pay package and as bonuses. Obviously many employees got rich as a result of the IPO; however, the opportunity for wealth still exists because the stock now exceeds the IPO level and its value has been growing at a rapid rate.
  5. It encouraged workers to drop by at any time — one of the most compelling work-increasing “benefits” that I have ever come across occurred at Facebook in its early years (2008 – 2009). Facebook paid its employees $600 each month extra for living within a mile of Facebook headquarters. The goal was to subtly encourage employees to live close by so that it was easy for them to casually drop in for free food but also for extra work and collaboration. The unintended impact on dramatically raising rents around its Palo Alto headquarters was one reason for eliminating this practice in 2009.

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.

  • Stephanie McDonald

    Can we please stop talking about food as a recruiting tool?

  • Richard Araujo

    @ Stephanie,

    It may seem a little ridiculous, or maybe it’s just making you hungry, but it’s actually an effective tool a lot of companies should consider. I work in New York, and in the city and in the Burroughs a ‘lunch’ of a salad and drink can run 15-20 bucks. And in these metro areas it’s not unusual for people to eat both breakfast and lunch away from home due to a commute. Meaning even if you go light on breakfast you’re still looking at five bucks there plus lunch, it’s not unusual for food to run 20-30 bucks a day. That’s $100-$150 per week, $420-$630 per month. Annually it’s a big hit, so unless you brown bag both meals, free or less expensive food offered by your employer is a huge benefit to many.

    It’s one of the costs employees have to bear, it affects their budget and health, and it’s also something employers rarely think about even in these areas where prices are ridiculously high.

  • Stephanie McDonald

    I am hungry, but focusing on food rather than almost everything else on that list is what so many startups are doing – if you aren’t paying to market, offering awesome opportunities, creating a compelling product, food won’t matter. I guess that’s my point. Focus on the other stuff, and throwing down for some free food will just be a nice add on that us recruiters won’t need to lean on to compel candidates to engage.

  • Richard Araujo

    I mostly agree, but there are some companies that can’t or won’t do most if any of those things, the food would still be a good benefit for their employees. It’s something that I think is easily added and run with minimal effort and which doesn’t have to tie into some massively developed broader strategy that requires a Corporate Development VP or some other such person to write it out and sell it.

  • http://sovren.com Robert Ruff

    I’m not sure how much of a recruiting tool food is, BUT I do think it’s often a smart perk. Back when I had retail stores, we would provide free lunches to employees who would agree to take 15 minute lunch breaks. This kept us from having to hire even more cashiers just to cover lunches, so it was a win-win.

  • Richard Araujo

    @ Robert,

    Good example. In many employer environments there is a massively antagonistic relationship between managers/owners and staff, and the attitude that comes out of this on both sides is to try and ‘screw’ the other group as much and as often as possible. Rarely do people approach the relationship as one of people who are trying to work together for mutual benefit.

    Another good example is flex time. Many companies are opposed to it to such a ridiculous extent that they won’t even allow their employees to combine their break with a half day off. That meaning, say an employee has an approved half day, and their shift is 8:30 to 5 every day. There are many employers, some of which I’ve worked for, who will not let such an employee leave at 12:30 and in effect combine their break with their off time. No, they insist that the employee take a break during the four hours they work, and then come back and leave at 1:00. I was in a position to ask a company higher-up what the point of this was once, and he was massively antagonistic and claimed he didn’t want anyone ‘gaming the system.’ I was young and stupid and asked that that meant, what ‘system’? Because either way we were getting 4 hours out of the person, and it looked like we were just making their lives a little less convenient simply because we could. That observation almost got me fired.

    However, this is a persistent and common attitude among employers. There are many opportunities where they could give a little, or even nothing, to get a lot, and they don’t take advantage of them. Food is one example that could help quite a few companies, especially those in high COL areas. In the case of the break time, the owners had an opportunity to treat people well and make their lives occasionally a bit easier that would cost them nothing and buy them some good will. Instead they decided to deliberately be pricks and make people’s lives less convenient simply because they could.

    It’s not hard to understand, when this kind of attitude is so pervasive, and when individual instances add up to policies and pervasive behaviors, why it’s ridiculously hard to implement some of the more pie-in-the-sky solutions presented in these pages, which when written down seem so simple.

  • Keith Halperin

    @ Robert: I am at a company that has a break room filled with drinks and snacks, and has a breakfast brought in on Friday. I am grateful for this and the other good things I have right now from my client… A cautionary word to any company considering a perk: If you ever have the slightest doubt that you won’t be able to maintain the perk FOREVER: don’t institute the perk. It’s far more demoralizing losing something you have once you have it than not getting it at all. An example: about 15 years ago I contracted for Tandem Computers, which was just about to be acquired by Compaq, which was then acquired by HP… Anyway, Tandem was “old school” they had weekly beer busts, extensive fitness facilities for everyone, and sabbaticals for employees. Compaq came in and got rid of all these things. I particularly remember the foolishness of having a security guard sitting in front of the fitness facility while new card-key access system was installed to prevent contractors like me from continuing to use it.

    As far as “pie in the sky” solutions, we should all know by now that what much of what we read here is rarely useful to the vast majority of recruiting staff who work in the real world of under-resourced and over-worked recruiting, far from the rarefied atmospheres of rich and famous companies whose size is only exceeded by the egos of those who found and run them. These firms are veritable temples to the GAFI Principles of Greed, Arrogance, Fear, and Ignorance/Incompetence and show what any firm can accomplish with huge sums of money, marketing, and luck.

    Cheers,

    Keith

  • olanmills olanmills

    As a single guy, food is absolutely a huge perk. Prior to my current job, food was my biggest single expense aside from the mortgage, but it could come close sometimes. I’m lazy so I always buy food.

    Aside from saving me lots of money, it also just seems to make the day more enjoyable, and contrary to what you might think, I often take smaller portions than what I would otherwise get when I’m buying food because I know can always get another serving if the first wasn’t enough.

    It’s nice feeling that you have everything you “need” at work. It makes you feel like there are few obstacles to actually working on what matters.

  • Stephanie McDonald

    I totally get that. Really. I just think everything else on this list is amazing, dropping food off the list would not diminish the “wow” factor for me at all. My company provides all meals, even on the weekends. Course, I’m self employed.

  • Keith Halperin

    @ Olanmills, Olanmills:

    For what shall it profit a man, if he shall gain the whole cafeteria full of yummy free food, and lose his own soul?

    Keith 10:36

  • olanmills olanmills

    Also, I get that the food may not be a perk primarily for recruiting. As you said, I wouldn’t want to work at a company with an otherwise poor work environment, compensation, product/business, etc. However, I think for many people, it could be a deciding factor between places that are all desirable to work at. For example, if someone was deciding between working at Amazon, Microsoft, or Facebook, and they were genuinely excited to work at any one of them, I think the food perk could make a difference.

    However, FB, doesn’t really promote it as a perk for recruiting, I think, so much as they say it helps employees “move fast”, enjoy their work day, and perform work with more productivity and/or quality.

  • Keith Halperin

    @ OM2: Of all the people looking for work, how many of them are in situations where they need to decide on whether to work at Amazon, MS, or FB, and how many of THOSE would freebies be the deciding factor? Must be nice to be in that situation….

    Cheers,
    Keith “Recruiting in Reality” Halperin

  • http://www.tmp.com Jessica Young

    What I find so interesting about articles like these about “amazing talent management” is that Apple, Google and Facebook DO NOT NEED anything amazing – they have hoards knocking on their door. Their recruiters are not very experienced bc it is easy to recruit there. And if you are ever interviewed by them you will know that immediately. Perhs are key in the Bay Area but they do not make a program “amazing” – IMO.

  • Keith Halperin

    @ Jessica: Well said. I’d like to hear about *EOCs (Employers of Choice) that have a quick, efficient, and pleasant application and hiring process for both applicant and recruiter. It’s been my experience that the more the EOC is hyped, the WORSE it is to apply for. I’d also like to hear about corporations (maybe easy, maybe hard to recruit for) that treat their *RECRUITERS really well (maybe paying well, maybe not).

    Cheers,
    Keith

    *I can’t speak as a recruiter, but I found the MS application and hiring process for contract recruiters in 2007 to be very efficient, well run, and pleasant, and I didn’t even get the position…

    **Corporate and contract. Sorry, 3PRs…