3 BIG bets to get great people and keep them - a practical guide for scaling startups

The Context

 Globalization, tech innovation and shifting demographics are a few of the megatrends shaping the ‘now of work’. The black swan events of 2020 so far, have further accelerated the pace of change, challenging our personal and professional lives in ways we never imagined. This is all having a profound impact on the talent landscape with global talent shortages at an all-time high and astonishing deficit predictions for the decade ahead. Kornferry predicts by 2030, a global human talent shortage of more than 85 million people. Add to that, continued issues with talent retention and engagement (although recent research post COVID tells a different story, more on that later) and the high cost of attrition, the average colleague exit costs 33% of their annual salary (Employee Benefits News), this context is big, especially for start-ups. Your employer brand is your best weapon in the war for talent.

How should start-ups think about their brand to get and keep great talent? This week, in partnership with Hub71 and Michael page, I ran a webinar to offer some practical advice for local start-ups. Here are my top three recommendations:

 #1 Cultivate an Authentic Culture

Culture is the common denominator of the most successful companies. As Louis Gerstner, Former CEO IBM rightly puts it:

“Culture isn’t one aspect of the game, it is the game”

What is culture?

Many put it simply as ‘the way we do things around here’ but this oversimplification doesn’t reflect the layered and complex nature of organizational culture. The famous iceberg model developed by anthropologist Edward Hall in the 1970’s and which shaped many of our ideas about culture today, provides a useful analogy for how we can think of it. Only around 10% of an iceberg is visible, the most visible elements of company culture is ‘the way we do things around here’ like dress code, work environment and communication style. At the next level down, still above the surface, is what we say is important, like business strategy and those values posters on the wall! What lies below the surface are our thoughts, feelings, shared assumptions, values and beliefs all honed by experience. Below the surface processes are both conscious and unconscious. Professor Edgar Schein a psychologist and leading authority on culture and leadership, called these levels: artifacts, espoused values and tacit assumptions.

Values are front and center

What’s most important for an authentic culture is that you say and do what you really believe, so there is congruence between these levels of culture. At the org level, it’s about ensuring your values are well articulated, with no room for interpretation and become a common language, decision tool and reference point which underpin all people practices. If you think about the colleague journey, from before they even join the company, what are all the touch points, or moments that matter? How are you shaping their experience and what you offer them in alignment with your core values?

Steps to shape a truly authentic culture and create an awesome colleague experience:

1. Purpose & Values - Start with 'why'. Yes, Simon Sinek has a ted talk on this. He suggests that people don't buy what you do, they buy why you do it. As a starting point for culture, it’s important that you first answer questions like: Why does the company exist? What impact do we want to have on the world? What problems are we solving? Who are we at our core? Who do we want to be? Engage your people in this dialogue, particularly the latter two points. This information will shape your purpose and values.
2.  Behavior - ‘how’ we behave. Once you have your values articulated, stress test them. Are they open to interpretation? Most likely, the answer is yes. Whether you use one word or values statements, I recommend then articulating them in behavioral terms. What would people be doing and saying (and not doing/saying) if you see them living the values?
3. Principles – ‘how’ we operate. Then align on your philosophy and guiding principles for how you will operate. You might have operating principles at the company level and you should definitely have them to guide your people practices. For example, as you grow you will want to be clear on your philosophy on talent and pay, how transparent will you be? How important is parity? How will you think about differentiation, reward and performance? Your values will guide your answers to these questions.
4. People Practices - ‘what’ you offer. Your guiding principles will inform decisions about what you offer colleagues in terms of people practices i.e. hiring, onboarding, reward and performance, learning and development, progression etc. Don’t forget to think about the colleague journey through an ‘experience lens’ for maximum engagement of your people. 

Next, we’ll unpack how you can think about people practices, what you offer, as a value proposition. 

#2 Build a winning Colleague Value Proposition (CVP)

Have you got a customer value proposition? Thought so. Well to attract and retain great people you will need to treat your people like customers and articulate a clear colleague value proposition which answers the question ‘why should I work for your company instead of somewhere else?’. This not only allows you to compete for key talent in a fiercely competitive market, but it draws the conversation away from compensation to a more holistic offering. Crucial for startups who can’t usually compete on salary.

 “To win in the marketplace you must first win in the workplace”

Doug Conant, CEO Campbell’s Soup.

What are the main elements of a CVP?

Mercer’s model captures a useful and holistic framework to reference for your CVP:

Compensation

Starting at the base of the pyramid, theories of motivation reference these contractual elements as 'basic needs' or 'hygiene factors' which will not create significant, lasting motivational gains, but they will demotivate if not present at expected levels. Refer to your values and talent/reward philosophy when making decisions about compensation. Also consider who you are competing with for talent. That will inform your benchmarks, pay scales, mix of fixed, variable and equity pay and the cadence and nature of pay reviews. When building out pay scales always focus on roles and not people. Basing comp decisions on someone’s previous salary is not good practice and doesn’t allow for agility as you grow. 

Benefits

Don’t copy paste! It’s tempting to look at what others are doing and replicate, but it has to be relevant to your business strategy and your values. Ask your colleagues what they want and what is most important to them. You may find that what people really want is different to what you thought and doesn't cost a lot. COVID has accelerated the flexible working agenda and studies like one done by Princeton and Harvard University highlight the productivity gains from flexible working (+12%) and just how much salary people would forgo to keep this benefit (average reduction of 8%). We know people have different needs at different stages in life, therefore multigenerational workforces make it hard for you to decide which benefits to offer. Colleagues, like consumers, demand personalization and more curated experiences. Consider a ‘total rewards’ points-based system where colleagues can swap a variety of benefits for points allocated according to their grade. This allows you flexibility at no extra cost. Although with flexibility comes greater administration, so depending on your stage of growth, you may consider outsourcing this rather than build an internal rewards team.

Career

Career growth and development, one of the top reasons people join a company and also one of the top reasons for leaving. Impact, speed, variety, challenge all come to mind when you think about working at a startup. It’s a rich learning environment. How can you help your people to turn their experiences into learning? You must build a learning organization. Learning is the fabric of successful companies and many tech companies who adopt agile practices are doing this well already. Consider how you can embed learning rituals day-to-day. Nurturing a culture of feedback through regular 1:1s, peer to peer feedback and retros are a good place to start. Democratize learning! The pace of change means that learning is not just a nice addition to your CVP,

learning is a business imperative, if you aren’t learning at the pace of change, continuously up-skilling and re-skilling your people, you won’t survive. 

Keep top of mind the megatrends referenced at the start of the article and the skills gaps we face. Learning doesn’t have to cost a lot. Think about community based learning, knowledge sharing, leverage your experts, exchange feedback, get your leaders coaching and mentoring, rotate your talent and give them heat experiences. Solving complex problems is one of the big draws (for tech talent in particular) of working in a startup, empower everyone with opportunities to learn and grow.

 Wellbeing

Stakes are high in startups, consequently stress and emotions run high too. With working hours rarely fitting into a 9-5 pattern, burn-out is rife. A Gallup poll of 7,500 full-time colleagues indicates that one in four colleagues feel burned out at work very often or always, while nearly half report feeling it sometimes. The World Health Organization has added burnout to its list of globally recognized diseases. Interestingly, since COVID two large-scale independent studies (more than 1.1m respondents) have found that employee engagement has reached the highest level ever. An increase of 11% this year which is unprecedented and significant. A devastating pandemic created a level of care, connection and support in the workplace that we haven’t experienced before and it’s reflected in this data. Wellbeing + resilience is the new performance equation and caring for your people should be central to your values and culture. Think of wellbeing holistically, in terms of emotional, financial and physical.

So how can you care for colleagues? Create a listening strategy. Give people a voice and encourage a speaking-up culture. Find ways and means to hear what’s important and top of mind for them. Pulse surveys are great, as long as you take action on the findings. Exit interviews should be another element of your listening strategy, what are people saying who leave your company? The importance of leadership support and leadership style for wellbeing cannot be understated, you’ve all heard the saying ‘people join a company and leave a boss’ the truth is:

leaders are a strong lever of culture with outsized impact on colleague experience and wellbeing. If they are not behaving in alignment with your values you need to address it, immediately.

What you say and do, and don't say and do shapes culture and signals what your true values are.

Recognition

The Mercer model doesn’t include this explicitly but I believe it sits somewhere between career and wellbeing on the emotional level of the pyramid and it’s too important not to call out. To underscore the importance of recognition, consider Josh Bersin’s findings that high-recognition cultures have 31% lower voluntary turnover than companies with poor recognition cultures. He describes recognition as a flywheel with praise leading to more praise, greater levels of engagement, retention and performance. Find ways to build a culture of recognition and appreciation. It’s worth noting that progressive companies are thinking about recognition beyond performance recognition or a job well done and focus on the whole person. Recognizing people beyond performance intersects with the inclusion agenda, it creates a sense of belonging, an opportunity to bring your whole self to work and to be seen and appreciated for who you are. It’s really not ‘fluffy HR stuff’ I promise you.

 “Recognition is the greatest motivator of all and if you want your employees to be energized and work their hardest, you have to fulfill this need”

Anders Dahlvig, Former CEO IKEA.

Purpose

This is the starting point ‘your why’. It’s about providing meaningful and fulfilling work that connects colleagues to purpose. When colleagues emotionally connect to a company’s ‘why’ it creates affinity and love for your brand. This goes beyond the attraction stage and you should continue to find ways to connect people to purpose day-to-day. For example, providing them with opportunities to engage with consumers and their feedback will allow them to more clearly see the impact of their work. When you’re thinking about why you exist and the impact you want to have on the world (step 1, part 1 above) think beyond profit and successful exit. Think about how you can shape a better world through the communities you operate in. Maybe your business model doesn’t lend itself to solving the world’s problems but how you do business certainly can. A company culture that fosters diversity and inclusion for example, or consider forging strategic partnerships with local social enterprises. There are endless ways to build a responsible brand, be intentional about it. Colleagues and consumers alike want companies that stand for something and create social impact.

Steps to build a winning CVP:

1. Know who you are and why you do what you do
2. Audit your current offerings along the six elements of the CVP pyramid
3. Involve your people Bottom-up and top down, co-creation is the best way. Ask people why they joined, why they stay, why they leave and what’s most important to them.
4. Scan the horizon See what the competition is doing but remember not to copy paste, it’s one data point.
5. Build your CVP Find out what makes you unique, answer the question ‘why should I work for you instead of somewhere else?'. Articulate it in a powerful way.
6. Broadcast the message At minimum you will want a consistent elevator pitch for the people involved in your hiring efforts. Find ways to create engaging content for your careers page, company blogs, colleague content and videos are a few ideas to get you started. Make it unapologetic, you want people to walk away, early, if it’s not the place for them, it will save you a whole lot of pain later on. Most importantly, make it authentic. You don’t want to give people unrealistic expectations that go through the floor on day one when they realize ‘this isn’t what I signed up for’.
7. Tailor the message Depending on your business you will be trying to attract different profiles of talent e.g. graduates (millennials and gen z), mid-career tech talent and senior execs to name a few. Create personas for these candidate groups and find out what’s most important to them, where they spend time off and online and how they expect to be engaged. Adapt your message and approach to suit.

There is no one right way, only your way. Building a winning CVP is an iterative journey which you evolve over time.

 #3 Create an intelligent hiring process

Now, you’ve done all of the above and attracted some awesome talent, don’t fall at the last hurdle. Hiring.

The people you hire literally make or break your business.

If you’re like most people, you believe you make great hiring decisions using your intuition and gut instinct, right? Hmmmm. Here’s the thing, any time a human makes a decision about another human it is fraught with bias. Naturally we hire in our own image and we are drawn to people ‘like me’, whether you realize it or not.

Steps to a more intelligent hiring process:

1. Standardize the process Instead of having an unstructured chat through someone’s CV, take time to identify up front what are the key, measurable criteria for success in this role. Then build your questions around that, along with what a good response looks like.
2. Train all interviewers Make sure that everyone involved in the hiring process understands the criteria and general principles of great interviewing. This level of consistency and standardization will go some way to mitigate bias in the process.
3. Make better decisions with multiple data-points Find ways to gather different data points beyond the interview, such as case studies and work simulations. If you have access to experts with the right experience and credentials consider other forms of assessments and psychometrics.
4.  Leverage technology and focus on the candidate experience There are heaps of great HR tech solutions out there that will help make the process more streamlined and efficient. Tech can also create a superior, more personalized candidate experience. As we said earlier, design your people practices through an experience lens. Things like, clear, frequent and transparent communication go a really long way.
5. Hire for values train for skill. Yes, it is cliché, but it’s key for building an authentic culture. Don’t hire brilliant jerks! If they don’t align to your values, it’s really not worth it. There are many ways to assess values during the process. Consider adding a ‘bar raiser’, a well-trained (values) assessor from a different function to the hiring manager who does the final round interview and hosts a debrief discussion for the final decision.
6. Consider ‘culture-add’ The idea of ‘culture-fit’ in the hiring process over recent years has been weaponized and used as an excuse to reject candidates and bring bias into the process. While you absolutely want people who align with your core values, that doesn’t mean a homogenous group, which would kill innovation. Consider adding a question in the process, which asks ‘what does this candidate have/what can this candidate bring to the table that brings an element of diversity to this team/company?’. Remember diversity is much broader than demographics, other forms of diversity e.g. diversity of thought, are equally important.  
7.  Self-selection Make the process two way. Find ways to allow candidates to self-select out of the process early on. It ensures a better candidate experience and will save you time and money. A great careers page, as we mentioned earlier, with well-articulated CVP is a good starting point. For a more immersive experience, incorporate a scenario based simulation (also on your careers page) to assess values alignment, candidates can work through different scenarios to find out if they are aligned, even before submitting their CV.

That’s it. Those are my three very big bets to get and keep great people! Good luck and enjoy the journey.

“we are authentic when we say and do what we really believe”

Simon Sinek

By Hannah Matta CPsychol

A chartered business psychologist and coach, and former Senior Director of Global Talent, Learning & Culture at Careem. Hannah was part of Careem's growth trajectory from 300 to 3000 colleagues and successful exit from the market, acquired by Uber 2020. She is a HR leader with international experience across sectors from local government transformations to fortune 100 companies and high growth startups. Passionate about building high performing and inclusive cultures through progressive practice.