Street Culture: A Different Approach to Hiring and Firing

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were-hiring-street-cultureStreet Culture is a bi-weekly feature where we take a closer look at issues in office culture and management at some of the most dynamic companies in the industry.

When recruiting top talent, money is only money. In tech, the talent pool is small and the number of open jobs is projected to keep rising in the coming decade.

“Everyone has the same money,” said John Smith, CTO, chief evangelist, and team member at Questis, a financial service provided as an employee benefit. “If you want to be different, you really have to be about the culture.”

Smith said that in America, an average yearly income of about $68,000 is actually a line where people stop caring as much about their paychecks, and start looking at how much they like – or hate – their jobs.

That line is driving a change in how some companies are finding employees. The talent shortage means candidates who have high-demand skills, such as programming, have their pick of employers. Startups are responding to that by creating ultra-transparent, collaborative workplaces.

“The reason for coming to work becomes much different,” Smith said. “In a creative, knowledge-based economy, we’re fighting for talent. If I pay $68,000, and someone else pays market value, the only thing that’s going to draw you to my company over someone else’s is the culture. Through culture I can get multiple orders of magnitude on top of what just money will deliver.”

Previously, Smith supported BoomTown, People Matter, SPARC, and Benefit Focus grow immensely in short periods of time, and he links certain company behaviors with success and failure.

“As a small organization or startup, your whole business plan is around innovation for the customer,” Smith said. “You’re adding value for the customer, you bet the entire organization on that almost every day. What I’ve seen with multiple organizations is that right around 50 people, that switches. Instead of adding value, they switch to risk mitigation. They switch to a mindset of, ‘just don’t f*ck this up.’”

That switch can mean that the culture and employee engagement start to die, and then the best talent starts to leave.

Defining a strong culture early on is the easiest way to prevent this, and it’s even easier for small companies when they build upon clearly-defined values from the beginning, according to Lee-Anne Scalley, CEO and co-founder of culture-based recruiting firm OneinaMil.

“If we get in earlier with a startup, they’re a lot more open to working with us on their culture,” Scalley said. “They start to hire 10 or 11 or 12 people; they see it’s working and they want to maintain it.”

OneinaMil recruits employee candidates based on culture first, but only after making sure the company is a great place to work.

“We don’t just go out and hire for companies,” Scalley said. “We interview companies first and do cultural assessments. If we’re placing you and we’re going to ask you to relocate and uproot your family, leave everything, we’re going to make sure that it’s a place that we would work ourselves.”

Scalley said that leadership should always take feedback from the current team on new hires.

“We want to be able to say that we’ll pass on candidate who’s rock star, someone who sounds amazing, their resume is amazing — but if they’re a jerk and nobody likes them, nobody is going to wants to work with them,” she said. “You should always go to your internal team and say, ‘Hey, we’re not going to hire anyone who you guys aren’t on board with.’”

Scalley also treats the recruiting process kind of like dating, by spending time feeling each other out and being honest about whether it’s a good fit.

For hires that don’t work out, she adds in a bit of Dan Savage’s campsite rule (leave it better than you found it) not for a clear conscience, but for the benefit of the company. Ideally, employees should be let go in a way that leaves them as an advocate of the organization. It’s a concept practiced rarely for many companies, but one Smith also says is absolutely essential for culture and for company growth.

“If someone doesn’t work out, it’s at least half the company’s fault,” Smith said. “If I’m going to fire somebody, the first thing I need to do is put them on probation, a set defined period where they can correct the behavior.”

The process is above all extremely transparent. An employee who might be let go should know weeks in advance and should be given tools and information to help him or her keep the job, or choose independently to leave.

“Your job as the employer is to support that next level of departure,” Smith said. “You still hired that person and made those bets. It’s your job to help them with their resume, with references for where they did perform, with networking. When you take that approach, if you own half of this problem of the employee’s challenges, one of two things will happen. One, the employee fixes the problems and you never do have to fire them. Or two, they become an advocate of the organization, they’re self-aware that it wasn’t a fit and are supportive of the organization going forward.”

Not much direction exists for company leaders on how to fire employees in a mutually beneficial way, but it’s possible. Job-seekers are searching for positive places to work, not necessarily places with special perks.

“There are not a lot of people who understand culture driven recruiting yet,” Scalley said. “But pretty soon this will be a viable thing and companies will start to realize that it’s the only way to [hire]. No one is going to put up with what previous generations did.”

April Nowicki is a contributor at Street Fight.