HR Is An Unfortunate After-Thought In The Tech Industry

It’s not 100% true that all growing SMB tech companies view HR as an after-thought but it’s definitely a high percentage. Where’s the research to support this? I don’t need it. I am the research and my own experience being an HR leader in the space.

But, if you need some cited sources here you go. Fast Company published a fantastic article in 2017 called “This Is Why Your Startup Plan Needs to Include HR“. You can also go to Google and find an infinite number of articles talking about the same thing.

One of my favourite thought-leaders is Josh Bersin. He recently did a talk called, “A New World: Where The Engagement Market Is Going” (see below). I encourage all HR practitioners AND business leaders to watch it, all 28 minutes.

A Typical Conversation That I Have

Let’s start with a typical scenario that I’ve encountered countless times. I’m an avid networker and have met with many of the most recognizable tech companies in Toronto. I don’t know them all well but well enough to have this strong opinion. Most leaders say they have an “amazing workplace culture” and they’re running like a well-oiled machine. Being the inquisitive type I ask questions. I compliment them on their great culture and ask them how they achieved this. Many respond by immediately talking about their physical office space, the perks they offer their employees and the various playbooks they’ve designed and implemented. You know what I’m talking about — open concept office space with exposed beams, ductwork and floor to ceiling windows, beer Fridays, catered lunches, ping pong and foosball tables, on-site yoga, and of course the visually pleasing “culture playbook” that talks about how awesome they are because… well… they simply kick ass. It’s all about the lipstick and superficial stuff.

I Dig Deeper

As I sit in their space I nod my head in agreement… “yeah you do have a great office environment and I love the constant employee chatter coming from the middle of the office, and the hooting and hollering from the intense game of foosball, and the smell of the lunch being rolled into the kitchen area”. It’s the kind of place you’d love to spend all of your time in.

I then kick into the important part of the conversation. “So… can you tell me what your key drivers of employee engagement are”? Silence… “how do you develop your current and future leaders”? Silence… “how do you ensure your employees sitting remotely around the world are connected and have the most effective collaboration and productivity tools”? Silence… “do you know what your ideal employee experience looks and feels like”? Silence… “what is your organization structure and is it ideal to enable success in your hyper growth plans”? Silence… “given that you want to grow 500% in the next 12 months how are you planning to attract and recruit the right people”? Silence… “what is your turnover like, and do you know what drives your employee turnover”? Silence… “what are your top sources of hire”? Silence… “are your employees actively involved in recruiting”? Silence… “is your career site optimized”? Silence… “are you leveraging the right online tools to promote your employer brand”? Silence… “do you know what your employee value proposition is”? Silence… You get the idea.

The Disconnect

I then get into a conversation about how they plan to build their HR team. They often talk about finding someone newer in their career who has experience in the tech industry. They want someone who visually represents their workforce — younger, energetic, willing to spend all of their time physically in the office and be that culture catalyst. They want to go lean and use software and the expertise of the leadership group to scale the HR function. It’s funny because who will help this young and energetic HR practitioner grow into an HR leader? Will it just happen organically? Will the CEO, COO or CFO coach and mentor this person? How in the world does it make sense to have people who have no clue about HR to mentor the “up-and-coming” HR rockstar?

Another perspective is the company wants someone to be a true HR leader and has experience scaling a company from 75 to 1,000+ in a hyper growth environment. Ummm… okay. In Canada, how many tech companies have grown rapidly beyond 1,000 employees? Let’s see… Hootsuite, Shopify, PointClickCare, Wattpad and… ummm… maybe a few more. Good luck to you in finding that needle in the haystack.

The Final Rant

It baffles me that many tech organizations view HR as an after-thought. Would they hire a junior marketer to be their CMO? Would you recruit a software developer who finished school in 2016 to be their CTO? What about Finance? Let’s just find a recent CA graduate and slap the CFO title on them. Of course you wouldn’t and the majority of growing tech companies don’t cheap out when it comes to these functional areas. So why HR?

It’s a huge, and I repeat, HUGE risk to not have someone at the HR leadership role, particularly in a rapidly growing company, who knows what they’re doing. I recently published a roadmap of how I would go about creating an HR organization in an SMB tech company. It’s highly complex because people are complex. Until the day comes that we can employ robots in every position within our organization we will have to deal with the complexities that come with employing humans. There’s no sugar-coating this, and you need an HR leader who understands the intricacies of human behaviour, and the psychological aspects of diverse people and their influence on business outcomes. Note: while I encourage you to view my Slideshare presentation, don’t think for 1 second that you can simply “do it” if you are not an HR leader. Reading about a concept and learning about it is one thing, but doing it… that’s a completely different thing.

At the end of the day, growing SMB tech companies need to invest as much in HR as they do other functions. If you’re looking for an HR leader then hire one. It needs to be someone who has a deep understanding of every single functional area within the broad spectrum of HR, from talent attraction to engagement to retention. ALL OF IT. It’s someone who can sit with the senior leadership team and help the business flourish and then roll up their sleeves and get shit done. It’s someone who can mentor and coach a team. It’s someone who can build and deliver an HR strategy that connects people to systems to business outcomes. It’s someone who understands the employment legislative landscape. It requires experience and you can’t underestimate the value of experience within the tech industry. Your investments, your VC investments, your talented employees and customers deserve this and no less.

My Open Invitation…

I openly invite anyone to contact me to have a discussion about this. I particualrly invite those who think HR is a waste of time. I love a good debate and this is one that I will not shy away from. Let’s go.

One comment

  • Hi Jeff,
    Great article, thanks a lot. I am an early-career academics and an HR lecturer . I am sometimes struggling to explain the importance of HR to my students as everything in the textbook is too descriptive and defined as step-by-step. However, the real life of HR is complex, as you say.
    The concept of HR needs to be revised today rather than repeating the same old-school stuff.

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