Modernizing the Employee-Employer Relationship

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John Jersin, CEO, Connectifier

John JersinJohn Jersin is the co-founder and CEO of Connectifier, a recruiting technology software company that helps recruiters quickly and effectively connect with hundreds of millions of candidates. John began paving the way for Connectifier based on his passion for building high-quality teams at scale while leading the efforts of dozens of engineers in Google's ads group, where he launched the world's largest real-time web analytics platform. John is also a mobile trailblazer, having founded Zintin, a company that built two of the first 500 iPhone apps and acquired millions of users. John studied computer science at both UC San Diego, where he received his B.S., and Stanford University, where he earned his M.S. He was selected as one of the Top 50 Up and Coming Entrepreneurs in Southern California by

There is a sentiment that suggests we have evolved beyond the prototypical industrial-era, adversarial relationship between employers and employees. What often goes unrecognized, however, is that the fundamentals of the company-employee relationship still have strong roots in the thinking that was first developed more than a century ago. Yet when it comes to how companies manage talent, they have changed a lot, and they still have a great distance to go.

Modern companies, and the relationships they have with workers, emerged largely during the industrial revolution. The conception of employees was simple at the time; a company that assembled widgets hired people to assemble widgets. Producing more widgets meant hiring more people, and the primary qualification for the job was simply being able to put widgets together. Workers were not put on a path to promotion, and workers were viewed as more or less interchangeable.

This perspective on employees can be called the "production view" of people, where the company treats people more or less the same way it treats machines. This view of employees has changed tremendously over the last several decades, but rather than sitting back and thinking that we are close to treating people the right way, there are clear signs that we actually need to accelerate the innovation on how those of us in HR handle people.

A Need for Change

HR professionals today are rightly proud to treat people with much more dignity and respect than early companies did. Yet the production view of people still reigns at the most strategic levels. Throughout the organization we refer to budget and headcount, implying that we still view people as units that take a certain input (salary) and produce a certain output (e.g., salespeople produce sales, web developers produce web pages).

We recognize that the world is more complicated on the ground level (for example, HR professionals and managers throughout an organization routinely look at an individual employee and think about what his or her nonmonetary motivations are). We care not just about employees' work products, but how they work, how they affect their team and the corporate culture. Yet when we talk about hiring, we look at budget and headcount as if people are machines that we just need to buy and install.

Budget and headcount numbers are simple, but it's not a good kind of simplicity. For comparison sake, it's worth looking at the finance department, which deals with financial capital differently from how HR and talent functions deal with human capital. Profit has its rightful place as the most important metric, but every CFO worth a penny can tell you about assets, debt ratios, equity value and lots more. In the world of human capital, can we honestly say we are as organized?

As an HR professional or manager, do you know right now how many people in your company are able to provide effective mentorship to junior employees? Do you know how many management positions are expected to open up in the next quarter? We know these things matter to current and future employees as much and often more than money, but we fail to account for them the way we account for budget. These failures expose the simplicity in the budget/headcount model for what it is—a lack of sophistication.

Nonmonetary Compensation

I believe there are two kinds of efforts we need to undertake to effect a change toward a more complete view of compensation. Today most companies already do a good job of articulating things like health benefits, which are necessary to stay competitive, and fringe benefits like free lunches or gym memberships, which are widely viewed as somewhat minor. The first necessary change I see is to track other, more core benefits.

For example, I routinely see candidates who are running from an employer where they felt the team was unsupportive. For those of us who do the hard work to ensure a positive culture, why don't we have on hand proof of our success that we can show such candidates? Why doesn't every company conduct internal surveys on topics like how supportive teammates are? Such a report could not only help us detect and fix problems that hurt employee morale and retention, but also function as a recruiting tool that could advertise a specific aspect of a prospective employee's compensation—an emotionally positive work environment.

There are many items that are rarely (if ever) tracked but factor strongly into an employee's decision of where to work and whether to stay at a company, as well as his or her overall level of motivation. Although I have seen firsthand that building a kind of compensation inventory system is difficult, I have also seen it matter much more than even fairly large differences in salary to many very high-quality candidates and employees. The details of such an inventory are a topic for another time, but the important thing is to get started moving in this direction. I know of no company today that can't make at least some steps in this direction.

The second change I want to discuss is perhaps simpler in concept but harder in terms of execution as it requires changing not just the way we think but the way others think. The production view of employees has so dominated our culture and interactions that even candidates and employees have effectively been trained to view themselves this way—and it badly needs to stop. Although the power of money in compensation is undeniable, candidates often over-focus on this one factor.

After taking a marginally higher-paying job, many people find that the environment (which they knew nothing about before starting) doesn't satisfy their numerous other needs and ambitions. The outcome is that the company has an under-motivated employee, eventually needs to replace that person, and the employee spends a significant portion of his or her life being less happy than he or she could have been. The solution to this mess is simple. In addition to talking to candidates about the things that matter to them, we need to talk to them about why they matter.

We know already that money is not the only thing people value. We need to start counting all those other things, which are, in essence, our nonmonetary budget. By measuring we can not only understand but also improve and advertise to potential employees.

We are at a unique juncture in history. Although we have evolved substantially since the modern corporation first emerged more than a century ago, we are in a new era that demands new thinking and the application of fresh views on the relationship between employees and the companies they help build. This will be, as it has been already, both hard and exciting work. But fundamentally it is about making our companies run better, making people happier, and further humanizing the individuals who literally keep the world running every day.
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