What does it take for a company to achieve success today? A quality product, clever marketing and sales strategies, and capacity building are all components of a successful business. And who makes all of these things happen? People. The employees are the ones putting together the quality product; they’re the ones coming up with clever marketing and sales strategies, and they’re the ones building an organization’s capacity.
In order to succeed, companies need to stay innovative and fresh. They need to always be working toward the next best thing, so they’ll stand out from their competitors. Innovation starts with people, that’s why it’s crucial to hire and retain the most innovative talent in the field.
Just look at Google, the third most valuable firm in the world. HR at Google is different from at other companies, and for a company that deals in analytics and data, it’s not surprising to find out why. At Google, the human resources department is called “People Operations”, and its main difference from other HR departments is that it demands data-based decisions at every turn.
And it makes perfect sense.
The business of hiring and retaining top innovators isn’t cheap – approximately 60 percent of a company’s variable spending is on personnel. That’s a big chunk of the budget. Now think about the company operations that take up smaller portions of the budget, like finance, marketing, supply chain, etc. None of these departments would ever dream of coming up with a strategy without evaluating and analyzing all of the available data. So why isn’t that the case with HR?
For starters, traditional HR has relied almost exclusively on relationship building. Relationships work counterintuitively to analytical thinking since they largely rely on subjective opinions and biased decisions. This is the opposite of how most business decisions are made – through looking at data, analyzing numbers, and coming up with strategies.
Google has flipped the traditional HR model on its head and devised a strategy to use data analysis to drive its HR functions, and Google’s success is proof that it works. Google’s workforce productivity is enviable, with each employee generating approximately $1 million in revenue and $200,000 in profit every year.
So how has Google replaced HR’s old subjective decision-making methods? By relying on data-driven analysis, Google hires, manages, and retains its workforce in a completely unique way.
Do you think Google’s data analysis approach is right for HR functions? Have you applied any of these tactics to your workforce hiring, managing, and retention?
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3 Comments
Google has a special human resources policy that is so strong and different from other companies. And it is clear that this policy is productive. The proof is evidenced by Google’s market evolution, by employee satisfaction, and by the fact that the people who work at this company are at the top of their respective fields. Each department of the company has highly qualified people who work with great passion for their jobs.
I really liked your article, and I want to answer the questions you asked at the end of it. Unfortunately I do not believe that all these “lessons,” as you called them in the article title, can be applied in just any company. I think it takes a big company with a certain level of seniority and safety, a fairly high level of performance, and a greater focus on people’s satisfaction than on profit. I would like to be able to apply all these principles in the company I work for, but the company is too small for such dreams.
Google has such an impressive human resources policy. It’s awesome! This is my dream company! As a human resources specialist, I think it would be a great opportunity to work in a company that values their employees and understands the importance of human capital. It’s a good article and a wonderful algorithm that you’ve described here.