Page 1: Introduction
Tesco is the biggest private sector employer in the UK. The company has more than 360,000 employees worldwide. In the UK, Tesco stores range from small local Tesco Express sites to large Tesco Extras and superstores. Around 86% of all sales are from the UK.
Tesco also operates in 12 countries outside the UK, including China, Japan and Turkey. The company has recently opened stores in the United States. This international expansion is part of Tesco”s strategy to diversify and grow the business.
In its non-UK operations Tesco builds on the strengths it has developed as market leader in the UK supermarket sector. However, it also caters for local needs. In Thailand, for example, customers are used to shopping in 'wet markets' where the produce is not packaged. Tesco uses this approach in its Bangkok store rather than offering pre-packaged goods as it would in UK stores.
Tesco needs people across a wide range of both store-based and non-store jobs:
- In stores, it needs checkout staff, stock handlers, supervisors as well as many specialists, such as pharmacists and bakers.
- Its distribution depots require people skilled in stock management and logistics.
- Head office provides the infrastructure to run Tesco efficiently. Roles here include human resources, legal services, property management, marketing, accounting and information technology.
Tesco aims to ensure all roles work together to drive its business objectives. It needs to ensure it has the right number of people in the right jobs at the right time. To do this, it has a structured process for recruitment and selection to attract applicants for both managerial and operational roles.
As part of my continuing series of case studies and analyses of truly world-class recruiting functions, I will highlight some of the key features at Google, the world’s only corporate “recruiting machine.” In the past few months, I have spent a good deal of time researching Google and communicating with Google managers and employees in an attempt to identify their best practices. For those of you who are not in the technology field or who don’t consider Google to be a direct competitor for talent, you might be thinking, “Well, that’s nice, but what Google does doesn’t really impact me.” But if you did think that way, you’d be wrong.
“Disruptive Technology” and Strategic “Disruptive Recruiting”
Google, through its branding, PR, and recruiting efforts, has made itself so well known and attractive to professionals from every industry and university that they have essentially changed the game of recruiting forever. If you know anything about technology, you know that people in the field use the term “disruptive technology” for technologies like Apple’s iPod, which has almost overnight changed the entire technology and entertainment marketplace to the point where everyone must pay attention to what that firm is doing. Google has created the same phenomenom in the form of a “disruptive approach” to work and recruiting, an approach so different and so compelling that if you don’t pay attention and attempt to emulate some of the things they’re doing, you might soon lose some of the very best employees you have. I urge you to read on and to see some of the disruptive and breathtaking things Google is doing.
The World’s First Recruiting Culture
Google has accomplished something that no other corporation has ever accomplished. In less than a handful of years, they have developed what can only be categorized as a “recruiting machine.” They still have a ways to go, but what they have done so far can only be categorized as amazing. Now, Google still doesn’t have the best sales and marketing strategy (FirstMerit Bank does), nor are they the best when it comes to the use of metrics (Valero Energy is). But what they have done better than anyone else is to develop the world’s first “recruiting culture” (see my previous writings on this subject). What that means is that recruiting and the need for it permeates the entire organization. Not just the recruiting function or the HR organization, but the entire company — from the key leaders on down to the entry-level employees. As a result of this culture, not only does Google fund recruiting to the point where the function is in a league by itself, but they have also gone to the extraordinary step of changing the way employees work in order to attract and retain the very best. (Note: It might be credible to argue that Cisco in the late 90s had the world’s first “recruiting culture” but since the exit of Michael McNeal, Janel Canepa, Randall Birkwood et al, that function has long since been dismantled to below “K-Mart levels,” so it’s probably a moot issue.)
Google Has Changed Work Itself With “20% Time”
Many organizations have changed their pay or benefits in order to attract better workers, but no one has changed every professional job in the company just so that the work itself is the primary attraction and retention tool. Rather than letting work, jobs, and job descriptions be put together by the “out of touch” people in corporate compensation, Google’s founders (Larry and Sergey as everyone calls them), HR director Stacy Sullivan, and the leadership team at Google have literally crafted every professional job and workplace element so that all employees are:
- Working on interesting work
- Learning continuously
- Constantly challenged to do more
- Feeling that they are adding value
The key element of changing the work so that the work itself becomes a critical attraction and retention force and driver of innovation and motivation is what Google calls “20% work.” There is no concrete definition of what 20% work means, but generally for professional jobs it means that the employee works the equivalent of one-day-a-week on their own researching individually selected projects that the company funds and supports. Both Google Groups and Google News products are reported to have started as a result of personal 20% time projects. Other firms, like Genentech and 3M, have utilized similar programs, and although I’ve spent time at both firms, I find the Google approach to be clearly superior. Despite not being clearly publicized on their website, it is so easy to understand and so compelling that just the mention of 20% time excites applicants and current employees like no other program I’ve ever come across. In addition to being a phenomenal attraction tool, it also keeps their retention rate at, as one HR executive put it “almost nil.” But its greatest value is that it drives innovation and creativity throughout the organization.
At Google, innovation is expected of everyone in every function, not just product development. The 20% time, along with the expectation of continuous and disruptive innovation, has driven the company’s phenomenal success in product and service innovation. Yes, in this rare case, HR activities and policies are actually driving corporate business success.
One Thousand Millionaires
I find that most people who have never visited Google think that the primary attraction tool and driver of retention at Google is the phenomenal income derived from employee stock options. Yes, it is a fact that Google created an estimated 1,000 millionaire employees when they went public (they could be billionaire employees by the time you read this case study, if the stock price keeps growing and its current rate!). But rather than driving success, I have found (as I also found at previous stock-growth powerhouses like Charles Schwab, Intel, Cisco, and Microsoft) that rather than contributing to success, the money also has negative impacts. The public awareness of such widely held wealth among employees actually brings in a volume of resumes from people who want to “work for the money” rather than the joy of being at the firm that celebrates innovation more than any other company on the planet. Other ways that the wealth is distracting include the difficulty of motivating and managing individuals with sudden wealth and the almost inevitable “us versus them” mentality that is caused by the significant wealth differential between people hired before and after the IPO. My conclusion is that stock options are not the primary attractor of top talent at Google. Instead, it’s the work.
The World’s Largest Recruiting Budget
Google recruiting is the best-funded recruiting function in any major product-driven corporation. This is not in a misstatement. Arnnon Geshuri, the head of recruiting, and Stacy Sullivan, the director of HR, have done what can only be classified as an unbelievable job in convincing senior management to fund the recruiting effort beyond that of any corporation in history. My own calculations indicate that, at times, Google recruitment has a ratio of 1 recruiter for every 14 employees (14:1). That ratio surpasses the previous record of 65:1, held by Cisco during the first war for talent in the late ’90s. If on the surface this ratio doesn’t impress you, I might suggest that you compare it to the typically much larger ratio of employees to all HR professionals, which is about 100:1. Because “building a business case” is an essential factor for building a recruiting culture (or even for having a strategic impact), their funding level puts Google in a class by itself!
The Benefits Are Breathtaking
Before I highlight the extraordinary benefits that Google offers, it is important to note that although these benefits are certainly so breathtaking that they do in fact get almost every potential applicant’s attention, they are not designed just for recruiting purposes. Instead, these benefits are also designed to encourage collaboration, to break down barriers between functions, and to stimulate individual creativity and innovation. These benefits do attract some of the “wrong people,” that is, talented individuals who are seeking benefits rather than an opportunity to do their best work, which creates a screening challenge. In addition, some also argue that such a wealth of benefits and opportunities to play distracts less-focused workers from their jobs. The take away for other firms is that, even if you do match Google’s “non-work” benefits (as firms like SAS have almost done), you are not automatically going to attract the very best and the most innovative. To do that you also need a strong “employment brand” and jobs that are designed to continually challenge and grow employees. A partial list of Google’s “I bet you don’t have that where you work” benefits include:
- Flex hours for nearly every professional employee
- Casual dress everyday (and this goes well beyond business casual)
- Employees can bring their dogs to work, everyday
- On-site physician
- On-site dental care
- Health benefits that begin as soon as an employee reports for work
- Free massage and yoga
- Shoreline running trails
- Stock options everywhere
- Free drinks and snacks everywhere (espresso, smoothies, red bull, health drinks, kombucha tea, you name it)
- Free meals, including breakfast, lunch and dinner (some have described this as a feast with multiple locations and world-class chefs, including one that cooked for the Grateful Dead)
- Three weeks’ vacation during the first year
- Free recreation everywhere, including video games, foosball, volleyball and pool tables
- Valet parking for employees
- Onsite car wash and detailing
- Maternity and parental leave (plus new moms and dads are able to expense up to $500 for take-out meals during the first four weeks that they are home with their new baby)
- Employee referral bonus program
- Near site child care center
- Back-up child care for parents when their regularly scheduled child care falls through
- Free shuttle service to several San Francisco and East and South Bay locations (San Francisco is 45 miles away from the main campus)
- Fuel efficiency vehicle incentive program ($5,000 assistance if you buy a hybrid)
- Onsite dry cleaning, plus a coin-free laundry room
- A Friday TGIF all-employee gathering where the founders frequently speak
- A 401k investment program
- A “no tracking of sick days” policy
- Employee interest groups (formed by Google employees, these are all over the map and are said to include Buffy fans, cricketers, Nobel prize winners, and a wine club)
- An onsite gym to work off all of the snacks
Note: These benefits are not all available to employees who do not work on Google’s Silicon Valley main campus. So what else drives the excellence of Google’s recruiting efforts? Next week I’ll look at Google’s approach to referrals, international recruiting, and employment branding, as well as some weaknesses in the Google approach.