The loveless relationship between tech firms and HR

June 25, 2014 at 8:40 AM

The loveless relationship between tech firms and HR
 
Despite being viewed as human resources playgrounds bursting with foosball tables, hammocks and vegan cafeterias, most small to mid-sized tech firms actually have an ambiguous view of the HR function. For some HR is little more than an overhead administrative support function, while for others it is the ‘bums in seats’ department that never seems to move fast enough to fill those last-minute openings. And for still others, HR is the clean-up crew that deals with the occasional bruised or broken employee, the unavoidable collateral damage in the quest to change the world. As reported by PayScale, tech start-ups with 100 or fewer employees have on average half the HR staff found in similarly sized companies in other sectors. Beyond sheer numbers, many tech firms also under-hire for the HR function, are rewarded with exactly what they paid for, and then use the results to rationalize why they under-hired in the first place.
 
Many factors contribute to the tech sector’s view of the HR function. For example, a great many tech firms are built for speed rather than endurance. Theirs is a death race against time-to-market, and in venture-backed enterprises, time-to-liquidity. And of course time is always equated with financial considerations and anything perceived to encumber the business, or to reduce its entrepreneurial agility and flexibility is shunned. This includes HR processes in strategy, hiring, performance management, and even interpersonal conduct.
 
Entrepreneurial tech firms prefer to simplify the matter of dealing with their people by relying on charismatic leadership and stock options. Founders (often high analytics by the way, another factor) and their followers go forth fearlessly to conquer uncharted lands and use stock options to materially connect everyone to the plunder that awaits. The odds of victory are long and the journey arduous. Unquestioned effort, bravery and commitment are a must….. and not everyone will survive. Rules of engagement, policies and procedures are for times of peace, not war.
 
Inconveniently, the New York Times recently reported that many tech firms pay a price for their disregard of the HR function (http://www.nytimes.com/2014/05/01/upshot/yes-silicon-valley-there-is-such-a-thing-as-not-enough-bureaucracy.html?_r=0) . They refers to lawsuits and the negative press brought about by abusive, even misogynistic, corporate cultures with no policies or procedures for which to deal with them. They reference CEOs who lament poor hiring and scaling decisions made without the benefit of counsel. And they point to data suggesting that organizations with sophisticated HR processes are nearly 40% less likely to fail than the norm and 40% more likely to go public. They conclude that in fact, organization building, rather than distracting from the business of building a business may in fact be most critical to it.
 
This is not news to the many competent tech sector HR professionals who labor in anonymity or to the others who have left for friendlier sectors.
 
About the Author

Robert Hebert is the founder and Managing Partner of StoneWood Group Inc., a leading executive search firm in Canada. Since 1981, he has helped firms across a wide range of sectors address their senior recruiting, assessment and leadership development requirements. 

Contact Robert by email at rhebert@stonewoodgroup.com or call (1) 416-365-9494 EXT 777