In a recent survey of HR graduate students, the technology sector rated among the most coveted destinations to ply their trade. It is viewed as a world of innovative people, technologies and approaches where progressive talent management, OB/OD and related HR work awaits.
Alas, what these graduates will find in the vast majority of Canadian tech companies is that HR either does not exist as a standalone function or it is limited to administrative and recruiting-related tasks. They will also find that their textbook theories and best-practices training ill-equips them for the Alice in Wonderland world of entrepreneurs and founders which so dominate the sector. Many will run for the proverbial hills.
Before proceeding further let me clarify that when I refer to the tech sector I do not include tech titans such as IBM, Rogers, Microsoft and similar concerns. These are large, mature companies with established HR functions that may actually have meaningful roles. Instead, what I am speaking to is the majority of early stage startups through to mid-sized firms that dominate the tech sector landscape across Canada including some of the most successful firms in the land. Many of these firms are not simply ambivalent to HR, they are actually hostile towards it. Consider a recent article in Profit Magazine which profiled Toronto-based GAP Adventures, a successful non-tech firm with decidedly tech firm characteristics, run by what the article calls ‘one of Canada’s most celebrated entrepreneurs’. In the article, GAP founder Poon Tip refers to HR as “an evil practice intended to take away people’s freedom”. Is that hostile enough?
Several factors help explain why large swaths of the tech sector are HR wastelands. First, much of the startup/early stage tech sector defines itself in finite temporal terms where speed (ie. time to market through to time to liquidity) remains the dominant zeitgeist. Money is the rocket-fuel of rapid growth and once firms secure external funding they become assets to be harvested. When firms pray at the alter of speed, and liquidity events matter more than long term sustainability, they stick to basics, including their approach to employees. They pump staff up with the adrenalin of big audacious dreams and invite them aboard for the all-consuming joy ride ahead. It is the founder/entrepreneur’s show and staff will join the firm, work hard and stay loyal based on his or her performance (and of course the lottery tickets of employee benefits, stock options). These entrepreneurial virtuosos bring challenges of their own (see Stonewood Perspectives “Founder Syndrome”, Part 1 and II https://www.stonewoodgroup.com/perspective/article/26/; https://www.stonewoodgroup.com/perspective/article/25/) but for the most part human resources is at best, a supporting bit character in these plays.
Second, in smaller firms the HR function is usually tucked under ‘administration’ where it is the responsibility of whoever sits in the finance chair. Growth challenges the bandwith of this resource and eventually relief is sought for the administration around hiring, compensation, benefits and the like. The benefits of an in-house HR resource are tipped when weighed against the costs of paying fees to recruiters. A contractor or junior/mid-level generalist is hired to address the full gambit of the function. Though recruiting is the work of hunters and administration the work of farmers the role is immediately under pressure to excel at both. The HR practitioner runs as fast as they can on this tactical treadmill rarely getting closer to the carrot of more meaningful work.
The next blog will discuss the circumstances that drive a deeper engagement with the HR function.
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.