Here's Your Gold Stopwatch

Netflix HR recently said that their way of keeping good employees is to make sure they are working with quality co-workers. And the way they ensure those workers are high quality is that they are quick to get rid of employees once their skills don't match what's needed.

To be fair, they did also emphasize generous severance packages as part of this strategy. But it does also exemplify the unrealistic view tech companies have of finding talent.

As many have noted, there's a contradiction in the way employers relate to employees: they try to get enthusiasm and loyalty from their employees, while also reserving the ability to reduce the workforce whenever they want, and there doesn't seem to be much recognition that these two desires are contradictory. The Netflix situation seems to be the ultimate embodiment of this contradiction: they think they can get loyalty and enthusiasm from their employees because they are quick to let them go.

Any business wants the best employees they can get, but in high tech, the need is particularly acute. And yet, there doesn't seem to be much intelligence given to finding the best.

Part of the problem is the speed with which modem tech companies can grow. In other areas, there's an understanding that you need a great reputation before you can be demanding of your employees. Not so much in technology.  I remember one company I came across during my post-graduation job search, who wanted to see the transcript of recent grads, and said they would only consider applicants in the top quarter of their class. Who would do this, IBM? Microsoft? Google? Nope, some start-up that didn't even have a product on market yet.  But since everyone assumes their start-up is the next Google, they have all the swagger from day one.

What's curious is that in other areas, businesses are acutely aware of the different factors that go into a company's positioning. For instance, expensive, luxury products tend to be more lucrative than cheap products. But companies don't all simplistically go after the luxury market to make more money. They understand that the luxury market is small, and if someone else has captured it, you're probably better off to make do with a less profitable segment. But when it comes to hiring, no one seems to even acknowledge that there are only so many above-average employees, and a lot of companies will have to make do with less.