What is Employee Experience?
HR Tips Emma Tracey
Upon handing Brian Chesky a cheque for $150 million, serial investor Peter Thiel passed one piece of advice to the AirBnB co-founder: “Don’t fuck up the culture.”
Chesky took that advice and ran with it. This year, AirBnB scraped its Human Resource department and replaced it with Employee Experience, with the sole aim of making people happy at work.
While certainly pioneering change in the workplace, AirBnB’s Employee Experience department should not be seen as an isolated achievement, but rather as an important iteration in a larger trend, signalling a shift in the way people think about, well, people.
Why the change from Human Resources to Employee Experience?
The shift to a more humanistic outlook on employer-employee relations has been driven by underlying changes in the nature of the labour market, combined with new ways of management thinking, the growing influence of software developers in the workplace and a negative perception of the HR function generally.
Companies realize they are competing for a globalized talent pool, made up of employees who change jobs far more frequently than their parents generation. The majority of workers will not spend their entire career with one company.
Today’s workers value rapid growth, a flexible workplace, and a sense of mission and purpose at work. This new generation look past salaries, to see which companies offer the greatest chance for personal development and a happy work environment.
Aside from titles, what has changed?
While titles shift to Human Resource Manager to SVP of People, Chief People Officer and Global Head of Employee Experience, the real changes are much deeper.
The biggest change from the traditional HR set-up to Employee Experience is the scope of responsibility of the HR team. In traditional setups, HR functions include recruitment, compliance training, career development, risk management, and performance management. A large emphasis is also put on compliance and administration, particularly keeping to budgets.
In this setup, success is measured through recruiting a particular number of people within a defined budget. It is argued that these metrics are often manipulated, with people motivated to fill roles rather than to find the best candidate for the right position. Further, the focus on cost efficiency is being judged as coming at the cost of flexibility and innovation.
In contrast, Employee Experience focuses on three main areas: culture, technology and organizational design. Payroll and admin are being separated from the main function, so as not to complicate the relationship between Employee Experience teams and the employees.
Topics covered can range from compensation and engagement to people analytics, workplace design, and well-being. Many of the changes have been inspired by design thinking and behavioural psychology, all with the ultimate aim of creating a workplace people actually want to show up to.
The changes are being supported by more tech-orientated HR teams, who rely on multiple tools, like modern ATS systems (e.g Lever), recruiting platforms (e.g Honeypot) and employee happiness tools (e.g Peakon), rather than clunky legacy systems. Data, in the form of people analytics, are being leveraged to guide decisions in talent planning and management.
Who is leading the shift from Human Resources to Employee Experience?
In the last five years, companies are placing an elevated priority on the reimagination of HR. Many of the individuals responsible for this reimagination have become leaders in the field.
Three top profiles are: Laszlo Bock, Google’s Former SVP of People Operations, Mark Levy, Head of Employee Experience at Air B’B and Patty McChord, former Chief Talent Officer at Netflix.
McChord’s 2009 presentation on Netflix’s culture laid the foundation for thinking on culture in the workplace, which Bock and Levy later developed. In Europe, VP People at SoundCloud, Caoimhe Keogan, is recognized as being an innovative influencer.
The Future of Employee Experience
Thiel’s advice, which launched Airbnb’s obsession with employee culture, came to life in Levy’s vision of the workplace and remains the most complete example of Employee Experience. With the change, more diverse profiles are entering HR, seeking to revolutionize how people and organizations interact. And that’s good news for employees everywhere.
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