Almost everyone is aware of Facebook. Usually that knowledge comes from either using its social media product or by reading about its CEO. However, the unique aspects of the firm that almost no one is aware of are its distinct and powerful talent management practices.
In most cases, it takes literally several decades to develop an exceptional company that has a unique set of talent management practices that produce phenomenal business results. But occasionally there are exceptions. Apple became exceptional again in little more than a decade after the return of Steve Jobs. Google developed exceptional people management practices and business results in much less than a decade. But Facebook has gone from a college dorm room idea to an undisputed social media dominance in literally less than a handful of years. I’ve previously done case studies on the amazing talent management practices of both Google and Apple ) and now it’s time to cover the amazing talent management practices at Facebook that result in breathtaking workforce productivity levels.
Here within 15 months of its IPO, the average employee produces over $1.3 million in revenue and $120,000 in profit each a year. The firm’s global product reaches over 1.2 billion users, its stock price has been on a tear, and it has successfully shifted from an exclusively PC web-based platform to one that instead relies on the rapid growth of the mobile platform. Glassdoor has rated the firm No. 1 for employee satisfaction and its employees rate its CEO No. 1 with an almost perfect 99 percent approval rating. If your firm would like to learn from what I can only call simply amazing and results generating talent practices, read on.
The Top 45 Most Unique and Exciting Talent Management Practices of Facebook
I’ve been visiting and studying Facebook since 2008 (I have no financial relationship with the company). During that time I’ve compiled a list of management and talent management practices* that it has implemented. Most are unique and many have clearly not been directly copied from talent competitors like Google, Twitter, and Apple. My primary contribution in this case study is to provide insight into the business reasoning behind each of its unique practices. The 45+ features are separated into 10 different categories. As you scan through these best practices, see if you don’t agree that they are unique in that they push the envelope.
Employees are a high value corporate asset
- A powerful business case – of all of the things to remember about Facebook, it is that someone in HR or lower management convinced executives to fund and implement each one of the “crazy” and unique things that you will read about in this case study. Remember that Facebook is no different than any other firm; crazy ideas go nowhere unless a compelling ROI business case is first made to executives.
- Quantifying the value of employees – nothing spurs executives to focus on talent management like quantifying in dollars the added economic value of having top-performing versus average ones. Facebook (along with Google and Apple) has taken the time to put a dollar value on its employee assets. For example, Facebook’s Director Of Corporate Development Vaughan Smith has estimated that when recruiting, “Engineers are worth half a million to one million” (each). When a single engineer is worth up to $1 million, you strongly invest in recruiting and in increasing their productivity, and you certainly don’t focus on the relatively miniscule cost per hire that it takes to recruit them.
WOW features that provide employees’ amazing choices
- Extended six-week boot camp onboarding with a choice – most corporate onboarding is a relatively simple and often boring one day “form filling out” exercise (Facebook instead provides the needed paperwork to the employee before they start). Its approach is unique because it is extended over an industry-leading six weeks. And during that time, rather than watching videos and hearing lectures, employees actually work on teams that spend their time working on multiple real projects. And to demonstrate its trust in new hires, during this time boot campers have full access to the complete computer code behind Facebook. Each employee is assigned a mentor. But the most powerful part of the onboarding is that at the end of the process, each employee is asked, “Which team and project within Facebook would you like to join?” This is powerful because when you apply for a job, you really have no way of knowing which team or project would be a best fit for you. I know of no other organization on the planet that gives new hires a team choice.
- Hackamonth self-directed internal movement – at most organizations, getting approval to move to a new job is a complex often political process where the employee has little control. However Facebook’s Hackamonth process is the opposite because it is a self-directed internal movement process. It allows employees who have worked on a project for a year to select their own next project team and after working with them for a month, if they like it, they can stay.
* Note: just like at any firm, benefits and features are continually changing; however, unless noted otherwise, those listed here were current at its headquarters as of August 2013.
It doesn’t just have free food, it offers amazing food
- Free ice cream and cookies is a life-changing experience – Google is justifiably famous for publicizing free gourmet food, but Facebook wins the award hands down for the most compelling food. With a relatively young and healthy employee population that doesn’t have to overly worry about its weight, what could be more compelling than a free ice cream store and bakery? A dozen varieties of ice cream, low-fat yogurt, milkshakes, sundaes, as well as cakes, pies, and the absolutely essential cookies, all unlimited and for free. After one visit and without hesitation, I classify this as the No. 1 most compelling “fun” company features on the planet.
- Free barbecue — even though the Silicon Valley isn’t in Texas, who doesn’t love barbecue? Facebook’s open-pit barbecue is particularly compelling because it is centrally located, and as a result, the smoke from the barbecue waffles throughout the campus making employees think of barbecue. You simply can’t miss it. Of course the barbecue is free but the best feature is that the BBQ shack is in the middle of an open courtyard, where employees can collaborate while in line and then sit in the California sun and eat on picnic tables and chairs.
- A global array of food keeps employees on campus – because its 3,000+ employee population includes a large number of younger people from all over the world, it makes sense that it offers food day and night that fits every “global fast food group.” The last time I was there I had sophisticated French food that was as good as I eat in Paris, and like the French it also bakes all of its own bread on site. But it also offers hamburgers, pizza, and tacos as well as an espresso bar and unlimited snacks throughout the day. Being in California, it of course also offers health food including a salad bar, a juice bar, and sushi, as well as vegetarian and vegan options. Employees clearly take advantage of the free food because its roughly 2,400 employees at headquarters eat an average of 7,200 meals a day. The Facebook Culinary Team accepts food requests from employees and it lets employees know what’s on the menu, using of course a Facebook page.
- Happy Hour every Friday – one of the features that seem to startle most corporate people outside of the Silicon Valley is the availability of alcohol at Silicon Valley firms. At Facebook it is available on Friday happy hours and during employee-generated special events. A reason for allowing it at firms is that management simply can’t be credible when it says that it “trusts its employees” if it doesn’t trust its employees to be reasonable in the use of alcohol.
Its management approach focuses on speed and risk-taking
- Speed is essential, so “move fast and break things.” — Facebook isn’t unique in that speed is critical to being first to market. At Facebook, management proactively encourages employees to move incredibly fast, even though it will obviously result in some failures. Many firms have slogans, but Facebook goes to the extreme of painting corporate culture slogans larger-than-life on walls throughout the facility, and one of Facebook’s most prominent slogans is “Move fast and break things.” The concept follows the CEO’s idea that “If you never break anything, you’re probably not moving fast enough.” At Facebook, “We’re less afraid of making mistakes than we are of losing opportunities.” Another slogan emphasizes the importance of getting things finished and implemented rather than waiting until they are perfect, and that slogan is … “Done is better than perfect.”
- “Be Bold” and take risks — most corporate cultures are risk adverse, and in many cases, to the point where everyone is afraid to fail even once. Facebook is the complete opposite; its culture encourages bold decision-making and risk-taking. Its approach is illustrated by these less-than-subtle slogans: “The riskiest thing is to take no risks,” and “We encourage everyone to make bold decisions, even if that means being wrong some of the time,” and “In a world that’s changing so quickly, you’re guaranteed to fail if you don’t take any risks.” In a world where going first and being innovative is of course full of huge risks, you have no choice but to find a way to convince your employees to avoid the more common and natural conservative approach.
- The strong culture enabled a 180-degree shift in direction — the real strength of any company culture is its ability to change and shift the focus of its employees when the market requires it. The Facebook product has always been a website-housed product that was accessed through a PC. However you have to credit the CEO and the company culture for quickly realizing that the smart phone would eventually become the dominant platform. And in a period of less than two years, the company made a successful shift so that its product is now primarily accessed through the mobile platform and the smart phone. To make the 180-degree shift even more impressive, the advertising revenue from the mobile platform is now becoming a larger part of Facebook’s profit. The culture has also survived the loss of significant revenue from the decreased popularity of Facebook-based games from Zynga.
A focus on excellence in recruiting
- It is ranked the No. 1 employer brand – Facebook excels at spreading its “best place to work” employer brand image. In 2013 Facebook was listed as the No. 1 employer brand by Glassdoor for having the most satisfied employees. It was No. 1 because its employees are “Challenged every day to do your best work” and “The company’s leadership truly believes in Facebook’s mission to make the world more open and connected.” My research reveals that “doing the best work of your life” and “changing the world” are the top two factors that attract and retain innovators and top performers at any organization. They received an amazing 4.7 rating out of 5, where the next closest employer is rated a 4.5 and talent competitor Google received a 4.3.
- Acqui-hiring is a unique corporate practice – I haven’t found a single firm that can match Facebook’s signature recruiting practice of acqui-hiring. Acqui-hiring is where you acquire (usually smaller firms) primarily for their talent, rather than for their products or customers. Until its recent Instagram purchase, almost all of Facebook’s acquisitions had as a primary goal to acquire technical talent. The added advantage of this practice is that you get a whole “intact team” that if integrated correctly, can be productive almost immediately. “Acquiring the firm” may be the only way to capture “startup/hacker mentality” talent that wouldn’t on their own ever consider applying for a job at a large corporation, even one as exciting as Facebook.
- Obviously it can’t require a college degree – because its obviously successful CEO is a college dropout, it would be glaringly inconsistent and perhaps a little embarrassing to require a new hire to have a college degree. As one of the recruiters put it, “It would be weird for us to require a college degree.”So instead, its recruiting focus is “If you can build awesome stuff and have big impact, that’s all we’re really looking for.” Not requiring a completed degree gives it a chance to land top talent long before other firms, which must wait until after they graduate.
- Contest-based recruiting reveals what a prospect can build – Facebook, like many other Silicon Valley firms, relies heavily on Internet-based technical contests to find hidden or “non-obvious” talent from around the world. These relatively inexpensive contests have simple names like “The Facebook Hacker Cup” but they allow the firm to find people based on the problems they can solve, and what you can build is a major corporate focus. Because contestants are initially anonymous, the winners who are targeted for recruiting are selected because of their work and not as a result of their degrees, experience, gender, or where they reside. Facebook also recruits at algorithm coding contests sponsored by others including TopCoder and Kaggle.
- Hackathon college recruiting – each year Facebook visits more than a dozen college campuses and while there, challenges self-selected teams to come up with solutions to real technical problems. The finalists are brought to the Facebook headquarters for “Camp Hackathon,” where their solutions are judged and the winners get a small prize and an offer of a summer internship. The students get to keep their ideas in case they want to develop their own startup around it.
- Its CEO as its chief recruiter — most organizations dream of having its CEO occasionally involved in recruiting but Mark Zuckerberg takes it to the next level. He assumes the role of chief recruiter by periodically speaking publicly about the firm and by visiting college campuses in order to directly attract potential recruits from among faculty and students.
- Employee referral “Ninja Hunts” — Facebook, like most other Silicon Valley firms, relies heavily on employee referrals to identify top recruits. One of its creative approaches for generating names are called “Ninja Hunts,” where recruiters typically ask a gathered group of employees to think about all their friends to see if some of them would be great engineers for Facebook (where Ninja is their name for an exceptional engineer).
- Overall recruiting and retention success – overall, Facebook seems to excel at recruiting as a result of a combination of its powerful product and employer brands. In fact, Mark Zuckerberg recently stated that “We’re doing really well against the hiring goals that we have.” My sources also tell me that Facebook has been able to largely protect its staff from raiding, resulting in a single-digit turnover rate.
Economic rewards and employee benefits
- Facebook offers unlimited sick days – most firms would never even consider offering unlimited sick days, but if your work is truly exciting, your teammates count on you, and you are rewarded for performance, there are few who want to miss much work for frivolous reasons. There are also few better ways to demonstrate your trust in your employees than to offer them unlimited sick days. Facebook also offers 21 days of paid time off each year (essentially a month off) for even new employees.
- Amazing benefits for new parents – Facebook, like most tech firms, struggles to hire and keep women engineers. So it offers close-in reserved parking spaces for those who are pregnant. It also offers “four months paid parental leave for both spouses, reimbursement for some daycare and adoption fees, and $4,000 “baby cash” for a new arrival.
- Rewards are based on performance – the goal is for employee rewards to be differentiated based on performance results and from data from its comprehensive coworker feedback process. One internal source estimates that the reward differential between a bottom and top performer at the same level can be up to 300 percent. Nothing sends a clearer message to employees that performance matters (over status and tenure) than a large percentage differential between top and average performer rewards.
- An opportunity for wealth — although the firm appears to offer competitive salaries, the prime economic incentive are Restricted Stock Units, which keep employees focused on producing business results. And that business results focus also encourages cooperation and sharing with among employees. Everyone seems to agree that employees get generous RSUs as part of their regular pay package and as bonuses. Obviously many employees got rich as a result of the IPO; however, the opportunity for wealth still exists because the stock now exceeds the IPO level and its value has been growing at a rapid rate.
- It encouraged workers to drop by at any time — one of the most compelling work-increasing “benefits” that I have ever come across occurred at Facebook in its early years (2008 – 2009). Facebook paid its employees $600 each month extra for living within a mile of Facebook headquarters. The goal was to subtly encourage employees to live close by so that it was easy for them to casually drop in for free food but also for extra work and collaboration. The unintended impact on dramatically raising rents around its Palo Alto headquarters was one reason for eliminating this practice in 2009.
In part 1 of this series I covered the first 24 amazing talent management practices at Facebook. In this part, I will cover the remaining unique 21 best practices that you can learn from.
If you’re not aware of Facebook’s success, within 15 months of its IPO, its average employee produces over $1.3 million in revenue and $120,000 in profit each a year. Glassdoor.com has rated the firm No. 1 for employee satisfaction and its employees rate its CEO No. 1 with an almost perfect 99 percent approval rating. My primary contribution in this case study is to provide insight into the business reasoning behind each of its unique practices. The 45+ features are separated into 10 different categories. As you scan through these best practices, see if you don’t agree that they are unique. If you would like to learn from what I can only call simply amazing and results generating talent practices, read on.
The physical space encourages openness, collaboration and innovation
- An open floor plan to encourage collaboration – its office space design may even surpass Google’s in encouraging openness, collaboration, and innovation. Rather than offices or cubicles, everyone it seems has a simple standing desk (for its health benefits) but also because it improves sharing and collaboration. Without obstructions between employees, one can easily see and hear a dozen coworkers whenever they have an issue or a success. Because the corporate message is clearly one of openness, you simply won’t find a lot of locked doors or keep out signs like you do at most corporation headquarters. The main campus has a striped two-lane “road” running down the middle of the entire campus length and because there are free bikes located everywhere, it encourages interaction between “distant” teams on different ends of the campus. Also when its new “across the street building” is ready, an underground tunnel will make interaction still quite easy.
- Despite being a social media firm, Facebook is a “come-to-work” culture – as a firm that has a 100 percent online product, you would think that it would encourage work from home. But like other firms in the neighborhood (Google, Apple, and Yahoo) it encourages physically showing up to work by offering great food, amenities, and a free shuttle ride to work. In a culture where continuous rapid innovation is the lifeblood, the data simply shows that face-to-face interaction between non-team members is the driver of collaboration.
- “No meeting Wednesday” provides uninterrupted time – the firm informally emphasizes avoiding scheduled meetings on Wednesday. This midweek meetingless day assures “makers” (programmers) will have at least one complete a day of uninterrupted time. Being free of interruptions is especially important to programmers because a single interruption like a meeting can require a whole or half day to get back into the flow of their work. To add flexibility, many employees use Wednesday as a work-at-home day when they need it.
- No place makes it easier to get to work – in order to make it as easy as possible for employees to get to work, Facebook offers free Wi-Fi shuttle buses from distant locations as far as an hour away. The buses not only improve attendance but they also increase productivity because employees can both collaborate and work while they are riding. The firm also offers free train passes, van pools, and of course free auto parking. Few firms treat bicyclists better than Facebook because it has a bike commuting program and a manned full-service bike shop on campus!
- Working out and play are easy – of course Facebook has an onsite fitness center, and for busy employees, there are even treadmill desks for workouts when you are working. For fun, it has a fully stocked videogame room, a movie theater, a print shop, a skateboard course, and free on-campus bicycles. In addition the campus is located right on San Francisco bay, so it has a beautiful walking and biking path with a breath taking view.
- No need to leave campus for personal needs either – Keeping employees on-campus not only makes it hard for them to run into recruiters from other firms, but it also saves them “no-value” travel time that would be wasted sitting in traffic on busy Silicon Valley streets. Facebook employees enjoy free wash-and-fold laundry services, haircuts, and dry cleaning. There is also an onsite doctor’s office, acupuncturist, and a chiropractor, so there is little need to leave campus for personal services, and many stay later because they have few personal errands to run after work.
- A woodshop encourages “making things” — In a tech world, it may seem antiquated or out of place, but Facebook (like Google) offers its employees a full woodshop. It helps some to relax but it also serves to stimulate employee creativity, thinking, and most importantly, to develop the habit of making things. The making of personal items is therefore encouraged.
- Everyone gets whatever technology they need – because Facebook is a technology-driven firm that is full of software engineers and staff that rely on their computers, the firm goes out of its way to provide everyone with superior technology tools. Every building has its own tech support office (some are open 24 hours). Nothing demonstrates its commitment to supplying technology then its strategic placing of 24/7 vending machines around the headquarters that dispense needed replacement technology items (like keyboards) for free. To a geek, this is a WOW.
Unique approaches for managing employees
- Employees are excited by having an impact – My own research reveals that doing the best work of your life and having an impact on the world are the top two energizers of top performers. Leaders at Facebook also realize the importance of impact. So in order to ensure that employee impact is real, engineering staffing levels are purposely set to maximize the direct impact that an individual engineer has on customers. Imagine the excitement of every engineer knowing that what they do, on average, impacts over 1 million customers.
- Becoming a manager is not a promotion – at most technology-driven organizations, engineers strive to become managers primarily because they desire the added pay and prestige. However, at Facebook, becoming a manager is a lateral transfer and not a promotion. As a result, there is little incentive to move away from your technical work, unless you really desire to become a manager in order to make a difference. Lowering the incentive may also indirectly reduce some of the politics typically associated with selecting managers.
- Every new manager gets a mentor and a coach – even though it’s not a promotion, all new managers should succeed for the good of the team. Few firms give new managers more support than Facebook. At Facebook, new managers are generally given an internal mentor for four months and an external “strength coach” for three months. Facebook also has an extremely comprehensive employee feedback program for all managers and team leaders.
- Performance feedback – Facebook is fanatic about continuous feedback. Formal performance appraisal is done every six months, based on the results received from manager and employee online feedback tools (feedback is received typically from up to seven individuals). Managers and employees are also provided with real-time success metrics that quantify their results.
- A project-based team organization is fluid – Facebook has a 100 percent team environment, where most of the teams are small (usually around six) but they can be larger up to 30. In addition, almost everything is done on a project basis. An engineer will usually stay on a team until the project is completed; however, they may simultaneously advise several teams. The project work makes the organization extremely fluid, because most teams dissolve after the project is over. As a result, over a three-year period, an engineer may work on three different teams and have as many as five different managers. This fluid environment ensures that almost everyone gets to know and to work with many different colleagues, which in turn helps to reduce the building of the all-too-common corporate silos.
- Metric driven decision-making where “code wins argument” — in many organizations, decisions on ideas are frequently influenced by the status, tenure, and rank of those proposing the idea. However, because its CEO is a college dropout who had no formal management experience or training when he started, the title or the education level of the person with the idea means much less at Facebook. Instead it prides itself on data-driven decision-making where “code wins arguments,” (i.e. whether something works well) and metrics and data are the basis for most decision making. If there is an area that might use upgrading, it would be the expanded use of more advanced people analytics, more in line of what is happening at Google.
- Zuckerberg is rated as the No. 1 CEO – it’s hard to argue against the fact that Mark Zuckerberg is an outstanding CEO, based on his track record of gaining 1.2 billion customers, maintaining a dominant market share, continuing profitability, and most recently, the well-performing stock price. But most are surprised that based on employee ratings (99 percent are satisfied with his leadership), Glassdoor rated him its No. 1 CEO for 2013, well ahead of Google’s or Apple’s CEO’s. His second-in-command, COO Sheryl Sandberg, has an equally successful track record, and in addition, she has been called the most powerful woman in Silicon Valley.
- The most casual dress code in the corporate world – if there were to be a dress code at Facebook, it would be one that discourages “over dressing.” In an organization where the CEO is famous for wearing only hoodies or T-shirts, it is obvious that if you are going to impress a coworker, it won’t be through your clothes, so it will have to be through your work.
Transparency and openness are emphasized
- “Be open” — Facebook is clear that externally, it believes that a more open world is a better world, but it also believes that openness should also apply to its company culture. If you believe that informed people make better decisions and have a greater impact, it makes sense to emphasize “we work hard to make sure everyone at Facebook has access to as much information about the company as possible.” An open-book management approach is also another way to reveal that management trusts its employees. This is a practice that wouldn’t be found at other firms like Apple.
- All-hands meetings encourage openness – Facebook’s openness is illustrated on most Friday afternoons when the CEO makes himself available in an open to all-employees q-and-a meeting. During that meeting the CEO listens to ideas and he answers all questions from the employees. Most who describe him say that there is often a healthy exchange of often contrasting perspectives.
Unique practices for solving corporate problems
- War rooms for the sprint to ship – toward the end of a project when a team is “sprinting” toward a product shipping date, a dedicated war room can be set up. The war room ensures that the team has a dedicated workspace, but it also sends a message to all others that this project is important, so they should support the final sprint. Some even use a countdown clock so that everyone knows unambiguously when they must deliver.
- Hackathon a chance to build something – “hacking” is a core value of Facebook. The rule for these anything-goes sessions is to build something that is “not your day job,” which makes them more fun. Hackathons, which are eight-hour, all-night employee driven large group sessions that begin in the mid evening and don’t end till the wee hours of the morning. They aren’t just brainstorming sessions where employees offer new product concepts, because there is a requirement that they end with a developed rough prototype. Many of their products including the Like thumb, comment tagging, timeline, chat, Facebook videos, and their photo product came initially from these sessions.
- “Project Mayhem” — Facebook recently added a “project mayhem” event to supplement the more traditional Hackathons. The initial event attracted a couple hundred employees. These longer 27-hour sessions begin at 11 a.m. one day and continue until 2 p.m. The longer timeframe will give engineers more time to “facilitate the development of mobile products specifically, which often require more careful planning and development than Web-based products.” At the event’s conclusion, engineers get three minutes to pitch their ideas on stage during the prototype forum.
It is hard for many to justify labeling a firm that is still in its infancy, like Facebook, as a great firm, and one that is in the same league as Apple, Amazon, and Google. I disagree. Facebook does deserve its place on the virtual “Talent Management Hall of Fame List” because of its many thoroughly thought out and unique approaches to talent management. Its unique talent practices like boot camp onboarding, Hackamonth, Hackathons, acqui-hiring, unlimited sick days, not requiring a college degree, and of course the free ice cream shop set them apart from every other firm.
Its real triumph and strength lies in its laser focus. Unlike many great firms that try to do numerous things in many diverse areas, Facebook is laser focused on connecting the world together. Unlike any of the other 250+ firms that I have worked with, every employee and leader from the top down to the bottom seems to know exactly what the role of the company is and how they contribute to it. Every time I visit Facebook I am struck by the energy, focus, sense of urgency, and the desire to be first every time. I have yet to meet anyone there with a big ego, and in my experience, the lack of obvious corporate politics matches only the low levels at W.L. Gore and Zappos. The level of openness and employee trust is second to none, as is its willingness to try new things in talent management that can’t be benchmarked because no one else has ever tried them before.
After reading this case study, you might not agree with all of its practices or even feel comfortable with them, but you have to admit that taken together, they are unique and they have produced some amazing results in an incredibly short period of time. After scoring No. 1 on best places to work and No. 1 with the most effective CEO, you have to admit that there’s something going on here that is simply amazing.