Employees Rule

I am spending the week in the Bay Area. The war for talent, especially in the engineering area, continues to be fierce, with 25 percent turnover each year. The average age at many of the startups is 26-years-old. The important change for employees is the desire to go beyond material benefits such as superb food and a great workout area. Simply stated, the employees want their CEOs to stand up on the issues that matter to them, from immigration to diversity to workplace safety.

The CEO of a typical fast-growth technology startup has focused the HR department on recruiting to keep up with the marketplace opportunity. HR’s focus on the treatment of women has also become heightened. The revelation by an engineer at Uber of alleged sexual harassment by her boss, essentially finessed by the internal HR team (although there had been other reported cases of similar bad behavior by the same employee), has spread like wildfire around social media. The company has now hired an outside law firm, with a team headed by former Attorney General Eric Holder and advised by board member Arianna Huffington.

CEOs are spending substantial time and resource on regular “all-hands” meetings every two weeks to brief the global staff on important events from new products to hires. This attempts to retain the small-company feel of a daily meeting with all employees at true startups. These are now highly produced affairs, an important assignment for the communications team. The team members submit questions, and there is a crowd-sourced vote on the most important ones for the CEO to answer.

Over the past four weeks, in those town hall sessions, the most frequent question is about the Trump immigration order and whether the company will fight for its foreign-born employees. One local CCO told me, “They expect the leader to take a stand on immigration.”

There is use of culture as a growth strategy at established technology giants. USA Today profiled Satya Nadella, CEO of Microsoft, describing him as having initiated “a seismic cultural shift… that is moving the company toward a cloud-based future… getting investors and employees alike re-energized.” He is quoted: “My job is the curation of the culture.” The article goes on to relate the failure, then ultimate success of a Twitter bot for human-to-artificial intelligence conversation. One key moment was a note from Nadella to the programmers:

Keep pushing and know that I am with you… the key is to keep learning and improving.

The 2017 Edelman Trust Barometer reflects a continuation of the trend toward employees as the most credible source of information about a company, from its products/services to its financial performance and supply chain. In fact, the employee is often twice as credible as the CEO and even ahead of the technical expert. In a world of dispersed authority, the battle for the truth will be won or lost with the employees.

Richard Edelman is president and CEO.