People Analytics for Hyper-Growth Businesses

A company in hyper-growth mode typically grows faster than the industry average and it almost always happens unpredictably. A company in this phase would have plenty of businesspeople, engineers and product managers. But the HR team is likely understaffed, for a number of reasons.

Hyper-growth mode results in rapid hiring. Once newcomers are onboarded, business leaders realize that the company needs more managers. The managers can either be hired from outside the company, which requires more onboarding, or they can be internally recruited, which requires a certain amount of training. And as a result, the organization has a huge influx of new employees and new managers who don’t yet know how the company operates.

Let’s say you had 40 employees at the beginning of the year. Over the course of three months you hired 40 more people. The older employees would need to spend about 10-20% of their time onboarding the newcomers. As a result, managers will notice productivity decline and feel that they need to hire even more people to make up for it.

The cycle of unproductivity continues. By the end of the year, the older employees may be gone with hundreds of newcomers in their place. In HR, you’ll feel like you work for an entirely different company.

In short, working in HR during hyper-growth mode is akin to running frantically on a hamster wheel. As businesses prioritize other departments over HR, such as engineering or product and sales, it’s important for HR to implement people analytics and data-driven approaches. Not only can it improve capacity, but it can strengthen your argument to convince management how to improve company practices.

Ask yourself, what kind of people analytics can you implement immediately? How can you prepare your HR department for the future?

Recruitment and Talent Inquisition

While recruitment merely focuses on filling open spaces, talent acquisition emphasizes the importance of selecting the right people for the job. Here are some metrics that can help you support hyper-growth.

• Time-to-Offer: Number of days between the date recruitment began and when the offer is made.

• Time-to-Hire: Number of days between the date recruitment began and when the person is hired.

• New Hire Survival Rate: Number of new hires who voluntary or involuntary leave the company during the first six months.

In high-growth startups, increased hiring is a priority, but it requires careful consideration. Time-to-Offer and Time-to-Hire will help management plan everyone’s workload. If hiring managers know that they will be busy with recruitment for 42 days and that the new hire will join the team in 53 days, they will allocate tasks accordingly. Similarly, the new hire survival rate helps managers thoroughly analyze what went wrong with hiring, onboarding or post-onboarding stages and consequently improve the process.

Additional Metrics

Once your essential metrics are up and running, you can use data collection processes to look into these additional metrics:

• External employer brand strength: Job application rate, recruitment cost per hire, referral rate, sign-on bonus rate, job board ratings, etc.

• Staffing efficiency: Time candidates spend on each stage of the hiring process, recruitment diversity metrics, recruitment source breakdown, candidate pipeline.

• Selection efficiency: Offer acceptance rate, new hire performance during first six months, new hire job satisfaction rate.

Retention

While retention is always important, it’s hard to say what level of retention is important for hyper-growth mode.

Essential metrics for retention include:

• Regrettable attrition

• Non-regrettable attrition

• Breakdown of termination reasons

Culture

Companies in hyper-growth often don’t have a definite culture in the beginning. But even if they do, that culture becomes diluted by the influx of new people. Managers can help by creating ground rules for behavior among employees, and these essential metrics can help track culture:

• Employee Commitment Index: Also known as an engagement or satisfaction index. The Gartner Engagement Model is my personal favorite, but the most important thing is to consistently and regularly track dynamics. In the hyper-growth stage, employee commitment is key.

• Employee Net Promoter Score: How likely an employee is to recommend their organization as a viable place to work. This is measured by the difference in percentage between promoters and detractors.

Culture always trumps strategy. These metrics can help managers understand what’s happening in their company on the behavioral and cultural levels. Later on, once the company has concrete values, you can then measure your employees’ attitude towards those values and whether they help your business succeed.

Financials

The overall cost of acquiring and maintaining talent is becoming more and more expensive for companies. If you want a seat at the table, you have to talk financials:

• Percentage of Cost of Workforce: Sum of the salaries and benefits cost divided by total company costs within a given period.

• Employee Productivity Rate: Total company revenue divided by total number of employees.

• Employee Cost Productivity Rate: Total company revenue divided by total employee cost.

• Salary Competitiveness Ratio (SCR): Average company salary divided by the average salary offered from competitors.

• Pay Equality: Ensure that all employee groups are paid equally in accordance with their job level and contribution to the company.

After tracking these metrics, you can always dig deeper by looking into training expenses, investment returns on employees, operating expenses, etc.

The overall hyper-growth journey is exciting and thrilling; there’s always a new challenge to conquer. Work on simultaneously building your people analytics functions. It’ll help you tremendously in the long run and help you scale when the time comes.