The "Experience" Economy: HR's need for rapid evolution

Tim Guleri, Managing Director, Sierra Ventures

Tim Guleri, Managing Director, Sierra Ventures

Much has been written about the “Experience” Economy. In his seminal HBR article in 1998, Joseph Pine outlined how the economy had moved from an “Agrarian” to a “Goods Based” to a “Service Based” and now to an “Experience Based” economy. In the last 20 years, with the advent of the smartphone, social media and instant messaging, the Experience Economy has only accelerated. 

Technology trends have shaped a “photo first” world where perception is the reality. It’s imperative that HR leaders, whose job it is to hire, retain and grow the best talent, adapt their methods rapidly to the changing trends in order to compete and retain the best workforce.

"We are in a golden age of HR, where HR has become and will remain, a competitive advantage for the best-performing companies. It’s our mandate and opportunity to seize that moment and become excellent in the Experience Economy"

As a student of macro trends in HR, I believe there are three things HR needs to do to win and keep the best talent in the Experience Economy. Also, as an active Investor in HR Technology companies, these trends shape my investment decisions as well.

Commit to the Experience Journey

As a leader in HR, take stock of how good (or in some cases bad) the journey/experience is for an anonymous candidate or employee in your company. I have heard of CEO’s of public companies that “act like an applicant” and personally go through their application process to see how the experience truly feels like on the ground. After going through the process, rate yourself, especially compared to your direct competitors. From there, commit to building a multi-year roadmap for how you can become a world-class hirer or employer. As part of this journey, forward-looking companies often change or add organizational roles to further improve the candidate experience. For example, CHROs that have committed to the cause, have hired “VP of Marketing in HR” to refine and propagate their brand via a professionally run Marketing organization.

Invest in Candidate & Employee Experience Technology

Candidate Experience Technology has rapidly evolved to help HR leaders bridge the gap between the needs of the Experience Economy with respect to HR and the reality of what exists in the enterprise today. Current technology solutions are based on data powered intelligence systems. With these solutions, HR leaders can take anonymous website traffic and use it to treat and route candidates through pre-optimized “recruiting swim lanes” on your website. These “swim lanes” put the right collateral, success stories, and benefits in front of these prospects at the right time. A helpful BOT answers questions based on AI and an HR professional is a click away. Behind the “glass”, recruiting managers can see the most fitting and interested candidates and can fast path them to the right hiring managers. Additionally, once you have a full view of your conversion funnel, HR leaders can reallocate recruiting dollars to the best performing channels. These new technologies are working and creating a competitive advantage in HR. Leveraging and investing in new technologies is imperative for keeping up with industry innovations and winning the best talent.

Learn Best Practices from FAANG

Facebook, Apple, Amazon, Netflix, Google have highly evolved HR techniques as they compete for the best in class talent in the same markets. It’s good to learn and borrow from the best for two reasons.  

1. As software “eats the world” every company will need to learn how to hire and retain the best technical talent. FAANG companies have inverted the funnel where their operating assumption is that “the candidate is in control, and we have to earn their business.” This is where the candidate experience matters the most.  

2. The quality of your hires affects subsequent hires in a profound way. FAANG puts so much focus on hiring the best for this reason. I’m sure you’ve heard the common adage: A’s hire A’s, B’s hire C’s. Look into hiring marketplace technology companies where the best “passive” candidates express where they want to work and go get them. Get the best to keep attracting the best.

We are in a golden age of HR, where HR has become and will remain, a competitive advantage for the best-performing companies. It’s our mandate and opportunity to seize that moment and become excellent in the Experience Economy.

Weekly Brief

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