Why Are Employees Leaving Google? Facebook? Who$$s Next?

Use the knowledge of OB presented in this chapter to apply the Integrative Framework of OB and the problem$-$solving approach to the following case. Applying all of this knowledge should enable you to recommend realistic and effective solutions.

Read the case below and answer the questions which follow.

Many organizations recite a common mantra: $$Our employees are our most valuable asset.$$ How many companies then back this up and walk the talk is another matter. However, employees are indeed the most valuable asset of many knowledge$-$based companies, whose value resides in the experience, skills, and abilities of their employees. Google, one of the hottest companies to work for and repeatedly one of the most admired employers on the planet $($no$.1$ again in $2013),$ is acutely aware of this fact. Google$$s talent $($i$.$e$.,$ employees$)$ is largely responsible for the company$$s tremendous success to date and will largely determine the company$$s future success. It is no wonder then that many other companies continually and intensely compete for Google$$s talent to drive their own growth and success. Notable examples are Sheryl Sandberg $($Facebook$),$ Marissa Mayer $($Yahoo$!),$ Lars Rasmussen $($Facebook$),$ and Richard Alfonsi $($Twitter$).($Some reports as far back as $2010$ allege that over $140$ Facebook employees are from Google.$)$ Even Craig Silverstein, Google$$s third employee$$after Sergey and Larry$$left to work at Khan Academy.

Despite Google$$s perennial status as one of the best places to work, it $$competes for potential workers with Apple, Facebook, Amazon, Microsoft, and scores of start$-$ups, so every employee$$s departure triggers a costly$,$ time$-$consuming recruiting process.$$ The pay and the perks don$$t seem to be enough either. In $2010,$ then CEO Eric Schmidt gave every employee a $10$ percent pay raise. Google also was reported to offer enormous counteroffers$15$ percent raise, $4$x the stock benefits, and $$500,000$ cash bonus. Yet even this hasn$$t been enough to persuade some! As Robert Greene, a recruiter of engineers for tech start$-$ups, put it$,$Google isn$$t the hot place to work$$ and has $$become the safe place to work.$$

Possible Reasons

Articles, blogs, and many other sources speculate and report a variety of potential reasons. For instance, one obvious one is because the company is no longer a start$-$up$.$ It now qualifies as a behemoth with $30,000$ employees. And because of the size it has many employees filling each and every role. However, rumor has it that if you are not an engineer, you are a second$-$class citizen. Similarly, if you don$$t office in Mountain View $($the headquarters$),$ then you have no connection or impact. Other employees simply report that it is now a large bureaucracy that is slow and inefficient. These complaints occur despite the fact that employees get the famous $20$ percent time$$ to work on projects of their choosing. To some employees this makes matters worse, as one devotes so much time to developing ideas, yet now there is little chance they get implemented.

Is Facebook Next? What about the Next Hot Company?

Next Hot Company? If Google is victim to tech employees$$ lust for the latest, most exciting, and not yet public start$-$up$,$ then is Facebook next? Is your company next? Should every successful start$-$up that matures into a full$-$fledged viable business expect the same fate for its essential, life$-$giving talent? For instance, Facebook$$s IPO in $2012$ was enormous. And even though the stock fell sharply afterwards, many millionaires were created. And its average compensation seems to be similar to that offered at Google. Some reports, however, suggest that the luster is wearing off. Employee ratings of company satisfaction, compensation, and work$$life balance have been declining since $2009.($The same survey reports Google$$s employee ratings of the same characteristics to be stable over this period.$)$ More recent data reveal that employee satisfaction at Google has once again surpassed that of Facebook employees.

Which of the following is the most important problem in this case?

Multiple Choice

gaining market share

retaining high quality employees

organizational culture

employee compensation

increasing revenues