Hybrid Work

Future of Work Pioneers - John Kelly

Head of People at Balena, John Kelly, developed a system that provides career paths in a non-managerial environment and designed a compensation strategy for a global population. Check out his story and insights for the future of work!

Over the last two years, we have interviewed 2,000+ Future of Work Pioneers who have shared their insights into new work paradigms. Today we are very excited to feature John Kelly, our first guest as part of our series. Enjoy!
John Kelly has over 15 years of HR experience with a focus on analytics and organization design.  He is currently the Head of People at balena, developing a leveling system that provides career paths in a non-managerial environment and designing a compensation strategy for a global population with a culture that rejects job titles or departments.

How are you approaching your organization’s new work model (in lieu of 9am-5pm | 5 days a week)?

For years before COVID, many companies were experimenting with new work models.  The strict nine-to-five in the office was developed to standardize labor. In the past decade Human Resources has widely recognized that optimizing for the most “time at work” doesn’t produce the best work and in general, will dramatically decrease creativity.  As technology is moving faster, there has been a major shift in what we need humans to do: instead of pushing them to perform a manual, repetitive action as quickly as possible over a fixed time period, we’re looking for people to imagine novel ways to leverage complex systems to create something new.  

I’ve worked at multiple flexible work arrangements and remote-first organizations before COVID, so it was very clear what to do during the pandemic and afterward.  Just like any HR policy, our goal is to optimize for employee success.  My current organization was always remote-first and global, so asynchronous communication was already at the core of how we operate.  That comes with many challenges (isolation, challenges in coordination, hurdles in building a consistent culture), so we must develop systems to make up for them (cross-team projects, coming together to build strategic roadmaps, and dedicated online spaces around social things our employees already like to do).  Offices that need to be in-person, nine-to-five will have different challenges (safety, smaller candidate pools, dependent support) and will need to develop different solutions (increased ventilation, more focused recruiting strategies, childcare options).  The key to any HR practice is to understand the needs of a particular culture and develop solutions that address those needs.  You can’t copy-and-paste HR from one team to another.

What metrics or other indicators will you be using to measure how your work model is performing?

Setting up tight metrics can often have unforeseen results; Cathy O'Neil does a masterful job in showing how metrics can break down in her work Weapons of Math Destruction.  Instead of tying any policy too closely to metrics, we would rather have a holistic view of company health, and from there see what patterns we can find.  

There are many factors that can indicate health at different phases of the employee lifecycle, not just employee surveys.  There is useful data in everything, from the number of rejected offers from candidates to the length of tenure of employees.  Since we know who is doing/saying what, we can connect this to all the other data we have in HR.  Once we have a system in place that pulls together data like this, we can try to detangle the strongest signals we’re finding.  There may be a certain team that is struggling or a certain action that isn’t being received well.  

The human brain is the most complex thing in the known universe, so it’s very challenging to tightly define what you expect to find before you start to look at the data.  Having a more holistic approach and being more exploratory makes it easier to find something dependable when dealing with people's data.

What does the purpose and vision for an ‘office’ look like from your perspective in the next five years?

"Five years from now, there will be many offices that look exactly like they did five years ago. COVID has sped up a transition that was already happening, but those in power are naturally very resistant to change."

Much of what’s happening now is proving to society that non-traditional methods can work better than traditional ones.  Over the next five years, there will be many more people experimenting in this space, which will fracture the market.  These heterogeneous practices are good for society–this is how we progress–but they aren’t easy, and many people will reject them.  

As with much technology, there will be a lot of hype around a few ideas.  The excitement overcomes the functionality, and the technology will feel disappointing in comparison to what was promised.  Some true believers will keep working on improvements and eventually create products that become the new normal.  It’s common to overestimate the progress we’ll make in a year and underestimate the progress we’ll make in a decade.

We already have strong technology in things like video conferences (Zoom) and chat (Slack), which will enable more flexibility in the short term (though these will continue to be refined and improved).  Most of our exploration of virtual offices has been in creating a two-dimensional or three-dimensional space in a computer that mirrors the physical space we live in; the real progress will be when we can remove those limitations and build “virtual offices” that aren’t bound by how we think of space in the real world.  The seeds of major changes have already been planted, and our children will develop ways of working very differently than we have.

How much flexibility do you plan on or are you currently giving employees regarding where, when and how they work? What are your views on choice vs. policy?

Increasing flexibility is the way society is moving; there is no way to fight it.  Flexible placemaking is one of the biggest challenges HR teams will face in the coming years.  

The idea of Unlimited Paid Time Off was a revolution in the way HR wrote policies.  It gives the power to the employee, removing a constraint that people often complained about. In doing so, it also moved the responsibility to the employee.  I’ve seen (both in academic research and in doing analysis at my own organizations) that the policy decreased the total number of days employees took off.  We know that burnout is a major hurdle that decreases achievement and leads to turnover, so it’s very concerning when time off decreases.  So by increasing flexibility, we also increased some of the problems we were attempting to fix.

To me, the challenge isn’t about the amount of flexibility, it’s about the function of the structure.  In the past, structure created rules to force employees to do something they didn’t enjoy (often inciting rebellion against it).  Instead, if we want employees to move in a certain direction, then our structure should make that direction the easiest, most enjoyable path for them.  That way we can give them maximum flexibility while also aligning them to our goals.  If people aren’t following the path we expected, we should evaluate why that path is not desirable and what we can do to change that or if we should give up on it.

Can you share one prediction for the Future of Work that you’d strongly bet on?

Multiple factors are coming together right now that will have some very interesting effects on compensation practices.  Between the growing leverage of technology in our jobs, DEIB successes in the workplace, globalization due to remote work, legislation on candidate pay transparency, etc., there are many factors putting pressure on compensation.  This isn’t something we’ve seen for generations; the last time compensation has had so much pressure on it was during the rise of labor unions.  

Our status quo compensation practices aren’t capable of keeping up with modern demands, so I predict we’re going to see a lot of experimentation in this space.  Some companies will move to customize compensation to each employee, while others will have even stricter rules on compensation for large groups (like a “lockstep” approach).  I’ve written about some approaches on how to use sales-style compensation for software design, something I wouldn't recommend for many places but which could be very successful in the right culture.  We’ve already seen a lot more internal transparency on compensation algorithms, and some companies will make public compensation algorithms and even calculators.  Although it may sound revolutionary to make it easy for the public to identify the pay of any employee, functionally this isn’t very far from the governmental “grade” system, where you can look up someone’s compensation just based on public information (knowing their grade and location).

"As companies experiment with compensation, candidates will benefit.  A compensation algorithm is a good indicator of a company's strategy, so it provides transparency on how the company views its employees.  It also allows candidates to pick companies with a compensation plan that works well for them, helping people self-select into companies that might fit them better."

I’m very glad to be in HR while this is happening; it will be a lot of work to redesign the compensation field, but it really gives us the opportunity to really make societal shifts that improve people’s lives.

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