How Spotify generates 20,000 job applications per month

Spotify's parental leave program has played a major role in talent acquisition and retention, according to its head of HR, Michael Kim

A combination of data-driven business and integrated HR strategies – including a generous parental leave program – have contributed to a strong employment brand for global music streaming platform Spotify, which receives an average of 20,000 unique job applications per month.

One of the most significant HR activities to generate interest in the company from a talent attraction and retention strategy has been a carefully thought-through parental leave program, according to its head of HR for APAC, Michael Kim.

“When we launched the parental leave programme two years ago, one of the first interesting things we saw in the data was a significant spike in external applications from candidates who wanted to join Spotify,” he said.

“Our brand really generates a demand of talent, which is great, but when we launched the parental leave programme there was this big spike in interest – and this has never really come down.”

The programme was initially intended for existing employees, but Kim said that it has had an external impact on its talent attraction strategy.

“So when we talk about total reward in selling to candidates who want to join Spotify, our parental leave programme is part of the total reward conversation,” said Kim, who was speaking ahead of the HR Innovation & Tech Fest, which will be held from 27-28 November 2017 at the Hilton Sydney.

Spotify offers six months fully paid parental leave to all employees (regardless of gender and how they become a parent).

“When we launched the programme there was this big spike in interest – and this has never really come down”

Parents are able to take their leave up to their child’s third birthday, and are encouraged to take the full time off, with the added flexibility of splitting their leave into separate periods.

The programme also incorporates a one month “welcome back” initiative, which allows returning team members to ease back into their job with the ability to work from home, on a part-time schedule and with flexible hours.

Kim was tasked with designing the programme, and he spoke extensively with employees who had recently taken parental leave (under the company’s previous programme), as well as those who were interested in having families in the future and Millennials right out of college in the interests of long-term talent attraction and retention.

The policy was born out of the company’s Swedish heritage and culture, which places an emphasis on a healthy work/family balance, gender equality and the ability for every parent to spend quality time with the people that matter most in their lives, Kim explained.

The problem with unlimited leave policies
While many companies have good parental leave programmes, Kim said that sometimes they lack the culture to support and empower employees to make full use of the leave.

“The data shows that people don’t take the full amount of parental leave. If anything they take much less than what’s allocated to them,” he said.

“At Spotify, the parental leave philosophy was really driven from the top because it’s part of the culture in Sweden, and our CEO or VPs were taking three, four, five, six months off so this really sent the message across the organisation: ‘Well if they’re doing it it’s okay for me to do it.’”

“While these policies may sound sexy and fun on paper, you’ve got to look at the actual human behaviour of how people engage in these programmes”

Kim said this is potentially an issue for other companies who may offer unlimited leave policies, and he said data indicates that employees who have access to such policies actually take less time off.

“A lot of companies offer, quote, unquote, ‘unlimited vacation days’, but many people with access to these policies actually take less time off because there’s a fear based on their culture of what’s too much?

“’If I take too much, am I going be retaliated against?’ They are likely to take less, because there’s not that much guidance.

“So while these policies may sound sexy and fun on paper, you’ve got to look at the actual human behaviour of how people engage in these programmes – and these are really set by the culture of a company as well as its managers and the example set by its leaders.”

Using data to drive HR decisions
Spotify’s HR team also employs a strong data-driven decision-making process across the business, and Kim said this is a reflection of the broader company in how it designs its platforms and applications and creates better experiences for listeners.

“HR is very much aligned with this data-driven approach, from performance development and diversity and inclusion, through to talent attraction, management and retention,” he said.

“We use this format called DIBs, which stands for data, insights and beliefs to help drive decision making around what the HR strategy should be – and this always starts with data.”

Examples of this within Spotify include cost-budget analysis, P&L analysis, headcount forecasting analysis, workforce planning, ethnicity population versus gender population data, and gender wage gap analyses.

“HR is very much aligned with this data-driven approach, from performance development and diversity and inclusion, through to talent attraction, management and retention”

Each year Spotify conducts a general wage gap analysis based on compensation data and external benchmarking, to make sure that there is parity between men and women in the same roles.

If the analysis indicates a disparity in any roles, then Spotify’s HR team looks into the cause of this and remedies this through adjusting compensation or revising earnings.

Reinventing performance management
Spotify also takes a data-driven approach to performance development, and Kim explained that the business wanted a cutting-edge performance development strategy which broke traditional performance development norms in place at other companies.

“In our humble opinion, in the world of performance management, the notion of forced distribution, bell curves, ratings and rankings, coined the trivial idea-driven annual performance review process,” he said.

“It’s very much a dying breed of review and a very ineffective way of motivating a workforce – especially Millennials (who comprise the majority of employees in Spotify).”

Kim explained that Spotify wanted to adopt a “growth mindset” and the “development” part of performance development was critical.

“Development happens organically through effective one-on-ones, coaching, developmental conversations, and really being a very effective manager,” he said.

“Our philosophy is that if you do your one-on-ones and have ongoing constructive developmental conversations with employees throughout the year, there really is no need for an annual performance review.”

Another important element of Spotify’s performance development strategy is a genuine culture of learning.

“So if you’re underperforming in a certain area, it is important to understand why you’re underperforming – and what tools can we give you to get better,” he said.

“This is versus the more traditional route of ‘if you’re underperforming, here’s what you’re doing wrong, we’re going put you on performance improvement plan, and if you don’t improve within 30 days we’re going to fire you.’”

Michael Kim will be speaking at the HR Innovation & Tech Fest, which will be held from 27-28 November 2017 at the Hilton Sydney. Use the code InsideHR to secure a $500 discount on the standard rate (for HR practitioners only). Image: supplied