How Netflix hire the best people and keep them

Founded by Reed Hastings and Marc Randolph in California, Netflix began as a DVD-by-mail service in 1998 which eventually evolved into an online TV/Movie streaming service with 83 million global subscribers, generating over $7 billion a year and currently ranked the 15th most innovative company in the world according to Forbes.

They redefined the way people watch TV and movies and also produce their own original content – Stranger Things, House of Cards and Making a Murderer to name a few.

Netflix are a great example of a company rewriting the ‘typical’ HR rule book while attracting and retaining the best talent. To do this they use a set of seven Cultural Behaviours which set out clearly what they expect from their 3,500 employees - and what they offer in return.

A 124 slide presentation was created by Reed Hastings and ex-Chief Talent Officer Patty McCord to highlight the behaviours that they follow. It shows that high-performing employees will eventually leave a process-driven culture. They suggest that the talented, responsible people – the people every company wants – are worthy of freedom which they can thrive on, the lack of rules allowing them to be the best version of themselves. 

Instead of spending time and money creating HR policies to prevent issues that only a small number of staff might cause, they’d rather try hard to not hire those people in the first place. 

Rather than focusing on the amount of days or hours someone has worked, they focus on the output being of the highest quality. Letting people work through context rather than being controlled, meaning if they can link the job they do to what the company is trying to achieve, they will do better work. (However, if their work is not of high enough quality, they will be let go, with a generous severance package).

Also, rather than have formal performance reviews, managers and employees have regular, organic conversations about performance as a normal part of work. Most of the time it’s pretty obvious if someone’s not performing rather than waiting until their monthly review to be told.

Netflix are well-known for paying their employees extremely well, more than anyone else would pay so that each employee will be at the top of their market and also will have less chance of being wooed somewhere else because of a higher salary.

When it comes to holiday, employees are told to take whatever holiday they feel is appropriate. The Virgin Group have been inspired by Netflix with regards to their unlimited holiday policy and followed suit.

Netflix’s expenses policy is refreshingly simple - “Act in Netflix’s best interests” - common sense if you’re working for a company you care about. Imagine you’re spending your own money basically – and help the company save money by not putting through extravagant expenses.

Despite the great pay and the flexible attitude to holiday, the key to their success is hiring “fully formed adults” who actually care about the company’s well-being, will work hard to do the best job possible and make decisions that benefit the company. Having employees you can trust negates the need for rules and is the ultimate way of proving how high trust their culture is, which has been reflected in their better hiring followed by a continuous feedback loop between managers and staff helping maintain consistency and being able to root out any issues early on.

Just because these particular behaviours work well at Netflix, it doesn’t mean they will work everywhere. Their culture is a reflection on the community that currently exists within the company, which didn’t happen overnight, it has evolved over time and is now something unique to them. 

Most companies can learn something from their behaviours to apply to their own business in some way, it’s just a matter of deciding which ones will work. The reality is, even if a company decide to follow suit on all or some of the things Netflix do, it probably won’t have the same result, or at least not immediately.

It can take time to attract the best people and weed out the worst. It may even have the adverse effect - the best existing employees might not like the new changes and might leave. Working for a company with the same behaviours as Netflix won’t be for everyone and regardless of what industry you work in, the behaviours they created for their company won’t necessarily work as well elsewhere. 

To be fair, not all companies are on an even playing field, a small start-up company versus an established company such as Netflix worth $41.1 billion is going to yield different results in terms of how much they can pay, what benefits they can offer and who they can attract. 

Regardless of your company’s reputation or bank balance, the important thing to take away from this is that all companies need to treat their employees like adults. Put trust in the people that work for you and who care about the wellbeing of the company and they will want to work hard because they want the company to do well and succeed.

If a company feels the only option they have is to micromanage their employees, the question you should be asking is – Are they the right people for the business?