Overcoming trouble in paradise: Recruitment and culture at WeWork
Rachel Sharp, November 11, 2019
Co-working unicorn WeWork has had a rough few months. But it’s introducing HR processes and making recruitment more strategic
What a difference two months can make. One month a company can be riding high as the most valuable start-up in the US. By the end of the next its valuation could be slashed, plans for flotation shelved, and the CEO-founder out the door. That’s what happened this Summer for WeWork.
So what went wrong? It was August when The We Company (WeWork’s new name) filed its hotly-anticipated IPO paperwork. Intense scrutiny of the co-working company’s corporate governance and the unconventional leadership practices of CEO Adam Neumann quickly followed.
Reports surfaced that he had taken $700 million out of the company shortly before the IPO. Rumours of eccentric behaviour also abounded, including smoking marijuana on private jets and trying to become immortal. The company’s value plummeted from $47 billion to as low as $10 billion, Neumann stepped down as CEO, and plans to go public were abandoned.
Then came the news that WeWork’s board had accepted a takeover plan proposed by SoftBank Group and staff were
told to expect job cuts.
No-one saw this coming. But perhaps they should given the recent history of other fast-growing tech firms. Uber’s shares have tumbled since it went public in May. Google’s corporate governance was called into question when staff staged a mass walkout over sexual misconduct allegations in November last year. And Facebook’s Mark Zuckerberg
was summoned before UK and Canadian parliaments in October 2018 to answer questions relating to the Cambridge Analytica scandal.
So perhaps unicorns aren’t quite as magical as they seem, with WeWork becoming another example of what happens when an entrepreneurial start-up struggles to match monumental growth with process and good governance.
This was the topic of conversation when HR magazine caught up with WeWork’s senior director of talent acquisition for EMEA Stephanie Houston, at the firm’s Devonshire Square co-working space, prior to this Summer’s events.
We heard about her role treading this very line between retaining an enterprising start-up culture while introducing enough HR process to allow the firm to grow sustainably.
Making recruitment more strategic
“When a company is going through a transformation there’s only so long you can call yourself a start-up,” muses Houston. “I think I came in at that tipping point where you’ve got a company that still has a start-up mindset. But when you look at the numbers it’s not a start-up; it’s an organisation that’s maturing and growing.”
Neumann and Miguel McKelvey set up their first co-working space in New York out of the belief that people were ready for a new approach to work based around community. In less than 10 years it has grown to 528 spaces across 111 cities in 29 countries, with a 527,000-strong membership.
Houston came on board in July 2018 to a brand-new role and the task of making recruitment more strategic. This first involved ringing some changes within the talent acquisition function itself.
“My recruiters were very generalist – two of them had been here since the very beginning when they just did everything. They were the people partners, the people operations, the recruiters, the counsellors… their roles encompassed everything and they would hire all across the business.”
One of Houston’s priorities has been expanding her team from seven to 22 and creating more defined roles where recruiters specialise in hiring for certain parts of the business. Another is introducing employer branding for the first time.
Employer branding is crucial to recruiting talent to enable WeWork’s growth in new and existing EMEA markets. In the past year the team hired 900 people, accounting for almost 10% of the total 10,000-strong global workforce, and taking the EMEA zone to a portfolio of more than 70 open locations.
“In the US it’s more of an established brand and people speak the same language across the country. In our region we’re not only launching into markets where the brand doesn’t exist yet but we also have different languages, cultures and behaviours,” she says.
“We need to make sure we have the people we need to launch successfully in those markets by creating hiring strategies that are locally relevant, while also keeping the WeWork global mindset as well.”
Both recruiting local talent and seconding staff on international assignments is key, Houston explains: “We don’t talk about culture fit but culture add.”
Protecting the culture
Despite recent events there’s a lot about the culture that’s important to protect as the organisation scales, says Houston.
She shares how she was drawn to join the business by its sense of community. “I used to walk past aWeWork around the corner from my house in Amsterdam and I’d see people happy, and dogs running about, and there was just this vibe. I remember thinking ‘oh my god that looks amazing’,” she says.
Houston explains that the community vibe WeWork is renowned for isn’t just for members but runs through the internal culture too. Part of this comes down to the fact WeWork employees work among members in the co-working spaces, encouraging the same networking and collaboration between members and employees as among members, feels Houston.
“It’s not a member space and then an employee space,” she says. “It’s very much one community.”
In true start-up fashion the two founders used to interview every prospective employee. It was “difficult to tell founders that ‘we’re now too big, you don’t have enough hours in the day so you’re going to have to just trust us’,” says Houston. Part of the solution has been “cross-functional interviews”.
“We get the leadership team to nominate people in the business to be our culture interviewers. So we have a list of people who are WeWork ambassadors,” she says. “And we trust them with the most valuable part of the hiring process, which is the values and culture piece. It’s more important than the skills part, more important than being able to do the job.”
But new hires don’t have to come from a start-up background. “I didn’t,” says Houston, who spent the first 10 years of her career in oil and gas where there was “a lot of red tape”. “You can come from a mature company that’s 100 years old or from a one-person start-up. Culture is something from within, it’s about your behaviours as a person .”
As well as culture interviews, Houston has also implemented the “power of veto” where her recruiters can challenge and overrule hiring decisions made by managers if they feel an individual is “not a culture add”.
Houston admits that “not everyone will necessarily agree with” this, but it has taken off thanks to her function’s growing credibility: “We’ve had to work hard to build that trust.”
Data, tools and process
Data is one way trust has been built. “In the past it was very much people saying things like ‘I think we don’t have enough candidates’,” she says. “But now we can say ‘actually the data is telling us you have plenty of candidates but we’re too slow to arrange a second interview so that’s what we need to work on’.”
Houston has introduced tools to help predict trends in hiring speed, source of hire and blockers, as well as playbooks for interviewers.
“It gives them autonomy and that feeling of being an entrepreneur. As instead of putting red tape around them and saying ‘you can’t do this’ or ‘you have to interview this way’, we’re saying: ‘if that’s what you want to do then perfect, here’s some tools to make it successful’,” she explains.
The way the recruitment strategy is presented to the business (or not as the case may be) is important.
“I say the word ‘process’ and people switch off but we need processes in place,” says Houston. “So we don’t call things a ‘process’ to the business. We’ll say ‘do you want to hear what this manager does differently that means they’re able to find better talent or hire someone twice as quickly?’ We know there’s a process there and steps being followed but they don’t need to know that.”
It comes back to that balance between start-up culture and enough formal process to allow it to scale. And if recent events are anything to go by it’s certainly time for WeWork to get this right.
As Houston says: “I’d liken it to being a teenager. Your teenage years are kind of painful. You’re figuring out what’s right and wrong, finding yourself and finding what your brand is, and WeWork is no different.”
This piece appears in the November 2019 print issue. Subscribe today to have all our latest articles delivered right to your desk