Rachel Charles: Tell me about iPlace’s business.
Fred Price: iPlace is the largest firm providing sourcing and recruiting services to American companies from India. We are known as an offshore recruiting firm, or sometimes as an offshore recruitment process outsourcing firm. iPlace’s clients are American companies. Each of our recruiters is dedicated to a specific US company and does not work for any other client. The recruiters work remotely from our International Recruiting Center in India, but they do the same work as the recruiters who work in-house for our clients. In other words, our recruiters are an extension of our clients’ in-house recruiting teams.
Rachel: So why don’t your clients just hire in-house recruiters?
Fred: Because using iPlace recruiters lowers the cost of hiring for American companies. iPlace’s recruiters identify candidates already in the US, qualify the candidates for specific jobs, negotiate the candidate’s pay rate or salary, and present them to our client’s hiring managers so that they can be interviewed and hired. iPlace has nothing to do with sending people from India to the US, our recruiters just work remotely from India. We have a pretty large operation, with 470 employees.
Rachel: I understand that iPlace has gamified all its employees. What is gamification?
Fred: If you look up gamification in different dictionaries, the definitions are about how you can use elements of games to make work more fun and engaging. I personally see gamification much more broadly. Gamification can be an extremely effective management tool. It’s a tool that can help an average employee deliver above average results, help managers get the best out of their teams, and help companies get more work done and make more money. And the best part is that your employees will like it.
Rachel: Don’t a lot of companies already use gamification?
Fred: A lot of companies use gamification in bits and pieces. Some companies are very good at gamifying their customers. For example, most major airline and hotel brands have customer loyalty programs. Many companies have their salespeople play games and participate in contests. And it is common to see games as parts of training programs,
especially online training. But at iPlace gamification is the foundation for how we run every department, including our operations and support departments. All of our employees are gamified – even the leadership.
Rachel: Why did iPlace decide to gamify all its employees?
Fred: We were hoping that through gamification we could fix three challenges: improving employee engagement and retention, increasing productivity, and revamping our system of annual pay raises and promotions.
Rachel: Why is retaining employees difficult for iPlace?
Fred: Our recruiters work during the US daytime so that they can talk to candidates and hiring managers. Since they are in India that means they work a hard nightshift. Retention is always a challenge with people working nightshift jobs. Our retention was always far better than other companies in India with large numbers of nightshift employees, but our goal is for our recruiters to stay with iPlace for five or more years. To achieve this, we needed a work environment where recruiters were engaged and through hard work could make more money and advance their career.
Rachel: That makes sense. You said that a second reason for gamifying iPlace employees was to increase productivity.
Fred: Yes. A second challenge was that some of our recruiters were coasting. They had been with iPlace for three or four years. They liked the company, but they had stopped going the extra mile to get placements for our clients. Their attitude was that if their client cut them from the team, another client would take them because they had a lot of experience. They simply were not producing enough, and this was setting a bad example for more junior recruiters.
Rachel: Changing work culture is difficult. I can’t wait to hear how gamification helped iPlace do that. But before we go into that, you also mentioned that one of the reasons iPlace gamified the entire company was to revamp its appraisal system.
Fred: Like many companies, we put a lot of effort into our annual appraisal system. But nobody seemed to be happy with it. I can rattle off a long list of complaints we heard:
- Too much work for managers – Preparing and conducting annual performance reviews took a lot of time, and often the reviews were not conducted on
- Subjectivity – Each manager had his or her own style and grading scale, and our recruiters did not think that was
- Once a year feedback – This is counter to everything we know about millennials wanting rapid
- Recency bias – It is hard to remember events that occurred nine or ten months ago, so performance scores tend to be heavily weighted toward recent
- Too much emphasis on compensation – Because our performance reviews were tied to pay raises, reviews often became a salary negotiation when they should have been about providing feedback so that the recruiter could
- Negative fallout from promotions – Our turnover was highest soon after performance reviews. Not only did our recruiters get upset about their own pay raises and promotions, they got upset about other recruiters’ pay raises and promotions.
Rachel: Okay. I understand the urgency. What did you do to resolve these challenges?
Fred: A little over three years ago we introduced a huge change to iPlace. It would not be an overstatement to say that we bet the company on what we hoped would be a better way. Our goal was to solve our challenges with retention, recruiters who were coasting, and dissatisfaction with our annual performance review and appraisal process. We also wanted to find a way to scale iPlace into a huge company. Our solution was to introduce a very innovative “company operating system” called LaunchPad, which has been a driver of our growth. The underpinning of LaunchPad is gamification. As we just discussed, every single employee at iPlace is gamified. LaunchPad is the platform through which our recruiters are assigned work goals, receive training and professional development, obtain pay increases and promotions, and even improve their health and wellness. As a result, iPlace recruiters are more engaged, feel more in control, achieve higher levels of performance, are happier, and stay with the company longer. Because of LaunchPad, we have been able to eliminate performance reviews. The principles of LaunchPad can be used to scale any service business.
Rachel: Sounds almost too good to be true. Tell me, how is LaunchPad organized?
Fred: iPlace is comprised of clusters. A cluster has from 30 to 60 recruiters. Each cluster is organized as an entrepreneurial business managed by a Head, who is responsible for his or her cluster’s profitability. Each support department such as Shared Service, Finance, and Marketing is also set up as a cluster.
Rachel: iPlace has over 80 clients. How do you decide how clients are assigned to clusters?
Fred: To manage his or her cluster, the Head must understand the factors that ensure success for each client, and the strengths and weaknesses of each recruiter in the cluster. Clients following similar processes are assigned to the same cluster. Some clients are assigned to clusters where speed is critical, while others are in clusters where salary negotiations is the most important factor, and still other clients are assigned to clusters where quality drives the recruiting process.
Rachel: So, each recruiter is assigned to a cluster, but how do all the recruiters get gamified?
Fred: Under LaunchPad, all the recruiters play a weekly and quarterly game. The objective of the games is to earn stars for doing things that are good for the client or the recruiters themselves. Recruiters earn stars for both the weekly and quarterly game.
Rachel: How do all the recruiters know if they are winning or losing the game?
Fred: The performance of every recruiter is captured on a scoreboard, which can be accessed at any time on iPlace’s intranet and is displayed on monitors throughout our offices. It is a totally transparent system. The performance of every recruiter is posted for all to see.
Rachel: So, stars are good. But do iPlace employees really care how many stars they earn?
Fred: You bet they do. Every time a recruiter earns 40 stars, he or she gets an automatic pay raise. At every 120 stars, the recruiter gets an automatic promotion. Earning stars is how you make more money and get ahead at iPlace.
Rachel: Do the employees mind that everyone can see how they are performing?
Fred: If they are doing poorly, then yes. But our top producers love the fact that their performance is constantly being recognized. Basing pay raises and promotions on earning stars largely removes managers’ biases and subjectivity, which can be a major shortcoming of performance reviews and appraisal processes. LaunchPad’s transparency drives recruiters to always do their best. Nobody wants to be at the bottom among their peers.
Rachel: The more stars you earn the faster you get pay raises and promotions. Correct?
Fred: For the most part that is correct. But recruiters can also lose stars for negative behaviors such as taking unscheduled leaves and excessive breaks. These negative behaviors are called “escalations” and when there is an escalation the recruiter and the recruiter’s entire team loses stars. We have found that peer pressure, especially because losing stars affects pay raise and promotions, is extremely powerful.
Rachel: Wow. I can see why nobody would want to get an escalation. Tell me how the weekly game works.
Fred: Every week the Head meets with each recruiter in his or her cluster and assigns four “strategies.” The strategies are tasks, and these tasks are customized to address the needs of the client and the strengths of the recruiter. The Heads also discuss with the recruiters why the assigned strategies are important for having success on the recruiter’s client. For example, for a client where quality is critical, the strategies are based on quality measures. On the other hand, for a client where quantity or speed is the most important factor, the strategies are based on quantity or speed measures. The following week the Head again meets with each recruiter in his or her cluster and reviews the performance on the previous week’s strategies. Recruiters earn stars for each strategy they successfully completed. The Head then assigns the recruiter new strategies for the upcoming week and explains why doing a good job on the strategies is critical for the client. In this way, the goals of the client and the recruiter are aligned.
Rachel: Makes sense. These weekly meetings should really keep the recruiter focused on client needs.
Fred: That’s right. But more importantly, the weekly meetings serve as mini- performance reviews. Through weekly strategy setting meetings, the Heads and recruiters have continual conversations and receive two-way feedback. This is in stark contrast to most companies where feedback and goal setting happens once or twice a year. Shortening the feedback and goal-setting cycle results in mentor-mentee relationships, a shared understanding of how the recruiters are performing, and insights into how the recruiters’ performance affects profitability. Because LaunchPad provides a mechanism for continual feedback and improvement, as well as automatic pay hikes and promotions, there is no need for performance reviews – and at iPlace they have been eliminated.
Rachel: That is really cool.
Fred: Our employees love it. There are lots of studies that show that millennials want instant feedback. Most of our employees are millennials, and there is no question that this weekly feedback really promotes engagement.
Rachel: How does the quarterly game work?
Fred: The weekly game is based on day-to-day work and production. The quarterly game is primarily based on achieving results, especially placements and revenue. In addition, in the quarterly game our employees earn stars for achieving professional development and health and wellness goals.
Rachel: Sounds like the quarterly game is largely about performance. How does the quarterly game improve performance?
Fred: iPlace’s clients hire us to get placements, and no performance measure is more important. But it takes more than a week after a job order is released for a candidate to start work and the recruiter to get a placement. Therefore, our recruiters earn stars for placements in the quarterly game and not the weekly game.
Rachel: Got it. You mentioned that the quarterly game also is about professional development. What did you mean by that?
Fred: Recruiters also earn stars for improving their skills. Our professional development department has a library of training programs. The Head selects the program for the recruiter that is most important for his or her development. If the recruiter completes the training modules and gets certified during the quarter, he or she earns stars.
Rachel: I see. Since you cannot complete a training program in a week, training is part of the quarterly game.
Rachel: You also mentioned that the quarterly game has to do with health and wellness. How can you gamify health and wellness?
Fred: Probably the coolest part of the quarterly games is that employees earn stars for improving their health and wellness. For example, say an employee has a lot of credit card debt. iPlace has a tie-up with a financial advisor who will create a plan to reduce credit card debt. If the employee follows the plan, he earns stars. We also have a tie-up with a gym by our office that shares data with iPlace from their access system. If the employee attends the gym, she earns stars. You can earn stars for quitting smoking, losing weight, reading books, participating in our Corporate Social Responsibility Program, or playing on our iPlay sports team for soccer, cricket, basketball, and billiards. Our employees love the fact that they can earn stars and get pay raises for doing things that are good for them. And the company does better because the employees are healthier and more engaged.
Rachel: That’s amazing. I’m curious. You said that LaunchPad covers all employees. I understand how it works for sourcers and recruiters. But what about employees who work in support departments?
Fred: Support departments work differently. Each employee who works in a support department plays a monthly game that is based on value creation. The department Head assigns a dollar value to each task the employees does, and he or she earns stars for the extra value they create. We use a value to star conversion where say $100 in value is equivalent to one star. If the employee creates value worth $1,000, they earn $1,000 divided by $100 or 10 stars for that month.
Rachel: How do you decide how much extra value a task creates?
Fred: It’s a very simple system from the outside, but the beauty of it lies in the way values are assigned. Administrative tasks such as running the payroll earn low values because an inexpensive resource could easily be trained to do the same task. On the other hand, support department employees who bring innovation into iPlace create a lot of value and rapidly get pay raises and promotions. The best support department employees are constantly looking for ways to improve the bottom line, and they make sure their ideas get implemented. This really changes the way support department employees behave. For them, doing administrative tasks is just a necessity. Their goal is to add value and create profits for iPlace.
Rachel: This all sounds great. But has it really worked? Do you have hard numbers?
Fred: LaunchPad and gamification has transformed iPlace. Our recruiters are happy to be gamified because LaunchPad is transparent and fair, they get weekly feedback, and their earnings and promotions are in their hands. Our top performers earn four or more pay hikes each year, and they rarely leave us. We saw our attrition drop by around 20 percent since we introduced LaunchPad. And most of this attrition is from poor performers who are not winning the game.
Rachel: Okay. But what about from the client’s perspective?
Fred: In the three or four years prior to introducing LaunchPad our placements per recruiter per month, which is our most important performance metric, stayed essentially flat. Getting more placements was a major reason for rolling out LaunchPad. When we introduced LaunchPad in 2015, we pushed volume. We reasoned if we assigned our recruiters weekly goals where they had to submit a lot of candidates that our placements would shoot up. However, our placements actually went down at first. That is when we changed our goals. We focused not only on volume, but also on strategy. We incorporated strategic elements like speed, rate, and quality into the weekly goals. That is why we stopped calling the tasks we assigned in the weekly game goals and started calling them strategies. And this really had an impact on the placement numbers. Placements started growing in 2016 and 2017, and we are seeing this trend continue in 2018. In 2018 we have seen a 63 percent increase in the number of placements per recruiter since early 2016.
Rachel: That is very impressive, and I am sure the clients are thrilled. How has LaunchPad changed iPlace’s work culture?
Fred: We also have been able to dramatically reduce unprofessional behaviors through gamification. In India, being a few minutes late is okay; it’s a cultural thing. And we used to see a lot of our employees coming in late. As a service business, our US-based clients will not tolerate that. We started monitoring late comings very closely in July 2015, and what we saw was shocking. Through the entire month, employees arrived late almost 30% of the time. So, in August 2015 we introduced an escalation for late comings. Remember with escalations both you and your team lose stars. The next month we saw late comings drop by 46 percent. Late comings continued to drop over the next six months. In February 2016 late comings had dropped by over 90 percent from July 2015. Since then late comings on average have been 83 percent lower than in July 2015. LaunchPad led to a change in behavior, a change in culture.
Rachel: Were there any unanticipated changes?
Fred: A big advantage of LaunchPad turned out to be that it changed how Heads and our Managers spend their time. Now they spend their time working with the recruiters and clients, which is what we want. Before the Heads spent a lot of time on administrative tasks, such as dealing with late comings and unscheduled leaves. LaunchPad to a large extent has put management of administrative tasks on autopilot.
Rachel: What other things has iPlace been able to gamify?
Fred: We can drive almost any desirable behavior through integrating it into LaunchPad. A good example is technology adoption. In 2012, before LaunchPad, we bought a productivity tool called DaXtra, which is a job board aggregator. A recruiter enters a search string into DaXtra and it simultaneously searches the databases from five job boards. You would think our recruiters would like DaXtra since they can work faster and make more placements, but initially there was a lot of resistance.
Rachel: Why did recruiters resist?
Fred: Recruiters complained about having to learn a new user interface. Many continued to search for candidates on individual job boards. We pushed hard to get adoption. We had mandatory training and invested a lot of management time. But many recruiters continued to use individual job boards when nobody was looking.
Rachel: So, what did you do?
Fred: All along the solution was to gamify DaXtra usage, which we did in 2015. In the weekly game, recruiters could earn a star for using DaXtra and a second star for using advanced features. Almost overnight, we had close to 100 percent adoption.
Rachel: That’s an amazing story Fred. Thanks for sharing so much information.
Fred: You’re welcome Rachel. I get really fired up talking about LaunchPad. It was fun talking with you.
Rahul Talreja (Fred Price)
Head, Data Analytics
Fred runs iPlace’s Data Analytics department, including leading LaunchPad’s data and program management. In addition to LaunchPad, Fred directs the company’s performance management, people analytics, assessment and strategic implementation of Vendor Management System (VMS), and data presentation programs.
Professional Development Lead
Rachel runs the iPlace Academy training program for new hires and leads professional development training for experienced recruiters. Prior to training, Rachel was a Recruiting Team Lead for demanding VMS/MSP accounts where she managed multiple clients and teams simultaneously. Along with her training responsibilities, Rachel manages media relations.