ServiceNow is at a critical moment in its history. The company is working aggressively to expand outside its core IT department customer and establish itself as a prominent business software vendor akin to the likes of Salesforce, SAP and Oracle.
Part of that ambition entails hiring more employees than the company has ever had – all in the midst of a shaky tech market rife with layoffs and talent shortages. Alongside important sales roles, ServiceNow has also pledged to grow without buying other technology companies, which means increasing the number of developers in its ranks, a position seeing incredible demand right now in basically every major business.
At ServiceNow’s annual conference last week, Chief People Officer Jacqui Canney spoke with Protocol about why talent is key to the company’s growth ambitions, what role compensation plays in retention and how ServiceNow will maintain its culture while doubling its headcount from 18,000 to 35,000 employees.
This interview has been edited and condensed for clarity.
How does your part of the organization fit into where the company’s overall strategy is going and what we can expect from that?
I had the opportunity to meet Bill [McDermott, ServiceNow CEO and former SAP CEO] –– I don't remember what year it was, 2016 or something like that, when I was at Walmart. And we were between picking SuccessFactors and Workday, and we picked Workday. And Bill and Jen Morgan came down, because we were a big SAP shop anyway, and I remember meeting him and admiring him and thinking about the products that they sold. It just wasn't the time for us to be buying what they sold.
So then, when the opportunity came that this job opened, Bill was the new CEO, relatively new, 2019 I guess is when he started, he called me to interview for the job. He didn't have someone that he felt could help with culture, with scaling an HR organization, with DE&I and then on the development of our people. That was kind of the initial conversation, and I was excited to work for him because I had admired him from before, but also that human capital challenge at my point in the career felt like, what an awesome opportunity.
How do you think about injecting enough stability to where employees don't feel like everything is changing every second, while at the same time trying to beef up these numbers?
In my experience, you need to have a purpose and values and those have to be real, not just words on a wall or on a piece of paper, that people can anchor to. And you need to be living those things in a way that's palatable; you don't just talk it, you can feel it and you can see it. I think the other thing that's important to be successful when you have that much change going on is that you have a CEO whose purpose aligns to the company's purpose, because that lack of connectivity shows up in the work because the CEO drives so much of how that change is absorbed.
And specifically this year, to make that even easier, we created something called our “People Pact,” which is our employee value proposition. So if you come to ServiceNow, you can live your best life, do your best work and fulfill our purpose together. And we talk about it in every town hall, we talk about it in every one of my meetings, we talk about it enough, and it's hopefully simple enough that it seems to be catching on and it should stand the test of time. It's not like we have to iterate on that every time to keep changing where we're going. And I think that creates stability and we are bringing that to life.
Why was it important to double headcount? Obviously, you're trying to push towards more revenue, but why is headcount important to hitting some of those metrics?
If you look at our footprint now and where we want to grow to, it's not just in the United States. We have a strong headcount presence here in the United States, [but] our opportunity is quite global, even more so than it is today. So if you want to cover the rest of the globe, as well as build out to the revenue number, that's how we're interpreting to get to the double. Is it going to be exact? I don't know, but we're sort of on that road, and it seems to be the math is working.
Have you found it a challenge to hire globally?
Yeah, for sure. ServiceNow is a net importer of talent, which is really a good position to be in; our brand, while growing, has a good brand out there to come work here. Our products are very well regarded if you have experienced the products and a lot of our people who we hire have, and we provide a good early in-career experience for people who are just getting started, so the momentum in hiring is real and there.
What I would say is challenging is we need to keep everybody that we have here too, and recruit like that. So you can't take your eye off of, what's the retention opportunity as well as what's the hiring opportunity.
When you say keep, did you see attrition numbers go up last year?
We did slightly. Not as material as others, but definitely they went up.
When do you expect those to stabilize and go back to normal levels?
They've started to level off right now and I think the market may be causing some of that as much as we're proactively trying to mitigate it. We also go through a cyclical time around bonuses and that was just in the last quarter. So I think that that's also contributed to the tick up but now the tick down.
You did hiring at times when your stock price was very high [and now] it's dropped. Have you made any changes to level the playing field between those who joined when the stock price was lower and those who joined when it was higher?
We have not made any changes to anybody at any level. I know that is something that other companies are starting to talk about.
The CFO and I actually just [talked about] this: Is there something in this that we need to do? Do you focus on high potentials? Do you focus on hotspots? You’ve got to make choices because there's a lot of implications to doing something like that. I also believe our company's very strong, and that this is a cycle: It's gonna go back the other way as quickly as it went the other. And I don't have a crystal ball, but I do think that we don't want to over-rotate either.
You see at other companies, Google and Amazon, there's a lot of employee-led activism in terms of salary increases and discussions around increasing base pay and things like that. I'm curious whether you've seen that within your own workforce [at] ServiceNow?
We’ve been moving up our bases pretty systematically. We haven't made a big announcement about that, because it's not the headline we've been trying to go for, it's just who we are. We're constantly evaluating the market, constantly reevaluating the pay bands and things like that, and it seems that we have been tracking well.
This cycle is definitely one that with the war, with inflation, with everything, this is a time that I've never seen I don't think in my career.
This cycle is definitely one that with the war, with inflation, with everything, this is a time that I've never seen I don't think in my career. But I think that our practices have kept us in line and at pace, so much so that I don't have the same situation as some of those other companies.
And what happens in this situation, because there are so many corresponding factors — you mentioned inflation and what's going on in the market — what happens if those do begin to level out? Does there then have to be a readjustment? Are you raising pay now to match higher inflation? And then do those have to be reassessed if inflation goes down?
I mentioned we have advisers, which I rely on quite a bit, from external [companies], not just internally in the company. We also have a great philosophy of how we are moving pay, including what is performance, what's base, what's bonus. I think you have to be careful about how you use your comp philosophy and [wavering] too much from it. You have to walk a very fine line.
You don't want to miss out on something because you lagged, but also this is people's pay and rewards and they rely on things to be at a certain place. So you have to be careful not to go one to the right, one to the left, and then confuse people about what's the value of their rewards package. And so we're trying to keep a level head, be informed, keep evaluating the market and make the moves that we need to make when we need to make them.
In terms of salary when you switch to flexible work, are you adjusting pay based on region?
We have not done that.
And do you anticipate maintaining that policy?
I think that there's going to be times when we might slow down raises, like if somebody moves to a lower band or a lower salary zone, I could see that. But we haven't officially put in any kind of like, take a pay cut.