​Michael Hyatt’s Three Rules of HR

By Julian Humphreys ● September 26, 2016 10:20

Maybe you know Michael Hyatt from CBC’s Next Gen Den - Dragon’s Den. Or his regular appearances on CBC’s The Exchange. Or his talks on leadership, entrepreneurship or the future of technology at conferences across the country. Chances are that you’ve probably seen or heard or seen Hyatt in the last year.

We were lucky to have him right here at CFC Media Lab talking and listening to entrepreneurs in the fifth cohort of CFC Media Lab’s IDEABOOST accelerator. His talk was packed with so many gems that we’ve split it into three articles: Seven Rules of Success, Three Rules of HR and How Venture Capital Works.

Check out the second in our series here: Michael Hyatt’s Three Rules of HR.


HR is often the bottom of an entrepreneur’s priorities when starting out. Many aren’t even sure what HR does – contracts, maybe? Yet after more than 20 years of starting and building highly successful technology companies, it’s clear that HR must be a top priority.

Look at statistics on employee engagement. According to one recent study, only 13 per cent of employees are actively engaged, meaning that they want to be there and do the work they’re paid to do. The rest are either disengaged (63 per cent), or actively disengaged (24 per cent). Think about that. Twenty-four per cent of employees are actively trying to sink their company and 63 per cent more are indifferent. These are terrifying statistics for any business owner.

The solution? Three Rules of HR.

1. Everyone is recruited weekly.

Leaders of technology companies need to understand that developers are like artists – they move to the beat of their own drum. So offering an extra financial incentive may not result in more productivity. Quite the opposite: they may be insulted, as if they are not already as productive as they can be.

Money won’t keep anyone. Another business will always offer more. What employees really value is autonomy and purpose. It’s your job as a leader to give them that. Clearly communicate what hill you’re climbing and why. If the why is inspiring enough, they’ll follow.

2. You are being rated.

Many years ago the only good way to get the real low down on a car was to go to the dealership. Now, I would think almost 100% of buyers do research and know a ton before they get to the dealership. What’s more, if the reviews aren’t good – they won’t even turn up. This is exactly the same for a company looking to hire.

Once, potential employees could not get a clear sense of what it’s like to work for a company unless they knew someone working there. Not any more. Glassdoor, the site where employees and former employees review companies and their management, now makes it easy for potential employees to pick and choose where they apply. If you want the best employees, you better have an impeccable Glassdoor profile. This isn’t done through a few friendly post – you have do it the old fashion way and earn it!

Hyatt revealed that his company, BlueCat, has worked hard to improve its Glassdoor profile so it attracts the best applicants. The site currently shows a 90+% per cent approval rating for BlueCat’s CEO, and that 76% cent of current and former employees would recommend the employer to a friend (a very high score!). It has an overall rating of 4.2 out of 5 based on 55 reviews. To get there we worked on a huge number of small and large things. The work is never done, it’s a constant look at how things are going and how we can engage more.

3. People join companies and leave managers.

Truly great leaders have the capacity to inspire such loyalty that their team will follow them wherever they go, no questions asked. Conversely, terrible leaders can inspire such loathing that their team will leave them, no matter how good the company.

So abide by the simple rule: don’t hire jerks, no matter how brilliant they may be. If you don’t like the idea of being stuck at an airport with someone for four hours, don’t hire them.

At the end of the day, only two questions really matter with HR:

1. What percentage of your employees will fill out an anonymous candid survey? If that percentage is low, something’s wrong. Either your employees don’t trust you, or they don’t care. Either way, that’s a problem.

2. Would you recommend a friend?

If your employees aren’t recommending you to their friends, you still have work to do. BlueCat pays its employees a $1500 referral fee, but it does so immediately after the person has been hired, not after three, six or twelve months. Once the employee is hired, it’s not the referring employee’s problem whether the new employee is happy or not. It’s the organization’s problem (see Rule #1).

You can learn more about CFC Media Lab's IDEABOOST Accelerator and Network Connect program here. Thank you to our photographer Aida da Silva. You can see more photos on CFC Media Lab's Facebook page, please follow us on Twitter and on LinkedIn.