Companies’ Real Competitive Edge: Talent ROI

Is human resources a cost? The core issue isn't about costs; it's about returns and output—specifically, ROI.

For example, some positions can be eliminated and replaced with advertising budgets to test new channels, while in other cases, people simply generate higher productivity.

Headline's HR approach:

We believe the focus should be on increasing the proportion of year-end bonuses, giving exceptionally outstanding employees the opportunity to receive bonuses equivalent to 100 months' salary. At this point, we want them to know that joining Toutiao at any time offers extraordinarily high returns and excellent platform resources—this is more competitive than joining a startup.

Stock options awarded upfront don't primarily reward employees' business capabilities; they reward their investment acumen. An individual's returns essentially depend on when they joined which company and whether they chose more cash or more stock.

Professionals with strong business performance may not have sufficient financial means, so they request more cash when joining. Later, even if their business performance is outstanding, their overall returns will be significantly lower.

When conditions allow, I strongly encourage shifting more incentives to post-employment, specifically year-end rewards, and converting more incentives to be tied to individual contributions rather than investment foresight.

If a company cannot correctly understand its talent, that talent ultimately does not belong to it.

Toutiao HR reading recommendation: *How Google Works*