Netflix encourages employees to interview at other companies — here's why

Patty McCord

• Netflix encourages employees to interview at other companies, and to talk with their managers about what they learn.
• The company's former chief talent officer, Patty McCord, says it can help you learn how much you're worth and clarify your professional goals. It can even help you find people to recruit to your current company.
• The main idea is that your company is a team, not a family, so no one has any real allegiance to each other.

Netflix's approach to people management can come off as logical but harsh.

Case in point: Hard work isn't enough to get ahead. If you're not effective at your job, you're gone. And even if you are effective, when the company's needs evolve, it may very well oust you — albeit with a generous severance package.

Patty McCord describes many of these unconventional management practices in her new book, "Powerful: Building a Culture of Freedom and Responsibility." McCord is a former chief talent officer at Netflix; now she runs her own consulting business.

One of McCord's more shocking revelations is that Netflix actively encourages its employees to interview at other companies.

I asked McCord to explain the logic behind this practice and she outlined a few reasons why it makes sense.

1. It helps you clarify your professional goals

"My experience is that you're more honest with a perfect stranger than you are with your own manager after a while," McCord told Business Insider.

"You know what management wants to hear. But you go to talk to a perfect stranger and they're like, 'What do you want to do?' You're like, 'Well! Actually I've got a couple of ideas.'"

2. You start to learn how much you're worth

"You want to find out what you're worth to another company because that really is what determines your salary level," McCord said.

She advises women in particular to shop around at other companies: "Don't feel like you're cheating on your husband when you're interviewing for another job! You're just finding out what's happening in the market."

3. You expand your network

"Let's say you interview at another company and you don't really want the job, but you really like the people that you met," McCord said. "Now you have a source of candidates for your own company. It's all about networking."

4. It can make you appreciate your current company more

"Sometimes you just find out the grass isn't greener," McCord said.

"I've found people who, after they interviewed, came back and said, 'Wow, I just thought that other company would be so much cooler and there would be so much more opportunity. And I realized when I got there and sat down with them, I kind of like what I'm doing a lot. It made me happy to stay.'"

Although McCord is no longer at Netflix, the company still condones this interviewing practice. The "culture" section of its website reads: "Knowing that other companies would quickly hire you if you left Netflix is comforting. We see occasional outside interviewing as healthy, and encourage employees to talk with their managers about what they learn in the process."

McCord's arguments about why outside interviewing can be helpful go back to her core philosophy: You're building a team, not a family. You don't have any obligation to keep an employee and, likewise, your employee doesn't have any obligation to stay with you.

Harsh? Yes.

Interestingly though, Netflix was rated one of the top tech companies (and one of the top big companies) to work for in 2017. It's possible people appreciate the transparency from both ends.

NOW WATCH: 9 phrases on your résumé that make hiring managers cringe