BIG BROTHER: 'ALGORITHM'; KNOWS WHEN STAFF MAY QUIT...

By SCOTT MORRISON

Concerned a brain drain could hurt its long-term ability to compete, Google Inc. is tackling the problem with its typical tool: an algorithm.

The Internet search giant recently began crunching data from employee reviews and promotion and pay histories in a mathematical formula Google says can identify which of its 20,000 employees are most likely to quit.

Google officials are reluctant to share details of the formula, which is still being tested. The inputs include information from surveys and peer reviews, and Google says the algorithm already has identified employees who felt underused, a key complaint among those who contemplate leaving.

Applying a complex equation to a basic human-resource problem is pure Google, a company that made using heavy data to drive decisions one of its "Ten Golden Rules" outlined in 2005.

Edward Lawler, director of the Center for Effective Organizations at the University of Southern California, said Google is one of a few companies that are early in taking a more quantitative approach to personnel decisions.

"They are clearly ahead of the curve, but a lot of companies are waking up to the fact that there is a lot of modeling that can provide you with critical data on human capital," Mr. Lawler said.

Associated Press

Current and former Googlers said the company is losing talent because some employees feel they can't make the same impact as the company matures.

The move is one of a series Google has made to prevent its most promising engineers, designers and sales executives from leaving at a time when its once-powerful draws -- a start-up atmosphere and soaring stock price -- have been diluted by its growing size. The data crunching supplements more traditional measures like employee training and leadership meetings to evaluate talent.

Google's algorithm helps the company "get inside people's heads even before they know they might leave," said Laszlo Bock, who runs human resources for the company.

Concerns about a talent exodus have revived in recent weeks amid the departures of top executives, including advertising sales boss Tim Armstrong and display-advertising chief David Rosenblatt. Meanwhile, midlevel employees like lead designer Doug Bowman, engineering director Steve Horowitz and search-quality chief Santosh Jayaram continue to decamp to hot start-ups like Facebook Inc. and Twitter Inc.

Current and former Googlers said the company is losing talent because some employees feel they can't make the same impact as the company matures. Several said Google provides little formal career planning, and some found the company's human-resources programs too impersonal.

"They need to come up with ways to keep people engaged," said Valerie Frederickson, a Silicon Valley personnel consultant who has worked with former Google employees. "If Google was doing this enough, they wouldn't be losing all these people."

Google spokesman Matt Furman said the chance to contribute to "constant and often amazing innovation" keeps employees engaged. The company is determined to retain top product managers and engineers.

Google wouldn't say how many people have left, but says it has managed to hang on to its most important staffers. "We haven't seen the most critical people leave," Mr. Bock said.

Write to Scott Morrison at scott.morrison@dowjones.com

Printed in The Wall Street Journal, page B1