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Interview

Octopus Energy’s Greg Jackson on why he doesn’t want an HR department

Octopus Energy doesn’t have an HR department—but there’s a catch.

Yessi Bello-Perez

Octopus Energy CEO
Greg Jackson. Photo credit: Octopus Energy.

Unleash Your HR We take a look at why billion-dollar company Octopus Energy doesn’t have a traditional HR department.

  • Founded in 2016, Octopus Energy claims to add, on average, 30,000 customers a month and supplies 1.5 million homes in the UK. It currently employs over 1000 people.
  • The company’s CEO and founder Greg Jackson made headlines earlier this year when he said he didn’t believe in having a traditional HR department.
  • We spoke to Jackson to find out why he thinks a decentralized approach is best.

Over the past 16 months, much of the focus in the business world has shifted on to HR. 

Once focused solely on attracting, hiring, and firing, HR is now responsible for every employee touchpoint across the organization and is working more closely with the C-suite than ever before. 

But not every C-level executive believes in the existence of an HR department per se. 

Back in February, Greg Jackson, the founder and CEO of Octopus Energy—a UK retail electricity and gas company worth over $2 billion—made headlines when he said he didn’t believe in having a traditional HR department, in the same way he didn’t think a traditional IT department was necessary.

Founded in 2016, Octopus Energy claims to add, on average, 80,000-100,000 customers a month and supplies 2.2 million homes in the UK. It currently employs over 1400 people globally.

“We do have some employees in the company with people-focused roles — usually transitory or connected to other functions, such as learning and development in sales. For example, there’s someone with the title HRBP who arrived in the company via an acquisition. He sits in finance and does a fantastic job on payroll, contracts, systems, and more,” Jackson tells UNLEASH. 

Jackson is an advocate of decentralization. “The key is no department. ‘Parkinson’s Law’ is part of this—as soon as you have a function it creates a ‘need’ for itself. It sees the world through its lens and expands to meet the needs it sees,” he continues. 

This approach not only helps keep costs down but also removes any organization “sclerosis and friction”. Essentially, he believes fewer conventional departments result in a more agile business. 

He does, however, admit that many HR experts find this decision difficult to contend with—and it’s not difficult to see why. For decades, HR has acted as the first point of contact for employees seeking advice and guidance on anything from payroll through to wellbeing and career development.

“Many HR professionals were aghast. But the reality is that people are so important to our organization that I lead it myself and expect every manager to do the same.

“Managers shouldn’t need a department telling them how to do their jobs—they should be able to reach out and find expertise where they need it. Whether that be self-driven learning, external providers, or internal colleagues. It’s what small companies do and it works,” he commented, noting how Octopus’ approach is not for everyone. 

Jackson says managers within the company are trained to deal with HR-related topics before they start managing people. 

“But we don’t tell them how to manage their team, they do it in ways which suit them and their team. There’s no fear of hierarchy, so managers’ managers have good visibility,” adds the CEO. 

HR spreads across the business

So, who exactly is responsible for HR-related tasks? 

Jackson explains managers are responsible for their own teams. By allowing managers to source the training and development they need, Jackson adds, it means individuals have lots of points of learning for different approaches. This, he notes, may be stronger than a monolithic approach.

“We are basically scaling what small businesses without HR departments do. Usually employees in small companies are happier because they have a strong relationship with their managers and can ‘go find’ the support they need. 

“This is essentially what we are replicating. We are creating micro-businesses across the company, just on a much larger scale,” he says. 

NAVIGATING A CRISIS WITHOUT AN HR DEPARTMENT

HR has been overwhelmingly praised for its response to the COVID-19 crisis. The function, has after all, been tasked with keeping employees safe, engaged, healthy, and productive during a global pandemic. 

But how did Octopus Group manage without the help of HR experts and leaders? 

“We are a completely digital business, and that has been a huge boon during the pandemic. We decided as a team what we would do, and welcomed ideas from everyone on what would help them get through lockdown and home working.

“Loads of great initiatives came through from the team and were immediately implemented, like an allowance for office furniture, daily fitness sessions via Zoom, daily children’s entertainment to keep little ones entertained, and a weekly activity pack designed by one of our amazing designers and sent out to anybody that fancied a bit of coloring and puzzles,” Jackson explained. 

The message was clear: anyone struggling could speak to a senior member of staff about their problems, Jackson notes.

“We even implemented a listening ear programme, where one of our team (a trained psychotherapist) trained other team members who wanted to participate to help others deal with mental health issues,” he adds. “Now anytime our team is having an issue, they know they have a whole group of people they can turn to.”

Octopus Energy is funded to the tune of $547 million. In its latest round, in December 2020, the firm received $247 million from investors including Tokyo Gas. “We’re a fast-growing business,” Jackson says, adding that the company has recruited and trained hundreds of team members remotely during lockdown. 

The firm, which has made eight acquisitions since launch, completed three such deals during the pandemic. “Talking to people from other companies, I get a sense that all of this may well have been easier with the devolved responsibility,” Jackson points out.

Inside Octopus Energy’s HR tech stack

Octopus may not have a conventional HR department, but it certainly has a substantial HR technology stack.

The company uses Lever for candidate tracking, and leverages HiBob for employee data. 

It also makes use of platform called Vu so that staff can manage their equity—every permanent employee is, or becomes, a shareholder, Jackson notes.  

In terms of training, employees can use Loop to upload their own content, which is then administered by teams. 

The company also uses OfficeVibe for continuous team feedback and data. 

Technology and connectivity at work 

At Octopus Energy, hiring responsibilities fall on a small group of full-time recruiters that are tasked with attracting and hiring talent. 

“They have managed to scale, hire and keep up with the needs of the business despite our team doubling in size in 2020 alone,” Jackson highlights. 

Internally, the business relies on online collaboration tools such as Slack and Zoom. Both of these, he adds, have played a pivotal role in connecting team members from the onset of the business. 

“Our Slack has become a meeting place for everybody in the business. [They can] share inside-jokes, memes, best practices, connect with people from all across the globe, and go about their daily work.

“We use Zoom for our weekly all-hands meetings, where over 1000 employees globally jump onto a video call together and hear the most recent activities and projects across the business. We alternate weekly between global, team-based, and national calls. 

“Sometimes we even get team members to play music to the rest of the team while we wait for everyone to join. To be more precise, some members have brought along instruments and started playing—everyone loved it so it’s carried on,” he quips. 

Jackson has made a conscious effort to ensure the HR function spreads across the entirety of his business—and while many will find this difficult to digest, this somewhat controversial approach seems to work for Octopus Energy. At least on the surface.

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