Podcast: Run an Employee Base Audit
đ For the first time ever, weâre hosting an MPL Build AMA on February 5th. This live session is for People leaders who are bought into the idea of running your team like a product team â and still asking, âOkay⌠but how does some of this stuff actually work?â Bring your questions to Jessica Zwaan. Sheâll be live, unscripted, and diving into the messy reality of what it actually takes to make this mindset shift inside your company.
Check out our recent episode â where we sat down with Pete Fader, Founder of Incompass Labs, to talk about how people teams can run an âEmployee Base Auditâ.
If youâve ever struggled to explain why performance varies across cohorts of employees â or youâre tired of using surveys as your only source of insight â this oneâs for you.
Hereâs what stood out most from the conversation. âŹď¸
1. The marketing tool HR leaders didnât know they needed
Pete Fader spent decades studying customer behavior â and helped pioneer the concept of customer lifetime value. But when a CEO asked if his peer grading model could be applied to employees, it unlocked a whole new chapter.
That idea evolved into the Employee-Based Audit: a rigorous framework for analyzing employee data the same way marketers analyze customer data.
âThe point is that when it comes to customers or employees, weâre not fishing with a spear â weâre fishing with nets. And if we can just figure out where to throw the nets to get a better mix of good fish⌠that changes everything.â
The audit looks at your employees both cross-sectionally (how people differ right now) and cohort-wise (how people evolve over time). And it doesnât rely on surveys alone â it uses real behavioral and performance signals.
2. Youâre probably overweighting survey data
Surveys arenât bad â but theyâre noisy, and often over-relied on. According to Jess, most people teams use surveys as their primary lens on employee health and engagement, without much context.
An audit gives you a framework to situate survey data next to things like:
When someone joined
Which office theyâre based in
Their performance or usage of tools and benefits
âIt gives you a place to put survey data â a home â that doesnât make it the only mechanism by which youâre making decisions.â
In other words: donât throw surveys out. But use them alongside richer, behavioral insights that reveal why certain groups feel or perform differently.
3. Cohort analysis can reveal where your best people come from
One of the most powerful outputs of an audit: better hiring decisions.
Jess shared how, after analyzing first-year performance and retention by source, they found that their highest performers werenât coming from the most obvious or prestigious companies. That insight allowed them to refine their sourcing strategy and focus on what actually worked.
âWe changed our sourcing strategy because we had real data to back the hypothesis. That allowed us to throw the net in a different area â and catch better-quality fish.â
Think of it as building your employee ICP (ideal candidate profile) â not based on gut feel, but real post-hire outcomes.
4. First impressions matter more than you think
Another surprising insight: early performance scores are highly predictive of long-term success.
In Jessâs words: âIf your first performance score was somewhere between a one and a two, it was almost impossible that you ever recovered from that point.â
That data led her team to focus heavily on onboarding and early support â building growth plans in the first few weeks to help more people reach early wins.
Instead of waiting for a year-end review to intervene, they doubled down on shaping performance in week one.
5. Start with this question: what are our patterns?
The biggest mindset shift? Stop chasing individual exceptions â and start looking for repeatable patterns.
Your goal isnât to perfectly predict every outcome. Itâs to understand what conditions lead to better cohorts, more engaged teams, and higher long-term performance. And then replicate those.
âLook for patterns, not exceptions. Itâs not, âletâs stop and see how everyoneâs doing.â It should be happening at the speed we do work.â
Some companies are running audits after every sprint or team initiative. Thatâs where this is headed: performance as a product function, constantly iterated and improved.
6. The future of company valuation might include employee data
One of the most forward-looking ideas: if customer quality impacts company valuation, why not employee quality?
Pete and his team are already working with private equity firms to incorporate employee metrics into diligence processes.
Imagine a world where:
High-performing, engaged teams = higher valuations
Better people practices = more valuable equity
Performance data = strategic asset, not just HR admin
âItâs a shame employee data isnât part of diligence today â but those conversations are already starting.â
The implication is clear: employee data isnât just for HR. Itâs for the boardroom.