Human Capital magazine issue 10.12

RECIPE FOR SUCCESS

Change management P36 ISSUE 10.12

JOINING THE DOTS

Talent management P44 PROFILE

HR at Unilever P50 CELEBRATING 10 YEARS

RAISING

HUMAN CAPITAL MAGAZINE HCAMAG.COM

THE BAR The HC scorecard: HR’s progress rated

WINNERS REVEALED! AUSTRALIAN HR AWARDS P46

editor’s letter

Express yourself! Got a burning issue to get off your chest? Check out the readers’ forums at hcamag.com

Too soon for a mid-life crisis?

In its latest incarnation, HR is less than 30 years old. In 1980 the term ‘human resources’ was unknown.

In a rapid pace world, it’s still surprising to see how the profession has evolved so quickly to this point. The function is now no longer operating in a silo (at least in most businesses), and is immersed fully within the business. Its functions are becoming more advanced and the insights it can provide to the business are becoming more sophisticated. Concurrently, talent management, strategic workforce planning and performance management have risen up the priority lists of executive boards.

Yet, are there clouds on the horizon? Potentially.

There is still a perception – despite a move away from creating people strategies in isolation towards those that are closely tied to business strategy – that HR directors are not proving the value of the function by stretching and provoking the business: by asking difficult questions, by forecasting ahead rather than looking back. And of course, there’s still the perception that the practitioners themselves are HR people first and foremost, rather than business people who are adept at ‘talking the language’ of business.

But let’s not panic. The commercial skills and partnering abilities of many practitioners are still evolving – and many corporates are undertaking capability programs with their HR teams to enhance these.

There is a perception, too, that the ‘people challenges’ facing businesses today are beyond the scope of just one department.

Roger Collins, an observer of the HR function for 30 years, suggests it’s time to move away from just developing HR practitioners, and instead concentrate on sharing the burden with other executives and the Board – again, that’s where those influencing and partnering skills will be sorely needed. “Asking the question, ‘how is HR going?’ is only a fraction of the real issue – you must ask a broader question: collectively, is the leadership of that organisation committed to its workforce as a source of high performance and competitive advantage?” Collins says.

Does this ‘share the burden’ trend mean the HR function will lose momentum? Will the increasingly criticised Ulrich model of business partnering (the common gripe: have you ever heard of a finance business partner?) help or hinder progress? Are we too hung up on models in the first place? Time will tell – perhaps the answers will be so much clearer when Human Capital magazine celebrates its 20th anniversary in 2022.

The commercial skills and partnering abilities of many practitioners are still evolving

Iain Hopkins, editor, HC Magazine

Human Capital wants to hear from you. Email us:

COPY & FEATURES EDITOR Iain Hopkins JOURNALIST Stephanie Zillman PRODUCTION EDITOR Carolin Wun

ART & PRODUCTION SENIOR DESIGNER Rebecca Downing DESIGNER Marla Morelos TRAFFIC MANAGER Abby Cayanan

CONTRIBUTORS People + Culture Strategies, The Next Step, Kenexa, EmployeeConnect, Frontier Software

SALES & MARKETING MARKETING EXECUTIVE Anna Keane COMMUNICATIONS EXECUTIVE Lisa Narroway NATIONAL COMMERCIAL MANAGER Sophie Knight ONLINE COMMERCIAL MANAGER Sarah Wiseman

CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR – BUSINESS MEDIA Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Iain Hopkins tel: +61 2 8437 4703 iain.hopkins@keymedia.com.au Advertising enquiries National commercial manager, HR products Sophie Knight tel: +61 2 8437 4733 sophie.knight@keymedia.com.au Subscriptions tel: +61 2 8437 4731 • fax: +61 2 8437 4753 subscriptions@keymedia.com.au Key Media keymedia.com.au Key Media Pty Ltd, regional head office, Level 10, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 Offices in Singapore, Auckland, Toronto hcamag.com Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept as HC can accept no responsibility for loss.

editor@hcamag.com HCAMAG.COM

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HC MAGAZINE 10.12

contents

Check out the HC archive online:

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Cover story: Celebrating 10 years As Human Capital celebrates 10 years, we look back at how the HR profession has progressed and what needs to be done to ensure 10/10 scores at the end of the next decade

14 REGULARS

04 | In brief: news 06 | In brief: hr insight 55 | The lighter side

FRONTLINE INTELLIGENCE

08 | In Step – HR career experts 10 | Legal 12 | HR consulting 13 | Technology

36 | All things must pass: Change management Is it possible to engage all employees through a change initiative? The experts say it is – and it’s not as difficult as it might first appear, as Iain Hopkins discovers

44 | Joining the dots: Proactive workforce management Your workforce is an asset – but do you have a strategy for your investment? Marc Havercroft provides best practice tips 34 | When payroll fails Payroll mistakes can cost a company a financial penalty as well as its reputation, writes Andrew Parker

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IN BRIEF

news CORPORATE HEALTH & WELLBEING

MOST STAFF HEALTH PROGRAMS ARE MISSING THE MARK n Only 50% of employees actually participate in the health programs on offer to them at work – and misfired health initiatives are costing Australian employers millions.

New research compiled by Medibank found that out of 5,000 Australian employees from 13 industries, the top reasons people gave for not participating in workplace health programs included being too busy, that they exercise outside of work hours, and that the sessions are run at inconvenient times.

Dr Melissa Lehmann from Medibank Health Solutions said the low rate of participation is not because people aren’t interested; it’s that the time and place doesn’t always suit them.

Importantly, 72% of workers who participate in workplace health initiatives think that their health and productivity improves as a result. “This key finding tells us that employers can take steps to invest in the health and wellbeing of their employees, to ensure their workplace is safe, positive and – in turn – productive,” Lehmann said. “We’d suggest employers examine all of their options.”

So what sorts of programs would Aussie employees prefer like to see on offer?

• 64% of respondents said they would prefer their employer to subsidise their private health insurance • 36% said they would like to see on-site health and wellbeing classes and services • 35% wanted exercise/physical activity programs • 35% said regular health screenings would be beneficial to them

SEXUAL HARASSMENT

SEXUAL HARASSMENT STILL ALIVE AND WELL n A new report from the Sex Discrimination Commissioner shows that sexual harassment is not only widespread in Australian workplaces, but that progress in addressing it has stalled.

Working without fear: Results of the sexual harassment national telephone survey 2012, showed that two years on from the landmark David Jones sexual harassment case, Australian workplaces are no better off. “This research is conducted every four years and shows that little has changed,” Commissioner Elizabeth Broderick said. “It shows that approximately one in five people aged 15 years and older were sexually harassed in the workplace in the past five years – an extraordinary figure.”

Targets of sexual harassment are most 4

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likely to be women under 40 and harassers are most likely to be male co-workers. Women are at least five times more likely than men to have been harassed by a boss or employer.

Men harassing women accounts for more than half of all sexual harassment, while male harassment of men accounts for nearly a quarter.

Commissioner Broderick said that one of the most encouraging parts of the research concerned the role of bystanders. “Fifty-one per cent of people who were bystanders – that is over half - took some action to prevent or reduce the harm of the sexual harassment they were aware of,” she said.

“Bystanders have an extremely important role to play in confronting and combatting sexual harassment.”

TECHNOLOGY

The month in numbers

2.94 – Score

out of 10 given by mature age workers (aged 45+) when surveyed about their level of satisfaction with recruiters.

Employers did not fare much better, scoring only 3.05 out of 10 for their efforts.*

129 million –

number of accrued days of annual leave for Australian workers, worth $40bn in wages^

3.9 – the

median number of years CEOs in ASX100 companies spend in the top job, a decline of nine months in the past five years. However, the figure is twice the international average ~ Sources: *A survey of more than 800 workers by Adage (adage.com.au) ^Australian Bureau of Statistics ~Goldman Sachs, ‘CEO Turnover: Implications of Declining Tenure and Longevity Risk’

EMPLOYERS DON’T SUPPORT MOBILITY: REPORT

n Employees want to be more mobile and use their own devices, but the business community is lagging in making this a reality.

The 2012 Australian Consumerisation of IT research from Unisys and Forrester Consulting found that compared to 2011, IT support for companyowned smartphones and tablets in Australian organisations has nearly doubled, but support for BYO devices has decreased. The reason is that employers continue to misunderstand why staff want greater mobility.

Employers perceive that their employees’ desire to use mobile tools for work is a preference rather than a requirement of increasing output.

What’s more: •While 72% of Australian business and IT decision-makers predict that tablets will be integral to the way they conduct business and provide services in the future, just 39% believe supporting employeeowned devices will be inevitable.

•Almost half (47%) of surveyed employers believe that BYO devices increase workload on the IT department.

However, the survey found 52% of IT and business decision-makers believe that employees who encounter trouble with their own devices are most likely to contact the IT department. Yet 60% of employees said they would troubleshoot the problem themselves, and 14% said they would ask a friend.

IN BRIEF

HR insight/work trends

A history of work As part of its Way You Work campaign, Cisco has examined the cultural, social and economic changes that have influenced our working world since the 1900s. This infographic walks us through these changes and takes a sneak peak at what the future might hold

WHAT’S INFLUENCING THIS WORKING FUTURE?

AN EVOLVING WORKPLACE

Early 1900s

2009

Australians commonly worked 10 to 14-hour work days, 6 days a week, all based in their place of work *

The average hours worked by fulltime workers is 39.7 hours, 5 days a week *

Only 6% of Australians have a formal teleworking agreement with their employers.

The majority of telework arrangements currently occur on an infrequent and informal basis *

By 2020 Australians will double the amount of employees that have a telework arrangement with their employers to 12% **

TECHNOLOGICAL DEVELOPMENTS MEAN A MORE MOBILE WORKFORCE 2010 Two networked devices per person in Australia. By 2015, there will be 3.5 networked devices per person†

Today

Internet contributed

3.6%

A more diverse workforce is leading to more flexible ways for working, with more women in the workforce and more people working part-time: 1911 Only 20.5% of women were in the workforce *

20.5% 2010–2011 The labour force participation rate stood at 79.7% for men and 65.3% for women ***

% 79.7 for men

% 65.3 for women

$50bn GDP‡

2011 Today

Internet will contribute

7.0%

2016

The average broadband speed is 7.8Mbps. By 2016, broadband speeds will grow 4.6-fold to 36Mbps***

HOW WILL THIS WORKING FUTURE AFFECT THE WIDER ECONOMY? 6

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$70bn GDP‡

If there is a

27%

10% increase in Australian employees that telework 50% of the time it will be valued between $1.4–$1.9bn per annum ^

27% of employed Australians worked parttime*

1 in 5 Australian jobs is related to international trade††

10

%

of employees surveyed globally work an extra 2–3 hours per day because they are able to work remotely

Sources *Australian Bureau of Statistics **NBN ***ABS, Gender Indicators, Jan 2012 ++The Centre for International Economics Report: Benefits of Trade and Trade Liberalisation, 2008 +Cisco Connected World Technology Report, 2010 ‡Deloitte Access Economics, 2011 ^ Access Economics for the Department of Broadband, Communications and the Digital Economy, 2011

FRONTLINE INTELLIGENCE

recruitment

Lisa Robson is a Consultant within the Next Gen division of The Next Step, a specialist consulting practice in the human resources market. For more information call (02) 8256 2500 or email lrobson@thenextstep.com.au. Website: www.thenextstep.com.au.

Around the World in 80 seconds!

Businesses are increasingly being run along global lines. To maximise current and future career objectives, it is important for HR practitioners at all levels to be aware of what is playing out in both their local market but also abroad.

This month we take a look at some of the market trends for the HR profession in some offshore regions.

THE NUMBERS

A comparison of the make-up of the HR profession in Asia, UK/Europe and Australia/ New Zealand was just one of the many areas examined by the recently published 2012 Global HR Viewpoint Survey (Viewpoint) conducted by The Next Step and its offshore partners in Asia and Europe.

The Viewpoint report was based on the responses of almost 3,000 HR practitioners globally, and the results in the survey showed that the profession in: • Aus/NZ is the least gender diverse with 70.4% being female, compared with 63.5% in Asia and 61.9% in the UK/Europe.

• Asia is the most highly qualified with 95.4% having a tertiary qualification, compared with 87.4% in Aus/NZ and 84.6% in the UK/Europe.

• The UK/Europe achieves the most work/ life balance with 39.1% working less than 40 hours per work, compared with 25.7% in Aus/NZ and only 13.2% in Asia.

• Asia is more likely to earn an STI with only 11.2% earning no bonus, compared with 31.6% in Aus/NZ and 37.9% in UK/Europe.

SOME REGIONAL TRENDS

Within the Australian market, we are seeing the different states performing at different levels of activity.

This may be in part due to different industries within each state dominating activity such as the Resources orientation of Brisbane. In the UK, the most buoyant sectors for HR opportunities seem to be in Insurance, IT and, more recently, New Media.

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The local skills gap and the push towards increasing capability in these areas provides potential expat opportunities This is similar to Asia where IT and New Media industries seem to be driving growth alongside traditional sectors. For instance, in Hong Kong, the financial services sector accounts for approximately two-thirds of the HR market, whereas in Singapore it is more balanced with commerce being represented in areas such as FMCG/Pharmaceutical.

INFLUENCING FACTORS

The HR profession globally is citing riskadverse and protracted recruitment processes. Employers are favouring ‘like for like’ hires and it is not uncommon for them to expect their entire candidate ‘wish list’ to be met.

A weak and uncertain international environment continues to pose downside risks to each domestic story. Each region is also indicating varying external influencing factors. The Australian market is feeling the pressure of the high Australian dollar and the slowdown of the manufacturing/ resources sector. China is on a more sustainable growth path and this will continue to favourably impact the volume and scope of HR opportunities for locallybased HR professionals.

Europe is being closely watched given the sheer magnitude and complexity of the problems. The UK market did, however,

notice a positive upswing in activity during the Olympic Games period.

OPPORTUNITIES

Using a flexible workforce to deliver businesscritical projects and backfill lean HR teams has meant the contract market in Australia is the most buoyant.

Approximately 54% of HR opportunities are currently being offered on a contract basis compared with 46% on a permanent basis.

Not surprisingly, the early and intermediate HR career markets are witnessing more activity than the senior market.

Interestingly, on the flip side the UK is reporting more movement in the senior HR market than any other level and there is a weighting towards permanent opportunities at 58%. Whilst they are reporting a recent market increase, this region continues to be one of the softest.

Asia is witnessing a buoyant early HR career marker with the quest for salary increases driving this. Emerging HR professionals are gaining up to 20% more each time they move.

Prospective employers are preferring to source talent from within their home markets rather than from abroad, resulting in increased difficulty for HR professionals in Aus/NZ and the UK/Europe to obtain work in Asia. The exception has been within the areas of Talent and L&OD. The current local skills gap and the push towards increasing capability in these areas provides potential expat opportunities.

FINAL NOTE

Whilst there are many consistencies in the HR profession globally, there are also evident differences in the composition and trends of each respective region. As we continue to operate within an increasingly global business context, the necessity to have an awareness and understanding of the professional field of endeavour beyond our local border increases.

MARKET MOVES

radar

Recent HR Market Moves APA Group, Australia’s largest natural gas infrastructure business, has appointed Jeff Robins as VIC HR Manager. Jeff joins the business with a wealth of experience in car manufacturing, distribution and sales organisations in Melbourne and the UK. Also joining APA Group, as Manager HR for NSW, is Paula Bayliss. Paula brings with her substantial generalist human resources experience with global businesses. She has diverse industry experience and is very comfortable executing restructuring and change projects.

Debbie Shagam, has recently taken on the Melbourne-based role of Head of HR for Incitec Pivot Limited (IPF). Debbie previously spent four years as HR Manager at Ajilon, prior to working with various media organisations in Sydney.

Nicole Zanette is heading up Group Remuneration & Benefits, Australasia at Amcor. Nicole brings with her experience in the manufacturing industry from Lion/ National Foods and previously with Tabcorp.

Joanna Pannett has joined KPMG’s People, Performance & Culture team as Head of People for Audit. Joanna has worked across a range of industries in Australia and in the UK and has built a strong track record delivering strategic planning, restructures, and re-engineering for improvement.

Hollard Insurance Company has appointed Paul Natili as Head of Human Resources.

Paul has moved across from MLC and NAB Wealth, where he held the role of Senior Business Partner. Paul has many years’ experience in senior HR roles in insurance and financial services organisations.

News Ltd has made a number of appointments to its HR Leadership Team. Fiona Nash is joining as Head of Organisational Development and Katrina Hawkins as Senior Advisor National Recruitment. Geraldine Rieper will be heading up Remuneration & Benefits, Lea Peterson will lead Business Partnering and Editorial, and Amy Morris is Head of Business Partnering – Sales.

Marcus Hanmer is also joining the team as a Senior HR Business Partner.

Leading provider of marine services, Svitzer, has appointed Mark Cox as HR Director. Mark brings with him experience and knowledge of HR in the maritime industry gained at Tenix and BAE Systems.

Penny Mabbutt is stepping into the role of HR Director, Australia & New Zealand at Ecolab. Penny has moved across from PMP Limited where she was the Group GM, People & Culture.

Telstra has welcomed Andrew Hay as General Manager, Health, Safety & Wellbeing. Andrew joins from Boral Construction Materials where he was National OH&S Manager, and prior to that was National HSE Manager at Boral Quarries and at Concrete Thailand.

Andrew has significant experience in Asia, having also held a regional safety management role at Lafarge Boral Gypsum Asia.

Grant Kelly has recently joined Star Track Express as HSE Manager. Grant has over 10 years’ OH&S experience, having previously worked for Bluescope Steel, Skilled Group and consultancies.

Avon Australia has a new Head of HR for Australia and New Zealand – Larissa O’Donovan. Larissa is an experienced HR leader and has moved across from Darrell Lea Chocolate Shops where she held the role of Group Human Resources Manager, and prior to that a senior role at Sara Lee. Andrew Pitman is now Group Manager Human Resources, Networks NSW. Networks NSW manages electricity distribution businesses Ausgrid, Endeavour Energy and Essential Energy, employing a staff of 13,500 people.

By supplying Market Moves, The Next Step is not implying placement involvement in any way.

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FRONTLINE INTELLIGENCE

legal

Kathryn Dent, Director P: 02 8094 3107 M: 0412 126 366 E: kathryn.dent@peopleculture.com.au.

What is “genuine” about a “genuine redundancy”?

As difficult economic times continue to plague employers, increased exposure to legal risks from termination such as an unfair dismissal, even where the termination is due to redundancy, warrants a proper pre-termination process of assessment, consultation and redeployment.

Section 389(1) of the Fair Work Act 2009 (Cth) (the “FW Act”) sets out the requirements for a genuine redundancy which will provide an exemption from an unfair dismissal action pursuant to s.385(d).

These requirements are that: • the position no longer exists • there has been consultation as required under any relevant industrial instrument.

Section 389(2) states that it will not be a genuine redundancy if there are opportunities for reasonable redeployment either within the employing entity or within the employing entity’s “associated entities”.

THE POSITION NO LONGER EXISTS

This reflects the traditional common law definition of “redundancy” established by years of case law and should be relatively straightforward to establish if the employer has assessed its workforce and the need to implement change.

The “non-existence” of the position can be due to either the position being totally abolished or the duties of the position being performed differently. If the position is advertised or recruited in close proximity to the termination, the subject of an unfair dismissal claim, then the strength of this argument is significantly, if not totally, diminished. However, there is no legislative timeframe within which re-establishing the position is prohibited and in Shepherdson v Binders Compendiums Menu Covers Pty Ltd T/As John Batman [2012] FWAFB 7675, Fair Work Australia “allowed” an 11-month 10

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The obligation to undertake “reasonable redeployment” is one of the most recent, and therefore the most difficult aspects to this defence period between dismissal and then reestablishment of the position.

THERE HAS BEEN NO CONSULTATION AS REQUIRED

Consultation is required if there is an applicable award or enterprise agreement (both to avoid an unfair dismissal as well as an action for breach of an industrial instrument). The failure to consult in UES (Int’l) Pty Ltd v Harvey [2012] FWAFB 5241 rendered the termination “unfair” because such a failure was unreasonable.

However, had consultation occurred, the employment would have been terminated, but later – two weeks later – and that formed the basis of the compensation ordered.

REASONABLE REDEPLOYMENT The obligation to undertake “reasonable redeployment” is one of the most recent, and therefore the most difficult and

controversial aspects to this defence to an unfair dismissal claim, and a failure to do this may render a dismissal unfair because it is unreasonable or because there was no valid reason for termination. Redeployment must also be considered across a number of entities being the employer and its “associated entities”.

The Fair Work Bill’s Explanatory Memorandum provided examples of where redeployment may not be reasonable, such as in a small business or where the employer has “no positions available for which the employee has suitable qualifications or experience”.

However, since then, there have been cases which have provided clearer guidance.

It is now well established that if the redeployed position is of lower status then it may still be reasonable (it is up to the employee to reject it) – Jenny Craig Weight Loss Centres Pty Ltd v I Margolina [2011] FWAFB 9137 – as may be a position in a different location provided that the employee agreed to it or did not insist on unreasonable relocation terms – Aldred v J Hutchinson Pty Ltd [2012] FWA 8289. This latter case also indicated that redeployment was a process which the employer, and not the employee, should initiate.

In order to avoid a redundancy becoming an unfair dismissal an employer should – where the employee is otherwise eligible to bring such an action – therefore: • be able to establish that the position no longer exists • consult as any applicable award or agreement requires • explore redeployment to any available position for which the employee is qualified, regardless of location, remuneration or status, within the employer or an “associated entity” of the employer.

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FRONTLINE INTELLIGENCE

HR consulting

Alison French, Director, Product Marketing, Kenexa Level 2, 451 Little Bourke St, Melbourne Phone (03) 9602 3899 or email alison.french@kenexa.com

It’s not the SIZE of the salary, it’s what you do with it Does the size of an employee’s salary drive his or her belief in the fairness of pay?

That’s a question Mark Szypko, Kenexa Compensation Managing Director, explored at last month’s Kenexa World Conference during his session “Perception is Reality: The Importance of Pay Fairness to Employees and Organisations.”

The context in which employees interpret their salaries is influenced by many factors.

Friends, family, co-workers – all inform an individual’s point of view on pay, and its connection to self-worth. Has your husband or wife (or mother or father) ever said – in frustration – “they don’t pay you enough!”?

Have you ever found out that a less senior (or less skilled) peer in a similar role makes more than you do? Before you joined HR, did you ever look up your salary on the internet and come up with a number far from reality?

Without a solid understanding of how pay works within an organisation, employees have no choice but to rely on these external “interpreters” and may quite reasonably conclude that they are not being paid enough and, therefore, that they are not paid fairly. In fact, only half of employees in the US believe they are paid fairly.

Why do we care? Because employees who believe they are paid fairly are nearly twice as engaged as those who don’t. They are more than twice as likely to remain with their organisations. And they are far less likely to consider their jobs stressful.

Friends, family and internet factors aside, how do we really measure pay fairness?

The external market is probably the best yardstick we have. But as has probably been pointed out many a time, perception is reality.

We can spend all the time in the world developing an elegant, market-based pay program that is the holy grail of “externally competitive and internally equitable”, but if our employees don’t understand how 12

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PERCEPTION MATTERS Perception matters Fair Pay

Unfair Pay

17%

Unreasonable Work Stress

54%

15%

Turnover Intentions

49%

85%

Personal Life Satisfaction

70%

85%

Mental/Physical Health

64%

78%

Employee Engagement

33%

%

10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent Agree

Source: WorkTrends © Kenexa 2012

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If employees don’t understand how their compensation is determined, and how it is linked to their individual performance, they may view even the “fairest” of pay programs as unfair

their compensation is determined, how to maximise it, and how it is linked to their individual performance, the external factors will prevail and they may ultimately view even the “fairest” of pay programs as being unfair. What’s the lesson here?

Communication and transparency are key to accruing the goodwill that should be engendered by a well-thought out compensation program.

In essence, it’s not about how MUCH you pay (though we’d still recommend a market-based approach) it’s about how you COMMUNICATE to your employees about their pay. Finding the time to focus on communication and transparency pays big dividends in the end, and can ultimately impact the bottom line.

So to answer the age-old question “does the size of the salary matter?” – Sometimes.

But the size doesn’t matter nearly as much as what you do with it and what you say about it.

FRONTLINE INTELLIGENCE Nick Southcombe is General Manager, Frontier Software. (03) 9639 0777; www.frontiersoftware.com

technology

Using technology to support payroll best practice

Q A

How can our payroll department unlock best practice in their processes?

Accessing best practice processes isn’t a one-off, it’s an ongoing challenge to get the most value out of every business activity. For payroll departments, best practice processes go hand-in-hand with technology. Payroll professionals must continually scrutinise their processes for activities that can be simplified, standardised and automated.

PAYROLL EVOLUTION

In the past few years, we have seen an evolution in the payroll profession. Many payroll professionals have access to contemporary payroll solutions that minimise manual data entry and automate tasks thus eliminating risks and delivering maximum operational efficiency. It’s important for payroll professionals to continually examine why they do things that way and if there is a faster, better way offered by technology or by streamlining manual components of the processes.

IDENTIFY GAPS

The Australian Payroll Association (APA) defines best practice as “integrating and streamlining payroll systems and processes, helping to build efficiency and improve payroll and business outcomes”. Payroll professionals can do this by mapping their current processes and identifying gaps where productivity is wasted.

While this may sound complex, it’s as simple as monitoring and recording what happens during the average day in your payroll department. APA recommends using sticky notes or timesheets to record every task and the time taken to complete them.

This allows you to create a timeline or map of processes that can then be scrutinised analytically.

Data integrity is mission-critical in the payroll function. If your evaluation shows gaps that could put your data in jeopardy, it’s time to enhance security It’s important to remember that you can’t improve what you cannot see and do not measure. Payroll must identify and measure the larger indicators of process efficiency, such as cost of payroll processing per employee, as well as smaller elements, such as time taken to respond to enquiries.

Regular process reviews will ensure your department is always providing a productive and efficient service.

TECHNOLOGY TO PLUG THE GAPS

Once you’ve identified process gaps, it’s necessary to source a solution.

There are four main areas you should consider when accessing payroll technology, and these are: 1. Data capture – Depending on your industry and workforce, you could stand to save time and money by reassessing the way you capture employee data. This could mean replacing paper-based timesheets with

electronic forms, installing point-of-sale time and attendance devices or integrating data capture with security devices.

2. Communication – Consider how employees communicate with your payroll department. Can technology be implemented that makes it simpler for employees to make enquiries or to access payment advice?

3. Risk mitigation – Data integrity is mission-critical in the payroll function. If your process evaluation uncovers gaps that could put your data in jeopardy, it’s time to enhance security. Fraud is a serious concern for payroll professionals today; this is why it’s vital to minimise risk by eliminating areas of vulnerability.

4. ESS/MSS – Employee and Manager Self Service allows your organisation to have a single point of entry for all employeerelated information. ESS allows employees to update many of their own personal details, while MSS allows line managers to fast-track enquiries and leave approvals for a rapid and accurate payroll process.

PAYROLL PROVIDERS

Many organisations do not have dedicated payroll staff but rather administrative or HR staff who are burdened with the payroll responsibility. Handing off non-core payroll activities to a specialist payroll organisation may be the better option for these businesses. A specialist provider can lower administrative costs while accelerating processes and assuring compliance.

VALUE-ADD PAYROLL?

As the central hub of employee-related data, payroll departments have the opportunity to add significant value to their processes.

Frontier Software recently commissioned APA to research payroll best practice, and the results are compelling. To access your free copy of the eBook, visit www.chris21. com.au/bestpractice HCAMAG.COM 13

PROFILE LISA BURQUEST

my brilliant career

success

Switched onto

Consistency counts when it comes to HR practice at Origin Energy. In just 12 years, this leading provider of energy to Australia and the Pacific has amassed a staff of over 5,600, proving that the company certainly has horsepower. Lisa Burquest, GM business partnerships, people and culture, Origin Energy tells Carolin Wun why a consistent approach was needed from the beginning Human Capital: With such diverse operations ranging from gas exploration and production, to electricity generation, operating and developing sustainable energy sources (such as Origin’s wind farm and hydro projects) and energy retailing, how does HR operate?

Lisa Burquest: My role was created in March this year where they wanted one person sitting across all of the business-facing HR resources, so all the different business groups would have consistency. There needed to be a level of consistency because we, the business, had grown so quickly. We had lots of new people and a significant number of senior people with less than two years’ experience at Origin.

HC: How is the HR team structured?

LB: My resources from a business process perspective are aligned; they report to me but they sit with the business.

Payroll, services, operations – and all of the HR activities in that space – are centralised. We have recruiters sitting across different key Origin sites. We have a couple of specialist areas that are centralised also, so all of the learning which happens across the organisation comes out of a central group to maintain consistency.

The people & culture function has grown with the organisation. When I joined six years ago, it was a very small group of people – and far more decentralised – and over time it has evolved, as we wanted to be more strategic, focused and aligned. Our current operating model has thus emerged and it is working effectively.

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HC: Describe your current role. What parts of it give you a real buzz?

LB: A key aspect of my role is to help support the building of the Origin culture. What guides the way we make decisions at Origin is our ‘Compass’ – our purpose statement, principles, values and commitment. My role provides that centralised view of how we deploy the key people processes, enabling us to gain that consistency in our decision making.

I enjoy the opportunity to see across all of the business and understand how it fits together, and making all the different parts function effectively – I love HR when you apply it in a business context. But it’s all part of a bigger picture, and I’m fortunate enough to see and feel that bigger picture in my job.

Career timeline: Lisa Burquest FIRST JOB At Uni

Concierge, Grand Hyatt Melbourne

1991–2006 BHP Billiton •Various roles from graduate to senior human resources officer, logistics and services (Melbourne, NSW, New Zealand)

•Senior human resources consultant, petroleum (Melbourne) •Global executive remuneration team leader, petroleum (Perth, Houston) •Human resources team leader Australia/Asia, Petroleum (Perth) •Global resourcing manager, corporate (Melbourne, Houston, Santiago)

2006–CURRENT

Origin Energy • National resourcing manager • Group manager, people & culture (development & energy markets) • Group manager, organisational capability & resourcing • General manager, business partnerships – people & culture

LISA BURQUEST ROLL OF HONOUR Bachelor of Business (RMIT, 1992), logistics and marketing major

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PROFILE LISA BURQUEST

my brilliant career We’re not an organisation that does process for the sake of process. What we do is backed up by some very thoughtful thinking – LISA BURQUEST HC: What are some of the unique challenges that you have encountered being in such a large organisation?

LB: Origin is a relatively young company, having listed on the ASX in 2000, and because we grew so quickly and brought in a whole lot of new people managers into the organisation, there was a strong need to create a consistent culture and have uniform decision making. Our managing director Grant King and executive management team contribute actively to the discussion around the sort of culture we want to create and the way things are done at Origin. Our ‘Compass’ provides that framework. So the biggest challenge is how do we induct our people and align our people with the key people processes that make us unique.

We’re not an organisation that does process for the sake of process. What we do is backed up by some very thoughtful thinking.

HC: How has the mining & resources boom affected Origin Energy?

LB: We pre-empted the challenge some years back. My first role at Origin was to set up its resourcing function and capability in the newly-created role of national resourcing manager. Back then we were a lot smaller, but after we did an intensive workforce planning exercise, we anticipated the volume by which we would grow and also the different disciplines we’d be growing in. So we established some strategies that have seen us through the skills shortage and held us in pretty good stead.

HC: What is Origin Energy doing to attract workers?

LB: First and foremost, we try to tell our story. Origin is the leading Australian integrated energy company and we continue to grow. We have diverse operations, from a large retail brand and portfolio of power generation assets, to significant onshore and offshore gas producing assets and an LNG export project, providing a wide range of opportunities. We’re also focused on managing the applicant’s experience, how we go to market, how we receive candidates, how we manage them through the process. We look to do this efficiently and well, and to give candidates a good experience. Also, our talent search team proactively goes out to market in our critical short-skilled areas, and ‘courts’ future potential candidates.

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HC: What key strategy do you believe has been crucial to decreasing Origin’s staff turnover and/or engaging staff?

LB: There are two key areas: the first is performance management, which is maintaining communication from the top down in terms of what are our priorities, where do we need to be focused, where do you fit as part of that, and what do you need to do. So we hope that people come to work understanding the contribution they make to the bigger picture. And we’re honest in that process, so that for example, if we anticipate we’re in for some hard times, then we need to focus on certain things and support our people to get through it.

The second is career opportunity. As an organisation growing significantly, we should be able to provide a lot of opportunities for our people. So we’ve looked at our internal recruitment processes and we’ve increased our internal replacement rate from 7% to as high as 28%. We make sure the opportunities across the organisation are highly visible.

Origin’s executive management team takes ownership of this and they drive the message through the business

Did you know?

• Origin was the first of the large energy retailers to move into the residential solar market, following an aggressive marketing strategy which has led to its success as one of the largest residential solar retailers in Australia.

• Origin has 4.4 million customers in Australia; its closest rival has over 3.5 million.

• Origin is Australia’s leading supplier of GreenPower.

• In May 2010, Australia’s first public on-street electric vehicle charging station utilised 100% GreenPower provided by Origin.

• Origin is offering scholarships worth up to $13,500 to apprentices in some parts of central southern Queensland. These apprenticeships don’t have to be in oil and gas – they can be for a butcher, baker, beautician, florist or any other trade.

around, for example, internal opportunity and consideration of people we already have before we turn to market.

HC: What are the biggest HR challenges facing Origin Energy?

LB: There are four key challenges: 1. For an organisation that is growing so fast over a short period of time – how do we ensure consistency? This doesn’t mean we have to do everything exactly the same, but it’s about getting consistency across our people processes to build the sort of culture and engagement that we want.

2. Supporting and adding value to the business through being efficient and effective in all our designing; making sure we’ve got the right organisational design so we have the right people in the right roles.

3. Because we are growing and changing so rapidly, we need to support the organisation to work through change and the people-related aspects of change, for example, a new system implementation, organisational restructures or building a new project. We need to support the business to do its part well.

4. Making sure we stop and anticipate the future. What do we need to do today to help us be what we want to be in a few years’ time?

HC: Is there anything about HR that you would like changed?

LB: I want my team to be careful that they’re not just being purist thinkers, and that they’re applying their technical HR knowledge in the right business context. It’s about adapting your thinking and your execution of your subject matter knowledge and doing it in a smart, sensible way that adds value to the business. I help to coach this message to my team.

HC: What piece of HR technology makes your life easier? Why? LB: Having good metrics at hand is useful. It lets you know the temperature of your organisation at a point in time; so, what is my turnover? What is my internal replacement rate? It’s a reporting system that gives timely insights.

Metrics tell an important story.

HC: What achievement are you most proud of?

LB: Being able to do the job that I do – and I really do enjoy it and get a lot out of it – and being the mother of five boys aged from five to 15. I have been blessed with the opportunity to do both.

More industry profiles at:

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COVER STORY

celebrating 10 years

WHERE do we go from here?

As Human Capital celebrates 10 years, we look back at how the HR profession has progressed and what needs to be done to ensure 10/10 scores at the end of the next decade

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When Human Capital launched into the market 10 years ago, the HR profession was in a state of flux.

The most hotly contested debate was whether HR deserved a seat at the executive level, and what they might do to earn it. Attending functions, forums and seminars, and talking to practitioners, it’s apparent that in many cases (not all), the debate has been won. It’s now almost a foolhardy organisation that does not have people concerns on the corporate agenda and, more often than not, these concerns are being raised, and solutions driven, by HR directors.

WHERE TO NEXT?

In order to continue to operate at that executive level, it’s time for HR practitioners to change tack. Roger Collins, a long-time observer of the HR function in Australia, and chairman of the Octant Foundation Steering Committee, says it’s time to “stop preaching to the converted”. He cites Italian statistician Pareto, who developed the 80–20 rule; the law of the vital few. This principle suggests that 80% of accidents are caused by 20% of people, that 80% of profit comes from 20% of customers, and so on. It follows that if one is trying to improve the performance of an organisation, and the quality of work experiences people have, it’s probably going to be created by 20% of the people who have an impact on the 80%.

“I don’t think the HR group are in that 20% anymore,” Collins says. “We’ve worked so long to improve the calibre, skill, role and contribution of HR people, and now it’s time to shift that across to Boards, CEOs, executives and line managers – and indeed the employees themselves. But trying to work more on the HR group is really a waste of resources, given the leverage that would provide.”

Indeed, Collins suggests the key to HR’s future may lie with the quality of the HR director’s relationship with the Board and the executive team. And this in turn is impacted by how informed they are about the importance of people in organisations, and whether or not they ask the right questions.

“A willing and informed CEO would expect any member of their executive team to be partly a specialist but increasingly also a generalist, in the sense that you understand the whole of the business, not just your functional area,” he says.

PRESSURE TO CHANGE

This may require a significant mindset shift not just for CEOs and Board members, but HR practitioners themselves. It also highlights shortfalls in traditional career backgrounds.

“Most HR people come through a very narrow career path – they started in recruitment or learning or remuneration and worked their way up. Very few have had line experience or accountability for P&L. If we’re

“We’ve worked so long to improve the calibre, skill, role and contribution of HR people, and now it’s time to shift that across to Boards, CEOs, executives and line managers” – ROGER COLLINS thinking about leaders of the people space of the future, they’re going to have to have had a much broader background than they’ve had previously. Maybe we should move some line people into HR for a couple of years, as part of their career development, and prepare them to become informed CEOs,” Collins says.

Collins adds there are significant demographic shifts driving this need to change how ‘the people stuff’ is handled in organisations.

In the mid-1960s, blue collar workers made up over 60% of the workforce; now it’s just over 30%. Industry structure is changing as the nation moves towards service- and knowledge-based organisations.

“Once you move the workforce to knowledge and service workers your potential for competitive advantage and high performance is much greater through people, and that demands a higher value add from the HR area,” Collins says.

For that reason, if they are serious about performance and sustainability, senior managers and Boards must be more interested in the people dimension.

However, a look at the background of CEOs and Board members suggests they are not well prepared for this brave new world. “On Boards, they are mainly accountants and lawyers who get the gig because Boards are focused around risk management and prudence. Most Boards in Australia are risk managers, and they must be prudent, there’s no doubt about that, but you must also be bold to reinvent organisations,” Collins says.

Yet with sectors like media, retail, manufacturing and airlines/travel all going through transformation, one wonders if those at Board level can conceptually understand how to successfully transform industries and organisations.

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COVER STORY

celebrating 10 years …

How far we’ve come ill we ever see the be the first CEO? W “Who among us will corporation chairman of a major day when the CEO or e question that ckground? This is on comes from an HR ba h 2004 arc M ’s HR Summit…” – arose from this year

“We’re at a point where people are much more central to organisational performance and the wellbeing of our society and economy. Whilst good HR directors are necessary, they’ll never be sufficient,” says Collins.

ENGAGING WITH THE BOARD

How can HR position themselves more centrally with Board members and other executives? Trust is crucial.

Lawyers aspire to be trusted advisors to their clients, and that trust comes at three levels – one is trust in their expertise as a lawyer, second is trust in them personally in terms of integrity and transparency, and then trust in understanding of their client’s business. HR directors need to move towards that trusted advisor category.

“The barriers are not so much the technical or occupational expertise or even their personal integrity – many HRDs don’t understand the performance drivers of their organisation because they are not commercial people in the main,” Collins says. “But you’re sitting there not because of your HR expertise – that half gets you there, but the other half is understanding the business well enough to contribute beyond the people dimension.”

This traditional focus on interpersonal skills and human behaviour is both a blessing and a curse. When they put an argument to the Board or the chief executive, for example, in the main HR professionals have not based their arguments around strong factual cases or cost benefit analysis – “that’s not been part of their makeup,” Collins says.

Instead, they attempt to persuade their peers with a different type of logic, which is values based and centres on how people are treated as human beings. “That’s a very valid argument but it’s not how you persuade the CFO,” Collins says. “I’m not saying one is better than the other, they are just different sorts of logic which

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sometimes don’t allow the HR person to be persuasive or as influential as they need to be.”

Yet there is also a demonstrated need for that perspective at executive level, especially in times of crisis such as the recent troubles at Qantas. “A good HRD ought to have the courage to stand up and say, ‘ignore this at your peril’. Hold the CEO to account for ethical problems or bad business decisions where the people stuff is important,” Collins says.

It’s perhaps instructional to look at people with HR backgrounds who are on Boards. Ilana Atlas, formally a senior partner at Mallesons and later legal council at Westpac, is a prime example – she is now on the Board of Directors of Suncorp Group Limited, Coca-Cola Amatil and Westfield Holdings. Ann Sherry, formally of Westpac and currently CEO of Carnival Australia, was recently named the first female Board member of Australian Rugby Union.

“The examples I can think of are people who’ve had a cross-functional career path – they are more attractive to add value as a CEO or Board member because the problems you deal with on the Board or as CEO are often multi-disciplinary or multi-functional problems where it’s not just about people – you’ve got to have the cognitive complexity to unravel the problem and some of it may be finance, some technology, some people.”

RATING HR’S PROGRESS

Collins rates HR’s overall progress as a profession at a six, and he notes this ‘middle ground’ score is in part due to the challenges of managing the workforce of today – it’s far more complicated now than 10 years ago. Not only is there the shift towards knowledge and service industries, there is also a sophisticated international workforce to contend with.

“If everything just stood still, HR would’ve made some good progress, but the trouble is demands have accelerated and some HRDs haven’t kept up. Some have. To get closer to 10, you must engage the CEO, executive team and the Board, and to assume greater collective accountability rather than just focus on the HR people,” he says.

Asking the question, ‘how is HR progressing?’, is only a fraction of the real issue, he suggests. “You must ask a broader question: collectively, is the leadership of that organisation committed to its workforce as a source of high performance and competitive advantage?”

Over the following pages, HC scores key areas of HR’s mandate over the past decade.

Business value-add …

How far we’ve come uests in this case declined interview req of er mb nu ge lar he “T Os still regard HR the fact that many CE may be indicative of rd to measure – something that is ha as an ‘airy -fairy’ field CEOs have not yet indicates that many and evaluate. It also a process function, t jus on that HR is not ati lis rea the to me co business capable of providing but a business centre 04 20 , ay M sis…” – intelligence and analy

Far from the transactional ‘personnel’ function HR was once known as, according to the highest accolade recipients at the 2012 HR Awards, the profession has firmly arrived at the executive table.

Chris Whitehead, CEO Credit Union Australia, says his HR team is integral to achieving the overall business goals and sit alongside the other key executive roles.

“They absolutely get the strategy – they understand what it means, they understand the transformational change we’re going through and what that means to our people, both in respectfully managing the change for those that are finding it hard, but also really driving the change and bringing onboard the organisational changes that we need to take us forward as an organisation – so it really is a holistic role that they’re doing.”

For Whitehead, his HR director is his ‘left-hand support’. However, this manner of thinking has only somewhat recently entered the executive ranks. Why? Because organisations and the C-suite are recognising that business continuity and success is inherently linked to change. “There’s far less certainties in the business world, and an organisational imperative is flexibility and the ability to cope with change, and the impact that it has on people. So HR has become much more important and I think it will continue to do so.”

Rose Clements, HR director Microsoft and HR Director of the Year, agrees that HR has arrived, and that empowering staff to achieve their best is absolutely accepted as being integral to business success. “We’re part and parcel of the business strategy, and it’s very difficult to distinguish the people strategy from the business strategy – and so when I hear phrases like ‘HR getting a seat at the table’, to me, that is so out of date.

That is so wrong to even be referencing those kinds of phrases anymore because we’ve been inviting other parts of the business to have a seat at the people strategy table instead,” Clements comments.

HC Rating

8/10

For Rob Petit – HR manager at Hatch Associates and HR Manager of the Year, HR’s business value-add comes down to partnering closely with the most senior leaders. “[Business partnering] has meant that [HR] gets to know more about the business, gets to know who the other leaders are, what their key issues are, and they’re able to take to them solutions and information – so that’s been a really big success, this strong connection between the HR professionals and the guys that are running the business,” he says.

Petit says the days of running an HR function that is just about the management of people are long gone. “We really need, as a function, to be much more strategic, closer to the business and actually help the business shape and move into markets… We’re in the business of selling people’s expertise and time so you have to be flexible, adaptable, and help the business attract and keep the best people and make sure they’re applying their skills and experience as best as possible.”

It’s also up to HR as a profession to be more agile and flexible in their processes, because as businesses go through cyclical downtowns and upswings more quickly, business success will depend upon HR’s ability to change shape and change directions quickly.

Clements adds it’s time businesses more readily recognise that people are not a resource. Success depends upon organisations recognising that employees are people, and business must earn the trust and respect of the people that dedicate their energy, their passion and their capabilities. ‘People enablers’ rather than ‘human resources’? Sounds good to HC.

“Phrases like ‘HR getting a seat at the table’ are so out of date… because we’ve been inviting other parts of the business to have a seat at the people strategy table instead” – ROSE CLEMENTS HCAMAG.COM 21

COVER STORY

celebrating 10 years

HR skills

HC Rating

5/10

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…

L&D in business centres on upskilling How far we’ve come ip is that it has nt focus on leadersh rre cu the employees, closing skills gaps, grooming “One result of creating the for shine. Responsibility future leaders and high potentials, and given HR a chance to rtment and pa de HR has fallen to the ms gra enhancing the EVP – all noble causes. Have pro e iat pr appro e has given HR a g as it does – this rol HR professionals afforded the same care – focusing on leadin gement…” rth directly to mana and attention to furthering their own chance to prove its wo career development?

– February, 2002 Gauri Bhalla, director of executive education at UTS Business School, says in terms of keeping HR’s own skills up-to-date there is always more to be done, but HR suffers just as much from the basically every HR role has an IR element to it,” business pressures of time and resources as other areas Aspromourgos says. within an organisation.

While the need for IR skillsets varies according to the “So often we’ll hear HR professionals wanting to specific role or the industry that HR is operating in, do more L&D for themselves, but not able to fit the Aspromourgos says many organisations have seen the time in for formal programs,” Bhalla says. need to upskill their HR professionals, and they’re While the premier formal qualification for the taking an active course in order to do that. profession remains the MBA, she says there has been L&D in the IR space needn’t be tied to legislative a noticeable increase in less formal learning landscape though, Aspromourgos says, because skills avenues. Events such as breakfast meetings, such as conflict resolution and proactive intervention workshops and conferences offer a flexible way to are worth their weight in gold. “It’s one of those things get a bite of learning with a group of peers. Many HR professionals still opt for studying in the that are difficult to put a measure on, because if it’s evening after work, and those who undertake an done very effectively – with early proactive intervention MBA stand to achieve a highly recognised

by HR professionals who can identify the issue and qualification and to grow their personal networks. know how to resolve it early – it never escalates. So you Outside of the MBA, one L&D area where HR has never have the comparison between the two scenarios, lagged is in the area of IR management. According to because you know suddenly, this workplace doesn’t Professor Greg Bamber, discipline group leader HR and have any particular IR issues.” employment relations at Monash University, an But it doesn’t all happen by chance, he says – it understanding of workplace legislation and its happens because good HR processes and practices are implications is crucial for HR professionals, yet IR in place, professionals are correctly skilled, and the upskilling has fallen by the wayside. “Many current HR systems and the processes of the workplace are teams seem to be less knowledgeable about workplace consistent and include an early intervention and law than in the past,” Bamber comments, adding that resolution process. over-reliance on external legal teams can escalate issues Bhalla says in the next 10 years, HR is on the path to unnecessarily. be leaders of business. “We would like to see many more Managing director of specialist IR consultancy firm HR directors become CEOs, and a broad business Livingstones, Alex Aspromourgos, agrees. He says a education is key to possess the skills, networks and combination of many HR university courses having experience to demonstrate capabilities.” She would also taken out their practical IR elements and a change to like to see more professionals actively seeking the Fair Work Act in 2009 has left HR as a profession secondments or projects outside of HR. Finding not just lacking in IR skills. a mentor but a sponsor outside of the HR area is “You get a lot of graduates and younger essential in achieving this move, she adds. professionals coming through that really don’t have a More agile learning processes might be the way lot of theoretical background or understanding to the forward for the time poor, and Bhalla says at present, while online resources are used well for compliance background of the IR aspects of their role. And I training, more tools and apps could be developed to don’t necessarily think that they have an allow for ‘bite-sized learning’ in the time-poor world. understanding, when they come into the roles, that

“While travelling, or in a spare five minutes [new tools are needed] that can be linked to a learning portal and journal, keeping a record in a learning management system of outcomes of learning,” she says.

Aspromourgos says the most successful HR professionals, and those who aspire to high level executive roles, are those who have a good appreciation and understanding of not just IR, but all the various elements of the portfolio – they are able to readily identify and seek resolutions to IR issues before they escalate.

He pinpoints conflict resolution skills, interpersonal skills, the investigation skills, and counselling skills as the most important areas for development, “because a lot of it comes down to how you deal with individuals and people in a particular situation and environment”.

Many younger professionals don’t have a lot of theoretical background … of the IR aspects of their role – ALEX ASPROMOURGOS

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COVER STORY

celebrating 10 years

Talent management

HC Rating

7/10

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Skills shortages, increasingly global talent markets, leaky leadership pipelines and outmoded succession plans, the changing nature of how and where work is done… These major issues have risen to prominence in the past decade and show no sign of being resolved by easy fixes.

Alec Bashinsky, national partner, people & performance at Deloitte, comments that in 2002, HR was still hung up on policy, programs and process – the three Ps. Today’s environment requires talent conversations in a different context; it’s about flexibility and mobility.

“I’ll use the words ‘guidelines versus strategies’; in other words rather than getting prescriptive around x, y and z, we’re now saying ‘these are the guidelines we have’ – let’s say social media guidelines – and that’s the difference. We’re telling our people less, and we’re providing guidelines and direction and letting our people move forward more.”

Employers still have some work to do to strengthen workforce planning and achieve productivity improvements. Half the organisations surveyed in Randstad’s World of Work report currently spend 10% (or less) of their total strategic planning time on future workforce planning.

“Considering the long-term nature of today’s key human capital challenges, the workforce planning horizon is also alarmingly short,” says Kellie Rigg, director of HR solutions at Randstad. “Almost half of employers don’t plan their workforce a year in advance – and just 13% plan for a two-year period. This suggests the positive work that many organisations are doing around talent management needs to be integrated with workforce planning that looks further ahead.”

For example, with 45% of employers looking to boost middle management capabilities to improve productivity over the next five years, now is the time to start thinking about the pipeline for executive recruitment, training and development. It’s also important to think about the work options, systems, processes and performance measures that will support these managers, to ensure their success – and their loyalty – in the future.

“A more robust, inclusive and long-term approach to workforce planning can ensure organisations have the right skills in the pipeline,” says Rigg. “A meaningful workforce planning process should follow best practice, align with company strategy, and engage business leaders and employees at all levels.”

On the plus side, Bashinsky feels HR as a function has built its business capabilities over the years. “We’ve built

“More organisations are prepared to move their people around, and employees are looking for opportunities to put different skills under their belt” – ALEC BASHINSKY our business focus over that 10-year period of time. I think we’re far more financially literate and bring more to the table around the talent strategies.”

Ideas around succession planning have also evolved.

“In today’s environment we’re spending more time ensuring that an organisation understands who its high potential people are, and then how does it keep them and develop them so that they do become leaders of the future,” Bashinksy says.

Most organisations, Bashinsky adds, understand they need to have a strategy to replace key people, but the traditional notion of succession planning as a talent model is out-dated. Career paths used to be onedimensional and vertical – start at the bottom of the organisation and work your way up – but not anymore.

“We’re seeing more organisations prepared to move their people around, and I think from a career development point of view employees are looking for opportunities to put different skills under their belt.

“It’s about having a clear understanding of your high potentials and developing them across the business, so that when opportunities come up you actually have people ‘on the bench’ that can take up these new roles,” he says.

Both a desire from young people to move quickly through the ranks, and the realisation from employers that they must hold onto this talent, has boosted the concept of fast-tracking talent.

He says it’s not just about employees moving companies – it also depends on the marketplace and how quickly growth is occurring. For example, the energy and resources and the construction industry is in a situation where they can’t find engineers. There’s a range of factors starting from the sort of graduates available from university. If the pool of graduates in engineering is small, it forces organisations such as Leightons or Transfields to go overseas to find engineers.

Bashinsky also feels the lines between part-time, full-time and “the whole flexibility thing” are about to become very blurred. As just one example, recent press reports in the US indicate the full-time workforce in retail is nearly non-existent and it’s nearly completely debased of structures. “We’ve got to get used to doing now is starting to work with a far more contingent workforce – and by that I don’t mean casual, I mean using talent for moving project-to-project, utilising additional resources, crowd-sourcing,” Bashinsky says.

An organisation’s ability to tap in and out of talent is going to be a key to how organisations work with its people – and that’s all about managing their moods, their feelings, their requirements. “When I think about flexibility I don’t mean come in late and leave early, but flexibility around how you bring your talent pools

…

How far we’ve come immediacy. Its t is synonymous with en itm ru rec t ne “Inter ess sin bu of ce in all aspects revolutionary presen potential to s ces ac t tan ployees ins ent management gives em itm ru nting for a job on a rec mpany’s candidates, be they hu co the by ployed and lured in website or already em 03 website…” – May, 20

together and what they’re composed of. That’s going to make you an agile organisation,” Bashinsky explains.

He says those conversations need to be occurring at the executive table in terms of what they are planning to do with their business strategy. As an example, the automotive industry is looking at more automation, and perhaps running on a peaks and troughs scenario. “Once you know what you’re doing in what I would call your ‘strategic workforce planning’, then you can start having conversations about the people you’re hiring and their flexibility.”

The next 10 years will – hopefully – see a focus on the proactive development of talent strategies, rather than managing with a big stick. “And by the way, employees respond to that far more effectively,” Bashinsky concludes.

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COVER STORY

celebrating 10 years

HR essentials If HR has made headway towards the strategic level in business, hopefully it has not come at a price.

Is the profession still delivering on ‘the essentials’ like reward & recognition, engagement and adoption of flexible work practices?

It’s debatable whether HR professionals are turning the tide on employee engagement – but then it’s questionable just how much influence HR can have on this notoriously slippery metric. Research indicates it takes more than one person, or group of people, to positively influence engagement levels. What is known is that Australia is facing a disengagement epidemic – recent Gartner Group research indicates just 18% of employees are ‘actively engaged’ at work.

Ben Thompson, CEO of Power2Motivate, says embracing engagement strategies and understanding the importance of engagement for retaining talent can only be seen as a win – or a path to greater employee relations and increased productivity. “Ten years ago we just focused on retainment as a key metric; now holistic engagement metrics are the driver, enabling targeted HR interventions and improvements to the overall employee experience at work,” Thompson says.

Leadership and management consultant Avril Henry has always found that the simplest way to engage employees, and reward and recognise their efforts, is to actually ask them what they want, and what they think.

Recognised best employers like RedBalloon take the time to genuinely know their employees – and hence are more likely to keep them engaged. At RedBalloon, newbies are asked to complete a ‘Getting To Know You’ questionnaire and a ‘Dream Catcher’ survey. “These activities allow us to get to the heart of each RedBallooner – what makes them tick, what they dream about achieving, right down to how they like their coffee!” says Megan Bromley, RedBalloon employee experience manager. “These insights allow us to reward our people in a specific and meaningful way – we’re not a one-size-fits-all kind of operation.”

Thompson, who rates HR’s efforts as six out of 10 in this area, says there is so much potential that is not being explored – for example, acknowledgement of formal and informal L&D as a way to drive engagement. “The HR profession should be proud of its ability to transform in the face of changing business dynamics, globalisation, elevation into key decision-making at the executive level, increased technology and demand for greater efficiencies and ROI. It is no longer a cost centre,” he concedes.

But evidently there is still work to be done.

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Cash is still seen as king across the industry, when we know from legitimate studies that cash rewards do not inspire loyalty – MEGAN BROMLEY When it comes to R&R, Henry believes on the whole HR has not necessarily delivered the strategies that appeal to different generational groups. “To a large degree, what I have observed are either fragmented R&R strategies or none at all,” she says.

Bromley says there is still far too much focus on pay and bonuses, and not enough ‘outside the box’ thinking when it comes to R&R. “Cash is still seen as king across the industry, when we know from legitimate studies that cash rewards do not inspire loyalty. In fact non-monetary incentives have a higher perceived value, being 24% more powerful at boosting performance than cash incentives,” she says.

There is an element of complication for complication’s sake at play. Bromley says keeping it simple can pay dividends. “If businesses were nailing this element of their overall people strategy there would be less disengagement and we wouldn’t still be having this conversation. But we must also remember that R&R is only one piece of the pie – it takes a whole lot of ingredients to cook up a successful employee engagement reality.”

Bromley, who stresses the power of a simple ‘thankyou’, says too many businesses can get caught up in the new and shiny. But if you don’t know what your people want it doesn’t matter how new or shiny – it simply won’t work.

HC Rating

6/10 …

How far we’ve come life appears to joy home and family en to on ati tiv mo “The r’s mindset, rke wo ce in the modern en ced pre en tak ve ha le hours, leave n was the focus. Flexib where once occupatio lines, family tion time, looser dead time, sport and recrea eiving greater rec work culture are all balance and positive 05 attention…” – May, 20

“R&R should not be owned by HR. HR should set the program – but the day-to-day implementation and drive needs to come from your people managers. Because ultimately the employee experience is owned by your people,” she says.

Fortunately, aside from legislative requirements, HR has played a key role in facilitating the shift towards flexible work arrangements and other work-life balance initiatives by establishing a framework within which managers and their employees can improvise how work is performed. Thompson, who rates HR a favourable seven out of 10 in this area, says the modern workplace demands this new way of working.

“A reluctance from management to embrace these initiatives has perhaps held this back due to a perceived loss of control. The ongoing challenge for HR is championing the mutual benefits of such arrangements,” he says.

What must HR do to score 10 out of 10 on these ‘essential ingredients’ in a decade’s time? Thompson says emphasis must be placed now on the total Employee Value Proposition (EVP), which involves capitalising upon the ethos within the mission, vision and value

statements of the company and reinforcing a total employment proposition package. “This includes a strong culture of reward & recognition, a unique mix of effective HR policies and programs, service-driven processes, corporate citizenship and values,” he says.

Henry takes a more philosophical view and doesn’t believe any HR team should ever be rated 10/10 – otherwise there’s no reason to strive for improvement, and complacency becomes a risk. “I believe we should strive for 10, expecting 9/10. To be 9/10 you need to understand the business strategy, the financials, speak the language of the business, be part of the strategic planning and develop both the culture and leadership capability of the organisation. Equally importantly HR needs to find the fine balance between being the key advisor on people issues to the business, while being the champion of all employees and the voice for those who have no voice,” she says.

HR WISHLIST Ten years from now, what would you like HR teams doing differently? Megan Bromley responds…

1. Stop calling ourselves HR – we don’t manage resources, we manage people 2. Stop overcomplicating everything we do 3. I’m going to open a can of worms here – but I would love to see those in the profession to have a genuine love for working with people…

4. Make sure the employee experience is at the heart of what you do, every day 5. Rid the profession of the misconception that HR can’t be fun

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COVER STORY

celebrating 10 years

Diversity There’s no question the homogenised term ‘diversity’ has made great strides onto corporate agendas over the past decade – but like all areas of business, there are success stories and areas to improve on.

Nareen Young, CEO of Diversity Council Australia, says it’s fair to say some HR institutions and peak bodies have been slow to realise the importance of diversity practice but we are now seeing some action. HR directors at leading employers like Robert Orth at IBM, Alec Bashinsky at Deloitte and Chris Lamb at Lend Lease have played key roles in developing and driving diversity practice in Australia.

“In some organisations, it’s HR that leads the way on diversity. In others it can be the diversity manager, while in others it’s the CEO or a particularly passionate leader.

Diversity practice shouldn’t be left to HR alone – it needs to be embedded in the fabric of the organisation – not some add-on that is separate to the way the business runs,” Young says.

Catherine Eyre, general manager of 2discover, notes that many organisations now have diversity as a strategic pillar, with clear activity and measures to support this.

Two leading examples are the increase and acceptance of flexible working options and the ongoing debate of women in leadership.

“Options like working from home, job share, part-time and purchase of additional leave are all being utilised by organisations to retain talent and create a great place to work,” she says. “Women in leadership is also firmly on the agenda for corporate Australia, with many organisations running initiatives such as mentoring and high potential programs. Several high profile organisations have targets in place.”

The introduction by the ASX Corporate Governance Council of a requirement for listed companies to adopt and disclose a diversity policy and measurable objectives relating to gender (or explain why they have not done so) has added real impetus for change yet the debate around

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setting quotas for women on Boards continues to rage.

And given the wage gap has changed little in the past two decades, one is left to wonder at the progress made.

Donna de Zwart of Diversity @ Work notes that as with any aspect of diversity, women are not a homogenous group. There is no one solution that will settle this debate. “Women’s representation in 2010 was a mere 8% at executive level and 8.4% at Board level of the 200 largest publicly-listed companies. This underrepresentation prevails despite 25 years of Equal Employment Opportunity legislation in Australia, a shrinking labour market, and accumulating empirical evidence that women’s participation in the workforce is positively associated with economic growth,” she says.

Young says a pay equity audit is the most important first step for any organisation in identifying where gender pay inequities may exist within the workplace, in order to adopt strategies to address issues and remove barriers to workforce participation and career progression for female employees.

“A pay equity audit usually begins with a detailed analysis of payroll data to identify where gender pay differences and gender pay issues exist within a workplace. Identifying those areas where there are larger than average gender pay gaps can facilitate the development of targeted pay equity strategies,” she says.

As with any strategy implementation, de Zwart stresses that HR and their organisations need to evolve their people strategies to fit with the culture and goals of the business. Reward and recognition of KPIs tied to diversity and inclusion goals are key to making change in this and other diversity areas. “Change the goal and the action and behaviour will adjust to hit the target,” she says.

Eyre adds that some organisations are looking beyond the traditional areas of diversity. Other areas gaining momentum are: • Awareness programs being run on unconscious bias for leaders, as part of organisational strategy

HC Rating

6.5/10

Options like working from home, job share, part-time and purchase of additional leave are all being utilised by organisations to retain talent and create a great place to work – CATHERINE EYRE • Cultural awareness and recruitment strategies out of reconciliation action plans for Indigenous Australians • Activity around workforce diversification, looking at opportunities with mature age workers • Increasing talent pools to include Australians with disabilities This last area needs work. In Australia, currently one in five people have a disability. Unfortunately their employment participation rate is 54%, which compares to 84% for people without a disability.

“The large investment required to introduce the National Disability Insurance Scheme is indicative of the challenges faced daily by people with disabilities, their families and carers,” says de Zwart.

“There is an imperative to address the employment of people with a disability currently by providing employers with the necessary knowledge and understanding. This is particularly significant with our ageing population.”

In other areas, such as employment and support for Aboriginal and Torres Strait Islander Australians, Reconciliation Action Plans (RAPs) have been the foundation for enabling organisations to create meaningful relationships and sustainable opportunities for this minority group.

“Leading organisations now understand that it’s about embedding Aboriginality into everything they do – as a business and as an employer,” Young says.

“Creating an environment where Aboriginal people can be identified as talent and be able to flourish is key.

Unfortunately, racism is still a problem in some workplaces and more work needs to be done to eradicate inaccurate stereotypes about Aboriginal and Torres Strait Islander people.”

Young adds that cultural diversity is an emerging focus area. DCA will be producing ground-breaking research, Capitalising on Culture, which will for the first time shine the light on just how culturally diverse our ASX200 company Boards are so we can understand how to make the most of the diverse talent we already have in Australia. de Zwart adds that while it’s great to consciously target specific diversity groups, it should be tied to an overall diversity and inclusion strategy, rather than having disparate tactics across a business. For example, a robust policy and culture that embraces flexible workplace conditions is good for all aspects of diversity.

What needs to change to boost that score to 10/10? de Zwart puts it simply: “When organisations ensure diversity and inclusion becomes business as usual. When there is a clear understanding that a commitment to diversity and inclusion is a key contributor to the triple bottom line of an organisation.”

…

How far we’ve come undeniable fact is ic these days, but the top t ho a is are dc hil “C ived of a valuable r market is being depr that Australia’s labou urn to work but desperately wish to ret asset – mothers who ” es… vic lack of childcare ser are unable to due to – March, 2006

COVER STORY

celebrating 10 years

Technology

HC Rating

…

Ten years ago Human Capital came in one How far we’ve come me an integral ms, or HRIS, has beco ste Sy n tio format, and one format only – and that was “HR Informa ng rdi to most HR rn HR function. Acco hardcopy. Now, mirroring changes in technology element of the mode 10 years in terms las s changed in the t ha le litt and reader habits, HC is available as a ls, na sio fes pro s offer. But, t these kinds of system comprehensive website, as an e-mag, in of the functionality tha ntributions, the us on HR costs and co e-newsletters, and as a smartphone app. It’s also with an increased foc HRIS…” to define the ROI of disseminated through LinkedIn Groups and pressure is on for HR other social media channels. The mantra of being – August, 2003 one step ahead when it comes to technology is particularly apparent in publishing. However, is HR a different matter? to try the latest off-the-shelf technology offering or The consensus from the experts indicates a decidedly newly espoused process and, in doing so, run the risk mixed view. Andrew Cross, Ambition’s managing of disengaging those who are then asked to use the director, technology, says that on the whole HR new tool.” professionals have been relatively slow in embracing And of course there are laggards, who refuse to adapt technology, but perhaps for no other reason than their both the processes they use and the technology used to true level of influence within a business hierarchy. streamline those processes. Souter says there is a great “The past few years, however, have shown a more number of HR teams still relying on PowerPoint healthy appetite for change in general and a catch-up presentations and Excel spreadsheets, filled with exercise has finally started to take place, seeing the half-completed employee reviews and profiles. It takes HR sector adopt more and more the technology months to attempt to pull together the relevant data that tools of the day,” he says.

Cross believes a significant driver of change was businesses require for talent-related decisions, such as the GFC and the need for business divisions to look managing compensation and succession planning. for efficiencies and cost saving practices. Prior to this, “This way of working has left many HR practitioners HR was focused on the people element of the role and in the unenviable position of trying to engage leaders in as such technology was perhaps less leveraged than it is ‘strategic’ talent conversations, using clumsy paper binders today. This is echoed by Mark Souter, head of human full of scattered and obsolete information,” he says. resources for Asia-Pacific and Japan, SuccessFactors, Technology presents a way to improve HR processes, who says HR has traditionally looked at technology he adds, but the answer is to not only focus on the primarily as a means to become more efficient or to operational activity that technology can advance – it is automate processes. also using HR technology in creative ways that amaze “From a business owner’s perspective, technology is the C-suite and highlights the value HR can bring in even less attractive to embrace, especially when it only delivering a real business impact. sees its benefit translate to reducing paperwork within The news is brighter in terms of social media adoption. the HR department,” he says.

Cross believes HR professionals have embraced social However, the profile of technology within business has media “quite well” and in many corporate entities they, also risen over the past decade and this has created a along with the technology team, have been the early greater accessibility for internal shared service functions adopters and promoters. This is despite the opportunity such as HR. for scorn and derision in the early days as those more Cross also believes HR professionals are becoming conservative leaders pointed a finger and said, ‘show me more adept at utilising technology, so rather than the return on investment, then I’ll buy it’. shoe-horning old practices into new technology “Perhaps as another positive effect of the increased vehicles at their disposal, the majority are more profile of certain shared service functions in recent years, accepting of adaption and change – in fact he notes HR has been able to partner with technology to build that as an industry group of professionals, HR are talent acquisition strategies both internally and externally; to sell culture and values through intranets among the more responsive to change programs, and websites; and to improve communication and sometimes to their detriment. “A potential criticism sharing through collaboration software,” Cross says. levelled at HR is that they are sometimes too keen

5.5/10

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Souter adds there are still “amazing opportunities” out there for HR when they are able to consider building and managing talent communities, as well as sourcing different candidates from all social media outlets, including non-traditional recruiting areas like Pinterest, YouTube and Instagram.

“Candidates are more likely to use these platforms, or simply enter their job description term into a search engine. Consequently, the companies that do not cater for these options will be missing out on masses of potential candidates,” he says.

Overall, Cross rates the performance of HR in using technology as a seven out of 10. To attain a 10 out of 10 score he believes HR must be careful not to get caught up in its own success. “For some time social media strategies have travelled unabashed with the tagline, ‘just because you can’t measure it doesn’t mean it isn’t doing good’.

Consider the ROI of your mum – you can’t do it, but it doesn’t mean she doesn’t add value,” he says.

As the ability to measure and quantify success becomes more readily available and easy to understand, Cross says some programs are going to be shown to not cut the mustard. Similarly with all the data that businesses are now collecting (think big data) there will very soon come a time when more meaningful analytics will show that certain practices and procedures just aren’t working – whether HR responds and adapts, and how, will be telling in whether their benchmark score goes up or down.

Souter adds that technical know-how has been identified as the number one HR competency area that influences HR’s credibility within a business. So it would be up to the people in the HR department to have this

For some time social media strategies have travelled unabashed with the tagline, ‘just because you can’t measure it doesn’t mean it isn’t doing good’ – ANDREW CROSS drive and desire to equip themselves with this know-how to get a perfect 10. “An organisation with fantastic leadership that owns a comprehensive people strategy driven by technology will result in their HR teams getting the full points on offer,” he says.

Peter Forbes, managing director, Navigo, says new breeds of social, mobile, and easy to use HR solutions are emerging, and we will see a significant number of productivity and analytic tools for HR which will deliver real value in employee management.

“Technology adoption will be a large part of an HR practitioner’s role in the modern organisation,” he concludes.

HCAMAG.COM 31

EXPERT INSIGHT

technology

Ari Kopoulos is the national sales & marketing manager at EmployeeConnect. For further information visit employeeconnect.com.au

Caveat emptor…the marketing of HR technology There’s no doubt technology is in a constant state of flux; a new wave of technology appears before you’ve had time to evaluate the previous. What’s more, time between waves is getting shorter. In many cases, these shiny new terms are merely repackaged terms presented to a new generation of thought and opportunity. So how do you recognise and translate industry buzz into real world value?

FIVE PHASES OF HYPE

In 1995, Gartner introduced the hype cycle to classify the journey from enthusiasm, disappointment, to widespread adoption of new technology. The first phase is the ‘trigger’ event that generates interest. This is followed by ‘inflated expectations’, where media generates exuberance and unrealistic expectations. Negative publicity follows with all the implementation failures, and interest drops in the ‘disenchantment’ phase. This marks the end of the hype. Beyond this is the ‘enlightenment’ phase where the benefits are realised and technology matures. Finally, as the benefits become widely proven, technology reaches the ‘plateau of productivity’. From here on, technology becomes increasingly stable and evolves into second and third generations.

Entering vendor discussions with this knowledge is important in understanding where exactly the technology sits on the hype cycle; however, it’s no substitute for informed questions and understanding the ramifications to your specific requirements.

CLOUDY…

Consider the term ‘cloud’. This could mean anything from SAAS, On Demand and Hosted. Beyond a delivery model, cloud is about real-time, web-based outsourcing of functionality through software, delivered in a pay-as-you-go commercial relationship.

This means it has scalable and flexible architecture, with data storage outside your firewall.

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It’s not about the technology; it’s about the ability to embrace the paradigm shift and culture of a truly social workplace It’s widely accepted the term cloud is over-hyped and showing signs of marketing fatigue and customer disillusionment. It doesn’t help when vendors are offering traditional hosting services rebadged as cloud. Furthermore, the location data storage component could refer to storage in Australia, the US or Barbados. It pays to clarify this point early in the discussion.

These vendor actions are disappointing, hindering market growth and frustrating end-users.

WORKFORCE ANALYTICS

Another hype term is ‘workforce analytics’.

This can include data accessible though ad-hoc reporting; operational and managerial reports; and executive dashboard reporting supporting strategic decision making.

More and more, vendors are providing these capabilities packaged within their applications. This gives HR the ability to process information and reach a decision in a very timely manner. Uptake of the more strategic elements of workforce analytics though has been sluggish. This is partly because the incumbent tools have been awkward to use and, partly, because the HR department does not have the skills to crunch

and analyse the data. Overall, it’s quite hyped, but the promise is there. The good news is there is a new generation of functionality, characterised by robust support and user-friendly flexibility entering the market.

BRAVE NEW SOCIAL WORLD

Finally, we come to social media. You can’t deny the incredible growth of social media.

It’s a trend that’s set to continue, despite many organisations still working out how to leverage social media. In terms of functionality, it covers amplification of recruitment, through to social learning.

Social media promises a future workplace complete with real-time connectivity, collaboration and fully-engaged employees.

Despite this, questions over efficiency and productivity still loom. I believe the promise is there and the benefits outweigh the hype.

More and more organisations are leveraging social media to effectively address the war on talent. A positive sign is that 89% of job seekers are using social media as their primary search strategy.

Social learning has witnessed one of the largest growth markets within the HR technology industry over the last few years.

It offers a passive and cost effective pipe into the collective knowledge and expertise of people. But don’t make it the only weapon in your learning and development strategy!

There is no doubt the tangible benefit social technology can deliver for business; however, few organisations are truly ready to commit to social technology. In short, it’s not about the technology; it’s about the ability to embrace the paradigm shift and culture of a truly social workplace.

While the benefits of new technology are certainly there, savvy organisations seek to balance this with understanding and preparation for change. Consider the advent of online banking – scary at first. Then as it becomes commonplace, issues of trust and privacy dissolve. Until finally, we can’t imagine a life without it.

HR ESSENTIALS

payroll

When payroll fails What’s the cost of high profile payroll mistakes? Andrew Parker outlines that not only do they result in steep financial penalties, they also cause untold damage to corporate reputations We all understand the impact of an incorrect payroll move. As the old adage goes, a happy customer tells three people and an unhappy payroll customer never forgets and tells everyone for the rest of their life.

In this technologically-advanced age with all the latest systems, constant news services and access to training, there should be no reason why an individual is paid inaccurately. Certainly, mistakes can be made, but in the last year there have been a number of cases where payroll mistakes have resulted in some significant penalties to the offending organisations. For example: • a labour hire company fined $40,000 for underpaying one employee (Oct 2012) • a Gold Coast employer fined $30,000 for attempting to force workers to forego their penalty rights for overtime on weekends and public holidays (Oct 2011) • a café operator who underpaid two casual employees was fined a total of $120,800 in penalties (Sept 2011) So how do we address these risks and the wider consequences on both the individual and the organisation?

CONSTANTLY CHANGING LANDSCAPE There is a constant and continuing change to the responsibilities and

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obligations on how we pay our people today.

The EBA was intended to bring consistency and fairness to all employees. The growing demand for flexibility from the business and the employee perspectives often complicate the one-size-fits-all approach. Individual flexibility agreements are sometimes documented, but all too often these are just verbal agreements that operate outside of the knowledge of payroll. It is not uncommon to see organisations paying different ways for similar roles in different locations whilst working under the umbrella of one EBA. Fair Work Australia (FWA) is committed to consistency and making it harder to change particular Awards, but there are still clarifications being published almost on a daily basis.

Some have been major, like the revision of the aged care award, which incidentally was accompanied with a 33-page guide relating to the payroll calculations. The recent FWA structure review (2012) resulted in over 50 recommended changes to different aspects of the legislation and processes relating to the way people are paid and disputes managed.

Tax changes are continuous and never ending. The recent livingaway-from-home-allowances are causing a ripple through many

In this technologic -ally advanced age with all the latest systems, constant news services and access to training, there should be no reason why an individual is paid inaccurately

organisations and shortly we may have FBT and salary sacrifice changes coming into play. These have every chance of impacting hard on many organisations and in particular the charity and not-forprofit sector.

SO WHO OWNS THIS PROBLEM?

Well, one thing is for sure: successful payroll is an outcome of a team approach to managing the risks. The business is the owner of workforce strategy and engagement, to make sure that the workforce performance matches the market rate of pay. The HR and IR teams are the keepers of the corporate governance and meeting legislative requirements.

The IT team is the provider of stable payroll systems that reduce the probability of errors by minimising manual processing and supporting contemporary practice.

The two most obvious reasons for most mistakes in payroll are macro issues relating to lack of communication and planning between the aforementioned parties and human error. Reducing the risk is a team effort.

SO WHAT SHOULD AN ORGANISATION DO TO REDUCE THE RISK?

The creation of a cross-functional payroll operations committee is by

far one of the best ways to avoid the pitfalls. The charter of this team would be to: • Monitor and review the external environment to ensure that changes impacting on people’s pay are firstly captured and then reflected in the payroll system in a timely fashion.

• Training and process. There is a set of process documents providing transparency on deadlines and ensuring everyone knows the method of calculating entitlements, accruals and allowances.

• Check and double check that the payroll processes and systems

include the right check-points with regular end-to-end payroll audits, from employment contract to payslip.

• Feedback and quality. Commit resources to plan for changes, capture feedback and manage a set of service-focused and improvement metrics.

Good workforce performance comes from paying people with equity and accuracy. Good payroll outcomes come from teamwork and cross-functional planning.

The organisation that invests in these areas reduces their payroll risks and ensures payments are right first time and every time.

About the author Andrew Parker is Associate Director, Grant Thornton.

For further information contact andrew.parker@au.gt.com

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HR STRATEGY

change management

All things must pass Is it possible to engage employees through a change initiative? The experts say it is – and it’s not as difficult as it might first appear Has your change initiative come undone? You are not alone. Only 38% of employees believe that major change initiatives within their organisation are well managed and help the organisation to deliver better business results, according to a recent study.

Furthermore, according to Aon Hewitt’s study of over 75,000 employees in Australia and New Zealand, little more than half (56%) of senior managers, those who should be driving organisational change, believe major change initiatives are well managed. With the amount of restructures, M&A activity and change initiatives happening in today’s market, it should be a key concern for business leaders that execution of change is being handled so poorly. How can this situation be reversed – and is it possible for change to be positioned in a way that actually improves business performance?

Manager capability clearly affects the success of change management programs. Aon Hewitt’s research of perceptions across hierarchal levels shows that the further down the hierarchical structure the messaging travels, the less successful its delivery.

“Change efforts typically fail when insufficient attention is given to the people elements of the program,” says Aon Hewitt’s Tim Powell, talent & rewards practice 36

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leader, Pacific. As if to demonstrate this, only half (51%) of those with senior management positions believe their leaders do a good job of helping them to understand the reasons for organisational change, and provide guidance on the desired outcomes. Success falls to 43% at the next level down (team leaders/supervisors), with only 32% of professional employees (non-managers) feeling their senior leaders are doing a good job of helping them understand the reasons for organisational change.

What’s the alternative? Powell recommends organisations take a holistic approach to driving behaviour change across their workforce. This includes the capability and capacity to change the way people work, the adjustment of processes and policies to reflect the new environment, and implementation of rewards and recognition programs that encourage and support the new ways of working. Measures also need to be put in place to track progression towards key outcomes of the change.

Stephen Hickey, employee engagement practice lead, Aon Hewitt, adds that irrespective of the ‘change trigger’, which could be an M&A, change in strategy or a restructure, changing behaviours lies at the core of a well-executed change program.

‘Senior leaders are doing a good job of helping me understand the reasons for organisational change and the desired outcomes’ 60

Positive perceptions

50

54%

51% 43%

40 30

32%

20

Source: Aon Hewitt

10 0 Senior management

EMOTIONS IN MOTION

Team leader/ supervisor

This sentiment is echoed by Shaun McCarthy, CEO, Human Synergistics, who warns organisations to be careful with the definition of ‘change management’.

“It does mean different things in different contexts to different people. One of the big mistakes organisations make is they think restructuring things is going to change things. You do not change an organisation by changing a structure.”

He adds that restructuring creates the illusion of progress – hence the expression, ‘everything changes but it all remains the same’.

“Usually, organisations are changing structure to achieve some desired outcome, which more often than not is something to do with the way people function – ie, the way in which people behave. The fundamental reason why that change doesn’t work is because it doesn’t address the way people behave. If you change the structure without doing something about the culture, you achieve absolutely nothing,” he says.

Insights from neuroscience provide clues as to how to position change. McCarthy says a key component of neuroscience is the understanding of how people respond to external stimuli; every situation is either a reward or a threat.

“If you see something as a reward you will move towards it; if you see something as a threat you will move away from it. That’s built upon the original fight or flight concept,” McCarthy says. “Nine times out of 10, if not 99 times out of 100, it’s framed as a threat.”

McCarthy adds that reward is not money – reward is attractive, it’s positive, it’s opportunities – as opposed to threats which are everything people try to avoid. “The

Professional employee (not a manager)

All employees

more we make change threatening, the less likely we are to get anywhere. The minute the CEO gets up and says, ‘1,000 people are going to have to be made redundant’, you have lost all capability and trust in the organisation.”

As demonstrated by the Aon Hewitt research, leaders play a critical role. They can impact change positively or negatively by the way in which they talk about the change. “I can talk about possibilities or threats,” McCarthy says. “It can be about the stories I use. I can talk about how successful the last change was, as opposed to all the problems associated with the last change. It’s the notion of ‘referring’ in leadership – what I refer to, the stories I use – in order to illustrate points.”

HOW TO DO IT BETTER

Aon Hewitt’s research continues to show that behaviour change is only possible if people have the right understanding, emotions, ability and intent. An organisation must have all four of those elements in abundance across the organisation to accelerate the achievement of change outcomes.

Hickey outlines what employers should be doing to address each element: Understanding – employees need to have the right direction and business case of where the organisation is going, how change fits into business goals, and also what’s required of them through the change process.

Practical, specific and attainable goals right through the change process is critical.

Emotions – emotions are often the fuel of behaviour change, so with the right level of passion and excitement and identity around the change, intended outcomes are greatly accelerated. Having a clear direction and overcoming resistance to the change is critical.

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HR STRATEGY

change management Your journey will not be the same as someone else’s journey – your role is different, your motivations are different, your background is different – MARTIN GREENLEES Ability – people must have the ability to do what’s required of them through the change process. But it’s not just about skill and ability, it’s also about organisational capability and capacity to enable change. People must have a clear path forward.

Intent – employees need to have the intent and motivation to change. In many ways this is the final result of understanding emotion and ability – then people need to have the intention to do what is required of them, and also to stop doing certain things that are no longer required of them.

TAILORING THE JOURNEY

When asked if effective change management has some fundamental steps that need to be taken, regardless of the type of change, Martin Greenlees, CEO, Workstar, says the answer is almost yes and no.

“The answer at one level would be most definitely yes – the more strategically you think about a change, the more the steps are very much the same. But the answer is also no, they are actually very different. That’s one of the mistakes which sometimes happens with change – it all looks the same after a while – because at that top level they are the same,” he says.

The key, he adds, is how organisations break it down to outline clearly how this is going to change, for example, Mary the accountant’s work life, as the change initiative may be very different to the last change initiative conducted, which only impacted on the call centre operators. Possible end results should also be communicated at this level. While the executive may be excited by the potential impact on the bottom line, the call centre operators may be less enthused.

“Find a way to excite them,” Greenlees suggests. “You can do your job faster, or you won’t get as many people yelling at you. I would care about that. Yes, it also translates to better bottom line results but quite frankly, we don’t really care. But 45% fewer customer complaints 38

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a month? I’m happy about that, because I’m the poor person who must field those calls.”

Greenlees says one of the key contributors to change fatigue is overburdening people with too much change – when in fact, the only things that are changing for that individual are a couple of smaller things. “You need the big vision as well, and that’s important, but if you get the story down to these two little things, for what it means for Mary the accountant, that makes the story much less overwhelming, much less terrifying, must less wearying.”

Workstar provides ‘digital support’ for change initiatives, which is essentially an online tool which provides everything from communication forums to video stories to structured learning, assessment and feedback, to engage, equip and bring people on the journey.

“One of the key things we’ve got is the ability to tailor the journey specifically, so your journey will not be the same as someone else’s journey – your role is different, your motivations are different, your background is different. So we can engage with you in a different way to how we engage with the salesperson, or the accountant,” Greenlees says.

THE FUNDAMENTALS

Regardless of the change type, Hickey notes there are five fundamental principles that must be adhered to: 1. Starting the conversation. Initiate the change process by understanding the strategic intent and expected outcomes of the change. This is a conversation that must be had amongst business leaders.

2. Setting objectives and mobilising the core team around that. This is where an organisation will set change-specific objectives, set critical outcomes and measures that will then be tracked right the way through the change process.

3. Understanding the current position. This is where qualitative and quantitative data is used to assess the most impacted stakeholder groups from the change and assess gaps between current and future stages. An important consideration in this step is that organisations should be identifying the drivers that will have the biggest impact on achieving the outcomes of the change.

4. Implementation and execution of the plan. This requires a focus on the variety of change levers that are at the disposal of the organisation and include: leadership alignment; stakeholder management; ongoing measurement against change outcomes; managing capability and capacity of people to change; and aligning rewards and consequences.

5. Creating a continuous feedback loop. Continually assess progress against the change outcomes that were identified in step two and then course correct as required. Feedback sessions should be continuously conducted with the most impacted and influential stakeholders of the change process.

‘Major change initiatives are well managed and help us to deliver better performance’ 60

Positive perceptions

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Greenlees adds that prior to any change, it’s important to invite people along – he refers to it as the ‘engage’ phase, positioning it as the ‘reward’ or ‘threat’. “One of the things that fatigues people is that often change is done to them. That gets very tiring after a while. So engaging people – the old story about the cathedral builders – they can see themselves as ‘I’m shifting sand from A to B’, or we get them thinking about building a cathedral,” he says.

Another element of the ‘change being done to me’ negativity is providing the opportunity for people to ‘opt in’. People should be able to say, ‘that sounds fantastic, I do want to know more. How will it affect my job? How will I remain engaged? What am I going to have to do differently?’

“Ninety per cent of people will say yes; they won’t say, ‘please don’t tell me anything’. What they’ve done is personally step forward,” Greenlees says. “Straight away I’ve removed the change being done to me – they’ve said, ‘ok I’ll sign up, I want to be at least part of it and want to know what’s going on’.”

During the change it’s vital to provide people with the skills that they are going to need. “People will say, ‘I used to do A and now I need to do B, which is slightly different. Do I need training or support?’ Just because someone at executive level wants it to happen, people still need to know what that means. Again, that’s where that individual journey becomes so important,” Greenlees explains.

Longevity can also be a problem, particularly in high staff turnover sectors like call centres which can have 25% turnover. One year on, for example, a quarter of employees might not be around after the change started.

They have no sense of what it was or why it was such a great thing. They’ve lost that momentum.

How can people stay informed and supported? It’s not viable to run classroom training for six months, nor is it practical to have a team of consultants holding their hand

56%

40 30

33%

20

38%

38%

Professional employee (not a manager)

All employees

10 0

Senior management

Team leader/ supervisor

Source: Aon Hewitt

every single day. How can momentum be sustained?

One way may be milestone recognition – celebrating small wins along the way at regular intervals. Another may be to tell ‘success stories’. “Let real people tell real stories. What you don’t want is a ‘from the top down’ approach where the CEO says, ‘here are some good stories I want to share with you’. What you want is the person telling the story,” Greenlees says.

Technology can play a key role – digital videos, blogs, forums and social media. “We make sure we identify early champions who can say ‘I tried this thing and it’s pretty good’. They’ll write a 300-word blog about their experience, and take questions for a week. Then another person does it – it builds a sense of ‘this is a good thing and this is what we’re doing around here now’,” Greenlees says.

And while it can sometimes be impossible to put a definitive end date on a change – particularly in the case of cultural change – it’s important to celebrate results.

Greenlees suggests that, in addition to those positive stories, stats can reinforce success. “If you can come back and say we’re now doing X, and this is where we used to be, that’s fantastic. It helps bring laggards along, who suddenly start thinking, ‘ok, maybe I better get onboard’.”

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CHANGE MANAGEMENT

case study – USANA

Halting a stagnating culture HC asks David Mulham, Pacific Region vice president of global health supplements giant USANA, for his tips on navigating tricky culture change Human Capital: What was happening at USANA that sparked the need to change the culture?

David Mulham: I was fairly new to the company, which had grown significantly over the first eight years it was in Australia. I could see signs of it stagnating. There was also change at very senior levels in the US and I believe our staff felt a bit vulnerable as to what was happening.

That created a need for us to take action – my experience has been if you do nothing in that particular period of time, what happens is it just keeps getting worse.

HC: Did you have a clear idea of where you wanted the organisation to shift to?

DM: Totally. I’ve worked for a number of large companies and with some very great leaders of business, so it was very much about creating a great company environment .

We’ve got the number one brand in vitamins, and my belief is we must align everything with that. I wanted people to walk in the door and say, ‘it’s good to be here, I want to put some effort in here, I feel good about my job’.

It was creating that culture about being great at what we did and delivering to customers.

The ‘what’ and ‘why’ of the change was the starting point. It wasn’t just about why I felt it was important – it was about engaging employees. There must be transparency in your messaging. Sit down with people at all levels; so for me that was going to the warehouse,

Where we are now is there’s an acceptance about change and not a fear that change is going to be bad – DAVID MULHAM 40

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going into offices around the region. There were a couple of ways of achieving that top level result – we hadn’t set our sights on any clear goals or targets. Also for the staff – there wasn’t really anything for them to look forward to as individuals or as groups. We looked to change that.

HC: How did you ensure you had employee (and management) support throughout the process?

DM: It was continuous communication, also addressing people leaders who will engage with staff. It’s also making other people take responsibility for the outcome so it’s not just my project. We set up six different areas we wanted to look at internally, but for the staff it was vision and mission. We gave that to two managers, they then had a group of eight people and they took a draft of that and worked it through their various teams to come up with a final draft. The final outcome was to have a document that talks about being fantastic at what we do – and people are engaged with that. We talk about it when we have staff meetings; we reinforce that message until it becomes part of our culture.

HC: Where is USANA on this change journey now?

DM: There’s an acceptance about change and not a fear that change is going to be bad. When we have a meeting and someone gets up and says we’re thinking about going in this direction, there’s an openness to that, they don’t put the shutters down and say we don’t want to change.

HC: What would be your top tip for other business leaders and HR in undertaking significant change initiatives?

DM: You must have your leadership team onboard – it doesn’t mean you need to agree on everything, but if you don’t have that leadership onboard you will struggle. I had one of my key leaders leave because they didn’t see they could be part of the direction we were going. That’s a choice people can make.

People also love recognition – look for opportunities to reward people, make them feel good about being here. To get your group to embrace change can yield some amazing results. You get to know your people, to communicate with them, work with them, understand them.

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CHANGE MANAGEMENT

case study – bankwest

COMMUNICATE,

COMMUNICATE,

COMMUNICATE With Bankwest embarking on significant culture change, including HR department restructuring, Human Capital asked Gill Rees, CEO of HR, for her views on best practice in change management

Human Capital: Bankwest is changing the structure of its HR department. Can you outline how HR has operated to this point?

Gill Rees: At Bankwest we are focusing on creating an even better bank and in HR we are shifting our focus so we are a strategic partner to the business. The priorities we are focusing on are to: Develop exceptional people leaders – through targeted development aligned to our business needs.

Attract and build capability – through a change to an outsourced resourcing model, clearly defined career paths and development. I believe building from within is vital as well as hiring new recruits.

Differentiate on performance – through clear objectives for all, effective performance assessments and differentiated reward.

Build a highly engaged Bankwest team – we believe our future is interlinked with the communities we operate in and vice versa, and this is a central part of our people and business strategy.

HC: What will the end structure look like?

GR: The model will be familiar, with a shared service team providing the transactional people activity, Centres of Excellence providing expertise in reward, OD, resourcing and commercial business partners.

But there are significant points of difference at Bankwest HR:

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 The community team is part of the HR team because we believe it best supports our role in the communities that our colleagues live in and that we do business in.  We are small and we are building agility so we are able to move at a pace as the business requires it. In today’s changing world we cannot have a rigid operating model.

HC: What prompted the restructure?

GR: The financial services sector across the world has faced turbulent times over the last couple of years following the GFC, and while Australia fared well when compared to Europe, we’re not immune. In response to this, at Bankwest we’ve been focusing on creating an even better bank for customers, and we believe the way to achieve this is by creating an even better bank for our colleagues. Our people, from our stores to our Executive team, are dedicated to do the best for our customers and the communities we operate in. We believe it’s our values and our people that make Bankwest the success it is today and will continue to ensure our success in the future.

The HR team has a critical role to play in this and can add huge value to our employees, customers, investors and communities. At Bankwest, our people strategy is a cornerstone of our corporate strategy and in agreeing our people strategy, we recognised that we needed to change the HR department, and develop the people practices and HR team to ensure we are playing our part in Bankwest’s success.

Agreeing the outcomes was and is vital to our change; this is not just a structure change – GILL REES

HC: Was it difficult coming into a role amidst such change? How involved in the process are you from here on out?

GR: It was a challenging time to join Bankwest five months ago amidst the change, although transforming businesses has been a central part of my career over the last 25 years. I’ve led mergers and acquisitions, transformed resourcing, learning and HR functions for Lloyds Banking Group, the largest bank in the UK with 30 million customers and 120,000 employees.

I was involved in the planning at Bankwest before I arrived in Australia and I’m very active leading the HR changes – my role is to lead the change and to give my team the confidence and skills to make it happen. The change relies on the HR department providing the structure, strategy and efficient processes so we are organised and focused on the right things. We, in HR, are the architects of the change but the people leaders across the bank also play an important part in making the change happen – my role is to visibly lead the change across the bank.

HC: What change management steps is Bankwest taking?

GR: Firstly, we are clear on why we needed to change – to create an even better Bankwest for our customers.

We do this by putting the customer needs at the heart of our corporate strategy and agreeing to our business priorities for the next three years. This meant we needed to review our approach to our people strategy and be clear on what capabilities Bankwest needs in order to meet our customer needs and compete in an increasingly challenging external market.

Agreeing the outcomes was and is vital to our change; this is not just a structure change.

Secondly, in HR we needed to agree how we will deliver our people priorities and be clear on how we were going to make the change, from doing the basic people processes brilliantly to building the skills and knowledge of our HR team and our people leaders.

Thirdly, this change requires the collaboration of leaders, HR and colleagues from across the bank with communication, communication and more communication being the key.

Measuring colleague engagement is always central to any change that I have led in the past and remains central to the changes we are making at Bankwest – if you keep the customer and colleague at the heart of your planning, in my experience you are more likely to make the change a success for all.

HC: How do you minimise fallout?

GR: People manage change at different speeds and you can’t over-communicate during times of change.

Knowing the people in your team, what’s important to them, what’s going on in their lives outside of work and the pressures they may be facing all influence the way you lead.

HC: What are your measures of success?

GR: There are numerous measures but ultimately it’s measured by Bankwest’s success, our customer’s satisfaction, shareholder value and our colleague engagement. Along the way, we seek feedback from the business and have a number of people measures, from costs to talent moves.

I don’t think the job is ever done – the world is constantly changing, our customers are getting more discerning and we have to constantly review what we are doing and change where appropriate in order to remain successful.

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TALENT MANAGEMENT

smarter workforce

Joining the dots

proactive workforce management Your workforce is an asset – but do you have a strategy for your investment? Marc Havercroft provides best practice tips The core challenge for workforce management has always been finding, hiring, and keeping the right people for the job. Businesses have traditionally approached this mandate in a reactive manner, only seeking out talent when a pressing need emerges.

Often, this occurs without a clear understanding of what sort of talent they’re seeking, where to find it, and what factors contribute to its ongoing motivation.

With labour markets growing increasingly complex and competitive, this sort of ad hoc methodology can end up being a costly drain on the organisation’s current and future resources.

We need to start approaching HR issues proactively if we want to benefit from a smarter workforce. A proactive HR methodology focuses on building up workforce engagement at all three main stages of the talent management process: acquisition, learning and retention. Moreover, it treats the workforce as a critical asset in itself, instead of as an artificial agglomeration of different departments and units within the business.

Businesses are in a prime position to drive end-to-end engagement by leveraging the growing volume and granularity of workforce data in the market.

However, the main priority for HR professionals should be to develop comprehensive workforce strategies which align with their organisations’ overarching commercial plans. Doing so will dramatically boost their success in not only engaging the right talent, but delivering it to where (and when) the business needs it most.

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STICKING TO THE PLAN

The first and foremost step in building a smarter workforce is to make sure your organisation has a forward-thinking strategy. It sounds simple, but workforce strategy can often be overlooked by executives in favour of a focus on other areas like sales, marketing, and product innovation – all of which are crucial to business success, of course, but are also reliant on the organisation’s workforce to meet those goals. According to IBM’s 2012 CEO Study, 77% of CEOs from Australia and New Zealand see human capital as a key source of sustained economic value in their organisations – the highest of any one source.

In other words, workforce strategy must underpin broader business plans. HR leaders need to use their executive positioning to map their strategy to current and future commercial activity. Otherwise, businesses will find their broader plans hampered by an inability to support executives with the right talent at the right place and time. Refocusing the business on a new product innovation, for example, will demand rapid up-skilling and learning amongst existing employees, which in turn may necessitate new hires to bring in that additional expertise.

With a comprehensive workforce strategy mapped to overarching business plans, HR managers can proactively prepare for changes to their workforce, instead of being wrong-footed by demand from other parts of the business. Organisational data and predictive analytics can provide in-depth understanding of the business’ current

and future situations. It can also assist in identifying gaps in the business, as well as potential solutions to those gaps, such as addressing skills shortages by identifying where those skills exist in other parts of the organisation.

One example: A well-mapped workforce strategy was crucial to General Motors’ turnaround in the immediate aftermath of the GFC. The automaker’s decision to focus on new clean-fuel technologies in its cars was complemented by significant investment in learning and talent development around the necessary new manufacturing and technical processes. Working with IBM, General Motors ensured its workforce was capable and engaged with the company’s broader vision, resulting in a rapid and ongoing rebound in profits and employee retention alike.

INTERNAL AFFAIRS

Once the business has a clear workforce strategy, it can go about building the internal capabilities needed to deliver on the strategy’s outcomes. The rationale for these new units and structures should be firmly grounded in how they contribute to overarching business goals. The actions which they take – whether in acquisition, learning or retention – should be entirely informed by the broader workforce strategy and how it ties back into the success of the business.

Different internal structures will go about their work in different ways. Some may focus on improving the productivity of their talent, while others may be tasked with building more geographic and seasonal flexibility into workforce deployment. However, each internal structure should provide capabilities to engage talent at all stages of their time in the business – from first-contact and acquisition to training to career progression. IBM’s 2012 CEO Study found ethics (77%), collaboration (70%) and mission (70%) are the key focus of Australian and New Zealand CEOs in engaging employees – all of which must resonate with the workforce’s own values in order for success.

Workforce managers in all three areas can improve these levels of engagement by using employee data as a vast consolidated resource. Employee histories, productivity analytics, and professional networking tools all provide valuable sources of data which can be aggregated to better inform hiring and training decisions.

However, data alone is not enough for a smarter workforce: HR professionals must use it to ensure employees are getting the training, opportunities and culture which will help them reach their full potential.

One example: ANZ Bank’s learning unit (supplied by IBM) now extends across the entire Asia-Pacific region to ensure consistent customer service in every branch of every country. This learning unit supports ANZ’s broader goal of building a super-regional infrastructure for easier,

faster banking throughout Asia – a case of workforce strategy supporting the business plan. It also gives employees access to regular updates in their technical and service skills, along with expanded opportunities for career mobility and advancement throughout the bank’s Asia-Pacific locations.

WHY AM I HERE?

As mentioned before, engagement is critical to maximising workforce potential to meet business goals.

It’s also critical to the sustainability of workforce investment. A high attrition rate can multiply the costs of new hires up to tenfold; losing employees only six months after acquisition not only affects core business performance, but can also reduce the organisation’s willingness to make future talent acquisitions.

This calls for a twofold approach to workforce management: aim for high retention by building a strong internal culture; and start leveraging other workforce assets like project-based contractors and freelancers.

While retention is obviously where this approach is most needed, it also has implications for acquisition and training/learning, particularly when factoring in new workforce elements like growing volumes of contingent labour. Most of all, workforce managers need to listen to their employees’ needs, ambitions and values to make sure their talent is worth the investment.

The growing degree of communication and synthesis between different data systems means HR managers are able to compile far more accurate employee histories and records than ever before. Data can now reveal what sort of working arrangements will best suit your talent, and how to best leverage their unique combination of skills and motivations.

One example: American Airlines uses employee data to drive its retention and cultural policies at all points of the business. As part of an end-to-end IBM workforce solution, the airline has boosted retention in an industry well-known for its low margins and high competition for specialised talent like pilots and flight planners.

RIGHT PLACE, RIGHT TIME

A smarter workforce only becomes possible when businesses treat their workforce as an asset. Doing so inevitably leads to a more proactive HR strategy, which seeks to maximise that asset’s value in relation to broader commercial goals. It allows businesses to identify what talent they require and deploy it where and when it’s needed, rather than scrambling to keep up with other divisions’ tactics. And it leads to greater engagement with, and retention of, the talent underpinning the business. A smarter workforce benefits the employee, the business unit, and the entire organisation; used strategically, it can ensure longevity in any economic situation.

About the author Marc Havercroft is leader HRO strategy and solutions, IBM Growth Markets

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EVENT PARTNER

Following an in-depth research process to verify nominations and identify the most deserving in the industry, a record crowd of over 700 HR practitioners attended the industry’s night of nights to celebrate best practice and innovation in the profession. The black-tie event, hosted by popular television personality Shelley Craft, applauded the efforts of HR practitioners across the nation. See who won over the following pages

2Discover Australian HR Director of the Year Rose Clements, HR director Microsoft

Gareth Bennett – R&R Consulting

How does it feel to win?

How does it feel to have won this award this evening?

“It’s just sinking in actually – I really looked at the calibre of the people who were up for the award and I just never imagined it was going to be me. I just feel completely overwhelmed – it’s incredible and I’m very proud.”

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Lifetime Achievement Award

“Very honoured, because being recognised by your peers is fantastic, and I feel very humble because in that room and my colleagues I have in HR, there’s some fantastic achievements – so very humble… and very old!”

INDUSTRY EVENT AUSTRALIAN HR AWARDS 2012

winners revealed for HR accolades Australian HR Team of the Year

HR Partners Australian HR Champion (CEO)

Heritage Bank Accepting this award: Bob Hogarth, general manager human hesources How does it feel to win?

“It feels amazing and a real privilege. When we look around the room, and see all the wonderful teams and the wonderful talent, to win this award is a real acknowledgement of the great work this team has done so we’re really delighted.”

HR3 Australian HR Manager of the Year

HR3

Employee Management Solutions

Ron Pettit, Hatch Associates How does it feel to win?

“Fantastic. I guess having found out I was a finalist you sort of dismiss the possibility of actually winning, so to be here with a group of my colleagues and some of the leaders of the business, to share this with, it’s fantastic.”

Accumulate Employer of Choice (>1,000)

Chris Whitehead, Credit Union Australia How does it feel to have won this evening?

“I’m delighted for the organisation and delighted for my HR team. I’ve just been very lucky – I’ve got a group of incredibly dedicated people and I guess always as CEO a great group of people makes you look good. But really it’s all their hard work and their dedication and we’ve been doing some fantastic things.”

The Next Gen Australian HR Rising Star of the Year Jessie Hommelhoff, BHP Billiton Manganese What do you think has set you apart from your peers?

“It has been a very big year for our company [and] I think probably what sets us aside is just having an amazing team that gets on so well together. We’re very much aligned to the direction in which we’re heading, and can bounce ideas off of each other. I’m very lucky to have a very supportive bunch of direct reports and peers as well.”

Frontier Software Employer of Choice (<1,000) P&G Australia and New Zealand

Frucor Beverages Australia

Accepting this award: Emma Russ, talent specialist

Accepting this award: Jonathon Moss, CEO

What makes Procter & Gamble an employer of choice?

“I think it’s really a testament to our culture at P&G, which is really unique, and fosters a learning and development culture, and focuses on building from within.”

How does it feel to have won this evening?

“Fantastic – we know we do some pretty special things inside the business, and it’s always nice to get some external recognition of the things we feel every day.”

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Employer of Choice (public sector and NFP) Glen Eira City Council Accepting this award: Betsy Young, manager human resources

Ramsay Health Care Accepting this award: Carolyn Terry, national HR manager

You’ve won employer of choice – how does that feel?

“I think we’ve got a great HR team, I think we’ve got a fantastic partnership with the business and I think the fact that we work hand-in-hand with the operations arm of the business really sets us apart. There’s no us and them, we’re all in it together, and I think we’re very well accepted as a key part of the business and a core component of the success of the business into the future.”

“It feels absolutely fabulous; it’s an organisation that really cares about the people in its staff, and I think we really deserve it.”

POWER2MOTIVATE Best Employee Value Proposition

Hemisphere HR Best Recruitment Strategy Atlassian Accepting this award: Deepa Dhupelia, senior manager, talent acquisition campaigns

How does it feel to have won this evening?

Tell us a little about your recruitment strategy?

Human Capital Best Reward & Recognition Strategy Coates Hire Accepting this award: Phil Caris, executive general manager, human resources Tell me a little bit about your R&R strategy.

“It’s a multi-pronged strategy – we have a real desire to link performance to our pay structures, so whilst we have the normal base pays and the like, we have a very lucrative incentive strategy which is very much linked to people’s performance on the role, and their individual performance in meeting our company’s objectives.”

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What do you think has set you apart tonight?

MSD Accepting this award: Kristy Montague, senior human resources manager “Fantastic! Our team has put so much work into building a great culture at the company, and really building a value proposition that we think is really worthwhile and this just solidifies it for us.”

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Best HR Strategic Plan

“We already had staff coming locally and from the US, but there were a lot of strong technical developers in Europe that we were missing. We filled a bus with Australian swag, travelled around the major cities in Europe to talk to those developers about what it’s like to live and work in Australia, what the roles were, what they’d be doing.”

Employment Innovations Best Employer Branding Youi Insurance Accepting this award: Emma Millen, senior recruitment specialist What do you think sets your branding apart?

“Well, being a relatively new company, we’re just about to turn four in November, the employee branding has been all about how we attract passive and active jobseekers, and also how we engage our internal candidates, so we’ve done numerous things from advertising on buses to wearing different T-shirts – all different things and it’s been terrific.”

INDUSTRY EVENT AUSTRALIAN HR AWARDS 2012

winners revealed for HR accolades Lawler Partners Best Change Management Strategy

Best Workplace Diversity Strategy IBM Belinda Reynolds, workforce and diversity manager

TNT Australia Accepting this award: Noel Springall, general manager human resources How does it feel to have won this evening?

How does it feel to have won this evening?

“Fantastic! I think it’s well deserved I have to say. We’ve done a really good job in our strategy. Our HR director has done a fantastic job of influencing our executive team to contribute and support the strategy. The HR team has done a great job of implementing the strategy – and we’ve had a lot of really good support from line managers, depot managers, so it’s been a big effort and well deserved.”

“It’s an absolute thrill – I’m really surprised but I’m really fortunate because I’m accepting this award on behalf of all of IBM. There are so many people who work to contribute and to make this award possible, and that’s right from our inspirational CEO Andrew Stevens, through to our HR director Robert Orth, to our small but dedicated HR team and the wider HR team, and most importantly, the hundreds of IBM-ers who contribute.”

EmployeeConnect Best Use of Technology

Learning Seat Best Learning & Development Strategy Atlassian Accepting this award: Joris Luijke VP human resources

Cochlear Accepting this award: Carolyn Taylor, global learning solutions manager

How does it feel to have won this evening?

How does it feel to have won?

“It’s fantastic. We as a company invest a lot in innovation – whether it’s with our technology or with our people practices. We allow a lot of free time for people to actually stop and contemplate and try to explore new ideas. So we stop the company four times each year at least, where everyone stops their work on a Thursday and starts developing an innovative idea, and then the next Friday they present it.”

Peak Health Management Best Health & Wellbeing Strategy

“Fantastic. It’s a real recognition of the hard work the whole team has put in, and I think we work really hard to make sure our strategy is meeting the requirements of the business and really helping to build how people think about learning and hearing in the world.”

The Human Group Best CSR Strategy

Citi Australia Accepting this award: Joanne Allen – head of human resources Australia & New Zealand

Bupa Australia Accepting this award: Liz Still, national manager, corporate responsiblity & sustainability

How does it feel to have won?

How does it feel to have won this evening?

“We are just incredibly excited.

Typically you don’t put ‘bank’, ‘health’ and ‘wellbeing’ in the same sentence – at least not in a positive way. This is testament to the creativity and the passion that my team have brought to thinking about how to provide optimal wellness.”

“Oh it’s fantastic, a real honour considering the other talent we were up against, so we’re really thrilled to accept this prize.”

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PROFILE JULIA FARRANT

HR at Unilever

Beating a pioneering path The head of HR for a global FMCG talks to Iain Hopkins about employee health, being a female pioneer in a male-dominated industry, and how a grassroots graduate recruitment campaign is easing the war for talent The health and wellbeing of employees should be a prime consideration for any employer, given the amount of time employees spend at work or connected via 24/7 technology, and the clear and demonstrated links to productivity and bottom line results – yet it’s surprising how few corporate programs have integrated not just physical wellbeing but also mental wellbeing.

Unilever’s global health and wellbeing initiative – The Lamplighter Program – is a ‘new breed’ corporate health initiative. The individually tailored initiative covers off four core components – Recognition, Exercise, Nutrition, and Mental Resilience and is available to the company’s 1,800 employees working from office sites, factories and on the road.

The motivation behind the Lamplighter Program is to ensure Unilever employees are taking care of themselves and being exposed to a wide range of activities that they might not think about attending in their private lives.

“The program’s roots came from our mission, which is essentially to feel good, look good and get more out of life,” explains Julia Farrant, vice president of human resources at Unilever. “The Lamplighter Program offers employees access to psychological and nutritional assessments, as well assistance with navigating through today’s busy and stressful environment.”

Farrant concedes it’s “a very fine line” around how involved the employer should be in the health and wellbeing of employees. “My firm view is that individuals need to make their own choices, but I think sometimes there is a lack of information, or potentially awareness, especially if you think about some of the cultural elements.”

As an example, Farrant notes that Australian males are not renowned for looking after their health, and that the 50

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there is an increasing prevalence in Australia of mental health issues, such as stress, and their direct correlation to the workplace.

“Those sorts of things, where we equip them, are fantastic, but I don’t think we should be stepping in to actually take responsibility or accountability for the health of individuals. As an organisation, we’ve always worked on the premise that individuals are here by choice and therefore we’re here to help them.”

Therefore the Lamplighter Program is not mandatory, but the company provides access points so individuals can either decide they want to be part of it or not.

As with any corporate initiative rollout, Farrant and her team have aimed to equip line managers with the skills to help employees manage their careers and to make the right choices – and when she talks about ‘careers’, Farrant stresses it’s not always talk about careers at Unilever. “We realise sometimes it’s appropriate for people to get out and try other things. We also talk about long-term plans and what really fires people up. As a result, when we talk about motivators and individual development plans, we have equipped line managers to be able to hold those sorts of conversations. And if we see people aren’t coping, for whatever reason, then it’s around ensuring they are able to tap in and navigate them towards the support that’s there.”

In terms of ROI of the program, participants are given feedback around their own health metrics (blood pressure, etc), but Farrant says it can be difficult to use these stats as an indicator of success given the variable baseline everyone is operating from, and whether or not they pursue the initiative over an extended time. In real terms, the number of participants is important, as are indicators such as absenteeism rates. Since its

IN HER OWN WORDS...

Pulch Photography, pulchphotography.com

What are the biggest HR challenges facing your organisation in 2013 – and how are you planning to overcome these?

Like most manufacturers in this climate the big challenge is that it’s a new paradigm. It’s not going to revert back to the environment that we operated in before. As a result it requires us to work differently. Part of this is equipping our frontline people, our salespeople, with the right skills – professional skills which have perhaps been lacking in this market. We also need to continue our focus on innovation, which remains such an important proposition. But we need to be able to land it well, to leverage it well with the consumer and our employees.

So, the other major piece for me is around finetuning our EVP, and ensuring we’re delivering against it.

It’s one thing being aspirational but quite another being realistic about what can be delivered.

PROFILE JULIA FARRANT

HR Personal file: Julia Farrant Family: Two children, Ben, aged nine, and Alex, my daughter who’s seven. And we have a dog who very much thinks he’s human.

Favourite sports: I love all sorts and I really got into the Olympics, but for me gymnastics and swimming are the two I really enjoy.

Favourite movie or TV show: One movie that resonates with me is The Help – I love movies that have good characters and storylines and a bit of a social thread.

Best advice ever received: Stay true to yourself.

Self-described: Uncomplicated, passionate and driven to make a difference.

Hobbies: I love walking, but I’m also a big foodie, a chef by trade in my early years. I still enjoy cooking and eating and the hanging out with friends that goes with that.

First job and/or worst job: Worst job ever was when I was backpacking; having to go off and sell these terrible paintings around some of the industrial sites in Sydney – awful paintings of dogs playing poker and silly stuff like that. Having to go in and talk up these pictures – but I managed to sell a whole load of them!

If not in HR: I would be running my own restaurant.

implementation in July 2011, survey results indicate:  98% of participants found the activities of benefit  55% have been inspired to make a lifestyle change  78% of Health Risk Assessment respondents feel valued by Unilever  77% attendance rate from a 81% booking rate

TALENT CHALLENGES

The Lamplighter Program is just one bright spot in a career dotted with significant achievements. In addition to several HR-centric roles, over the last 20 years Farrant has held a number of commercial roles, which she believes had been “hugely beneficial” in her HR career.

“The theory always sounds great but when you hit the road, you realise that a lot of the things you’re trying to drive down just aren’t resonating and you can understand why: it’s not aligned in the right way, it’s not delivered in the right way. Today it’s very much about business partnering – so the expectation is that you will actually be driving the agenda on the number of business links that matter, rather than just servicing.”

Assisting the Unilever HR team of 32 is an outsource arrangement with Accenture, who look after back-office functions including recruitment. HR business partners sit within the business, while another team handles specialty areas including L&D, rem & ben, payroll and super.

Farrant notes the major HR focus currently is around talent and bolstering Aust-NZ talent with talent from Southeast Asia – the goal being to reduce reliance on expats from Europe and to build local capabilities. Central to this is Unilever’s graduate program, which includes opportunities for job rotations. Candidates are also sourced directly from Aust-NZ universities and then relocated around the region.

Over time, Farrant believes the DNA of the business has changed so that HR-led initiatives – such as what happens to talent once it’s in the business – are now actually driving business success substantially.

She adds that it’s a mistake to underestimate the need to source and nurture great talent. “I wonder sometimes if [for HR practitioners] it’s lost its sexiness – it’s like ‘really, do we have to do that?’. But it’s the most important thing.

People really are the discriminating factor.”

PIONEERING SPIRIT

In terms of personal career highlights, it’s tough to go past the fact that Farrant has been, in many ways, an industry pioneer. Working in an environment where there has been a scarcity of senior females, Farrant has forged a career that she hopes will benefit those who come later.

“Realistically, what is the one thing that will have the most resonance long term? I think it’s about showing

people it can be done and helping people along the way. At Unilever we have a strong focus on diversity from the top. In the broader Australian market we still don’t have enough senior females in the top jobs across Australian businesses. I’ve been a sole VP on a Board/Executive for the last eight years, happily now being joined by a female colleague – it has at times been a lonely place.”

Farrant hopes that several initiatives she’s driven, including networking groups and mentoring programs, will enable males and females to compete equally, and to bring different mindsets to the table so that ultimately better outcomes are achieved.

“Whilst females still have primary care responsibilities, we need to be smarter around how we do things.

How do we ensure females aren’t penalised for stepping out for a period of time? I think people are beginning to understand it’s not about hitting a number – the tokenism of having just one person doesn’t change anything – you need to have enough of the criticality of different views so people get heard, and to enable that difference to cut to the core.”

More industry profiles at:

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SIGN OFF

the lighter side written by Stephanie Zillman

NEW INTERVIEW QUESTION: HOW DO YOU TAKE YOUR EGGS? Top excuses of 2012: dead grandmother exhumed for police investigation

ANGER ROOM: ADD IT TO YOUR PERKS LIST TODAY

Ever get so frustrated at work you want to smash something? Try installing an anger room – the only rules are no BYO machetes or chainsaws.

Texan woman Donna Alexander is making her living by offering the chance to do just that. The small-business owner provides baseball bats, golf clubs, crowbars and even mannequin limbs at her strip mall establishment, the so-called ‘Anger Room’.

Inside the Anger Room are all sorts of inanimate objects on which customers can inflict their repressed rage. From TVs and computer monitors to office furniture – there’s plenty to swing a bat at.

Customers must wear hard hats and protective goggles, and pay $25 for the five-minute “I Need a Break” session. Longer options include the 15-minute “Lash Out” ($45), or the 25-minute “Total Demolition” ($75).

“Most people only last between two and three minutes on average. We have some regulars who can last five to 15 minutes,” Alexander told Bloomberg.

When a customer requests 25 minutes, and actually uses all of it, she considers it a warning sign. “That’s when it’s time to suggest they look into real therapy,” she said.

Opened for less than a year, the Anger Room sees about 240 customers a month, and the numbers are rising to the point where Alexander has decided to expand to include another two rooms, around the size of an office. She’s also been approached about franchising around the world.

Her clients include “everything from company executives and CEOs to bachelor and bachelorette parties. We get birthdays, team-building retreats, and corporate mixers,” she said.

Not all sick days are spent under piles of blankets with a thermometer and maximum-strength medicine.

Drunk, heartbroken and police investigations: would you have accepted these excuses for sick day absences?

1

Employee’s sobriety tool wouldn’t allow the car to start

2

Employee forgot he had been hired for the job

3

Employee said her dog was having a nervous breakdown

4

Employee’s dead grandmother was being exhumed for a police investigation

5

Employee’s toe was stuck in a faucet

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Employee said a bird bit her

THINK TWICE BEFORE ACCEPTING THAT BONUS

Who would ever have thought there could be a downside to receiving some extra cashola?

Research has found recipients have an increased risk of dying in the week they receive a monetary bonus.

More than just a speculative theory – statistics collated by researchers at the University of Notre Dame and the University of Maryland showed that in the week that US tax rebate cheques arrived, the mortality rate among 25–64 year olds increased by 2.5%.

What’s more, following the receipt of a dividend payout to citizens of Alaska, the state’s mortality rate increased by a whopping 13%.

So what’s causing this morbid phenomenon? The answer seems to be in simply living it up. The higher levels of activity such as driving and recreation after money rolls in are the likely causes of the effect, the authors said.

Employee was upset after watching “The Hunger Games”

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Employee got sick from reading too much

9

Employee was suffering from a broken heart

Want some insight into a candidate’s personality and potential? Ask whether they prefer fried or scrambled.

In a complete turn-around from typical personality profiles, researchers have found that a person’s favourite way of eating eggs can predict their personality type and job suitability.

Using maths and data mining, scientists have uncovered a statistical relationship between a person’s character, lifestyle and social class and how they like their eggs – boiled, fried, scrambled or as an omelette.

Turning your next interview into a breakfast meeting has never been more important.

The study found that boiled egg-eaters have a tendency to be careless and impulsive, while fried egg-eaters are most likely to be younger and male and most frequently found among the skilled working class.

In addition, scrambled egg-eaters are more likely to be in managerial or senior-level jobs, while omelette-eaters are like to be tidy.

For recruiters, it may be a good idea to take the egg test with a pinch of salt as you certainly do not want any discrimination lawsuits – it is sure to leave a stink.

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Employee’s hair turned orange from dyeing her hair at home *Source: Careerbuilder.com

* The study was commissioned by the British Egg Industry Council and carried out by Mindlab International HCAMAG.COM 55