Human Resources Director 11.09 by Key Media

2013 SALARY & JOBS GUIDE

HUMAN RESOURCES DIRECTOR HCAMAG.COM ISSUE 11.09

EXCLUSIVE ONE-ON-ONE WITH SIR RICHARD BRANSON CULTURE DECIMATION SURVIVING DOWNSIZING SAME BUT DIFFERENT ENGAGING CONTINGENT WORKERS

ISBN 978-0-646-90956-1

FROM START-UP TO GLOBAL PLAYER LinkedIn’s HR success story

780646 909561

HUMAN RESOURCES DIRECTOR: THE NEW NAME FOR HC MAGAZINE

EDITOR’S LETTER / HUMAN RESOURCES DIRECTOR

IT’S A NEW ERA Astute readers may have noticed the ‘celebrating 10 years’ banner on our issues this year. Human Capital has indeed been in the game for a decade. In that time the HR profession has changed. Of all the functions in modern businesses, it could be argued that HR has undergone the most significant upheaval, and fortunately most of that has been for the better. HR is now contributing at executive level, and is accepted on executive teams as a valued contributor. To reflect these changes, HC has been renamed HR Director. This is more than a rebrand. Not only does this name change reflect the increasing influence of HR at the top level, but it indicates that the editorial content held within corresponds to the executive role of HR practitioners. I often hear from HR directors that their role requires them to be business people first and HR people second. This shift requires knowledge and understanding of all aspects of a business. It’s true that any business plan or objective stands or falls on the quality of the people behind it, and this is also a driving force behind HR’s new status. A CEO today does not call on the HR director to talk solely about people matters – although naturally this must be an area of subject expertise – but rather they will be asked for their input on any number of broader business issues. From this issue onwards you can expect to see profiles of global senior HR executives and their local counterparts, best practice articles from international thought-leaders and business schools, holistic special reports on the issues that matter most to HR practitioners, and more. We hope you enjoy the new look – and, just so you know, the HC name will live on at our website, hcamag.com.

COPY & FEATURES EDITOR Iain Hopkins JOURNALIST Cameron Edmond PRODUCTION EDITORS Roslyn Meredith, Moira Daniels

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

CONTRIBUTORS The Next Step, Kenexa, DDI Australia

SALES & MARKETING MARKETING EXECUTIVE Anna Farah 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

Iain Hopkins, editor, HRD

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SEPTEMBER 2013 | 1

CONTENTS / HUMAN RESOURCES DIRECTOR

ANNUAL REVIEW

HR Salary & Jobs Guide If the supply and demand equation holds true, what’s in store for HR jobs and their accompanying remuneration in the next 12 months?

Executive insight: Virgin territory Like him or loathe him, Sir Richard Branson is one of the most successful businessmen in the world. HRD probes the Virgin mastermind about the secrets to his success

Surviving the aftermath Culture change is tough to master – yet it becomes even more complicated when restructure or redundancies are required. Iain Hopkins looks at how damage can be minimised and how those left behind can be rallied

Up, across, sideways: The career lattice Employers are slowly starting to realise the value of both leadership and non-leadership roles in their talent pool, and are providing opportunities for both to advance their careers

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REGULARS 04 | In brief: News 08 | In brief: News analysis 14 | Profile: Yasu Sato, LinkedIn

FRONTLINE INTELLIGENCE 10 | In Step — HR career experts 12 | HR consulting

CHECK OUT THE HRD ARCHIVES ONLINE: hcamag.com

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SEPTEMBER 2013 | 3

IN BRIEF / NEWS

EMPLOYEE BENEFITS

GENDER BIAS SKEWS FLEXIBLE WORK OPTIONS Men are more likely to be approved for flexible hours than women, a new study shows. Although stigmas still surround male care-givers, a joint study from Yale, Harvard and the University of Texas-Austin has revealed employers favour giving flexi-time to men over women. This comes from bias associating high-ranking men’s flexible schedules as a means to advance their careers. Women were less likely to be granted the same flexible hours, regardless of their reasons for applying. The researchers attributed the denial of flexibility to a lack of trust from managers, who viewed women requesting flexible time to advance their careers as either lying, or wasting their time as their future family obligations would prevent advancement anyway. Conversely, a study by the 100% Project found only 39% of Australian men request work-life balance in their career, mainly due to fear of their career being negatively impacted. Seventy-nine per cent of Australian men who felt they did not contribute enough to their family stated they were unsatisfied with life as a whole. The study also found more Australian women than men (51% vs 39%) requested better work-life balance.

WHAT AUSTRALIAN EMPLOYERS LOOK FOR*

57%

Willing to work extra hours

75% of workers access social media at least once during the day, and 60% access it multiple times. This is despite many organisations implementing bans on social media*

IDEAL WORKER PROFILE

76%

THE MONTH IN NUMBERS

73%

Ambition

Unbroken employment record

complaints have been received by The Victorian Equal Opportunity Commission workers over the past five years alleging ‘looks-based’ discrimination based on weight, tattoos, hair style or body odour

37% Aged 18-50

66%

Without children

Twice as many employers believe men are more desirable employees than women

increase in recorded incidents of aggressive and abusive behaviour towards Department of Health Services staff in 2012 – up 37%. Almost 55% of customer aggression cases at DHS result in a psychological injury

33%

Source: *SilkRoad Technology % of employers naming trait Source: Kronos

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WORKPLACE LAW UPDATE RECRUITMENT

EXECUTIVE SEARCH IN DECLINE? Finding a replacement for Microsoft’s much lauded CEO Steve Ballmer will be a nice little earner for executive search firm Heidrick & Struggles (H&S). But such tasty assignments would seem to be fewer and further between in a sector that is battling to redefine itself. H&S’s revenue fell from US$616m in 2008 to US$444m in 2012, a 28% decline. In addition, the firm’s shares are now 70% lower than its peak in 2007. The executive search industry is experiencing tough market conditions. The average fee per search increased 8.9% between Q1 2012 and Q1 2013, offsetting the period’s 14.1% drop in new searches, the Association of Executive Search Consultants reported. This has resulted in a bittersweet average revenue increase of 2.1% for the sector. As they get more savvy in their use of online tools like LinkedIn to find executive candidates, some organisations are foregoing the use of recruitment firms entirely. At the same time, internal recruiters are increasingly being used to fill senior positions. Time Warner’s Maggie Rubey Lynch told The Economist that the in-house search group, of which she is director, generates better hires in less time than recruitment firms. Since the department’s establishment in 2003, it has saved the organisation US$200m. All of which means that, to be successful, executive search firms have to up the ante in terms of service delivery. “If all you’re doing is putting a bum on a seat and you’re surprised your client list is starting to erode, then clearly you haven’t adapted and innovated,” says Jason Johnson, managing partner of Johnson Executive Search. “It’s a great way to bring both art and science to the delivery of what our services now are – you should be able to add serious value in terms of what clients could otherwise do.”

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● The Sex Discrimination Amendment (Sexual Orientation, Gender Identity and Intersex Status) Act 2013 came into effect in August, offering protection against workplace discrimination on the basis of sexual orientation, gender identity and intersex status. These amendments also extend the definition of marital status to ‘marital or relationship status’, which encompasses de facto same-sex couples. ● Fair Work Act (FWA) amendments, introducing a crackdown on workplace bullying, have been passed by parliament. However, the start date has been moved from 1 July 2013 to 1 January 2014. ● A sales assistant at Legibook, who began making complaints about hostility, violence and rudeness from her boss in 2003, has been awarded close to $600,000 in a civil action hearing by The Supreme Court. The Court found the woman, Wendy Swan, developed severe anxiety and depression due to her treatment, and is not likely to work again.

SEPTEMBER 2013 | 5

IN BRIEF / NEWS

INTERNATIONAL NEWS US - Weeding out discrimination Illinois has joined other US states including Arizona, Connecticut, Rhode Island, Delaware and Maine in the push to incorporate employee rights into medical marijuana laws. The majority of these amended laws now include employment-related provisions, such as prohibiting employers from discriminating against or penalising individuals because they are qualified/registered to receive medical marijuana. Employers are not required, however, to permit the smoking of cannabis on their property and can still run initiatives such as ‘zero-tolerance’ drug-free policies.

Germany - Softer floors, less sick leave Rising healthcare costs and increased employer contributions are seeing German organisations focus more closely on maintaining the health of their workforce. Traditionally, German companies would terminate sick employees, but skill shortages and an ageing workforce mean this is no longer viable. BMW, for example, has redesigned its physical workspaces to keep older workers healthy. Initiatives have included softer flooring, adjustable worktables and a simple exercise regime. Sick leave has dropped from 7% to 2%.

Japan - Disabled workers pull in business As part of a growing trend, Japanese cafés are the latest to tap into a previously underused corner of the talent pool – those with disabilities – and the effect on business has been encouraging. Both customers and staff at ‘Sign with Me’ café in central Tokyo communicate in sign language or by running a finger over the menu. Another example is the Shibuya Park Café, which employs 10 mentally disabled employees, who interact with customers, cook and clean. Employment of workers with disabilities by the Japanese private-sector reached over 380,000 by 2012.

China - Nepotism knocks? A survey has revealed nearly 84% of Chinese workers believe the young people around them would rather use family connections than work hard to get ahead. Only 10% of the 3,809 respondents rated ‘hard work’ as the key to becoming successful, but 36% regretted not having a ‘good daddy’ to turn to when problems occur. The survey results say more about competition and corruption in the labour market than the appetite of the Chinese for hard work, however the Beijing Bureau of Statistics claims workers in the capital work 47.2 hours per week, on average, and a job-hunting website found 40% of respondents worked extra hours voluntarily.

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HR STRATEGY

HR INFLUENCING THE C-SUITE: STATUS REPORT The last two years has seen more than a 45% increase in HR’s influence on the C-suite, while the profession’s operating costs have also escalated, a study from the US has revealed. HR operating costs have increased by 36%, and activities budgets have risen by 33%. Nearly half (46%) of HR professionals anticipate their organisation’s HR operating budgets will increase over the next two years. Additionally, 40% of HR professionals expect their activities budgets to increase in the next two years. The findings come from XPertHR’s HR Staffing, Costs and Structure Benchmarks 2013 Report, surveying over 150 private and public sector companies that employ over 200,000 people, and encompassing 1,978 HR staff. “We found that HR professionals overall are optimistic about the future, especially when it comes to increased budgets and spending,” Peggy Carter-Ward, head of content at XpertHR, said. How has HR’s influence changed over the past two years?

55%

40% Same

Increased

5% Decreased The survey collected data on both the operating costs budget (covering staff salaries and the money required simply to have an HR department) and the HR activities budget (its expenditures on recruitment, training and other activities for the organisation as a whole. The report found the overall improvements in HR operations and recognition from CEOs about HR’s worth have meant HR professionals are now key advisors for strategic planning in most companies. “HR’s influence in the workplace is also increasing, which is an indicator that HR practitioners will be playing an even more crucial leadership role in their organisations’ success,” Carter-Ward added. Key stats Median HR operating costs per member of HR staff

Median HR activities budget per employee All

$1,250

$100,000

Private sector services $863

Manufacturing and production

$2,183

Public sector

$1,784

1-249 employees

$1,783

250-999 employees 1,000+ employees $783

$1,485

Median HR activities budget per employee

$1,250

Median ratio of HR staff to employees

1:100 Typical ratio of senior to junior HR staff

1:1.5 HCAMAG.COM

HUMAN RESOURCES DIRECTOR

DIVERSITY INITIATIVES HAMPERED BY LACK OF FOCUS A collaborative research effort by Korn/Ferry International, Futurestep and Diversity Council Australia (DCA) uncovered 41% of organisations are still at the ‘foundation stage’ of their diversity programs. Most senior level managers are only ‘somewhat involved’ or ‘not very involved’ in the diversity and inclusion strategies of their organisations, despite 81% of respondents feeling their involvement is critical to success. This lack of awareness has resulted in many diversity teams consisting of as little as two

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members, with 62% of diversity managers combining diversity with other responsibilities, such as talent and leadership development or HR. The most common reporting relationship for a diversity manager is to report to an HRD (33%) or head of talent & culture (21%). One-fifth report directly to the CEO. HR’s ties to the diversity function remain strong. The results found 67% of diversity professionals come from an HR background, with 85% having university qualifications. Most (60%) who enter a diversity role do so with little to no

experience in that field, with 40% of diversity professionals having less than three years’ experience. The CEO of Diversity Council Australia, Nareen Young, said the survey findings are one explanation of why progress in some areas of diversity has been so poor, despite legislation. “I urge business leaders to take another look at their diversity function to ensure they have the skills, resources and strategic engagement they need to achieve change and harness the benefits of diversity,” Young said.

Diversity professionals profiled

70%

85%

DIVERSITY

85%

are female

are degree qualified or higher

67%

60%

have career experience in human resources

had no or limited experience in diversity before their current role

SEPTEMBER 2013 | 7

NEWS ANALYSIS / TALENT DEVELOPMENT

HR PRIORITIES

Australian employers are focusing on talent development for all employees, yet global trends indicate the priority should be developing more capable and specialised leaders “The war to develop talent is like a pendulum swinging from recruitment to development,” Pip Dexter, consulting human capital partner at Deloitte, said. The statement holds weight: high Gen Y (those born 1980-2000) turnover rates are forcing organisations to not only recruit more employees, but also put more emphasis on developing and retaining those they have. This is perhaps why in a recent study by Deloitte 72% of Australian business and talent leaders cited the ‘war to develop talent’ as their number one priority. This points to the immediate need for Australian businesses to build organisational capability in terms of people and processes. Indeed, 47% of Australian respondents to the Deloitte survey also named ‘sustaining employee engagement/morale’ as a pressing talent concern.

LEADERSHIP - THE GLOBAL FOCUS AREA PRIORITIES FOR BUSINESS AND TALENT LEADERS GLOBAL RANK

PRIORITY

AUSTRALIAN RANK

Leadership next

Talent development

Organisational acceleration

Transforming HR to meet new business priorities

How boards are influencing HR

Globally, Deloitte’s report indicates ‘leadership next’ is the top priority, yet it sits at fourth on the Australian list. ‘Leadership next’ means grooming leaders for a new era. Businesses today face an unprecedented variety of challenges, from harvesting profits in mature economies with flat or declining growth, to establishing toeholds in

8 | SEPTEMBER 2013

emerging markets, to creating the next wave of disruptive innovation – and everything in between. Each of these unique challenges requires a unique kind of leader. For example, capitalising on hyper-growth in emerging markets requires leaders who embrace chaos and have a high tolerance for risk and failure. Deloitte report author Geoff Helt suggested some businesses are pursuing a deliberate strategy of ‘fast failure’ to rocket up the learning curve and accelerate their success. “Leaders in this kind of environment must be willing to shun conventional thinking about which markets are worth targeting,” he said. “They should also be obsessively committed to operational efficiency and execution to squeeze profits from even the smallest opportunities.” Unilever, for example, has a major initiative to develop 500 global leaders through intensive leadership development programs designed to position them for expanded roles. According to CEO Paul Polman, “Unilever’s Leadership Development Programme prepares our future leaders for an increasingly volatile and uncertain world where the only true differentiation is the quality of leadership.” Dexter added that developing new leaders is critical for Australian organisations. They need to use analytics to plan the future of the workplace; they need to tap into new networks; leadership decisions need to be escalated to the board room; and our leaders need to be challenged to think differently as new performance management frameworks are created that better support people. Here are specific strategies that may help: ● Get rid of the cookie cutter. Strive to create a pool of leaders who have different skills, styles, and experiences – and then work hard to assign people to leadership positions that fit their unique capabilities. Proctor & Gamble, for

THE WAR TO DEVELOP TALENT – KEY DRIVERS ● Talent gaps: High

Gen Y turnover rates and an ageing workforce have left organisations struggling to find the right skillsets to fill key positions. ● Escalating turnover costs: With recruitment taking longer and costing more, organisations need to develop talent from within as opposed to hiring it. ● A desire for lifelong development: Employees consider opportunities to develop as increasingly important, so organisations need to ramp up their talent development programs to cut down turnover rates. ● The demand for engaging work: Workers are increasingly demanding work which they find meaningful, so employers must respond by, for example, providing learning opportunities.

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example, analyses each individual leader’s capabilities and targeted leadership role, and then maps out a unique path for reaching the destination. ● Focus on resilience and adaptability. To thrive in an unpredictable environment, select and cultivate leaders who can readily adapt to a future that is constantly in motion. Support them with leadership training, tools, and coaching that can help them get up to speed as quickly and effectively as possible. Also, be willing to change leaders if necessary. ● Be disruptive. Today, many organisations create change ahead of the curve, even if it threatens to make their existing products and business models obsolete. This ‘creative destruction’ requires a special kind of leadership. For example, many of Amazon’s biggest innovations initially appeared to be money-losing distractions. However, as CEO Jeff Bezos explained, Amazon is “willing to be misunderstood for long periods of time”.

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AUSTRALIA’S HR AND TALENT PROGRAMS KEEPING PACE WITH REST OF WORLD Australian percentage

24%

Underperforming Getting by

Adequate

6% 6%

36%

World class

28%

World class in some areas

Global percentage

24%

Underperforming

24%

of respondents globally reported they are underperforming, indicating there is plenty of room for improvement in HR departments around the world

38%

World class

14%

Getting by

Adequate

21%

World class in some areas

SEPTEMBER 2013 | 9

FRONTLINE INTELLIGENCE / HR CAREER MANAGEMENT Craig Mason is the Managing Director of The Next Step, a specialist consulting practice in the human resources market. For more information, call (02) 8256 2500 or email cmason@thenextstep.com.au. Website: www.thenextstep.com.au

Leadership roles in HR just got bigger A recent HR benchmarking report in the UK has found that HR’s influence in the workplace and with the C-suite has increased more than 50% over a relatively short period of time. Great news! The report found that changes in HR leadership as well as improvements in HR systems had led to greater recognition from the top and to the function playing an increased role as a strategic partner. More good news! Whilst the report was from the UK, anecdotally similar improvements in the HR function’s stature are being experienced locally. Lacking formal research that Australian HR leaders and their functions are being held in higher esteem, the best evidence is actual outcomes. This month we look at the trend that is seeing HR leaders being asked to step up and take on expanded remits.

THE TREND FOR HR LEADERSHIP ROLES TO GET BIGGER

Whilst each organisation and its situation is different, some HR executives are being asked to take on functions on top of the traditional HR remit. This is a great indicator that in these businesses the sentiment about the HR function is very positive and ‘on the up’! There are excellent examples of this trend in some of Australia’s leading ASXlisted organisations, including Leighton Holdings, Mirvac, Stockland and GrainCorp. These businesses have HR leaders who manage much broader remits than the straight HR function.

HR LEADERS WITH EXPANDED REMITS

Dharma Chandran joined the Leighton Group in October 2011 (initially on an interim basis) before being appointed Chief Human Resources Officer in January 2012. Just recently, Dharma has taken on the role of Chief HR and Corporate Services Officer. In this current role, Dharma has responsibility for the legal and internal communications in addition to the human resources functions for the Group company.

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Leighton operates across Australia-Pacific, Asia, India, the Middle East and southern Africa, with a workforce of over 56,000 and a total revenue of $23,127m. Another example of an HR leader whose remit has expanded is Brad Moore of Mirvac. Mirvac is a leading integrated real estate group listed on the ASX, with a market capitalisation of approx. $5.1bn and revenues of approx. $700m. Brad joined Mirvac in January 2010 as Group General Manager Human Resources. In January this year, he was appointed to the role of Group Executive, Services. In this role, he overseas human resources, information technology, procurement, health, safety and environment, sustainability, project management office and group facilities. Further examples of HR leaders with expanded remits are Heather Miles of GrainCorp and Michael Rosmarin of Stockland. Michael joined Stockland in July 2010 as Executive General Manager, Human Resources. In 2012, he took on the position of Group Executive, Strategy and Human Resources, and he was recently promoted into his current role of Chief Operating Officer. Heather’s remit was expanded from day one when she was appointed General Manager Corporate Services in November 2010 for the ASX-listed GrainCorp. In her role, Heather is responsible for human resources, company risk, insurance, legal, company secretarial and sustainability.

WHAT’S INFLUENCING THIS TREND?

It’s an interesting question to look at why this trend is playing out and the background to it. Clearly, all four of the executives have demonstrated their capability to drive outcomes that are not just HR related. But how? Whilst each situation is different, in the four examples cited there is one clear observable common factor. Each of these leaders has significant career experience

outside of HR. Does this make a difference? An emphatic yes is the view of Dharma and Brad. Dharma is very much of the view that HR professionals who take on roles and challenges outside of HR for a period of time provide themselves with rich, educational and valuable experience. This experience often serves them well in their future careers, giving them the confidence and capability to manage other functions as well as HR. So how does an HR professional get line experience? In Brad’s view, one of the keys is having a sponsor. A sponsor might be an MD or C-suite executive who has seen demonstrated commercial delivery in the HR function and, on the back of this, offers an opportunity to move into a line role. In Brad’s view, it’s crucial to have that sponsorship. Other strategies to obtain line experience include volunteering for cross-functional projects, undertaking formal study in business management, and working with a mentor.

WHAT’S THE REALITY?

Whilst it makes sense that line experience will offer great career options, the vast majority in the HR profession are very reluctant to step outside the function as a career growth strategy. In the most recent HR Viewpoint Survey managed by The Next Step, 3,000 HR professionals voiced their views. The survey found less than 5% of HR professionals were attracted to move into a line role and thought such a move was their best professional development strategy. Mind snapping!

THE FINAL WORD

It’s great to see that in some leading Australian organisations HR leaders are contributing at such a demonstrable level that they are being asked to take on broader remits. It’s a great story for HR and those following behind these leaders in the profession, but what’s the key message? Take every opportunity to obtain experience outside of the HR function. This simple strategy seems to have worked for these HR leaders.

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MARKET MOVES / RADAR

Recent HR Market Moves QBE recently appointed Greg Kiddle as Group Head of Rewards and Performance. Greg has held a number of senior executive level roles within the remuneration and benefits field and has a strong background within the financial services sector. Greg joins QBE from Perpetual, where he was General Manager, Performance and Rewards. The Fred Hollows Foundation has recently secured Simone Sietsma as its new Director, People and Organisational Development. Moving across from Vodafone, Simone brings a wealth of experience in Leadership, Talent and OD. She will be playing a key leadership role in ensuring the Foundation has the HR and organisational capability to deliver on their goals. Brett Porter recently joined Visy Industries to undertake a Queensland-based role in HR and HSE management. Brett brings to the role almost 10 years’ experience in HSE, and seven years as an HSE leader with a career forged in heavy industry, manufacturing and aviation. As an industry mentor, Brett is continuing his professional development through a Graduate Diploma in OHS&E. Lee Smith recently joined Dyno Nobel as their Head of Health, Safety & Environment in APAC. Lee brings a broad knowledge of risk management and experience in managing operational teams. Lee has over 20 years’ experience in mining and heavy industry, and as an HSE leader has been instrumental in driving performance improvement and managing risk. Telstra has welcomed Ingrid Jenkins as General Manager, Human Resources (Technology). Ingrid brings with her a wealth of generalist HR experience within the APAC region and has a strong background in the telecommunications sector, having previously been HR Director at Alcatel-Lucent.

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FIIG Securities has appointed Jane Mackney as Head of HR, Training and Communication. The new role sees Jane return to Australia from Hong Kong, where she was Head of Human Resources, Hong Kong, China and Singapore, at ING Investment Management. Jane will work closely with the CEO, building an HR strategy to underpin the strong business growth plans. Mari Ruiz joins Dun & Bradstreet, the leading market credit information and debt management services organisation, as the Director of People & Culture. Mari brings a wealth of human resources experience gained in the financial services sector to the role; recently she was the General Manager, People and Talent, at TAL Direct. CSL Limited, the global manufacturing biotherapy organisation, has appointed Louise Angell as VP Remuneration and Benefits. Louise has led the strategic remuneration agenda for a number of global corporates, including Shell and BHP Billiton, and was most recently with Orica. Sarah Mills joins GroupOn, the world’s leading collective buying platform, as Head of Human Resources. She will play a key role in setting the strategy across ANZ to ensure operational efficiency and support the future direction of the business. Sarah was previously HR Operations Manager at Toyota Financial Services.

Buffy Bowles recently joined Brisbane Marketing as Manager, People & Culture. Buffy has returned from London where she was working as Senior HRBP at Christie’s and was previously Head of HR at Eurosport TV, supporting their European and Asian operations. Buffy is a strong generalist who enjoys meaningful change and working closely with the leadership team. StarTrack Express has made two key learning and development specialist appointments. Toby Naylor joins as the Commercial Learning and Development Manager after an outstanding career supporting development across Coates Hire. Tim Horman was appointed as the Operations Learning and Development Manager. Most recently, Tim was the Leadership Development Manager at Bunnings.

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

SEPTEMBER 2013 | 11

FRONTLINE INTELLIGENCE / HR CONSULTING

PAY PRACTICES MATTER, BIG-TIME!

Andrew Brock, client services director, Kenexa, an IBM Company, 60 City Road, Southgate, Melbourne. Phone 132 426 or email anbrock@au1.ibm.com.

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How much does pay really matter to us in our jobs? People go to work for two broad reasons. Firstly, they do it to provide for themselves and their families, not only to put food on the table and a roof over their heads but also to educate their children and have experiences like travel and leisure. The second reason is that work has become the way we define ourselves, how we contribute to the communities in which we live, and how we impact the world around us. So how does the pay cheque factor into this? A recent study by Dr Jack Wiley from the High Performance Institute, by Kenexa, an IBM company, gave some of the best answers I have seen to date. Over many years of research, Dr Wiley found that employees want three things from their organisational leaders: to be Inspired (32%), Respected (31%), and Rewarded (37%). Under each of these macro categories sit three specific subfactors. The three under Rewarded are: Appropriate and fair compensation (21%), Career growth (10%), and Job security (6%). Perhaps not surprisingly, getting paid fairly for the work you do is very important, and is in fact the largest factor of all nine subfactors. However, what is it about pay that is so important? The epiphany is that the actual pay level only accounts for 10% of our opinion of pay fairness! What’s really important to our perception of fair pay is how it is related to performance (36%), that we know how to maximise it (28%), and we understand how it is determined (26%). See Figure 1. This is fantastic news for all managers and leaders. It’s common to see a deflated and defeated manager mumble, “I can’t help it if my team feels underpaid”. This evidence now puts a solution in all of their hands: be more open and transparent about pay practices. The benefits are exponential as employees feel more appreciated and engaged, without any actual pay rise. Start communicating candidly to your team about your pay practices: 1. Explain how performance is measured, what great performance looks like and how it is rewarded.

FIGURE 1: RELATIVE IMPACT OF FOUR INFLUENCERS ON FAIR PAY Actual pay level

10%

Understand how pay is determined

Pay is related to performance

36%

26%

Know how to maximise compensation

28%

This not only relates pay to performance but also sets out the triggers to maximise reward. If this conversation still can’t be had because performance is not measured, or because reward is not differentiated based on performance, then there is a separate issue altogether. 2. Discuss how pay is determined. Without information on how pay packages are created, employees will make their own conclusions. Additional information from the compensation team might be needed, but as managers we should seek that out and openly discuss it with our teams. 3. Share the compensation philosophy. This is organisationally determined so may not be within the remit of the manager to change, but sharing it gives employees even more information to calibrate their perceptions. For example, the philosophy might be to pay at the 50th percentile of market pay but differentiate on variable compensation by paying at the 75th percentile. So, pay is extremely important. Our pay cheque allows us to provide for ourselves and our families. It helps us feel that our contributions matter. Although fair pay is the biggest ask we have of our organisational leaders, the actual amount has the smallest impact on our perceptions of fairness. Knowing how our pay is determined, how it relates to performance, and how it can be maximised increases the perception that our pay is fair for the work we do, and this is incredibly motivating and fulfilling. For more information about WorkTrends™, visit www.khpi.com.

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SEPTEMBER 2013 | 13

COVER / LINKEDIN

“What gave me goosebumps was being given a blank sheet of paper. No instructions from anyone. I had to stand on my own feet and seek out every opportunity” Yasu Sato

14 | SEPTEMBER 2013

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HUMAN RESOURCES DIRECTOR

GLOBAL TRAVELLER

After working with some of the most innovative global companies, including GE and UBS, Yasu Sato found himself in one of the most ubiquitous rapid-growth companies around: LinkedIn. He talks to Iain Hopkins Just over two years ago, looking for a fresh challenge and a change in career direction, Yasu Sato did what just about every professional does these days: he logged onto his LinkedIn profile. On his homepage a job ad caught his attention. “I clicked on it and looked at the description. I literally fell off the chair – I thought, wow, this is really me,” he recalls. The targeted, specific ad created the momentum that led to him joining LinkedIn. It also provided a valuable lesson for Sato about the value of data. “Later on I learned this is the power of data insights – there are algorithms built behind these advertisements that provide relevant information to the right party, to the right candidate. I felt it was personalised to me. It was another turning point, and told me that we – as HR professionals – need to be attuned to data and what it can bring to business.”

ROAD TO HR Sato’s first inkling of a career in HR came about in high school. After spending his formative years in Japan, his high school offered a one-year exchange program to the US. The father in the American family he stayed with had the misfortune of losing his job. Talking about possible careers with him one day, Sato expressed, understandably at that age, some uncertainty for his own future path. It was suggested he should consider HR; being multi-disciplinary, the host

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father mentioned, it contains elements from a broad range of specialist areas. “At the age of 16, to have that kind of message from somebody who had gone through the tough experience of being laid off – that stuck in my mind for a long time. When I went to university in Canada I decided to major in industrial/labour management relations. That’s how my introduction to the HR world came about,” Sato says.

A GLOBAL CAREER Skip forward a few years, and Sato can list on his CV HR roles at General Electric (GE) and GE Capital, as well as UBS. He holds a Certified Six Sigma Green Belt from GE and is truly the definition of a global professional, with work experience in Ireland, Japan, Singapore, Thailand and the US, and projects in Hong Kong, Hungary, Indonesia, Japan, Korea, Mexico, Philippines, Poland and Taiwan. Sato says he’s taken best practice elements from each workplace and each project on which he’s worked, especially from GE. He says the learning opportunities were everywhere in the company, and this, in turn, laid the foundations for his career as an HR professional. “I directly benefitted from the leadership and management philosophy that emerged from GE,” he says. The formidable shadow of former CEO, Jack Welch, still lingers at GE, and Sato adds that Welch’s words of leadership wisdom are still

WHAT’S BEEN THE BIGGEST HR CONCERN REGARDING LINKEDIN’S RAPID GROWTH?

“It’s probably not a concern as such but more an opportunity, and that is to ensure we maintain a high quality of hiring. That’s critical. Without that raw material, or if you get the wrong type of raw material, it’s difficult to change. If you get it right, it’s one of the strongest assets any company can have.”

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COVER / LINKEDIN

HOW DO YOU SEE THE HR FUNCTION EVOLVING IN THE FUTURE?

PERSONAL FILE: YASU SATO FAMILY

I’m in a serious relationship but no kids yet. FAVOURITE SPORTS

I love swimming and rollerblading. Something I’d like to learn is aikido, a martial art. BEST ADVICE EVER RECEIVED

It’s from a past colleague – “It is ok to lose a battle as long as you win the war”. SELF-DESCRIBED

I’ve used a psychology trick. I asked myself what my three favourite animals are: the reason you like the first one is that it represents your desire, what you want to be; the second represents how you want to be perceived by others; the third is who you really are. So for me, in that sequence I would chose elephant as my favourite animal. The second is tiger, and then bird. Elephants are very calm but also very strong – the qualities I’d like to possess. The tiger is very strategic and independent – I would like to be perceived like that. As

16 | SEPTEMBER 2013

for the bird, my true self, they are free, intuitive and perceptive. HOBBIES

Travelling, especially to places that might not be as civilised as Singapore. MOST UNUSUAL TRAVEL EXPERIENCE

I was stranded at the airport in Moscow in the late 1990s, along with hundreds of passengers. It was a frenzy as hundreds were fighting to get a room in a transit hotel, but there were less than 10 rooms available. Amidst the chaos, I saw a hotel receptionist. I went up and said ‘they are busy, but I am free’. I was promptly handed a key to one of the precious few remaining rooms. IF NOT IN HR

Psychiatry is a profession I’d like to pursue but knowing myself I lack insight into anything even remotely related to science, so it’s probably not realistic. So a realistic one would be an elephant rider in Laos during the daytime and then at night owning my own bar and being a sommelier – surrounded by Australian wines.

“I think HR can borrow some tools from marketing. It comes down to two things. Firstly, VOC – voice of customers. That can be internal stakeholders, candidates, managers, external interest parties, and so on. In particular, to have the EQ to correctly interpret what stakeholders may leave unsaid – that’s something I believe HR professionals will require. Secondly, VOD – voice of data. We’re now surrounded by so much data. How is that relevant to HR? How can HR use the data at their fingertips to make more informed decisions, to highlight possible implications, and build the road ahead?”

embedded and felt throughout the organisation. “That’s certainly the benchmark other companies aspire to. Even at LinkedIn, although it’s a very different company in terms of scale and being a young start-up, we’ve taken bits of that philosophy.” Sato’s own experience at GE involved extensive formal and informal learning opportunities, ranging from classroom learning and formalised leadership training. He was fortunate enough to be chosen to join the GE HR Leadership program, a two-year intensive program which involved rotations through different assignments in different businesses under the GE umbrella. At UBS Wealth Management, where Sato worked as director and deputy head of HR, one of his major take-aways was how to work in and benefit from a client-centric organisation. “Anticipating client needs, whether internal or external, was something that became even more imprinted in me,” he says. “When I was at UBS, our HR function played several key roles, from recruiting the best talent to advising the business on succession plans so that ultimately, we can ensure the client experience remains positive and uninterrupted.” From all his experiences, Sato has tried to use what he refers to as “the PIE model”. The P is performance, the I is image, the E is exposure. “I’ve utilised the PIE model to determine where I can focus and where I can build credibility as an HR professional, ensuring I deliver on performance, manage perceptions, and have the right amount of exposure to ensure the business is moving and growing.”

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WHAT’S THE BIGGEST CHALLENGE YOU HAVE FACED IN YOUR PROFESSIONAL CAREER?

HR AT LINKEDIN As director of HR for Asia-Pacific at LinkedIn, Sato oversees all HR operations, including a team of 30 and employee base of over 500. To put that in perspective, it’s eight-fold growth in the space of two years. The company follows a business partner model, with dedicated Centres of Excellence (comp & ben, HR operations, talent acquisition, etc) working in support. “Given the type of growth LinkedIn is currently undergoing, it’s important to focus on the HR business partner capability to equip the leaders and the people managers to harness the growth for the business,” Sato says. Two years ago, the Asia-Pacific region was the ‘new kid’ on the block for LinkedIn. In some ways Sato could borrow strategies and policies from other regions where LinkedIn was more established – but ultimately it was a Greenfields operation for Sato, setting up HR from scratch. He loved it. “What gave me goose bumps, and really excited me, was being given a blank sheet of paper. No instructions from anyone. I had to stand on my own feet and seek out every opportunity. It was certainly the turning point in my career, coming from the well established companies to a pure start-up environment.” Being one of the earliest senior hires in the region, Sato took a ground-up approach to building the employer brand of the company. Every candidate, every person encountered, was informed about the company and its background. Sato says that telling this story accurately required him to learn quickly about the business. Employer branding is multi-faceted, he adds. The strong consumer and client awareness about LinkedIn’s value proposition did help to bolster the employer brand but there is also a disciplined process in place to target, reach out and engage potential talent pools with a compelling

“To take an intelligent risk and step out of my comfort zone – to go from established, familiar companies and take the leap of faith to join a start-up company like LinkedIn. In an established company, it doesn’t really matter which company, but any established presence, one person can be just a number. In a start-up environment every hire makes such a huge difference – that’s a key lesson I’ve learnt.”

proposition. “This EVP offers talents the opportunity to transform how businesses and professionals work,” Sato says. Does LinkedIn use LinkedIn as a recruitment tool? “Not surprisingly, we eat in our own restaurant,” Sato says. “We leverage tools available via LinkedIn, such as Company Page and Recruiter to brand ourselves in creative ways to reach the right audience.”

NEXT PLAY: ONWARDS & UPWARDS How does Sato sum up the culture at LinkedIn? He says the concept of ‘next play’, frequently cited by LinkedIn’s CEO, is all-pervading. Next play comes from a basketball coach from Duke University. In basketball, like most things in life, there are some days where you win and others where you lose. Winning in one game will not necessarily mean you win the next game. It’s important to celebrate, but then move on and concentrate on the next thing, the ‘next play’. By the same token if you lose a game don’t dwell over it too much – learn the lesson why you lost and then move on and focus on the next one. “We used this next play concept when we as a company worked through an IPO process in 2011. I could see the focus and intensity the employees put into that continuing in other areas. There’s always an eye on what’s coming next,” Sato says. “That’s something I believe differentiates us from other companies.”

YASU SATO CAREER TIMELINE Qualifications Master of Philosophy, Development Studies, University of Cambridge ● Bachelor of Arts, Industrial Relations, McGill University ●

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1998–2008 GE/GE Capital – HR leader ● GE Money Singapore – head of HR ● GE Capital Asia – regional director of ●

HR operations (Thailand) ● GE Capital – C&B senior specialist/HR generalist (Japan) ● GE Capital – C&B senior specialist/HR generalist (Japan)

2008–2011 ● UBS Wealth

Management – director and deputy head of HR

2011–present ● LinkedIn

– APAC regional head and director of HR

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ANNUAL REVIEW / SALARY & JOBS GUIDE

WHAT ARE YOU WORTH? If the supply and demand equation holds true, what’s in store for HR jobs and their accompanying remuneration in the next 12 months? In 2012, observers of the HR profession may have baulked at the revelation of the earning power of US-based Daniel E Walker, chief talent officer at JC Penney. Walker, who resigned in April this year, had an annual salary of US$145,833, with a bonus of US$8m. Factoring in stock awards and other benefits, his total hit US$20.2m. Walker didn’t get such a pay-cheque from sitting around – he held management responsibilities for a total of 159,000 employees in the embattled retail sector. Regardless, Walker’s pay-cheque sits at more than US$15m above the next highest-ranking HR professional. The highest paid Australian HR practitioner (that HRD can find) is Karen Wood of BHP Billiton with $4,685,690. Those figures may be ‘pie in the sky’ dreaming for most HR practitioners, yet it’s heartening to see these figures associated with the profession.

18 | SEPTEMBER 2013

STATE OF THE HR JOB MARKET Realistically, for the average HR practitioner, how is the HR job market faring, and what’s happening with remuneration in 2013? The experts HRD spoke to indicate the job market is faring reasonably well in an unpredictable and changing market. One clear trend is the changing mix of permanent as opposed to contract opportunities. “We’ve definitely seen an up-tick in the use of short and medium term contractors being used to meet the HR staffing needs of business here in Australia over the last three months and we anticipate this will continue into next year,” says David Owens of specialty HR recruiter HR Partners. “There’s a lot more try before you buy,” confirms Chris Grant, director, Michael Page Human Resources and Legal. “There’s a definite strategy by

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HUMAN RESOURCES DIRECTOR

GLOBAL HIGH ROLLERS Germany

$9,661,550

$1,465,860

India

$4,314,070

Tracey Robbins, VP HR, Intercontinental Hotels Group

Horst Neumann, HR chief, Volkswagen Ag

Anupam Anand, director personnel, Hindustan Copper

$663,900

$3,981,170

$12,039,550

Claire Balmforth, operations director – UK Carpetright

Margaret Suckale, IR director, BASF SE

Ronald C Sequeira, executive director of HR, GlaxoSmithKline Pharmaceuticals

$312,060

Lucy Adams, director of HR, BBC Academy and International Communications

$22,350,830* Daniel E Walker chief talent officer JC Penney

$5,608,780*

Benito Cachinero-Sanchez Snr VP, HR, DuPont

Switzerland

South Africa

Australia

$4,682,050

$470,040

$4,685,690

Gary Steel, head of human resources, ABB

Pumeza Bam, HRD, EOH Holdings Limited

Karen Wood president of people and public affairs, BHP Billiton

$427,090

$3,362,000

Juba JA Mashaba, group human resources director, Aveng Limited

$5,337,990*

Martha A Burger Snr VP, HR & corporate resources

Hugo Bague group executive, people & organisation, Rio Tinto

$1,645,800

Michaela J Healy, group executive of people, communications & governance, NAB

All figures are A$ for fiscal year 2012 Sources: investing.businessweek.com/research/stocks except * from list compiled by US-based HRE

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ANNUAL REVIEW / SALARY & JOBS GUIDE

HR professionals to get people into their business under the radar, knowing that solid professionals can do a good job for them, and once they’ve done a good job, they’ve demonstrated some subject matter expertise in any number of given areas, the management team buys into them.” Grant adds that, in hindsight, 2012 was a “pretty good year” and while it’s not to say 2013 isn’t good, “it’s been a pretty flat market for the last 12–18 months”.

ROLES IN DEMAND As always, there are clearly defined trends in terms of the job roles in demand. Interestingly, Michael Page figures indicate that 40% of the year-to-date job market has consisted of HR generalist roles. Specialty roles have formed a smaller part of the market – the exceptions being L&D (17%), and OHS (14.5%). With companies operating leaner and the expectation that people do more, not less, the high number of generalist roles is unsurprising. “There has been a lot of focus on redistribution of roles and tasks,” says Grant. “If, for example, you’re not investing as much in employer relations or you’ve ratified your collective agreement, you may not need to concentrate on that for a while. You want a jack of all trades; HR generalists are the way to go,” he says. In terms of L&D, many companies did not invest a great deal into L&D and particularly OD initiatives last year and have likely experienced some general staff turnover in the meantime. Yet HR professionals know that most attraction and retention strategies are premised on three things: salary, professional development and opportunity. The vast majority of companies, if they gave a salary increase at all, only offered CPI. When combined with cuts to professional development, work starts being viewed as a job rather than a career, and employees are more likely to move. “I think principally the focus on L&D has been to retain people – and it’s the easiest lever of the three to pull,” Grant confirms. The strong demand for OHS professionals, meanwhile, is likely a carry-over from last year, when resources companies were investing heavily in OHS. When running lean, one critical area to

20 | SEPTEMBER 2013

HOT ROLES HR generalists – Strong candidates with good employee relations skills are sought, particularly in blue-collar industries. Employers are looking for candidates with strong performance management skills and award knowledge.

HOT

HR coordinators – Candidates are sought for temporary roles to support HR teams in busy periods, primarily with recruitment and employment contracts.

HOT

HR advisors – Professional services firms are looking for these candidates, yet there is a shortage of available talent.

HOT

Technical writers, instructional design and e-learning – These specialist L&D professionals are sought for contract roles to assist companies with particular projects or address an identified learning need in the business.

HOT

HR/payroll skills – There’s a trend of some organisations combining HR and payroll positions in order to save costs.

HOT

IR experts – This is not an area that many HR professionals are drawn to, and consequently there is a shortage of suitable candidates for the available roles.

HOT

WHS/OHS consultants and managers – Strong WHS/OHS professionals are always in demand given the growing focus on company culture and wellness.

HOT

Change managers – With the arrival of a new financial year, employers are putting clear plans in place for their workforce, including cultural transformation, new operating models and key strategic human initiatives. There has also been movement in the market, and as a result demand exists for those with change management and workforce development experience.

HOT

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HUMAN RESOURCES DIRECTOR

SALARY COMPARISONS FOR PERMANENT ROLES Role

HOT

Robert Walters

Hays

Michael Page

HR Partners

2012 HRD median

2013 HRD media

% change

HR director (large employer)

300,000

285,000

175,000+

325,000+

266,700

271,300

▲1.7%

HR manager (large employer)

200,000

175,000~

150,000

185,000

176,500

177,500

▲0.6%

HR business partner

110,000

135,000

125,000

155,000

124,700

131,300

▲5.3%

Senior HR advisor/consultant

85,000

110,000^

102,500

100,000

99,200

▼0.8%

HR officer/advisor

85,000

85,000~~

87,500

65,000

75,000

80,600

▲7.5%

HR coordinator/administrator

55,000

60,000

65,000

57,500

60,700

59,400

▼2.1%

L&D head

220,000

230,000

220,000

225,000

▲2.3%

L&D manager

140,000

147,500

135,000

150,000+

140,500

143,100

▲1.9%

L&D specialist

95,000

80,000

100,000

90,000

91,700

▲1.9%

L&D coordinator

65,000

66,000

65,000

▼1.5%

Instructional designer

130,000

92,500

135,000

118,000

119,200

▲1.0%

Rem&ben head

200,000

285,000

155,000

240,000

219,000

220,000

▲0.5%

Rem&ben consultant/specialist

100,000

112,500

140,000

111,200

113,100

▲1.7%

145,000

105,000

108,500

125,000

▲15.2%

HOT

Payroll manager

HOT

IR/ER manager

140,000

135,000

175,000

170,000

147,300

155,000

▲5.2%

HOT

IR/ER specialist

90,000

102,500

90,000

115,000

98,500

99,400

▲0.9%

Recruitment manager/head of talent

130,000

145,000

150,000

155,000+

142,300

145,000

▲1.9%

Recruitment specialist/officer

85,000

85,500

90,000

85,000

91,000

86,400

▼5.1%

190,000

170,000

150,000

180,000+

153,800

172,500

▲12.2%

HOT

WHS/OHS head/manager

HOT

WHS/OHS consultant

90,000

115,00

85,000

125,000

99,200

103,800

▲4.6%

WHS/OHS coordinator

60,000

90,000

62,500

60,000

70,800

▲18%

OD manager

140,000

150,000

160,000

150,000

OD specialist

110,000

105,000

107,500

106,700

▼0.7%

Injury/RTW manager

100,000

92,500

100,000

96,300

▼3.7%

Change manager

180,000

135,000

180,000

165,000

▼8.3%

HR graduate

50,000

49,500

50,800

49,800

▼0.4%

HRIS manager

165,000

HRIS specialist

85,000

95,000

90,000

Average

125,280

127,760

▲2.0%

HOT

Notes: Hays: Figures are the median from a lower and upper range (eg $160-170K); all figures are Sydney-based; all salaries exclude superannuation Robert Walters: Figures are for Sydney permanent roles, taken from the median of a lower and upper range; figures are basic salaries inclusive of superannuation, but exclusive of benefits/bonuses unless otherwise specified ~taken from salary figure for ‘national HR manager’; otherwise ‘HR manager’ figure is $145,000 ^5+ years’ exp ~~ HR advisor with 1-4 years’ exp Michael Page: Figures are the median from a lower and upper range (eg $160-170K); salaries indicated are based on annual basic salary, including superannuation at 9%, excluding bonus/incentive schemes; figures are for NSW and apply for large organisations only (defined as having a turnover of more than $100m) HR Partners: Figures are a median of indicative base remuneration ranges (eg 250-400K), produced after reviewing data from three states: NSW, VIC and QLD HCAMAG.COM

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ANNUAL REVIEW / SALARY & JOBS GUIDE

WHAT WILL LIKELY IMPACT SALARY LEVELS IN THE NEXT 12 MONTHS?* Domestic economic conditions

73%

Global economic conditions

48%

Competition with other companies

40%

Other

13%

Not sure

2% *More than one option could be selected

HOW DO YOU RATE YOUR CURRENT HIRING ACTIVITY COMPARED TO 12 MONTHS AGO? 8%

Stronger Slightly stronger

22%

Steady

44%

Slightly weaker

12%

Weaker

14%

cover off – because of the reputational, operational and business risk components – is OHS. Typically specialists in this area are required – a generalist won’t do, particularly in blue collar environments. “Unions won’t stand for it; they want a dedicated OHS representative,” Grant says. With many EBAs expiring in 2014, Hays anticipates the demand for ER/IR specialists will rise in the later part of the year. At the top end of the profession, HR director level, there are clear parallels with 2009 in that there is relative strength in the senior market. “My view is that no matter how the general market is performing there is a regular rate of turnover in the GM of HR or head of HR role. This seems to be driven by a wide number of factors which may not always be the same factors as the less senior HR recruitment market,” Owens says.

INDUSTRY SECTOR UPDATE

WILL THE SKILLS SHORTAGE PLACE UPWARDS PRESSURE ON HR SALARIES?

NO 19%

YES 45%

36% YES

at the rate of inflation

22 | SEPTEMBER 2013

more than inflation

The gloss has gone off the resources and mining sector, and Australia is shifting away from a twospeed economy to a system of micro-economies that are creating pockets of employment opportunities – even in the most challenged sectors. “Demand is not evident in every function in every location, but there are pockets of specific skill shortages,” says Lisa Morris, senior regional director of Hays Human Resources. “Employers are replacing departing staff and making selective staff investments in roles that can add immediate value to their business.” Industry sectors showing strongest demand for HR professionals include IT and IT&T. Michael Page also reports strong demand within the retail sector, due in large part to new international retailers entering the Australian market. A high number of HR job opportunities were also available in the digital area, which is rapidly expanding in line with changing consumer preferences and the growing popularity of online shopping.

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HUMAN RESOURCES DIRECTOR

“No matter how the general market is performing there is a regular rate of turnover in the GM of HR or head of HR role” David Owens, HR Partners

The Hays 2013 Salary Guide also notes a strong candidate market exists in the public sector, which is most notably impacting the market in Canberra. “We’ve seen many cases of a high quality candidate taking a voluntary redundancy and then making themselves available for lower level positions, which is driving salaries up to the top of the available salary band,” says Morris.

GLOBAL WORKERS There remains a steady stream of high calibre HR professionals returning to work in the Australian market due to slow market conditions in other areas of the world. Many people still believe the Australian market is holding relatively strong. Yet even though they are returning to Australia, it doesn’t necessarily mean there are roles here to go into. “I’m seeing some fantastic candidates come back, saying, ‘I’m here, I’ve got some great experience’ but there are limited roles,” Grant says. Pay is just one element in the attraction of talent. When comparing pay to other parts of the world,

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elements like cost of living, CPI etc must be taken into account to get the ‘apples for apples’ comparison against Australia. “When we do take these into account, Sydney comes out as the fourth highest paying major city in the world, behind Geneva, Zurich and Oslo,” says Steven Paola, senior consultant at Hay Group. He adds that when attracting foreign talent, especially at senior levels, Australia is competitive in the reward landscape; however, organisations would also be using other lures as well. It’s also not surprising to learn that, where there is an opportunity to do so, there is a merging of geographical functions. That is, it might be AsiaPac regional responsibilities, or increased interstate responsibilities. “There have been instances of people being promoted but not necessarily getting an increase in salary,” Grant says. “Or people asked to take on more work, especially the services context, working for a small financial services company or a law firm. You might have to take on OHS alongside the other roles you’ve been doing.”

Did you know?

A Princeton study found that workers’ happiness is only positively affected by higher incomes up to US$75,000. No matter how much more is earned after this level, no greater degree of happiness is reported.

24 | SEPTEMBER 2013

HR SALARY INCREASES OVER NEXT 12 MONTHS All my employees will receive the same percentage increase

17% All my employees will receive an increase, but it will vary according to performance

64% Only my best-performing employees will receive an increase

16% No one in my team will receive an increase

AVERAGE HR SALARY INCREASES 0-2%

15%

3-5%

78%

6-8%

9-11%

REM AND BENEFITS The Hay Group Australian Salary Movement Index report indicates employees can expect a 3.5% increase across all industries. HR salaries as a whole over a number of years have been in and around the national average – this year they sit 1.4% above the national average. When assessing the actual pay difference by each subfunction, compensation & benefits roles generally are the highest paid HR role from junior to senior levels, says Paola of Hay Group. When drilling down by level, he says the other notable difference occurs when comparing the Total Pay (including incentives) of senior management HR roles to other senior management roles – the package drops below the national average by a few percentage points, indicating that the target incentive and payouts are below that of other senior management roles. Other surprises in this year’s Hay Group report include just how quickly pay increases have fallen in the resources sector. This time last year the pay movement in the resources sector was 6.4% and a year on is now 4.8% with forecasts over the next 12 months nearing 4%. This is no doubt a reflection of the slowing pace of capital expenditure and falling commodity prices. “The gap between pay movements between the resources and general markets is the closest we’ve seen since 2006; however, we don’t expect the actual pay difference between the resources and other sectors to be any different to what has been the case due to the high pay awarded to staff in these sectors for a long

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HUMAN RESOURCES DIRECTOR

AVERAGE HR BONUS AS % OF GROSS SALARY

BASIS FOR HR BONUSES OVER NEXT 12 MONTHS Combination of all

48% Individual performance

Percentage

40 30

36%

23%

35%

Company performance

16%

20 Other

18%

10%

6% 0

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1-5%

6-10%

11-15% 16-20% 21-30% 31-40%

Team performance

SEPTEMBER 2013 | 25

ANNUAL REVIEW / SALARY & JOBS GUIDE

Did you know? The average salary for a male HR manager is currently $13,433 more than that of a female manager. At the current rate of convergence women in HR face a projected 107-year wait until their take-home pay is equal to that of male colleagues. This makes HR the sector with the longest wait until the pay gap equalises. Source: XpertHR and the UK-based Chartered Management Institute

26 | SEPTEMBER 2013

period of time,” Paola says. The second surprise was the increase in actual pay difference in WA – Perth and Regional WA – compared to other locations in the last 12 months. These two locations increased 3+ percentage points mainly due to incentives being paid closer to target levels for employees in these locations. Regardless of sector or geographic location, over the past 12 months Michael Page reports only companies that have performed well financially have awarded salary increases based on CPI. Companies tend to only reward high performers with base salary increases. “People are still saying individual performance takes up 23% of principal reasons why people are paid bonuses. Sixteen per cent say it’s about company performance. Then you’ve got 48% saying it’s a combination – and yes that’s true but probably out of that 48% the key hurdle or gateway will be company performance, before individual performance will be looked at,” says Grant. When talking about incentives, Paola says all levels, from operations to executive, did not reach their target in terms of payout with the average gap across all work levels being 4.1%. Incentives, however, are still being used within the marketplace as a vehicle for achieving better performance but the payout rates have remained steady over the past couple of years. There is a high rate of bonus payments being made available to HR professionals, usually in the range of 10–30%. “This element is much more common once you become a senior specialist or a people manager or take on the responsibility for delivery of HR strategy or HR business plan,” Owens says. Likewise, short-term incentives (annually based) are far more common than longer term versions except at HR director level when the HR leader is more likely to be a member of the executive leadership team, “a peer group that would more

likely have a greater mix of reward options and variable pay available and expectations of performance over a longer time frame”, Owens says. In terms of benefits, it’s no surprise to see mobile phones top the list of benefits offered to HR professionals – anything that can be positioned as a benefit which has the side-effect of 24/7 contactability and the possibility of increasing productivity will always be popular.

BENEFITS OFFERED TO HR EMPLOYEES* Mobile phones

78%

Parking

59%

Personal laptop

52%

Company car

47%

Income protection insurance

33%

Higher superannuation contribution

27%

Healthcare / health insurance

18%

Other 12% Travel pass 10% 0

100

*More than one option could be selected

Whether it’s positioned as a ‘benefit’ or just part of every-day work, most companies are now keen to support work-life balance. Michael Page research suggests 86% of employers list flexible working arrangements as being critical. Flexible work arrangements such as work from home or shorter working weeks can be leveraged by employers quite easily and are therefore more palatable for senior management to offer.

WHAT MATTERS MOST? When it comes to HR and their remuneration, what matters most? Experience? Scope and scale of work? Owens believes that relevant experience and a

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proven track record of success in key areas that are most important to the recruiting organisation are the key elements driving job offers and therefore remuneration conversations. “I could dress this story up a hundred different ways but this is what we’re seeing: COOs and CEOs want and expect people who have knowledge of their sector or who have worked in a business of the same size and complexity and delivered great results meeting challenges currently being experienced by the recruiting organisation,” he says.

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“When we take [cost of living etc] into account, Sydney comes out as the fourth highest paying major city in the world, behind Geneva, Zurich and Oslo” Steven Paola, Hay Group

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ANNUAL REVIEW / SALARY & JOBS GUIDE

KEY REASONS HR EMPLOYEES ARE LIKELY TO LEAVE Improve salary

23%

Gain more seniority

12%

Broaden experience/ opportunity to learn

38%

Achieve better work-life balance

Better training and support

Overseas opportunities

Other

15%

JOBS FORECAST What future do the current trends point towards? The Australian market will likely continue to be influenced by international trading conditions in 2013 and beyond. HR hiring is expected to remain fairly stable over the coming year. Companies are closely monitoring the costs associated with their support service functions, and are typically choosing to redeploy people or redistribute duties rather than hire new employees – but Grant has heard fewer of these discussions in recent months. “I’m not hearing about excess capacity or redeployment now. Offshoring I’m hearing less about. Those activities have already happened. What I’m hearing now is lean, overstretched, under resourced,” he says.

“The EVP gets an immediate focus when times are good, but who’s going to be doing the grunt work?” Chris Grant, Michael Page

Indeed, Hays reports 35% of employers expect to increase permanent staff levels in their HR department this financial year. “These findings show that many HR departments are cautiously optimistic about the year ahead and are making strategic hires into roles that will offer long-term benefits to the organisation,” says Morris. Longer term, the lack of focus on certain specialty areas, and even graduate intake, will mean that when HR recruitment increases and the market improves, there will be a shortage of suitable candidates. The predominant focus on generalists means there will inevitably be a shortage of people with expertise in change management, rem & ben, HRIS and OD, which are all the key focus areas when a company is doing better. “The EVP gets an immediate focus when times are good, but who’s going to be doing the grunt work?” Grant says.

BEYOND PAY The balance in the total value proposition put to employees should never be overweight with financial incentives. Many people stay with organisations because of non-monetary and often intangible benefits. “Research keeps on telling us that people exit organisations for reasons beyond remuneration, with many case studies highlighting that people leave their bosses, not their organisations,” says Trevor Warden, national practice leader for strategic reward at Hay Group Pacific. “The impact of culture, leadership, development opportunities and challenge on retention is higher than the size of the pay increase in many, many instances.” From a motivational aspect research continues to show that money is a hygiene factor and true motivators are things such as new challenges and opportunities. However, it goes without saying that the money does need to be at the right level. The remuneration budget that is available also needs to be fairly allocated. “It is not best practice to be giving good and poor performers the same pay increases,” says Warden. “Differentiation is important and the higher pay increases should be given to those who deserve them. Organisations have realised this in recent years and are getting better at targeting the scarce money resource at those where the message is one of thanks and recognition for their outputs.” *All graphs unless otherwise stated sourced from Michael Page HR Salary and Employment Forecast Australia 2013/14

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ANNUAL REVIEW / CAREER TIPS

HOW TO MANAGE ‘UP’ Melinda Tunbridge, director of HR at SBS, provides her top tips for ensuring your best work is noticed by the CEO

Know who you’re dealing with

Establish a relationship. Build the relationship by checking in periodically, whether you need to or not. You don’t have to share your private life or be friends with your manager to achieve a relationship beneficial for success and visibility. Know how your manager communicates best. Is information better communicated face-to-face, over the phone or via e-mail?

Present issues and propose solutions

Make sure that when you bring a problem to your manager, you bring a solution or, at the very least, options. Most managers today have to deal with their own manager as well, so help them to manage their own visibility.

Take a chance

But make it calculated and educated. It is critical to fully understand an opportunity before you jump in. What if ? — What if you are 100%? What is the worst that can happen? You move on, backed by yet another learning experience.

Ask for more, then back yourself

When a new project or task needs doing, step on up. Why wait to be selected? Speak up, step up and then back yourself. Ensure you are getting more responsibility and more opportunity for exposure.

“Make sure that when you bring a problem to your manager, you bring a solution or, at the very least, options”

Become a known factor

A proactive approach to work is always noticed. In a matrix environment or in this world of virtual teams, working on cross-functional teams also gives your talents exposure outside of your own area. A ‘known’ employee has the advantage. Learn to contribute in meetings. Comment on something outside HR. Read agendas in advance and be prepared. This comes with a caveat: do your homework and comment wisely.

Relentlessly improve – inside the box

We all constantly talk about thinking outside the box. That’s fine – but ignore the inside of the box at your peril. Make sure you have the basics right; better still, continually improve on the basics.

Take things in your stride

Learn to thrive in chaos. Generally plan but become completely at ease with the reality that something totally unexpected will happen. To succeed today means making the right choice, and then making the next right choice quickly.

- Melinda Tunbridge

Learn how to boast

You can be the most productive, innovative, results-driven professional in your organisation, but if no one knows about it, what’s the point? The key is to find a way that feels comfortable for you to communicate your wins. Increasing your visibility isn’t about sucking up or brown nosing – it’s about positioning yourself so your best work is noticed. Take the initiative to be relevant, contribute, and make sure your efforts are noticed by your industry as well as your organisation. This is even easier in today’s world with social media tools.

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EXECUTIVE INSIGHT / SIR RICHARD BRANSON

VIRGIN

TERRITORY The companies in Sir Richard Branson’s Virgin empire are renowned for being great employers. HRD probes the Virgin mastermind about the secrets to his success

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HRD: What’s the difference between

HRD: Both Virgin and Sir Richard Branson are

a business that chugs along at a happy medium and one that develops into a world-leading, global empire? How do you go about building an empire rather than just a business? Sir Richard Branson: Big or small, I believe that all successful and innovative companies need to have an excellent product or service; they need strong management to execute the plan and a good brand to give it the edge over competitors. Often entrepreneurs can create a good product and a brand but lack the management to help expand and create a truly great company – people are the core differentiator between a business that just chugs along and one that grows into an empire. An entrepreneur needs to build up a very strong and capable management team and delegate out the responsibility to run the existing companies to them, so that he or she can focus on new ideas and finding the next business to start up. Just remember that it is impossible to run a business without taking risks. Virgin would not be the company it is today if we had not taken risks. I couldn’t tell you which was the riskiest – there has been quite a few!

names that are known the world over. How important is a strategic approach to branding – personal and/or corporate? Can they be separated? What are the must-do’s when building a brand? RB: Brands ultimately belong to the consumer. While a business can influence its brand by what it does and how it behaves, it is what the customer thinks at the end of the day that is the only important thing. With this in mind, I think that it is important to try and identify early on what attitude you would like your brand to convey, and then go about building it! Brands need to be constantly nurtured, to be kept fresh and be seen. When I was thinking about setting up my own airline, the late Freddie Laker said to me: You’ll never have the advertising power to outsell British Airways. You are going to have to get out there and use yourself. Make a fool of yourself. Otherwise you won’t

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DID YOU KNOW? Virgin has created more than 200 branded companies worldwide, including the recent space tourism company Virgin Galactic. These companies employ approximately 50,000 people in 29 countries

“People are the core differentiator between a business that just chugs along and one that grows into an empire” Richard Branson HCAMAG.COM

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EXECUTIVE INSIGHT / SIR RICHARD BRANSON

BRANSON ON… WORK-LIFE BALANCE HRD: It’s all too easy for an entrepreneur or senior executive to get stuck dealing with the daily workings of a business. How important is it to get out of the office and do other things? What helps you refresh yourself mentally and physically? RB: I do try to keep fit – anytime I’m near a Virgin Active club I make sure I get in there and work out. I love tennis and kitesurfing and pretty much do some sort of exercise every day – without making it too rigid, as that just doesn’t work for me. I enjoy being outside and being active – keeping fit as a result is almost a by-product of doing something I enjoy! I recently completed the Pick n Pay Cape Argus Cycle Tour, a wonderful 109km ride with 36,000 cyclists, and an extraordinary atmosphere with breathtaking views. I have always believed that I needed to find good people to run my businesses and to delegate day-to-day management to others. I did this from a very early age and, importantly, that has allowed me to go and set up new ventures, sometimes in a new sector or country.

survive. I’ve been following his advice ever since and used myself to get the Virgin brand in the headlines and become more visible.

HRD: Many of our readers’ businesses deal with intangible services, for example in the financial sector. What are your tips for effectively marketing and selling intangibles? What have you learnt from ventures such as the Virgin Money companies? RB: Even today, the Virgin brand is not a product like Coca-Cola or McDonald’s; it’s an attitude and a way of life to many. At Virgin Money, we’re building a better kind of bank – a bank that genuinely cares about the customer and provides a better experience and better-value financial products in a straightforward, transparent way. I think it’s important to build up a strong brand when selling an intangible service as it makes your service distinct and different from anyone else’s.

HRD: You’re famous for your ‘Screw it, let’s do it’ approach, which has led to missteps as well as successes. What is your biggest business failure, and why? How do you pick yourself up from mistakes, both personally and financially? RB: Whenever I experience any kind of setbacks, I always pick myself up and try again. I prepare myself to have another stab at things with the knowledge I have gained from the previous failure. My parents always taught me never to look back in regret but to move on to the next thing. The amount of time people waste on failures rather than putting that energy into another project always amazes me. I have fun heading the Virgin group of businesses, so a setback is never a bad experience, just a learning curve.

HRD: How do you find the best talent for your businesses, and how do you keep them interested and engaged? RB: We don’t really have a general recruiting process at Virgin – it depends on the type of business and the position we are looking to fill. However, as a rule we tend to pick out employees who are inquisitive about the bigger picture, and have a ‘can do’ attitude, are positive and enthusiastic and, most importantly, have a strong sense of fun! I’ve found that choosing enthusiastic, talented and positive people has helped to shape a positive character for our businesses. 32 | SEPTEMBER 2013

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BRANSON ON… TECHNOLOGY HRD: Innovation is clearly something that is central to the Virgin ethos. How do you unlock this, both personally and in your business teams? Can you create a culture of innovation and, if so, how? RB: I believe our culture of innovation is a result of our ability to adapt to changes quickly. We run our companies small; there is very little red tape and certainly no bureaucracy – we make decisions quickly and implement them before our competitors in the market have held their fifth meeting on the same issue. Additionally, Virgin has many, many entrepreneurs within the organisation. In business, the picture is constantly moving and changing, so I try to employ people who enjoy thinking outside the box and are constantly creative and inspiring. Our people don’t just think about the numbers but think about how a deal will enhance the whole brand.

HRD: From big data to social media, the digital revolution is disrupting

industries across the world, with business models being forced to change, whether they want to or not. As an entrepreneur with a history of disrupting established industries, does the potential of digital excite you? What’s your advice on how to make the most of emerging technologies? RB: The mobile revolution has allowed entrepreneurs to better talk to their customers, suppliers and staff in real time to determine exactly how each one is responding to particular situations, and determine exactly what they want and need. An entrepreneur who takes full advantage of this is well on the way to making himself a success, because he knows how to approach his consumers and how to deliver his offer in just the right way. I know it’s a cliché, but knowledge is power. Virgin is a major advocate of social media and the power it can hold for companies. My advice to the businesses of the future would be to improve their social media presence and use it as a way of knowing their customers more intimately. It can act as a wonderful warning system for businesses as well as a cost-effective way to get your message out.

HRD: How important is it to devote time and capital to not-for-profit work as a businessperson? Does it matter what size your business is? Is it more important to donate time or capital? RB: I believe that today’s businesses, regardless of their size, must be prepared to do good in societies around the globe. I’m optimistic that we can make the world a far better, safer and more equitable place, but business and enterprise must sit at the heart of this process. We need government, business and the social sector to work together for the benefit of everyone. It should no longer be just about typical ‘corporate social responsibility’ where the ‘responsibility’ bit is usually the realm of a small team buried in a basement office. Now it should be about every single person in a business taking responsibility to make a difference in everything they do, at work and in their personal lives. Virgin Unite, the non-profit arm of the Virgin Group, calls this approach ‘Capitalism 24902’ because it’s focused on getting business leaders all over the world — all 24,902 miles of it — to look at how we can do what is right for people and the planet. Virgin Unite also helped incubate a recently launched not-for-profit organisation called ‘The B Team’, which is framing a new approach to business where people and planet are priorities alongside profit.

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VIRGIN DOWN UNDER Geraldine Chin Moody was appointed to the newly created role of group executive, people, culture and sustainability, Virgin Australia Group, in February 2013. With experience of senior management roles at law firm Baker & McKenzie (Australia) and the Australian Stock Exchange, she joined the team as the company transitioned from Virgin Blue to Virgin Australia. Early in her new role, Chin Moody was able to claim another accolade for the company when it collected a ‘most attractive employer’ gong at the Randstad Awards. On the night,

she acknowledged the power of social media and word of mouth from existing staff as the keys to building a strong employer brand. She noted it was also important to communicate effectively, especially in times of corporate change. “Our research shows our people understand and believe in our strategy and are very clear on their role in delivering on it,” she said. Other selling points for Virgin employees are its travel policy and discounts on services in the Virgin Group, such as hotels, hire cars and credit cards.

SEPTEMBER 2013 | 33

BUSINESS STRATEGY / CORPORATE AGILITY

The

THREE HABITS of nimble, agile companies Does change ever ‘just happen’? Not necessarily, says author Graham Winter. He outlines how HR has the opportunity to regain control over change readiness and agility One of Australia’s top HR leaders bemoaned recently how her organisation’s change agenda had been hijacked by what she called “project management specialists masquerading as experts in people change”. She continued: “They think everything can be boxed into a project with neat milestones and end dates. Just when they think the change has finished, that’s when the real transition actually begins. We then get to pick up the pieces!”

These agile leading-edge enterprises are a generation ahead of the conventional ‘change should be managed by experts’ approach in the way that they infuse the capabilities and habits of adaptability and change resilience directly into front-line leaders and teams. Three habits stand out in this approach, and they offer HR an opportunity to regain leadership over the whole area of change readiness and agility.

A NEW APPROACH

Most agile and adaptive organisations are arranged in a network of nimble, connected teams because this is the most responsive and flexible way to organise people and resources. To create this network demands a commitment to the value and philosophy of ‘one team’ and the access to shared tools to equip team leaders to lead, build and connect their teams.

Over the past two years, while researching and writing the recently published First Be Nimble and working with a number of Australia’s fast-moving enterprises, it became clear to me that the most nimble organisations don’t even talk about change management, let alone create a separate team to lead it!

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HABIT 1: FOSTER NIMBLE, CONNECTED TEAMS

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A practical example is the Think One Team model that was originally developed in Australia and is now widely used because of its engagingly simple model and tools to guide everyone, from CEO to front line. It is based on five core principles:  Share the big picture (get above the agendas of the ‘experts in silos’)  Share the reality (open, robust conversations where people call it as it is)  Share the air (effective performance partnerships between functions)  Share the load (plan and prioritise the resource allocations collaboratively)  Share the wins and losses (infuse a debrief-learn-adapt cycle)

The Think One Team model focuses on accessible and shared tools for team leaders to use in three core activities: Aligning their teams (within and with other teams) Collaborating on problems and opportunities Learning on the run HABIT 2: RELENTLESS DEBRIEFING

While conventional change management diligently maps its change plans and ‘stage-gate’ reviews, the nimble and adaptive organisation infuses intensive, relentless debriefing of task and people processes into the operating rhythm of every team. Skilfully led ‘action debriefs’ develop resilience moment by moment and, in doing so, put the power to learn and adapt into the hands of front-line teams rather than a separate change department. This is in stark contrast to the world of change management project plans, which certainly have their place in planning the technical aspects of change but simply can’t cope with the impacts of disruptive change on people. HR can play a huge leadership role here, but only the leading-edge seem willing to roll up their sleeves, get some tools and work with the operations leaders to infuse learning into the everyday workplace. HABIT 3: LET GO — WELCOME THE SQUIRM

Nimble organisations are constantly in transition: ending something, exploring opportunities, and embracing the new. In a nutshell, they are good at letting go and they know that endings make you squirm. HCAMAG.COM

“Nimble organisations are constantly in transition: ending something, exploring opportunities, and embracing the new” How do they learn to ‘welcome the squirm’? First, their leaders are trained to not rescue people, which means adapting their language and, instead of asking “How do I make people comfortable?”, they ask, “What is the optimum stretch that this team can handle?’’ Second, their day-to-day operating rhythm is built around collaborative problem solving and debriefing practices so they learn and adapt together, not to the beat of a change management drum. HR can help itself here, too, by challenging the current reliance on broad-based engagement measures that can limit the acceptance of ‘squirm’ as valid to organisational growth. It’s important for HR and the organisational psychology field to become more specific about measuring (quantitatively and qualitatively) what’s happening inside and between those nimble teams in real time as they experience the emotional rollercoaster that is disruptive change.

FIRST BE NIMBLE The vast majority of agile and adaptive organisations have leadership teams that promote a one-team philosophy and are organised into networks of nimble, connected teams. The leaders of those teams are equipped with the tools, skills and support to guide their teams to align, collaborate, debrief, learn and adapt on the run. Instead of resistance, they welcome the squirm that comes from new experiences and, tellingly, they are a generation ahead of the mainstream who still sit like experts in silos waiting for the change management team to tell them when it’s time to move. The organisations that best adapt to change aren’t those who manage through it, but rather those who first develop the resilience and adaptability to handle whatever the world throws at them. The HR profession can be front and centre of this new frontier, but only if it is prepared for a little squirming from the traditional change management experts who don’t take kindly to the suggestion that they’ll be all but extinct within a decade.

Graham Winter is the author of “Think One Team” and “First Be Nimble” (Jossey Bass), and director of Think One Team International. Contact him at thinkoneteam.com or graham@ thinkoneteam.com.

SEPTEMBER 2013 | 35

SUCCESSION PLANNING / SPECIALIST CAREER PATHS

THE

CAREER LATTICE

Your top-performing employees don’t have to be funnelled into your most senior positions to be valuable, especially if they don’t particularly want that seniority...

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The way in which workers want to work is changing. Workplace expectations around variety and mobility, work-life balance, and an acceptance that many professional capabilities are transferable and not restricted to a linear career path, are all playing a role in a rethink of traditional career paths and succession plans. These trends are often attributed to Gen Y, but increasingly this flexibility is desired and sought across all generations in the workforce. Flattening organisational structures and the tight financial rigour applied to leadership roles has meant the opportunities to move through traditional promotional pathways have been limited. In fact, Hay Group research shows that only 17% of companies have a career path for future leaders.

RETHINKING SUCCESSION The result has been a shift from ‘ladder’ to ‘lattice’ career paths, says Sylvia Vorhauser-Smith, SVP global research, PageUp People. Traditionally, you ‘climbed the corporate ladder’ – that is, you pursued a largely hierarchical career path that followed the hierarchical structure of most organisations – the salesperson became sales manager, then sales director and ultimately executive leader. Each step incrementally built on the prior one, and all were based on core functional expertise. Today, there are more options, for both organisation and individual. Like a lattice, career paths can go in many directions – both sideways and up. This is a boon for all employees, but especially those not enamoured with the thought of managing teams and taking on leadership responsibilities. Fortunately most organisations today recognise and value the contribution of both leadership and non-leadership roles in their talent pool.

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Corporate ladder

Corporate lattice

Traditional, hierarchical structure

Flatter, often matrix structure

Top-down authority; limited information access

Distributed authority; broad information access

Linear, vertical career paths

Multidirectional career paths

Low workforce mobility; loyalty is based on job security

High workforce mobility; loyalty is based on continuing opportunity

Work is a place you go to

Work is what you do

Individual contributor-driven

Team and community-driven

Separation of career and life

Integration of career and life

Tasks define the job

Competencies define the job

Many workers are similar to each other

Many workers are different from each other

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SUCCESSION PLANNING / SPECIALIST CAREER PATHS

“It doesn’t work for all roles, but building a job around a talented individual’s skills may be a good alternative to fitting an individual to a job description” Sylvia Vorhauser-Smith, PageUp People “In the lattice scenario, individuals may chose – and perform better in – non-management roles, and prefer to develop technical excellence, say in finance, or subject matter excellence, say in engineering,” Vorhauser-Smith explains. “This is sometimes described as technical, functional, strategic or thought leadership, and does not necessarily involve leading teams of people or business units. People working in organisations that allow them to pursue these non-managerial career paths have high levels of engagement and commitment.” Indeed, Naomi White of Suncorp (see case study opposite) suggests subject matter experts desire three things from their employer: ● Acknowledgement and recognition of their expertise around the tangible value they add to their organisation

LEADERSHIP LATTICE BEST PRACTICE Proctor & Gamble purposely moves leaders across regions and countries to give them ‘discontinuous’ experiences that accelerate their growth and help them learn to operate in a multi-dimensional business environment. Thompson Reuters, an information services company, transformed the decentralised finance functions of more than 40 portfolio companies into a more lattice-like, collaborative structure with service bureaus located around the globe. Now employees can move between business units, into a new geography, or in and out of corporate centres and division centres. The restructure has yielded $50m in annual savings. Cisco builds versatile leaders by moving high-potential executives around the company; for example, from manufacturing to materials procurement, or from finance to customer service. The practice aims to round out participants’ knowledge of the company’s operations.

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● To feel valued and well rewarded for the expertise they have. A robust remuneration framework supports this ● A genuine commitment to their ongoing professional development and support for their career aspirations

DUAL CAREER PATHS Work itself is often quite motivating for technical specialists, and their professional identity may also be very important to them. Offering opportunities for developing their skills further, enrolling them in associations and conferences where they are able to share their expertise and meet the leaders in their field, as well as recognising and rewarding their efforts, do much to keep them engaged. In the past, companies leveraged the technical knowledge of highly skilled individuals by placing them into roles as mentors and trouble-shooters, thereby meeting two important goals: maximising the use of their knowledge for the business, and keeping them engaged in their work. But to retain and engage individuals who do not want to progress into management companies need to create dual career paths, particularly where research is highly visible or strategically important. The strategy is to provide opportunities on two different career paths, both of which can lead ultimately to great success. “The dual approach says that you can move up the scientific track and be paid at an equivalent level to a supervisor or a manager by being a really excellent scientist and bringing value through innovation, ideas and scientific leadership,” Wendy Montague, national practice leader for leadership and talent, Hay Group, explains. “The employee becomes a manager of ideas, technology, or intellectual capital rather than a manager of people with the administrative activities typically associated with that.”

SHAPING THE JOB TO THE PERSON At heart there is a deeper issue: employers are rethinking the notion of job-role/employee fit. Traditionally an employee needed to fit in with a set job role, and have the attributes and experience/ skills required for that role. Now openness to fitting a job-role to the employee or candidate is increasing. Recruiting for ‘attributes’ and ‘characteristics’ became unpopular as the science of competencies and hard performance measures became more prevalent. But today, in a tight market for highly

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CASE STUDY: SUNCORP Suncorp’s commercial insurance division has re-engineered how they provide career opportunities for specialist skilled employees. Naomi White, Suncorp’s executive general manager of HR, commercial insurance, outlines their Specialist Career Pathways HRD: Can you outline what challenges you are facing in your industry when it comes to attracting and retaining key specialists? Naomi White: We are operating in a highly competitive industry for talent – particularly in the area of specialist underwriting and claims – where the size of the market is small for specialist talent and where a premium is paid for expertise. A compelling employee value proposition, of which the Specialist Career Pathway is part of, is one way that we can compete in the marketplace and which differentiates us as an employer. Internal trend analysis through our employee engagement data and a survey of our specialists showed that access to career opportunities emerged as a consistent theme.

HRD: How have you traditionally provided career pathways for employees? NW: In the past, our specialist skilled employees associated career progression and improved status with people leadership or managerial roles. Therefore, they were promoted into people leadership roles based on their strong specialist skill set, but were then expected to both perform as the specialist expert for the team as well as lead and manage a team of people. Sometimes this was not playing to their strengths. Whilst some people have the appropriate skill set to successfully perform both responsibilities, others simply wanted to remain as the subject matter expert while still feeling they were progressing their careers.

HRD: You’ve launched a new program called Specialist Career Pathways – can you outline this? NW: Introducing a Specialist Career Pathway in Commercial Insurance provides our people with the opportunity to build a great career by offering

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an alternative career path to traditional people leadership. When a person reaches a certain point in their career and seeks to progress to the next level of seniority, they no longer have to move into a people leadership role if their passion and expertise lie in an area of specialisation. It provides for specialist progression, recognition and reward, without any or minimal direct people reporting responsibilities, yet still is flexible enough for people to move between both pathways throughout their career. To support this pathway, a competency framework has been developed to assist in development planning and identifying skills gaps to provide clarity on how to progress in either pathway.

HRD: How do you ensure those employees using your SCP will be rewarded in a sustained way? NW: Our overall remuneration strategy is to ‘pay for performance’ where individuals are rewarded and recognised for the positive contribution they make to achieving our strategy. Ultimately, specialist roles would be no different to other roles: there’s the annual remuneration review to maintain employees in line with market as well as many non-monetary rewards, allowing our specialists to deepen their expertise.

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SUCCESSION PLANNING / SPECIALIST CAREER PATHS

“The employee becomes a manager of ideas, technology, or intellectual capital rather than a manager of people with the administrative activities typically associated with that” skilled labour, organisations are beginning to think more laterally about their selection criteria. “It doesn’t work for all roles, but building a job around a talented individual’s skills may be a good alternative to fitting an individual to a job description,” Vorhauser-Smith says. It also helps that organisations have become more adept at fine-tuning their talent management plans so that business plans can be achieved by having the right talent in the right roles. “An enormous amount of work has been done by HR and management in the past decade defining

40 | SEPTEMBER 2013

exactly this,” Vorhauser-Smith says. “What are the key skills, competencies, values and behaviours the organisation needs to allow it to achieve its business goals? The result is that most organisations have a fairly clear blueprint of what talent they need. That was the small problem. The big problem is the attraction, engagement and retention of that talent, once identified.”

EMPLOYEE INVOLVEMENT One “hotly debated question”, which varies from organisation to organisation, is whether employees should be involved in the succession process. “If the succession plan is the subject, employees are the object. It is a two-way process between the organisation’s needs for succession and the individual’s personal and professional aspirations,” Vorhauser-Smith says. Clearly identifying successors only to find they have no interest in the identified career paths, or lack the mobility or development drive to achieve them, can be an exercise in futility.

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SUCCESSION ESSENTIALS

The idea of a lattice organisation was first put into practice in 2005 at Deloitte, where management pioneered the idea of mass career customisation to replace flexible working arrangements. This program allowed workers to organise their level of responsibility at work to match their personal needs – employees who need to ‘dial down’ can move to positions with less responsibility, then ‘dial up’ again when they wish. The company found this approach so successful that they began to recommend it to their clients.

✔ Target critical roles and/or skills as a priority ✔ Map a succession pipeline of talent ✔ Identify readiness in terms of skill levels, mobility, motivation ✔ Involve frequent talent reviews (facilitated sessions to calibrate successors and identify development gaps and growth opportunities) ✔ Use a technology application that allows the succession scene to be viewed and actioned easily, regularly, and in real time ✔ Be supported by a commitment to actively develop successors

Regardless of structure, any succession strategy must: ✔ Align to the business plan ✔ Have leadership buy-in ✔ Be as transparent as possible ✔ Use objective measures of individual assessment

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EXPERT INSIGHT / CEO SUCCESSION

Who’s next for the TOP JOB? Bruce Watt provides his tips for successful CEO succession START SOON AND NEVER STOP How soon? Now. Don’t get caught unprepared by unexpected crises or opportunities and be forced to suddenly look outside for the next CEO. This not only ensures a likely drop in stock value but also introduces significantly greater business risk, since externally sourced CEOs are more likely to fail. Some say that CEO succession should begin at least three years prior to the anticipated change. This recommendation, or any that prescribes a specified timeframe in which to administer the succession process, misses the point. CEO succession must begin immediately and must be a constant, ongoing process that is managed as closely and regularly as the organisation’s most pressing business matters.

LOOK MORE CLOSELY AT CANDIDATES In the same way that emerging CEO demands are difficult to predict, so too are the human beings that occupy those roles. However, the prevailing method for assessing CEOs – to extensively interview candidates – dramatically oversimplifies both the job and the individuals who might fill it. To achieve a more accurate assessment of CEO capability, boards must better define requirements and more deeply assess the capabilities of the incoming CEO. This means breaking the tradition of private interviews with board members. Interviews are unquestionably a central component of this process, but the typical unstructured interview is riddled with inherent error and must be enhanced by additional assessment measures, particularly leadership simulations, to more closely examine central attributes that might not otherwise be detected.

MAKE THE GROWTH OF TOP LEADERS A BOARD IMPERATIVE Bruce Watt, PhD, is managing director, DDI Australia

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If we are realistic, we must recognise that scenarios will sometimes arise in which no viable internal candidate is available. However, this should not

deter organisations from constantly cultivating and growing top leaders’ capabilities. Hesitations rooted in the fear of a horse race, political dynamics, or the job security of the incumbent CEO must be dispatched in favour of more enterprise-conscious strategies. Boards must assume that the CEO role is always unstable, and that the organisation’s top leaders must be developed to the very peak of their potential to sustain maximum agility. This requires that the company identify a pool of internal leaders as potential CEO candidates and develop them toward that standard. Top management should conduct early assessments and prepare individualised development strategies to be discussed with the board. Since development must support the organisation, each development plan should be reviewed for its impact on business progress as well as on individual growth. Measures of success in both arenas should be tracked and reported to the board regularly.

USE CEO SUCCESSION AS A MODEL FOR TALENT STRATEGY CEO succession is not a decision – it is an ongoing process to diligently foster and drive the growth of internal leadership capability. To adequately address the challenge, boards must begin by developing a strategy for CEO succession that encompasses the identification and recruitment of high-potential leaders from inside and outside the organisation, the profiling of the CEO role and its core challenges, the assessment of candidates’ leadership capabilities, and the accelerated growth of a pool of leaders toward the CEO target. While CEO succession is aimed at a single position, the principles apply to talent growth across the entire organisation. If done well, CEO succession not only ensures stability of the top post but can also serve as a model for how talent should be cultivated and deployed for the long-term benefit of the enterprise.

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SEPTEMBER 2013 | 43

CHANGE MANAGEMENT / DOWNSIZING

SURVIVING THE

AFTERMATH The effort of downsizing on your organisation’s workplace culture doesn’t have to be negative. Iain Hopkins looks at how damage can be minimised and how those left behind can be rallied

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very week brings new headlines on widespread job losses: from the LNG and coal-mining sectors and the devastated car manufacturing industry, through to retailers like Target and ICT players like IBM. And, as it would be for the survivors of all traumas, the prevailing theme seems to be: grit your teeth and soldier on. There is no time for proper recalibration and realignment of corporate cultures following significant restructures; nor is there time to properly tend to those forced out of the company, let alone those left behind. Yet the experts agree: periods of great change are also ripe for just that kind of introspection. “We recommend that downsizing and restructuring are an opportunity to openly discuss culture and to work on creating a workplace culture that works,” says Vicki Daniel, co-founder and co-director of Change2020. “Symbolic change or disruptive change such as a restructure is a great trigger for reviewing the culture and determining what will be ‘fit for purpose’ for the future of the business. Ensuring that you work towards a culture which will support the business model/structure is imperative if the restructure is to be a success.”

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MY ONE PIECE OF ADVICE ON DOWNSIZING VICKI DANIEL, CHANGE2020

“Once a restructure or downsizing appears to be inevitable, then (1) move quickly – prolonging the process is bad for those impacted and for those left behind, and for morale overall; and (2) communicate, communicate, communicate with those impacted – even if final decisions are not made. Communicate what has been agreed and what is still to be decided – be honest but crisp” BRUCE ANDERSON, LEE HECHT HARRISON

If the focus is on cost-cutting, culture is often the last consideration when downsizing or restructuring, yet it can have a huge impact. “If the organisation’s vision for the future aligned to the objectives for the change program aren’t communicated, it can lead to a severe decline in morale and loss of productivity,” adds Bruce Anderson, managing director, Lee Hecht Harrison. In many cases there is a disheartening paradox at play whereby projects that aim to result in cultural change often fail to do so, while change projects that ignore culture in their scope typically produce large adverse cultural impacts. Because culture is constantly in flux, it’s naturally one of the elements most affected by change initiatives. “Since organisational change occurs at the scale of the individual, if people of all seniority levels don’t understand and aren’t able to articulate what comprises the unique culture of their organisation, that’s where serious problems occur,” says change expert Gavin Wedell.

CULTURAL AUDITS Predictably, it’s prior to a change being mooted that a company should be on its toes. Leaders should be

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“Plan in advance for organisational change and have a robust strategy which takes into consideration organisational culture, engagement of employees and how the change will impact human capital in the future” GAVIN WEDELL, CHANGE ACTIVATION TOOLKIT

“Even if there is some disagreement internally, make sure that the senior leadership team is aligned around the change project and unified in their approach to external communications and actions”

aware of what makes a corporate culture unique, what facets of the culture support the company moving forward, and what aspects of the culture need to change. There are various tools and surveys that can help with this, but often the best way is to simply ask staff to share their views on the workplace culture – current and desired. “It’s also important to note that some of the unique factors may in fact be holding the business back; just because you have a uniqueness does not

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CHANGE MANAGEMENT / DOWNSIZING

5 LARGEST LAYOFFS Large layoffs occur almost exclusively either in industries near the end of their most successful periods, or during difficult economic conditions

IBM

Biggest layoff:

60,000 Date of layoff: July 1993

SEARS/ KMART

Biggest layoff:

50,000 Date of layoff: January 1993

CITIGROUP Biggest layoff:

50,000 Date of layoff: November 2008

GENERAL MOTORS Biggest layoff:

47,000 Date of layoff: February 2009

AT&T

Biggest layoff:

40,000 Date of layoff: January 1996

When Louis V Gerstner Jr, viewed by many as one of the great CEOs of the second half of the 20th century, joined IBM in 1993, the company was in deep trouble. The company had 405,000 workers in 1985. After the Gerstner cuts, that figure was 225,000. The workforce reduction saved IBM $4bn a year.

Sears and Kmart both went through a series of job cuts before they merged in 2005. At the time of the merger, the expected savings from the marriage was $500m a year – this unfortunately never eventuated.

Layoffs were part of a companywide effort by management to save the financial firm after the collapse of the credit markets in 2008.

PLAN TO CHANGE

Layoffs in early 2009 were part of an effort to cut costs enough to match a drop in revenue. GM made the reductions as it was about to enter Chapter 11 with US Federal Government aid.

CEO Robert Allen said, at the time of the layoffs, that the move would create more shareholder value. The job cuts were part of a plan to spin out AT&T’s NCR and Lucent divisions.

Source: 24/7 Wall St

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mean it is good for the culture or the future of the business,” Daniel says. “Always hold on to the stories which underpin the business. Great storytelling is an excellent way to retain the special and unique factors of a business – keep the ‘good stuff’ alive and recognise it is OK to let go of the ‘stuff’ that may not fit in the future.” A cultural audit or assessment should be a part of the change management plan for any downsizing or restructure, but change leaders are warned against becoming too ambitious in their goals for multifaceted cultural reform during downsizing and restructuring initiatives. Wedell’s experience of working with change leaders around the world has demonstrated that, though cultural reform is possible in the context of these circumstances, it is only successful when it concentrates on one or two dimensions of culture at most. Otherwise the messaging and communication activities needed to promote cultural change become lost in the sea of noise generated by other transformation activities. “Keeping things as simple as possible is critical,” he says.

The old adage holds true in change initiatives: ‘fail to plan and plan to fail’. Every clear strategic change plan should identify the following: • Why this change is needed – the simple strategic picture and the urgency associated • What will change and what will stay the same in the business (strategy, operations, people, process, structure, technology, etc.) • How the impact of the change will be managed • What activities will take place to manage this impact to minimise operational disruption. Usually these activities include communications, training, coaching, stakeholder management, workplace change, company redesign, new processes and technology, etc. • What the impact will be on each person and how it will be managed

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Cultural reform is ... only successful when it concentrates on one or two dimensions of culture at most Throughout any change initiative, face-toface leadership presence is still and always will be best. Most people want to hear messages from their direct leader. Keep it crisp and honest. Other forms of communication are useful but should be treated as supporting communications – broadcast emails, posters, short films, newsletters. Ensure it is frequent and two-way; people need to be able to ask, not just listen. Additionally, holding focus groups where people can share their concerns or queries is a great way for people to know they are not alone in their concerns about a change. Whatever comms are used, however, you must be responsive. Don’t tell people you will release a weekly newsletter and then let it slip to fortnightly. “Leaders need to be out front; don’t hide behind others – we want to hear it from our leaders so we will trust and follow our leaders through the change,” Daniel says.

SURVIVORS Often ‘survivors’ of structural change find the new working environment difficult and stressful so it’s essential for managers to show leadership and offer support. As previously mentioned, communication is critical to ensuring that these negative feelings do not become damaging to the company’s culture or productivity, and also to stemming the loss of remaining talent.

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HR TAKEAWAYS: ESSENTIAL STEPS Downsizing is never easy. However, Susanne Biro of Bluepoint Leadership Development has distilled it to five guiding principles: 1. If real estate is location, location, location, then attempting to lead culture change is communicate, communicate, communicate. 2. You must first clarify the story for yourself: the company is moving from what to what exactly? You should be able to craft this story using nothing more than three PowerPoint slides: a slide that tells the story of the past, a slide that encompasses the realities of today, and a slide that paints a vision for a better tomorrow. It is irrelevant whether or not you actually use the slides to communicate with your audience. The purpose of the exercise is to ensure you are crystal clear on the key elements of the story and you can tell it in an interesting, visual way. 3. Considering yourself ‘chief marketing officer’ and thinking in terms of a logo, tagline, and headline would benefit you greatly. When Lou Gerstner Jr took over IBM, he used this simple phrase to communicate the vast and complex change the business would need to undergo in order to survive: “We used to be a computer parts company. We are now going to be a service company that, by the way, just happens to have some computer parts”. 4. In your communication, you must clearly state that this is a break from the past: “The past is over and the future will look and feel like ‘this’.” You might consider incorporating a ritual to get people to fully understand that the past is no more. Kenny Moore of KeySpan Corp held a funeral to say goodbye to the company as it once was. 5. You must catch any words or actions that are not in alignment with the new culture and appropriately redirect behaviour because everyone is watching to see if this change is going to be real. If you do nothing when people continue to behave in the ways of the past, you essentially say to everyone that the change is not real. You might consider how the Broken Window Theory might be useful. This theory states that if a window is broken and left unrepaired, people walking by will conclude that no one cares and no one is in charge, sending a signal to all that anything goes.

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CHANGE MANAGEMENT / DOWNSIZING

“Great storytelling is an excellent way to retain the unique factors of a business – keep the ‘good stuff’ alive” Vicki Daniel

The other element is making sure leaders and managers are empowered with the skills to negotiate through times of change and support the employees left behind after redundancies. These skills include: • An ability to identify the different phases of the cycle of change, ie handling loss, understanding change, making decisions and moving forward • Assisting employees in understanding changes in their personal lives in the context of larger global forces • Outlining the choices available to employees in times of change, ie to resist, avoid or embrace change • Encouraging employees to make constructive, proactive personal decisions in complex situations • Providing assistance with developing an action plan to help each individual navigate organisational change effectively Upskilling the capacity of front-line managers and supervisors to have conversations about the change is useful. “These people need to know how to address these feelings directly, whilst not singling any particular individual out,” Wedell says. “They should acknowledge that the team has lost some great people who had some fantastic skills, and assure those people who remain that the contributions those people made to the organisation aren’t forgotten.”

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Rather than being relieved and elated that it’s not them, the feelings of those remaining after restructure and redundancies are less helpful: guilt if they are the ones who did the firing, leading to feelings of distress (“why am I in this position?”); wakefulness; self-doubt (“surely there was another way?”); or even shame. “These all come under the umbrella of survivor guilt,” says Dr Hilary Armstrong, director of education at the Institute of Executive Coaching. Other versions of survivor guilt include thoughts such as “why her and not me?”, leading to stress from uncertainty and lack of confidence; or “will I be next?”, leading to feelings of insecurity. Another is resentment at being the one left to clean up the mess or take up the slack by shouldering others’ work, not to mention being the one who delivers the layoff message, which can unleash emotions that can potentially overwhelm the messenger and lead to long-term effects. Being able to express the emotions of survivor guilt is important. Questions such as “why not me?” and negative thoughts such as “he was better than me”, “my performance is not that good”, and “probably they chose me because I’m cheaper” need to be given expression and normalised, as does the effect of further guilt arising from thoughts such as “I should be grateful, or relieved”. Furthermore, as the workload increases and people are asked to take up the slack, survivor envy can set in: “I envy them. I am left to clean up the mess – I wish I had been laid off”. “The important thing is that it is normal to need to express these things, and they are normal reactions,” Armstrong says. A leader’s role is to give those who remain behind confidence about their future. Open discussions with employees about why retrenchments are happening and what can be expected in the future will lead employees to feel more secure and engaged with the company.

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CASE STUDY: ANSVAR INSURANCE HRD talks to Andrew Moon, CEO, Ansvar Insurance, about the structural changes his company recently endured, and what it meant for corporate culture

HRD: Can you outline the changes your company has been through? Andrew Moon: It was about recognising that we were not a ‘national’ company, in the sense that we needed representation, not full operations, in each state. As a result, staff numbers in each state were reduced, accommodation requirements revisited, and some positions centralised to HO, Melbourne. This meant we reduced staff costs by nearly 15% and staff numbers by more than that – the implication being that we reduced numbers and increased the benchmark of quality of staff. We had to reinforce the key competencies of underwriting, claims, IT and administration in HO. We also undertook major retraining of the sales team. HRD: Did you have a clear change management plan in place to navigate what needed to be done? AM: Yes, we were working from a blueprint which was focused on the best outcome for the business and the best outcomes for our broker partners and customers. All activities were managed in a central project office and progress monitored, down to the fine detail. Our HR team was intimately involved in all human aspects, as were our EAP providers. HRD: Were you concerned about the corporate culture repercussions of the change? AM: Very much so! We took great care to ensure that the rich heritage of Ansvar as the ‘First Choice for Customers’, ‘Best Place to Work’ and ‘Top Donor’ were preserved whilst we accentuated the emphasis on our core values of Innovation, Collaboration, Accountability, Agility and Professionalism. We take every opportunity to use the ‘language’ that we have developed in the business which works to that end. It was key to reinforce our values and our commitment to customers. We celebrate our successes whenever possible and reward those staff who ‘live’ and exhibit the values. They deserve the recognition and the reward and it inspires

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other colleagues. We also meet weekly (briefly) to ensure consistency and have employed a facilitator to be our ‘conscience’ and keep us on track. HRD: Did you get a sense of ‘survivor guilt’ from the employees remaining with the company? What have you done to bolster those remaining employees? AM: I don’t believe it was so much a case of survivor guilt; it was more a case of “at last, management has recognised the issues and is dealing with them”. Many staff felt smothered by the layers of bureaucracy and were relieved to see clarity and purpose for the organisation. Also, rather than picking up the slack, many staff felt empowered to ‘get on with it’. The new catch cry is “leave that to me and I’ll fix it”. This has really pervaded the company, along with the phrase “stop it!” when activities are inappropriate or ineffective. HRD: How did you ensure that trust from employees was not lost throughout the change? AM: As always, communication is the key. I undertook to report weekly to all staff, and I’m pleased to say that I have met that commitment. Members of my executive report to all staff meetings on a regular basis and we are much more open, as an organisation, than we have ever been. We seek staff feedback, on a regular basis, and report back to staff about our findings and areas for improvement. Transparency is the key and not just a buzzword. HRD: If you had one piece of advice to pass on to other business leaders who are about to undergo significant change – perhaps job losses are involved – what would it be? AM: One piece of advice is difficult. There are many moving parts, but the key for me would be that, when big change is afoot, faster is better than slower; keep everyone informed and remember a short, sharp pain is preferable to a long, continual ache. Rip off the band-aid; don’t tug at it! As Jack Welch [ex-GE CEO] might have said when asked what he would do differently in his career: “I wouldn’t have done anything differently; I just would have done it faster”.

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TALENT MANAGEMENT / CONTINGENT WORKERS

BUILDING ENGAGEMENT with a contingent workforce

Businesses are using growing numbers of contingent workers, yet an ‘us and them’ mentality still prevails in many organisations. Peter Szilagyi provides his tips on managing the complexities of a contingent workforce Over the past decade businesses have dramatically increased their use of contingent workers. The reasons behind this increase are many and varied. On the one hand, the need to reduce cost and improve productivity and flexibility has driven greater demand. On the other hand, contingent work is now widely recognised as an attractive career path both in the short and long terms. It can offer greater financial rewards and opportunities that may not be readily available through permanent employment.

workforce is classified as ‘independent contractors’, and this is only one type of contingent worker. Taking a more global view, a recent survey by Kelly Services found that in the US the number of contingent workers could be as high as 35% of the labour market. With such a large and growing workforce, are we doing the right things to manage and engage contingent workers in our own organisations? How can we improve the performance of this workforce without blurring the lines between employee and contingent worker?

CONTINGENT WORKFORCE GROWTH

KEEPING THEM FAR! DEFINING THE CONTINGENT WORKER...

While there is no common definition of a ‘contingent worker’, this segment includes individuals who work on a non-permanent basis and could be called independent professionals, temporary workers, independent contractors or consultants. The ABS estimates that up to 9% of the

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There are important reasons for differentiating between employees and contingent workers, the most fundamental of which is that contingent workers perform work under a contract for service as opposed to a contract of employment. This

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POTENTIAL CONTINGENT WORKER CLASSIFICATIONS

POTENTIAL CONTINGENT WORKER PRACTICES

Classification

Freelancer

Independent contractor

Agency contractor

Consultant

Outsourced supplier

Description (samples)

• A broad category • Independent • Agency contractors • Consultants work • Outsourced of worker who is contractors run their are sourced on behalf of their suppliers provide self-employed and own businesses, through an agency company (typically an ongoing/ not committed to a hiring out their (eg Manpower) in teams) to provide operational particular employer services to clients or and work on behalf services to a client for service through for any long period other organisations of that agency for a specific project or a contractual of time the client objective agreement. • These individuals Employees of these • Typically not will typically be • They typically • They typically provide companies work for registered as a registered under provide labour for professional services the client to provide business entity. a business entity temporary purposes outlined below that service Exchange of service • Exchange of service (eg replacing head • Consultants are is usually through count until a position • This work is typically is typically through engaged through a nontechnical an invoice and not can be filled) a formal contract formal contract for and can relate to a formal contract for service • A formal contact is consulting services the local site or between the agency operations across and the client sites (see below)

Type of work performed? (samples)

Miscellaneous (refer to links below) could include administrative support, customer service, software development or translations services

How procured? Online examples: (samples) www.odesk.com www.elance.com www.guru.com Possible business practices

Project management, systems integration and implementation, advisory services

Administrative support, customer service, specialist function roles (eg HR, finance and procurement support)

Direct engagement (agency or individual)

Examples: Kelly Examples: McKinsey, Services, Manpower, IBM, Accenture, CXC, Chandler Macleod Deloitte, E&Y, CGI, KPMG

Site: Security, cleaning services, onsite technology support Operations: Business process outsourcing teams, off-site customer support, etc. Examples: Serco, Veolia, ADT, IBM, Accenture, Infosys, HP, Oracle, ADP

Additional table rows could include: Approval process? Who directs their work? Responsibility to onboard and offboard? HR system classification (code)? Business system access? Contract ownership? Performance feedback responsibility? Engagement tips – communication/coaching/rewards etc.

distinction has different legal obligations in relation to employment law, superannuation, workers’ compensation, health and safety, intellectual property and taxation. If incorrectly defined and managed, the blurring of the line between employee and contingent worker could easily happen. For example, a line manager focused on the performance of their division could easily keep an individual contractor for longer than planned or pay someone contractor rates and call them a contractor without intending any employment relationship. Common law courts may treat custom and practice differently to a contractual agreement and use a variety of tests to determine whether an individual is a true contractor or in reality an employee. For many reasons it is vital to have a clear contingent worker strategy. This strategy should have definitions of the different types of contingent

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Strategy and planning project management, systems integration and implementation, other advisory services

workers and outline business practices that sit under them. These business practices would include how these workers are defined, engaged (ie contracted), managed, reported on and exited out of the business. The table above shows an example of the range of different contingent worker relationships a business may face and the means to classify them. Central to good business practice are clear contracts to cover the relationship between the ‘employer’ and the ‘supplier’ of the service (ie individual contractor, an agency or consulting firm, etc). Key provisions include the nature of the service provided, duration, rates, performance standards and termination provisions.

KEEPING THEM CLOSE? BUILDING CONTINGENT WORKER ENGAGEMENT... Notwithstanding the need to differentiate, there

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TALENT MANAGEMENT / CONTINGENT WORKERS

Did you know? Baby boomers (1946–1964) are the largest segment of ‘free agents’ (ie contingent workers), making up 52% of surveyed workers. Gen Y (1965–1979), on the other hand, was surprisingly the smallest segment at 9% Source: Kelly Services report, The New Workforce: Insights into the Free Agency Workstyle

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are important reasons to build engagement. Research by Deloitte and Manpower shows the importance of contingent workers yet highlights that organisations could do a lot more to build engagement. A lack of engagement can result in inflated costs, poor productivity, and noncompliance with policy. Furthermore, the flexibility offered by contingent workers is not a one-way street. Contingent worker attrition is costly, both financially and operationally. Building contingent worker engagement starts with understanding what is important for this workforce. If companies measure the engagement of their permanent workforce, and regularly action this feedback, there are opportunities to apply similar techniques to contingent workers. Interestingly, ask yourself whether contingent workers completed your organisation’s last employee engagement survey. Based on the commentary above, is this a good thing? A risk averse method to gauge contingent engagement is to assess the leaders who are managing contingent workers. Do leaders on the ground feel they have the right contingent talent in place and are they engaged and motivated? Another approach is to survey the supplier account managers to understand engagement drivers. The drivers of contingent workforce engagement will differ for many reasons, not limited to the type of workforce, skill base (ie niche vs transactional), generational factors, national culture, and years of experience. There are, however, key principles of employee engagement that apply, regardless of classification, including effective leadership, interesting work, opportunity and rewards. The most important way the business can build greater engagement and productivity is to build the capability of line managers. Line managers need to understand the different types of contingent workers, their role in relation to them, and the risks of non-compliance. Ultimately, contingent workers will want to feel included and part of a productive team. Applying the same company values for employees to contingent workers (ie respect, teamwork, accountability, etc) is an essential starting point. The tools managers use on a day-to-day basis, including regular and open communication, coaching, feedback and delegation, should all be used for contingent workers. Unfortunately, too often supplier arrangements are viewed in binary terms, as ‘us and them’. The nature of a contractual relationship can easily

A quick win with respect to HR practices and consistency in line management behaviour is to build greater structure in the onboarding process lend itself to this outcome. It doesn’t need to be so. Engagement should not only be viewed operationally, and strong relationships need to be nurtured through the account management tree for both client and vendor (ie contract negotiators, account managers, line managers and operational staff on both sides of the contract). A good example of the impact of this relationship management is delivery of regular feedback and annualised feedback. Line managers should look to provide feedback to both the vendor and the contingent worker. Not only does this help course-correct and improve performance but it is also central to the concept of engagement between line manager, vendor account manager and contingent worker.

WORKFORCE PLANNING FOR CONTINGENT WORKERS Matching skills and interest to the requirements of the role is a crucial means of building contingent worker engagement. Many contingent workers are completing an assignment or contract to build a certain skill set. From a strategic perspective, workforce planning plays an important role here. Workforce planning should not only forecast contingent worker numbers but also outline the process in which requirements are collected and provided to agencies procuring contingent labour. The more refined the requirements, the closer agencies can match capability and interest to business needs. This helps build the conditions for a motivated and engaged contingent workforce. From a practical perspective, managers play an important role here, and these requirements should be regularly calibrated, not set and forgotten. To do this, managers need to understand the contractual

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scope of work enough to make changes to better align interest and opportunity through an assignment. Again, strong engagement with the vendor account management teams is important. A quick win with respect to HR practices and consistency in line management behaviour is to build greater structure in the onboarding process. As we know, the first three months of any worker’s time in a role is crucial to success. If there are tools used for onboarding employees, these should also be leveraged for contingent workers. Too often contingent workers can be viewed as a ‘temporary fix’, and therefore they are not afforded the same opportunities to ramp up and become effective. This is particularly true for knowledge workers who need the right context, tools and access to perform effectively their roles. Inaction here can set the tone for poor engagement from day one.

REWARD APPROPRIATELY Finally, rewards play a crucial part in building engagement and motivation. As contingent workers

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are under contract, there are opportunities to tailor terms to lead to targeted outcomes. One approach for individual contractors is staggering bonus payments to timeframes or outcomes. For agency contractors, utilisation of the vendor relationship is essential, and regular performance feedback should be provided. As always, the small things are the big things, and making individuals feel part of the team through invitations to social events and the like is important. The contingent workforce is contractually unique but increasingly as critical as the regular workforce in delivering business outcomes. The trend of using contingent workers will only accelerate in the future. Managing the complexities of the contingent workforce requires an enterprise-wide approach with agreed accountabilities between the business, HR, legal and procurement. Ultimately, a contingent workforce strategy needs to be part of a broader workforce strategy. This strategy needs to balance legal compliance and business accountability with engagement and operational effectiveness. HR is in the driver’s seat!

Peter Szilagyi, CAHRI, GPHR, HRMP is an experienced HR leader in talent management, transformation and change management.

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HUMAN RESOURCES DIRECTOR

THE LIGHTER SIDE THE JOYS OF RECRUITMENT Job interviewees just keep getting weirder – check out the latest from the Ask a Manager blog site: ● A reader, who works for a healthcare finance company, told how they once interviewed a woman who had impeccable credentials on paper. “[However,] she said during the interview that she felt smokers deserve their lung cancer, an executive seduced her at a prior position, and that she is in a ‘modern marriage’. None of us are sure what she meant by the last one, but we wouldn’t dare ask either.” ● One respondent relayed the answer a co-worker gave when asked what he considered his weakness. “He responded ‘I’m always late. If you hire me, I’m going to be about 10 minutes late every day that I work here.’ The boss laughed and thanked him for his honesty and hired him.” ● Another reader told how one interviewee came up with a very strange thank you email. “[It] consisted of the lyrics to ‘She Works Hard for the Money.’ With the ‘she’ in every line replaced with my name. The worst part was that my boss had to explain to me that the song was about prostitution.”

FUNNY WAY TO SAY “YOU’RE FIRED”

Jason Goldberg, CEO of online retail store Fab.com, recently fired over 100 employees from his company’s Berlin office by e-mailing an internal memo to staff. The email started with an effusive demonstration of Goldberg’s appreciation of his staff and love of his company, and reasons behind his regretful decision – all well and good (apart from the method of delivery). The CEO then, however, chose the following almost farcically euphemistic way to say “you’re terminated ... maybe”: “Directly after this meeting you will learn what category your job falls into and whether you will have the opportunity to start your new job search immediately or if you will consider working with us through a multi-month transitional period during the fall and winter.” It’s not clear what employees made of the confusing corporate-talk. This case of a badly mangled missive isn’t the first time Fab.com has been in the news: the company has previously banned that hugely offensive habit of – horror of horrors – hanging jackets over chairs; and it went through no fewer than 11 executives in its first two years of operation.

CUTTING THROUGH JOB-AD CYNICISM Beware! Job applicants are getting increasingly cynical. So if you have any of the following phrases in your job ads, be mindful they will often be misconstrued – as follows.

• ‘Competitive salary’ So your competitors don’t pay much either • ‘Join our fast-paced company’ You have no time to train me • ‘Must be deadlineoriented’ Your first four projects are already way overdue • ‘Some overtime required’ I’ll be here very late, very often. And most weekends • ‘Duties will vary’ Anyone in the office can boss me around • ‘Career-minded’ Female applicants must be childless • ‘Apply in person’ If I’m old, fat or ugly, the position has already been filled • ‘No phone calls please’ This job listing is just a legal formality. The position was filled by some executive’s nephew

NASA’S COLD WAR GENDER PREJUDICES REVEALED The internet is abuzz after a 1962 letter from NASA to a candidate, identified as ‘Miss Kelly’ emerged online. While rejection letters from NASA were surely common, this one included the statement: “We have no existing program concerning women astronauts nor do we contemplate any such plan.” NASA’s latest class of astronauts is 50% women. However, if NASA had been a diversity champion earlier, they may have employed a number of women – including one Hilary Clinton. “When I was about 13, I wrote to NASA and asked what I needed to do to try to be an astronaut,” Clinton said. “NASA wrote me back and said there would not be any women astronauts.” NASA sent the first American woman, Sally Ride, into space in 1983, 20 years after the Soviet Union’s Valentina Tereshkova became the first woman in space.

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