EXCLUSIVE: GLOBAL HR SURVEY RESULTS ONE-ON-ONE HR AT MCDONALD’S CANADA
HUMAN RESOURCES DIRECTOR WWW.HRMONLINE.CA ISSUE 2.5 | $9.99
ANYWHERE, ANYTIME FLEX-WORK IN PRACTICE
COMMERCIAL PRAGMATIST
EMPLOYEE ADVOCATE
BALANCING
ACT
RE-HUMANIZING HR
HR’S BIGGEST LEGAL RISKS p.6 Mental health in the workplace
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p.8 Family status in the spotlight
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EDITOR’S LETTER
FISHING FOR TALENT Chatting to one HR consultant in the employment branding space recently, he got me thinking about how much the recruitment landscape has changed in recent years, and why HR needs to shift its thinking. A large part of that is the profession’s stubborn refusal to target ‘passive candidates.’ Employment branding, which I’ve always considered one of the more fascinating aspects of HR – tapping in as it does to marketing and advertising principles – is a way to reach these passive candidates. Not surprisingly, this field has also been revolutionized by digital capabilities. Media consumption habits have changed, so in all likelihood most employment branding exercises are not reaching the desired audience. My colleague suggested this was a shift from recruitment to ‘recruitment marketing.’ It’s getting smarter about how and where talent is found – and rethinking the means by which employers connect with that talent. Something else has happened with employer branding in recent years: it has shifted away from being seen solely as an attraction tool to having relevance at all points of the employment journey – from attraction through onboarding and employment and on to the postemployment phase via alumni. This means that, even if you’re not in the hiring phase, the employment brand should not be left to wither and die. Finally, content is king. The content required to engage with audiences via your brand should logically come from the existing examples of similar talent you already employ. My colleague noted: “In fishing terms, we use the right bait for the right fish.” Stay tuned for a more in-depth look at how you can make better strategic use of your employment branding initiatives in an upcoming issue of HRD.
COPY & FEATURES SENIOR EDITOR Vernon Clement Jones EDITOR Iain Hopkins SENIOR WRITERS Caitlin Nobes, Jill Gregorie CONTRIBUTORS Gary Taylor, Amanda Shaake COPY EDITOR Justin da Rosa
ART & PRODUCTION GRAPHIC DESIGNER Marla Morelos DESIGN MANAGER Daniel Williams
SALES & MARKETING BUSINESS DEVELOPMENT MANAGER Sarah J. Fretz NATIONAL ACCOUNTS MANAGER Andrew Cowan GENERAL MANAGER SALES John MacKenzie ASSOCIATE PUBLISHER Trevor Biggs MARKETING AND COMMUNICATIONS Claudine Ting PROJECT COORDINATOR Jessica Duce
CORPORATE PRESIDENT & CEO Tim Duce OFFICE/TRAFFIC MANAGER Marni Parker EVENTS AND CONFERENCE MANAGER Chris Davis
Editorial enquiries caitlin.nobes@kmimedia.ca tel: 416 644 8740 Ext: 234 Advertising enquiries sarah.fretz@kmimedia.ca tel: 416 644 8740 Ext: 241 Subscriptions tel: 416 644 8740 • fax: 416 203 8940 subscriptions@kmimedia.ca KMI Publishing 312 Adelaide Street West, Suite 800 Toronto, Ontario M5V 1R2 wealthprofessional.ca Copyright is reserved throughout. No part of this publication can be reproduced in whole or in part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as IB magazine can accept no responsibility for loss.
Iain Hopkins, editor, HRD CONNECT
Contact the editorial team: vernon.jones@kmimedia.ca
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CONTENTS
REGULARS 4 | In brief: Employment brands
10
14 | News analysis: Strategy execution 54 | Last word: Benefits
Profile: McDonald’s Canada serves quality HR Many people associate fast food employment with low-wage jobs and limited opportunities. Len Jillard, Chief People Officer of McDonald’s Canada, is on a mission to change that
issue
2.5 42
FEATURES: 6 | Legal risk HRD outlines how to avoid the major pitfalls associated with key legal issues, including how to handle mental health issues in the workplace and accommodating family status requests 20 | The global HR survey HRD asked over 4,000 HR professionals globally for their opinions about their profession. The results provide a snapshot of the industry’s health, showcasing what’s being done well and what needs to improve
34 | Swinging the pendulum back: Humanizing human resources At a time when big data and financial analytics seem to be overtaking every role in the corporate world, many HR executives are feeling removed from what attracted them to their chosen profession in the first place. How can they put the ‘human’ back into ‘human resources’?
48
Anywhere, anytime: Flexible work options Boost worker productivity, enhance morale, and have the potential to save Canadian employers $53 billion per year. HRD profiles three companies that have implemented successful flex-work programs
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Don’t gamble...
… what you can’t afford to lose! Managing labour and employment risks for your business is not a game. At Aird & Berlis LLP, we understand the importance of managing these risks in an effective, timely and strategic way. Our Labour and Employment Group has the experience, depth and track record to improve the odds in your favour. After all, when it comes to practical and responsive legal advice, why gamble? Lorenzo Lisi llisi@airdberlis.com · 416.865.7722
airdberlis.com Brookfield Place, 181 Bay Street, Suite 1800, Box 754, Toronto, ON M5J 2T9
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IN BRIEF / EMPLOYER BRANDING
ALL ABOUT THE (EMPLOYER) BRAND Employer Brand International has conducted its third global study on employer branding trends. Here are some of the key findings, tracking the period 2009-2014 WHO’S RESPONSIBLE FOR THE EMPLOYER BRAND? HR
Marketing CEO HR & Communications Directors HR, marketing & communications Executive team Talent management Communications HR & marketing
Branding I don’t know Corporate affairs
36% 11% 8% 7% 7% 6% 6% 6% 4% 4% 2% 2% 1%
HR OWNERSHIP - FIVE YEAR TREND
46%
33%
36%
2009
2011
2014
EXPENDITURE FORECAST IN 2014 An increase in the amount invested
38%
Approximately unchanged investment
32%
Need to justify investment
13%
Unsure
12%
A decrease in the amount invested
5%
EMPLOYER BRAND STRATEGY Q: Has your company developed a clear employer branding strategy? Yes, but it can be developed further
35%
No, but we’re working on it
32%
Yes, we have a clear strategy
17%
No, we have not developed a strategy
14%
I don’t know
2%
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ROI FOR BRANDING EFFORTS
EMPLOYER BRANDING INITIATIVES
The top ROI metrics include:
Q: Which activities are you currently undertaking to enhance employer brand?
Employee engagement
47%
Retention rates
41%
Number of applicants
34%
Quality of hire Cost per hire
Social media Career website development Recruitment advertising/ employer marketing Recruitment branding Induction program Defining EVPs Developing employer brand strategy
33% 33%
Employee referral program Current employee research Leadership development program
MOST IN-DEMAND EMPLOYERS LinkedIn’s Talent Brand Index analyzes the activity of over 200 million LinkedIn members, including company followers, page views and connections,to determine the level of awareness and interest in a company among its key talent audiences. Here are the latest results:
Canada HP Air Canada Accenture Royal Bank of Canada SNC-Lavalin Apple Microsoft Research In Motion Google Suncor
58% 56% 52% 45% 42% 39% 39% 38% 36% 35%
THE TOP 5 ATTRACTORS Q: How important do you believe the following employer brand attributes are in attracting new talent to your company? (1 = least important; 7 = most important)
Career development
6.07
Leadership
6.02
Work environment
5.97
Corporate reputation and culture
5.95
Reward & recognition
5.76
Global Google Apple Microsoft Facebook Unilever GE PepsiCo Procter & Gamble McKinsey & Co Coca-Cola Company
Source for all except where noted: Employer Brand International, ‘2014 Employer Branding Global Trends Study Report’, comprising results from a total of 1,143 responses from eight countries and regions. Further information: employerbrandinternational.com
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TOP LEGAL RISKS / MENTAL HEALTH
Mental health in the workplace:
Practical responses to tough challenges Brought to you by
Mental illness costs Canada $52 billion a year and is the fastest growing area of disability claims, but 64 per cent of Canadian businesses have no structure to support employees’ return to work from mental health leave. Lorenzo Lisi looks at best practices to help organizations meet both their legal obligations and workforce needs Canadian employers have long understood the importance and priority of accommodating employee disabilities, not only to comply with the law and avoid liability, but also to ensure a flexible and productive workplace that addresses the differing needs of its employees. Historically, the emphasis has been on the accommodation of physical disabilities based on assessment of physical capacities. In the last few years, however, Canadian workplaces have seen a dramatic increase in the instances of requests for accommodation on the basis of an employee’s mental or psychological disability. From an employer’s perspective, this triggers an identical accommodation obligation, despite the fact that the illness itself can be based on subjective symptoms, or is not disclosed by the employee until much later, usually after discipline/termination for specific conduct. This area of accommodation is fraught with uncertainty and is now the subject of litigation, which
will further define the obligations of employers. Managing this duty to accommodate and avoiding liability is a significant challenge, which requires foresight, patience and access to appropriate medical information.
THE DUTY TO ACCOMMODATE Despite the often “invisible” nature of a mental disability, an employer’s obligation to accommodate is identical to that where there is a physical disability: specifically, to the point of undue hardship. The case law has been clear that assessing this obligation is a multi-party inquiry, which requires input from the employer, the employee and any third party involved with the accommodation process, such as a union. Mental illness does not always manifest in visible symptoms, but employers still may have an obligation to inquire whether the employee has a disability. Difficulties often arise where there is conduct that would normally merit either discipline or discharge, which is alleged to be the result of a mental disability.
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The trick is determining whether there is a “causal connection” between the disability and the misconduct.
years after the employee was terminated.
ESTABLISHING THE “LINK”
Employers are right to be concerned about the evergrowing damage awards. It is part of the job of HR professionals to identify and manage these kinds of liabilities. But there is no reason to panic. Courts, arbitrators and human rights tribunals are assessing on a daily basis all kinds of claims relating to disability. Mental health is the most recent, and does not change the law of accommodation, or the obligations on employers, but only adjusts the approach. What this means is that employers must continue to utilize all of the tools and techniques normally associated with their obligation to accommodate their employees.
Based on recent arbitration and court decisions, the determination of whether there is a sufficient connection between the misconduct and disability is increasingly being made based on medical reports and advice. For example, in a ruling under the Canada Labour Code, an employee’s claim that his attendance at work while under the influence was causally connected to his alcoholism was dismissed in large part due to the fact that he failed to provide medical evidence to substantiate this claim.1
WHAT SHOULD THE EMPLOYER KNOW? In Krieger v. Toronto Police Services Board, the Human Rights Tribunal of Ontario (the “Tribunal”) held that the police service discriminated against a constable by suspending him for his overreaction to a situation involving a customer at a fast-food restaurant. The Tribunal held that the Police Services Board should have known, based on the constable’s behaviours leading up the incident, that the constable was suffering from post-traumatic stress disorder with respect to his involvement in a dispute with an armed suspect several months prior.2 The thrust of this decision is a warning to employers: there can be a duty to accommodate even in the absence of an employee actually articulating their need for accommodation. The cost of getting this assessment wrong can be considerable. In the recent ruling in Fair v. HamiltonWentworth District School Board (“Fair”), the Tribunal significantly altered the landscape for damages arising from mental health based claims.3 In this case, a school board supervisor alleged that her disability was the result of her highly-stressful job, overseeing the removal of asbestos. The applicant alleged that she feared that she could be held personally liable if she made a mistake. After going off of work and receiving disability benefits for approximately one year, the school board did not return the applicant to work. After a lengthy hearing, and some truly terrible facts with respect to the approach taken by the school board, the Tribunal held that the school board failed to accommodate the employee’s mental illness by not “actively, promptly and diligently” exploring accommodation options. As a result, the Tribunal awarded the applicant over $450,000.00 in damages and surprisingly ordered reinstatement, nearly 8.5
WHAT NOW?
Lorenzo Lisi is a partner and member of the litigation group and the labour and employment team at Aird & Berlis LLP. llisi@airdberlis.com
Source:s Air Canada v. Canadian Union of Public Employees (Airline Division) (Young Grievance), [2001] CLAD No. 472. 2 Kreiger v. Toronto Police Services Board, 2010 HRTO 1361. 3 Fair v. Hamilton-Wentworth District School Board, 2013 HRTO 440.
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KEY TAKE-AWAYS Getting timely, practical legal advice is always a good thing, but here are some best-practice tips which may help in navigating these often difficult waters. yy HR professionals are not doctors. They do not need to diagnose mental health problems. However, employers should watch for patterns and consider whether an employees’ uncharacteristic behaviour is an indication of a mental health problem. yy Do not impose discipline or terminate an employee without taking time to carefully assess whether the misconduct at issue bears nexus to a mental health issue. yy Where HR professionals suspect that an employee has a mental health issue, they should meet with the employee privately, identify concerns, ask if accommodation is required and, of course, document the meeting in writing. yy Accommodation is a multi-party inquiry. If there is a union at the workplace, involve them in the accommodation process as there may be considerations impacting the collective agreement, or other employees. If not, insist the employee actively participate in the process by providing clear, timely medical information to ensure an appropriate accommodation can be considered. yy In response to an employee’s request for accommodation or return to work, HR professionals should consider requesting a medical note from the employee’s medical specialist, rather than the employee’s family physician. In certain circumstances, employers may also want to consider getting an independent third party medical. yy Don’t be bullied! Employers have the right to receive appropriate and proper information in order to comply with the obligation to accommodate. Accommodation doesn’t always mean complying with the exact request of the employee, whether it be in relation to available duties or positions. The process must review available work/positions based on established restrictions. This doesn’t mean simply making work or bumping another employee! yy Be clear. Be concise. Be vigilant in following up. The longer an employee is left “out there” on disability, or absent without leave, the harder it will be to assess accommodation or impose discipline.
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TOP LEGAL RISKS / FAMILY STATUS
Duty to accommodate:
FAMILY STATUS IN THE SPOTLIGHT
Brought to you by
Requests from employees for accommodation on the grounds of family status are likely to escalate in coming years. Kelsey Orth outlines some common pitfalls and details what employers need to be aware of to remain compliant Family status – what can we tell you that you don’t already know? As an HR director you already know that: Family status is a protected ground in all Provincial and Federal human rights legislation. However, what constitutes “family” and what interests are protected under the definition of “family status” is not necessarily the same in every jurisdiction; not to mention that even within particular jurisdictions that definition is not necessarily a static one.
between the Restrictive Approach once enunciated, and the Liberal Approach adopted in the Federal realm. Discrimination will be found where the context suggests that the employer should be doing more to accommodate.
1
2
There have, historically, been three different ways for the law to address family status claims: a. The Restrictive Approach – The easiest approach for employers, discrimination is only found where some kind of employer-initiated change causes serious interference with a substantial parental or other family duty or obligation of the employee. With this approach, very few complaints make it over the threshold. b. The Liberal Approach – The approach favoured by the federal adjudicative bodies. Discrimination is found where the mere situation at work and/ or at home forces an employee to choose between his or her employment and his or her family obligations. This approach places a lesser burden on the complainant and is more congruent with requirements to prove discrimination on other prohibited grounds. c. The “Middle Ground” – Arising largely from Ontario case law, arbitrators and the Human Rights Tribunal of Ontario have struck a balance
3
The duty to accommodate requires an employer to accommodate a legitimate request for accommodation on the ground of “family status,” up to the point where doing so would cause the employer undue hardship. This duty has two elements: procedural and substantive, requiring the employer to both make the right determination with respect to whether or not the employee can be accommodated (substantive), and to have arrived at that determination in the appropriate way (procedural).
WHERE ARE WE NOW? Uncertainty has been created by different adjudicators (whether a provincial or federal Tribunal, Court or Arbitrator) using varying approaches as identified above, and no one approach has “won out” yet. As has been suggested, only a decision on an appeal to the Supreme Court of Canada would definitively answer the question for the country as a whole. However, with recent case law from across the country, including notably the recent Federal Court of Appeal decision confirming the liberal approach originally applied by the Canadian Human Rights Tribunal in Canada (Attorney General) v. Johnstone 2014 FCA 1101, along with a prominent arbitration decision from Ontario (Re: Powerstream) favouring
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a contextual approach to dealing with family status claims, it seems fair to say that any HR director who applies the Restrictive Approach is likely subjecting his or her organization to significant exposure. Instead, like all accommodation situations, it is important for the employer to take a reasonable approach in assessing the employee’s request/need for accommodation against the bona fide requirements of the employee’s position. In the case of family status, an examination of the following factors may be useful, based on the “Middle Ground” approach2: 1. What are the relevant characteristics establishing the individual’s family status? 2. What are the adverse effects complained of and is it reasonable to expect that the Human Rights Code offers protection against the particular adverse effect of the employer’s action on the individual? 3. What prompted the adverse effect on the employee? (e.g. change in a term of employment, or a change in the employee’s personal circumstances?) 4. What efforts has the employee made to selfaccommodate? 5. Did the employee reject options of selfaccommodation?
As we learned from the decision of the Human Rights Tribunal of Ontario in Devaney3, eldercare is another potential type of family status that may garner protection under human rights legislation. This was deemed to be the case in Ontario, where the definition of family status under the Human Rights Code is, specifically, “being in a parent and child relationship,” Clearly, Canadian society today has a much broader appreciation for all the different types of families and family situations that exist than ever before; accordingly – and regardless of the intent when first introduced – adjudicators seem are more willing to interpret “family status” protection under human rights legislation as broadly as can be construed in any given case.
PRACTICAL APPLICATION Between the combination of an expanding application of the term “family status” and the changes in expectations of today’s workforce with respect to work-life balance, employers can only expect to get more requests for accommodation on the ground of family status. It is therefore important to ensure that your managers and supervisors are properly equipped to handle these requests. No doubt the following is a common refrain for HR
directors: it is imperative for employers develop a rigorous procedural component to their workplace accommodation policies. The procedural component should set out a specific process for employees to present accommodation needs and an equally-specific way for management to deal with the request. However, this does not mean that there is only one way to analyze or respond to the family status accommodation request: quite the opposite, in fact. The increasing trend towards the contextual approach of interpreting family status described above also suggests that employers must engage in some type of fact-finding exercise upon receiving such requests in order to explore the employee’s specific needs and then attempt to accommodate the employee. Once you have the facts and understand the situation of the particular employee, it is then incumbent upon you to examine all reasonable options available to accommodate the employee. The most common types of accommodation for family status include: • Flexible scheduling, including hours/days of work; • Short term leaves of absence outside the available ESA leaves; • Alternative work arrangements, such as working from home or reduced travel; and • Providing on-site childcare. The feasibility of any of these options depends largely on the size of the employer and the type of work performed. Regardless of the type of employment, however, you are obligated to seriously consider all options during the accommodation process. These options should then be balanced against employee-specific factors such as: • Whether the employee is the primary-caregiver; • Whether the employee has made efforts to selfaccommodate; and • Whether the employee is rejecting reasonable alternatives to care. On that analysis, then, only if the accommodation causes an undue hardship will the employer be able to avoid accommodation obligations – but of course undue hardship can’t be as difficult to pin down as “family status,” can it? Sources: Canada (Attorney General) v. Johnstone 2014 FCA 110 [Johnstone]. 2 I.B.E.W., Local 636 v. Power Stream Inc. [2009] O.L.A.A. No. 447, 186 L.A.C. (4th) 180 [Re: Power Stream]. 3 Devaney v. ZRV Holdings Ltd. 2012 HRTO 1590, O.H.R.T.D. No. 1571 [Devaney] 1
Kelsey Orth is a partner at CCPartners, a boutique labour and employment law firm that exclusively represents and advises employers with respect to all manner of workplace issues and disputes.
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PROFILE / HR AT MCDONALD’S CANADA
McDonald’s Canada
SERVES QUALITY HR
Many people associate fast food employment with low-wage jobs and limited opportunities. Len Jillard, Chief People Officer of McDonald’s Canada, is on a mission to change that When Len Jillard was 16 years old, he wanted some spare cash for afterschool hobbies, but he only had a few evenings free every week because of hockey practice. In order to earn money while remaining committed to school and sports, he joined McDonald’s as a part-time crew member. Decades later, he is still employed by the fast food giant – although now instead of serving fries, he serves as Senior Vice President, People Resources, and Chief People Officer at McDonald’s Restaurants of Canada Ltd. After working as a swing manager during his time in university, Jillard spent several years in operations and field services, in places ranging from London, Ont. to Mexico City. Eventually he became a regional vice president of HR, and worked his way to the C-Suite. His story is impressive, but not unusual. Although the image of a young, disgruntled worker still constitutes many Canadians’ perception of a fast food employee, in reality, 65 per cent of senior officers at McDonald’s Canada, including President and CEO John Betts, started out in entry-level jobs assembling hamburgers and operating the cash register. Jillard’s passion for the company and the opportunities it provides is clear in his HR leadership, and he is committed to keeping McDonald’s among the top 10 of Aon Hewitt’s ‘Best Employers of Canada.’
THE THREE-LEGGED STOOL Not many HR leaders can boast a staff satisfaction rate of 91 per cent, but Jillard is quick to point out that at McDonald’s Canada, “that’s what we’re all about.” He credits much of this success to the McDonald’s model of the three-legged stool, comprised of owners
and operators, the supplier network, and corporate employees. Each leg is valued equally, and must work interdependently in order to sustain the business. In addition, to ensure that each component is capable of incorporating into McDonald’s overall cultural fit, HR has instituted a rigorous assessment process to ensure that stakeholders are prepared, understand McDonald’s values thoroughly, and are invested in the brand. Becoming a franchisee, for example, is a multiyear endeavor involving: • Panel interviews – individuals are brought into the boardroom for a dialogue with McDonald’s directors from various disciplines. “This is a shared 360 degree approach where we’re interviewing them, but they’re also interviewing us,” says Jillard • On-the-job evaluations – monitoring potential franchisees in the restaurant setting to examine whether they are capable of operating as a worker and a leader, and ensure they enjoy experiencing McDonald’s in a non-consumer role • A registered applicant program – two-year coursework that teaches panel-approved applicants about operations, finances, and other facets of business management • A day of transition where McDonald’s representatives travel with applicants to their new restaurant and walk through meticulous details such as banking and location-specific installments “It’s a collaborative relationship that we have. At the end of the day, we’re the franchisor and they’re the franchisees, but the relationship is very collaborative and in alignment because we need each other to be successful,” says Jillard.
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“One of the dangers as your organization gets older and more mature is you lose touch and relevance. We wanted to prevent that” Len Jillard
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PROFILE / HR AT MCDONALD’S CANADA
UPHOLDING A PROMISE McDonald’s also prides itself on an employee value proposition (EVP) that centres on flexibility and the McDonald’s People Promise, a very simple statement that says ‘we value you, your growth, and your contributions.’ To deliver on that promise, the company has instituted a robust reward and recognition structure that acknowledges high-performing talent and incentivizes workers to take on more responsibility with time. In addition to the employee of the month award, there’s an outstanding restaurant manager award, as well as the Ray Kroc award that showcases the “elite of the elite.” Named for the CEO who helped lead McDonald’s into the global empire it is today, the Ray Kroc award is given to nine managers across Canada every year. Winners receive a trophy, compensation, and a trip to Toronto for leisure and to discuss local concerns with senior management. “It’s a chance to connect with top performers, get a sense of their view on things, and talk about the business,” says Jillard. “We look at all the things they bring up – the complexity of the business, ideas about particular products, how to improve operations, our processes, or even the support they want for their restaurants.” These meetings have yielded such changes as the switch from “functional, pretty bland” uniforms to more employee-friendly, Lululemon-influenced outfits, as well as more liberal policies regarding applicants with tattoos. “One of the dangers as your organization gets older
HR BRAGGING RIGHTS Surprising facts about human resources at McDonald’s yy Over 80,000 employees in Canada; 1,400 locations yy 50 per cent of employees are 18 years old or younger yy 65 per cent of senior leaders began as entry-level crew members, including President and CEO John Betts yy Rated #8 ‘Best Workplaces in Canada – Women’; #10 on Aon Hewitt’s Best Employers in Canada, 2014 yWelcomed y 6,200 new recruits during this year’s ‘National Hiring Day’ yy 1 in 8 American workers were once employed by a McDonald’s yy > 1 per cent - acceptance rate for management trainees at Hamburger University in Shanghai, making it one of the most elite colleges in the world (Harvard’s acceptance rate is around
7 per cent) yy Employs 1.7 million people in 118 countries worldwide yy Over 80 per cent of global McDonald’s restaurants globally are independently owned and operated by local entrepreneurs
and more mature is you lose touch and relevance. We wanted to prevent that,” says Jillard.
COMMITMENT TO HUMAN PRACTICES Of course, Jillard remembers his days behind the counter fondly, and strives to make the employee experience as rewarding and enjoyable as it was in his youth. He does this through extensive investment in training and development, both in the business sense, and by teaching ‘soft skills’ such as teamwork, staying calm in a busy environment, accountability, and dependability. “Whether you stay with us for a year or build a career here, that’s great, but we feel an obligation to help develop you as an individual,” Jillard says. He insists that even employees who leave McDonald’s after a short time are still worth that investment, since restaurant performance in that span is likely to have improved, and the positive experience will turn former employees into lifelong customers. “When people do leave, they usually look back and say ‘McDonald’s was a great first job,’ and now we’re going to have that customer for life. We’re going to get ROI in a different way, but it’s still important to invest in them,” says Jillard.
YOUTH SERVICE One of the unique challenges Jillard faces lies in the nature of his workforce: 50 per cent of employees are 18 years-old or younger. While the possibility of generational conflict and misunderstanding may seem inevitable as a result, McDonald’s takes strides to appreciate the unique needs of students and Millennials. The company has awarded workers over $2 million in scholarships, and partners with such schools as with British Columbia Institute of Technology (BCIT) to offer leadership development coursework. In addition, it hosts a National Hiring Day every year, where it welcomes candidates to its restaurants to learn about the opportunities that exist at McDonald’s. Many are interviewed on the spot, and 6,200 were hired this year alone. Finally, youth outreach wouldn’t be complete without a social media component. McDonald’s realized that the way people communicate has changed, and decided to take part in that transformation. “I know with my kids, I can pick up the phone and call them, but they won’t answer. If I send an email, I might hear back in a week or two. But if I text them, I get a response in about 10 seconds. It’s bizarre to me, but I knew that if I wanted to keep in touch with them,
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top-performing employees and restaurants, and allow for workers to send feedback to the organization. This new engagement portal will allow for real-time communication, and ensure that both sides are as up-to-date as possible on the company’s internal and external affairs. As much as Jillard enjoys his job and providing skill-building opportunities to Canada’s multifaceted Canadian Tirethere’s employee event workforce, one area that remains the highpoint of a typical working day: “The Quarter Pounder with Cheese, or Sausage McMuffin with Egg and a medium Americano coffee, if it’s breakfast.”
I had to figure out how they talk,” says Jillard. In that vein, the company is about to unveil a new smartphone app called ‘MyMcD,’ which will be used to showcase new products and promotions, highlight
HR
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NEWS ANALYSIS / STRATEGY EXECUTION
BRIDGING THE STRATEGY GAP Grand plans and detailed strategies are great, but if they remain ‘on the drawing board’ and fail to be implemented, what’s the point? Iain Hopkins looks at the widening gap between strategy formulation and execution – and where HR should be involved
The majority of business strategies fail. In fact, many different studies have suggested that up to 90 per cent of them don’t live up to expectations. It’s sobering to think of once-omnipresent giants brought down by poor strategy. Think of General Motors’ failed auto design strategies, Blockbuster’s snail-paced adjustment to the consumer shift to digital media, or any number of retailers failing to embrace online avenues. A company with a poor strategy is doomed to fail, but even companies with well-conceived strategies will struggle to succeed if they do not execute effectively. Sixty-one per cent of respondents to a survey by the Economist Intelligence Unit (EIU)* acknowledged that their firms often struggle to bridge the gap between strategy formulation and its day-today implementation. Moreover, in the last three years, an average of just 56 per cent of strategic initiatives have been successful.
A FAILURE TO EXECUTE According to a new report^ from global consulting firm BTS, based on the EIU survey, strategy execution is regularly cited by CEOs as a top priority and
FORM
N O I T ULA
challenge, yet few agree on how to make it happen. The report cited three major drivers of strategy execution: alignment, mindset and capability. All three can be strongly impacted by HR operations within a company. Indeed, Rommin Adl, executive vice president, BTS, says HR is uniquely situated to support the organization in strategy execution. “The research findings revealed that to deliver the full potential of strategic initiatives and drive aboveaverage revenue growth, the success factors include alignment to the strategy, the right mindset, and the skills and capabilities needed for execution,” he says. Not surprisingly, there are key differences in how market leaders position these drivers within their organization, compared to market stragglers. By applying these research insights to their organization and considering execution through this
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ALIGNMENT
“We need to be able to articulate simple and clear messages about what we’re trying to achieve, and then be consistent with it” Cindy Reid
EXECUT
ION
MARKET-LEADING COMPANIES OPTIMIZE EXECUTION LEVERS Market straggler
Capability 12 Mindset
Market leader
42 56 32 52
10
20
30
percentage
40
MINDSET Reflects the level of emotional commitment to the strategy, and encompasses the belief in employees that the strategy is right, that passion can make a difference, and that urgency is required to make it happen.
CAPABILITY Refers to the essential skills required within the organization to effectively execute strategic initiatives. These skills include business acumen and decision-making, leadership and management, and sales capabilities.
framework, HR leaders can add significant value by: 1. Systematically analyzing and assessing the state of these three execution levers within the company 2. Working with senior leadership to develop initiatives designed to improve alignment, mindset and capability at the various layers of the corporate hierarchy 3. Directly tying these initiatives to the organization’s strategic priorities and goals It should be noted that the research also suggests that these three levers – alignment, mindset and capability – are not equally important. “Capability was identified as the single most important predictor of success. And HR is uniquely positioned to take the lead and add significant value through high-impact capability development programs,” Adl says.
A FOCUS ON CAPABILITY
28
Alignment
0
Includes how well people across an organization understand the company strategy, realize why it is critical to success, and recognize the actions required to make it a reality.
50
60
Why is capability so critical, and in this context what does it refer to? According to the BTS study, when surveyed leaders are ‘‘highly confident’’ in their managers’ ability to lead successful execution, the probability that their company is a performance winner is 71 per cent. Diving more deeply into the capability area, the research exposed that certain leadership behaviours and actions are particularly impactful. SEPTEMBER 2014 | 15
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NEWS ANALYSIS / STRATEGY EXECUTION
A ‘hands-on’ approach to implementation, aligning business unit goals to corporate goals, consistently making decisions aligned to the strategy, and crossorganizational collaboration emerged as critical to successful execution. “HR leaders have the unique ability to champion and advocate for the development of their organization’s leadership capability, define great leadership and then implement initiatives to accelerate the skill development that matters most,” says Adl. The structure of L&D initiatives is also critical to the ultimate impact. Most often, corporate learning programs follow a predictable pattern. It is usually positioned as a training event, unconnected to the corporate strategic agenda and lacking relevance to the strategy. Once the program has ended, employees usually return to their jobs equipped with new knowledge and capabilities, but most often fail to apply the learning experience. To avoid this common pattern, HR leaders can effectively link learning to performance and the bottom line by: 1. Recognizing that the development of leaders is not a one-time event but achieved over time through various blended activities to prime, build and sustain capability 2. Closely linking the learning initiative to the company’s strategic priorities and business objectives 3. Engaging the leader’s manager throughout the process to ensure that they communicate the learning initiative to the leader, tie the learning to individual and company objectives, and manage accountability for results 4. Maximizing engagement through high-impact learning modalities, including business simulations and other experiential learning approaches 5. Scaling the learning so it is consistently deployed across the global enterprise while allowing for localization as needed
FORMULATION VS EXECUTION What is more important – strategy formulation, or execution? The survey results provide a mixed view on where executives are focusing (see pie chart). Interestingly, superior performers in revenue growth, market share and profitability are most likely to strike a balance between strategy formulation and implementation. The days of HR sitting on the sidelines as organizational strategy is formulated are long gone,
FORMULATE OR EXECUTE? WHERE DO LEADERS FOCUS? preoccupied with development over execution
27%
strike a balance between formulation and implementation
46%
27%
or should be. BTS believes HR should be heavily involved from the very beginning. “Formulating strategy in a black box without a discerning eye on how to mobilise the organization around its implementation is a big mistake that companies make all too often,” says Adl. It’s a sentiment echoed by Cindy Reid, head of HR at Konica Minolta. Throughout her career, she has been involved in significant change programs, particularly at IBM, where she assisted in transforming the company from a hardware business to an IT solutions company. She’s now involved in Konica Minolta’s own change initiative. The company also needs to shift from its traditional hardware focus towards a software solutions focus. Although she’s only been in the role for three months, Reid has immersed herself in learning about the business. She does not want HR to be seen as an isolated function within the business. Knowing the business must transform to remain competitive, Reid is spending her first 100 days developing, in consultation with other business leaders, an HR strategy that will help deliver change to the business. “We’re not going to do the 15 things on the HR strategy menu,” she says. “We’ll focus on three and do those really well, tick them off and then move forward. I’ll be developing the relationships with my colleagues, the executive and leadership team, and making sure I understand the business strategy and objectives from each of their perspectives. I want to be trusted adviser for that team.” According to the BTS report, high-performing companies embed implementation plans early in the
spend more time on execution over development
FORMULATION
EXECUTION
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TION
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NEWS ANALYSIS / STRATEGY EXECUTION
strategy development process and focus on how to best engage people in execution. “HR has the potential to enable senior executives to think through execution holistically, from a broad talent perspective – do we have the right capabilities and what will it take to motivate and deliver the intended results? By involving HR in the initial stages, organizations can lay the foundation for execution early to ultimately better enable success,” Adl says.
CASCADING GOALS It’s not uncommon for executives to struggle with translating broad organizational goals into something meaningful to individuals – yet this is something that sets top-performing companies apart from laggards. Top performers are able to consistently connect broad organizational goals with business unit, functional and individual goals. However, Adl says non-traditional means of communication and a hands-on approach to bridging this gap are both essential for success.
LEADERS VS LAGGARDS: HIGH-IMPACT LEADERSHIP BEHAVIOURS 40 35
40
39
percentage
27
20
17
15 10 5 0
Cindy Reid, Konica Minolta
K
SIMEEP IT PLE
Sources: *Why Good Strategies Fail, Economist Intelligence Unit, 2013 ^Cracking the Code: The secret to successful strategy execution & lessons for the C-suite, a study by BTS based on a survey of 200 C-suite executives, senior leaders and managers conducted by the Economist Intelligence Unit
KEY HR TAKEAWAYS Increase C-suite attention to implementation Includes how well people across an organization understand the company strategy, realise why it’s critical to success and recognise the actions needed to make it a reality.
30 25
need to be able to articulate simple and clear messages about what we’re trying to achieve and then be consistent with it,” she says. To motivate a sense of passion and urgency, executives must provide opportunities to allow employees to engage with the strategy and discover the value first-hand. Through discovery learning tools and business simulations, employees can be immersed in designed experiences, recognise the actions they must take back on the job, and understand the components of great execution. The involvement of executives throughout the process is just as critical to success. “The research supports that hands-on managers, strong in setting goals and holding people accountable for results, are significantly more likely to be a part of top-performing companies,” says Adl.
Business unit goals align with company strategy
Decisions consistent and based on company goals
Market leader
Market laggard
“Organizations commonly rely on traditional execution approaches involving one-way information flows – offsite events, town hall meetings or PowerPoint presentations – from senior leaders to the employees,” Adl explains. “The senior executives may feel like the strategy is clear and well communicated, but these methods often fail to make the expected impact. Pushing the message out may give the organization brief moments of inspiration, but it tends to be business as usual.” Reid learnt one key lesson from her IBM experience: keep it simple. “Keeping it simple is always the goal in communication across a large group of people. We
Focus C-suite activity on the correct areas Corporate-level executives cannot, and should not, conduct every aspect of implementation. The areas in which they have the most impact, according to interviewees, are general oversight, communication and support for strategic initiatives and projects, and providing a concerted focus for the key activities.
Prioritize and allocate resources appropriately Companies cannot do everything simultaneously. Success depends on doing the most important things first. Hence, selecting which initiatives and projects should have a higher priority, and corresponding access to resources, is itself a strategic choice that should be made at the corporate level.
Integrate implementation and strategy formulation Strategy-making informed by the successes and failures of the past is much more likely to be realistic and itself successful. Although having an overlap between those involved in implementation and formulation helps, formal, standardised processes to analyse and record lessons learned is the most effective approach.
Develop the necessary skills throughout the company Because the C-suite cannot do everything, companies need other executives capable of helping to implement strategy. Hiring in and developing appropriate skills, especially the leadership abilities to drive execution, should be a higher priority.
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Emotional intelligence
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Canadian managers value emotional intelligence in the workplace but need better skills, Ipsos Reid finds
of managers & supervisors in the workplace Ipsos Reid conducted a national survey on the emotional intelligence of over 2,300 managers in the workplace in the fall of 2012. The survey assessed abilities across four key skill areas: • Dealing with other people’s negative emotions and reactions • Communicating effectively, including resolving conflict • Understanding your reactions • Managing your reactions
of managers & supervisors indicate it is important to continue improving their emotional intelligence in the workplace and believe they have the ability to do so
All survey results are available on the Great-West Life Centre for Mental Health in the Workplace (the Centre) website at www.workplacestrategiesformentalhealth.com.
The emotional intelligence of managers can have an impact on the psychological health and safety of employees. A key resource to help managers and supervisors assess and improve their emotional intelligence in the workplace is Managing Emotions. This free online resource was developed by researchers in collaboration with leading experts in emotional intelligence. Managing Emotions is available through the Centre website at
say they could do their job more effectively if they found ways to more easily manage distressed workers
www.workplacestrategiesformentalhealth.com/mmhm.
Yet
Only
100
100
100
80
80
80
60 40 20 0
perceive themselves as motivational leaders
60 40 20 0
are rated as challenged in one or more of the four skill areas
60
were rated as strong across all measured skill areas
40 20 0
The Ipsos Reid survey was commissioned by the Great-West Life Centre for Mental Health in the Workplace.
The Great-West Life Centre for Mental Health in the Workplace and design are trademarks of The Great-West Life Assurance Company.
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COVER STORY / GLOBAL HR SURVEY
THE GLOBAL HR SURVEY
HRD asked over 4,000 HR professionals globally for their opinions about their profession. The results provide a snapshot of the health of the profession, showcasing what’s being done well and what needs to improve As part of our commitment to keeping you informed of the latest developments, challenges and opportunities you face in corporate life, HR Director has undertaken an unprecedented survey of our readers in order to ‘test the waters’ and gauge how successfully HR professionals are tracking on their journey towards being true business partners. We’ve asked readers from around the world for a ‘health check’ of the HR profession. How is HR positioned within organizations to tackle the various issues they currently face? Perhaps more important, what are those issues and are HR professionals receiving the support they need to address them? What are the top challenges now and into the future, and how are HR professionals upskilling themselves to meet those challenges?
ABOUT THE SURVEY Globally, over 4,423 HR professionals took part in the online survey. Survey respondents came from 33 countries around the world, but for the purposes of this analysis HRD concentrated on the key territories of Australia, New Zealand, Canada and the US. The bulk of respondents (40 per cent) worked in large organizations of 1,000 plus employees, with a further 11 per cent working in companies with 501–1,000 employees. Although the survey was open to all HR professionals, there was a natural skew towards HR Director’s readership: most respondents held executive-level positions and would be classified as key decision-makers in their companies. Over 30 per cent held the job title of HR director (or similar), and just over 15 per cent held the CHRO position.
Respondents by position/designation
Respondents by company size
15.01
19.91
15.78
39.73 18.92 10.92
38.83
30.38
10.52
1-100
301-500
101-300
501-1,000
1,000+
CHRO HR director/VP/manager HR assistant/coordinator
HR adviser/ consultant/ executive
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TODAY’S PRIORITIES
Q
To what degree are you personally involved in the following strategic challenges this year?
1. MANAGING PEOPLE 1
Not involved at all
2
Rarely involved
3
Involved to some degree on some issues
4
Often involved
5
Involved at all times
Average rating by country 4.4 4.3 4.2 4.1 4.0 3.9 3.8 3.7 3.6
Australia
New Zealand
Canada
USA
Average rating by job title 5.0
The number one priority, by a significant margin, is people management. HR’s mandate is still to attract, engage and retain the best people. Although the majority of respondents globally listed this as their number one priority, respondents from the southern hemisphere (Australia, New Zealand) emphasized this point above and beyond the more mature HR markets of Canada and the US. Respondents indicated that although their role had changed and the perception of executive peers was shifting towards viewing HR professionals as business people first, who happened to be HR specialists second, there was still an expectation that HR would take charge and lead the people management agenda in most organizations. Strategic workforce management and the challenge of managing multiple generations in the workplace were key concerns for a number of respondents. Here’s a small sample of comments: “HR-related issues are getting more traction with other business leaders, but they still expect HR to do some of their people management for them”
4.5 4.0
“Establishing a robust succession planning process is my number one priority”
3.5 3.0 2.5 2.0 1.5 1.0 0.5 0
CHRO
HRD/VP/ manager
HR adviser/ HR consultant/ assistant/ executive coordinator
Average rating by company size
“A key priority is acknowledging generational differences between executive leaders and recent college graduates (Gen X & Y). The amount of flexibility is caught in a time warp and based on tradition rather than adapting to today’s environment”
41 per cent of HR professionals list ‘managing people’ as their top priority
4.3 4.2 4.1 4.0 3.9 3.8 3.7 3.6
1-100
101-300 301-500 501-1,000
1,000+
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COVER STORY / GLOBAL HR SURVEY
2. IDENTIFYING RISKS, REGULATING AND ENSURING COMPLIANCE Average rating by country 3.8 3.75 3.7 3.65 3.6 3.55 3.5
Australia
New Zealand Canada
USA
Average rating by job title
Not surprisingly, it’s the CHROs and HRDs who are shouldering the burden of these compliance issues. Professionals in these senior roles have been tasked with defining and executing HR policies that comply with local, state, national and international laws. Increasingly, they must also actively manage labour-related risks, regularly auditing HR processes and developing a formal strategy for mitigating workplace-related risks. In addition, HRDs can play an important role in the larger challenge of building an ethical and informed workplace – managers and employees who know, understand and believe in what they need to do. Yet, as readers emphasised, this is easier said than done: “Overregulation by government, meeting all compliance reporting, having enough time to understand and address changes is a constant struggle”
4.5 4.0 3.5 3.0
“A key challenge is integrating into a global market, learning the legislation of different countries and applying that to our existing policies, procedures and guidelines”
2.5 2.0 1.5 1.0 0.5 0
CHRO
HRD/VP/ manager
HR adviser/ HR consultant/ assistant/ executive coordinator
Average rating by company size 3.9 3.8 3.7 3.6 3.5 3.4 3.3
1-100
101-300 301-500 501-1,000
1,000+
Priority number two might surprise some, but with increasingly complicated IR issues and employment laws to contend with, it appears HR professionals are placing greater importance on identifying risks, and regulating and ensuring compliance. This is especially apparent in the more litigious US and Canadian markets – yet Australia and New Zealand also placed this as their second top priority.
30 per cent of HR professionals are ‘strongly involved’ in identifying risks and ensuring compliance
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3. REDUCING COSTS Average rating by country 3.8 3.75 3.7 3.65 3.6 3.55 3.5
Australia New Zealand Canada
USA
Average rating by job title
The global economy is only now – some six years on – recovering from the depths of the GFC. It’s no surprise to see that ‘cost reduction’ remains a key priority for cautious businesses. This is particularly apparent in the US and Canada, although it’s telling that Australia and New Zealand employers also placed this as their third biggest priority. Also of note is the importance of cost-cutting seen through the lens of company size. Smaller companies appear to be still in ‘cost containment’ mode. The overriding feeling from respondents was one of caution. Readers suggested that, in many instances, HR was being called to account not just for its own expenses (‘doing more with reduced HR resources’) but also for overall operating costs, including head count, L&D budgets and other discretionary spend. Readers expressed key concerns:
4.5
“Staff apathy while operating in a downward economic climate with budget constraints”
4.0 3.5 3.0 2.5 2.0
“Coming up with cost-effective HR solutions when there is an extremely conservative approach to spending”
1.5 1.0 0.5 0
CHRO
HRD/ VP/ manager
HR adviser/ consultant/ executive
HR assistant/ coordinator
“Management has an agenda to cut costs, and that equals cutting employees. This is at the expense of work being done”
Average rating by company size 3.9 3.8 3.7 3.6 3.5 3.4 3.3
1-100
101-300 301-500 501-1,000
1,000+
21 per cent of HR professionals are ‘strongly involved’ in cost-cutting initiatives
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COVER STORY / GLOBAL HR SURVEY
4. HELPING SALES AND MARKETING DEPARTMENTS ACQUIRE, SERVE OR RETAIN CLIENTS Average rating by country
5. EXPANDING TO NEW MARKETS
Average rating by country
3.0
3.5 3.0
2.5
2.5 2.0 2.0 1.5
1.5
1.0
1.0
0.5 0
0.5 Australia New Zealand Canada
USA
Both the fourth and fifth priorities are where the results get interesting. A decade ago, HR involvement in helping sales and marketing departments acquire, serve or retain clients would have been unlikely. The HR function generally would have been viewed as distanced from the impact on customers or clients. This perception has changed in recent years, as the impact that HR can have on building not just the skills and capabilities of its sales and marketing teams but also creating a ‘customer-centric’ culture across organizations has started to be recognised. “A priority is improving our skills across the organization around ensuring customer stability for existing customers, and customer growth by attracting new customers”
0
Australia New Zealand
Canada
USA
In May 2014, the Canadian Chamber of Commerce urged Canadian organizations to expand internationally and increase revenue. However, exports have continued to decline since 2002, despite a small recovery since the low of 2009. It is therefore not surprising to see Canadian HR leaders lag behind their counterparts in Australia (who are keen to break into Asia) when rating the importance of expanding to new markets. Opportunities for inter-provincial expansion could be key for Canadian organizations looking to increase their footprint and business leaders will watch with interest discussions of reducing trade barriers between provinces. Any expansion will require significant input from HR to ensure the organization meets its legal responsibilities in different jurisdictions. Our readers identified key concerns: “Developing the China market – the level of talent is not as developed as other Western countries”
40 per cent of HR professionals have added ‘expansion to new markets’ to their priority list
“My company is facing repercussions from the political situation in Thailand and strong local market which impacts on HR and staffing, particularly replacements” “Another business unit was involved in a scandal. Even though this happened in another business unit across the world, clients are hesitant to give us work. It’s a work in progress trying to rebuild the trust and relationships”
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EXECUTIVE BUY-IN
Q
To what extent do you feel that senior management supports your HR initiatives?
1
Not supported at all
2
Rarely supported
3
Supported to some degree on some issues
4
Well supported
5
Exceptionally well supported
Looking at results by country, Canadian HR practitioners feel well-supported by senior management, although they still lag behind their US counterparts. The increasing focus on HR as a business partner and ensuring initiatives align with organizational goals is clearly working to improve HR’s reputation in the C-Suite. The mixed survey responses show some organizations have a way to go: “Senior management values and is aligned with HR initiatives that support the business”
Average rating by country 3.8
“HR has a seat on the senior management team and is a right-hand man to the CEO”
3.75 3.7
“A very hierarchical organization to the extent that what is done at my level is either not known about or hardly known about unless something goes wrong”
3.65 3.6 3.55 3.5
Australia New Zealand Canada
USA
Average rating by job title 4.5 4.0
“HR solutions are difficult to quantify and therefore when it comes to new initiatives which could benefit the company it is a difficult sell because it has more challenging to measure the return on investment”
3.5 3.0 2.5 2.0 1.5 1.0 0.5 0
“We have a very small, cliquey senior leadership team that tend to micro manage over unimportant things. This hinders growth opportunities, instils a lack of trust and cuts into time allocations for big picture HR initiatives”
CHRO
HRD/VP/ manager
HR adviser/ HR consultant/ assistant/ executive coordinator
HR cannot be successful in a vacuum. Buy-in and support from other senior leaders is critical to ensuring HR initiatives take off within the company. Fortunately, some 59 per cent of respondents globally feel ‘well supported’ or ‘exceptionally well supported’ in their HR initiatives. Senior HR practitioners in particular feel ‘well supported,’ and while this drops to ‘supported’ for more junior HR roles, there was general satisfaction with the support shown for HR initiatives.
“Given the current economic climate, many organizations (like ours) need to contain costs and as such there is a constant conflict between best practice strategies and financial commitment”
59 per cent of HR professionals globally feel supported in their HR initiatives
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COVER STORY / GLOBAL HR SURVEY
LEADERSHIP COMPETENCY
Q
Rate the strength of your current leaders in the following areas:
1
Poor
2
Average
3
Good
4
Very good
5
Exceptional
The most surprising result here was staff development: 36.5 per cent rated their managers as ‘fair’ in this category, and only 6.7 per cent judged leaders to be excellent. A recent study from Harvard Business Review Analytic Services indicated that some 40 per cent of line managers were not receiving the tools and support needed to succeed. If they’re not receiving the support, it stands to reason that their team members are also suffering. In forward-thinking organizations it’s up to line managers to manage and cultivate the skills of their staff – yet as our survey indicates, this is rare. With change increasingly becoming the new norm in most organizations, the poor rating given to ‘managing change’ indicates work needs to be done on enhancing these capabilities in leaders. Readers expressed their thoughts:
Focus on client Managing results Solving problems
“Our biggest problem is getting immediate supervisors providing timely, specific and appropriate feedback to team members”
Communication Managing change Staff development 0
1
2
3
4
5
“Front line manager capability and getting them to understand their impact on engagement” “Getting the line level managers on board with process improvement, starting with everyone being held accountable for their roles”
62 per cent of HR professionals feel current leaders have poor to average communication skills
“Helping managers keep up with the speed of change in the business is an ongoing and pressing issue for us”
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CEO SUPPORT
Q
Readers agreed it’s a delicate balancing act:
How much time do you believe your CEO spends on HR-related issues?
11–20
“My CEO is highly committed to people & culture. Business communications, analysis, development, performance begin with people first, followed by the financials etc”
21–30
“My CEO spends time on the wrong HR-related issues”
31–40
“HR has a voice and a chair in the C-Suite. Recommendations may not always be supported but they are given real consideration, debate and mostly buy-in”
CEO time spent on HR issues
0–10
41–50 More than 50 0
10
20
30
40
per cent of votes by HR professionals
They say a fish rots from the head down, and the same holds true in business. The attitude and actions of the CEO spread down through an organization. All employees at all levels look to the CEO for the vision of the organization. They also look to the CEO for accepted norms of behaviour and culture – in other words, how things are done within the organization. It stands to reason that a CEO’s attitude towards the HR function is critical. Just about all senior HR practitioners profiled or interviewed by HRD over the years indicate that CEO acceptance – or otherwise – of the HR role is perhaps the most important factor in the function’s success at a strategic level. Without that support, or if the CEO has ‘old-school’ thinking about the role as a transactional cost centre and does not appreciate the potential ‘value-add’ HR can bring, it’s an uphill battle all the way. As our feature on p.34 in this issue of HRD demonstrates, the relationship flows both ways. Without losing sight of their core strengths in people management, HR professionals need to become trusted advisors to the CEO, in much the same way the CFO or COO might be. The motto of ‘Business person first, HR person second’ has never been more true.
“I find my fellow directors are not following correct procedures and are then using their influence to gain support from the CEO. HR is not consulted about issues that are predominantly HR-related” “I find I’m constantly trying to influence the CEO who is quite old-fashioned in his management style and unenlightened about what HR can provide. Trying to keep engagement high in these circumstances is challenging”
The majority of CEOs spend 11-20 per cent of their time on HRrelated issues. Only 5 per cent of CEOs spend more than 50 per cent of their time on HR issues
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COVER STORY / GLOBAL HR SURVEY
2. BUILDING INTERNAL CREDIBILITY AND INFLUENCE
TODAY’S CHALLENGES
Q
How would you rate the following challenges?
Average rating by country 3.7
1. EMPLOYEE RETENTION 1
Limited/no challenge
2
Minor challenge
3
Fair challenge
4
Significant challenge
5
Major challenge
3.65
3.6
3.55
3.5
Average rating by country 4.1
3.8
3.9
3.75 3.7
3.8
3.65
3.7
3.6
3.6
3.55
3.5
3.5
3.4
3.45 3.4 Australia New Zealand Canada
USA
3.74 3.72 3.7 3.68 3.66 3.64 3.62 3.6 3.58 1-100
101-300 301-500 501-1,000
3.35 3.3
Average rating by company size
3.56
USA
Average rating by job title
4.0
3.3
Australia New Zealand Canada
1,000+
Retention is back on top of the agenda for most organizations, especially those based in the US and Canada. For many, this may mean a refocus on the Employment Value Proposition. For others it may mean a greater concentration on the creation of career paths and development opportunities for employees. “Retention of staff in a low-paying industry is a primary focus for me” “Competency planning and aligning this with pay scales and professional development is where I’m focused”
CHRO
HRD/ VP/ manager
HR adviser/ consultant / executive
HR assistant/ coordinator
HRD has for some time attempted to shift the dialogue away from ‘how can HR get a seat at the executive table?’ to ‘how can I retain my seat at the executive table and continue to add value?’ Not surprisingly, there is still work to be done. Junior to mid-level employees in HR scored this as a higher priority than already-senior HR professionals. Senior HR practitioners are slowly shifting their status towards ‘trusted adviser’ partners to the CEO. Fortunately, thanks to big data and analytical abilities, they also now have the insights to back up their ‘hunches.’ “I’m trying to build accountability – getting all levels of the organization to realise they are responsible for HR management to some degree” “HR has a chair at the table; they just don’t know how to sit in that chair. I’ve worked for some of the most advanced HR teams/functions in my career and my current organization has a HR team that can’t articulate the VALUE they add or bring to the organization – either as a dollar value or an added-value”
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3. EMPLOYEE RECRUITMENT
4. DEALING WITH LEGAL CHANGES
Average rating by country
Average rating by job title
3.3
3.8 3.7
3.25
3.6 3.5
3.2
3.4
3.15
3.3 3.2
3.1
3.1 3.0
Australia New Zealand Canada
USA
Average rating by company size
3.05
CHRO
HRD/VP/ manager
HR adviser/ consultant/ executive
HR assistant/ coordinator
Average rating by company size
3.55
3.3
3.5
3.25
3.45
3.2
3.4 3.15
3.35
3.1
3.3
3.05
3.25 3.2
1-100
101-300 301-500 501-1,000
1,000+
If recruitment is an indicator of economic health, it seems employers in the US and Canada are picking up after a prolonged period of hiring freezes and downsizing. Companies hiring the most are those in the mid-size bracket. HRD notes that the terminology used by the majority of HR professionals has changed: there is no longer talk about ‘tapping into talent pools,’ as there is no such thing as a ready and waiting field of applicants to pick and choose from. Employers are realising the old ways of recruitment are no longer working, hence many readers responded by questioning whether traditional recruitment channels were working. Others are concentrating on more effective workforce management.
3.0
1-100
101-300 301-500 501-1,000
1,000+
Looking at the responses with the ‘country’ lens revealed that there is global caution around legal changes, but no significant differences between territories. Interestingly, it appears that smaller companies are struggling the most with this burden, perhaps due to lack of internal resources to stay on top of myriad legislative changes. It’s insightful to look at Canada. In 2013 alone, Canadian HR professionals saw expansions to workplace health and safety legislation, the introduction of accessibility requirements, legal decisions clarifying the obligations for accommodating employees with child or elder care obligations, and an increasing focus on understanding and accommodating mental illness at work. As one respondent noted:
“I’m trying to create a culture of high performance, and finding new employees who fit into this culture, especially engineers and skilled labour”
“Just having the stamina to stay in this profession and cope with the legislative changes is hard enough”
“Finding the right balance of talent that is suitable for the future of the organization – that is, strategic workforce management”
“One of my top priorities is keeping up with the constantly changing external environment, including legislative updates, while managing internal expectations that sometimes are not aligned with departmental goals” SEPTEMBER 2014 | 29
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COVER STORY / GLOBAL HR SURVEY
5. ADAPTING TO NEW TECHNOLOGY Average rating by country 3.6
PERSONAL DEVELOPMENT
Q
What skills and knowledge do you think will be most critical to your personal success over the next year?
3.5 3.4 3.3 3.2
1
Least critical
3.1
2
Somewhat important
2.9
3
Reasonably important
4
Significantly important
5
Most critical
2.8
Australia New Zealand
Canada
USA
Average rating by job title 3.4
Employment law knowledge
3.35 3.3
Information about competitors’ HR strategies
3.25 3.2
Knowledge about technology
3.15 3.1
Leadership capability
3.05 3.0
CHRO
HRD/VP/ manager
HR adviser/ HR consultant/ assistant/ executive coordinator
HR practitioners are early adopters of new technology. But as our results show, it’s CHROs who are focusing the most time and energy on the scope and pace of technological change – tasked as they are with rolling out enterprise-wide HRIS and keeping abreast of big data, the cloud and social/mobile technology. The advent of cloud-based technology has resulted in organizations being able to store and utilise vast amounts of data at a fraction of the cost and manpower required in the past. The trend has spread to HR, providing businesses with greater insights into talent. It has also forced a rethink of HR skills: to make purposeful use of the data, HR requires the analytical skills to make informed decisions. “Updating new technology into the HR processes is what I will be focusing on for the rest of 2014” “HR’s constant struggle is the ability to remain credible, and remain ahead of technology. A lot of our processes can be seen as ancient, and there seems a reluctance to move away from these manual processes and retaining written confirmation of everything we do”
Communication skills/persuasion Understanding of business strategy 0
1
2
3
4
5
How will HR meet the priorities and challenges they face? Tied to that ongoing battle to gain influence over other business leaders, HR professionals are keen to bolster their communication skills. Although there appears to be a willingness on behalf of HR professionals to develop their skills, there are hurdles. Key themes emerged from the responses. First, dealing with the pace of change is an issue – HR professionals need the skills and competencies to manage all priority items and complete them by given deadlines. Secondly, and possibly related to the first, is simply finding the time to devote to personal development when so much is happening in the business. “Understanding the commercial side of the HR relationship with senior stakeholders” “Broadening my qualifications and getting back to university. Without the support of my workplace it makes it very hard to keep up with current practices”
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THE FUTURE
Q
To what degree will you be focusing on the following areas over the next year?
1
No focus
2
Limited focus
3
Reasonable focus
4
High focus
5
Strong focus
Developing your personal leadership management skills
Where will HR be focusing its attention over the next 12 months? Responses understandably varied widely on this topic. Common themes revolved around change management – usually tied to downsizing, restructuring and streamlining of operations. There was also concern about costcutting and budgeting – primarily, convincing other executives and line managers of the importance of things like L&D in tight economic conditions. ‘Doing more with less’ was a common theme, for the organization as a whole and the HR function specifically. On the retention front, holding on to older workers emerged as a key concern, and for recruitment it was finding the right talent, quickly. Readers were keen to share their challenges: “Reducing cost in the business, finding and reducing/eliminating activity in the business that is now obsolete or doesn’t add value and restructuring activities”
Executive education programs for your organization’s leadership/ management team
L&D initiatives across the organization
“Training – having the time and resources to train the managers and staff ”
Change management initiatives
“Guiding the organization to find, motivate and keep talent via earning ‘employer of choice’ status. Guiding executive leadership to viewing people issues/ opportunities through a business case lens”
Working with law firms on legal compliance Working with external parties on recruitment
“Engagement in a declining market is my top priority”
Working with external parties on strategy-focused projects
“Communication on change is the greatest challenge. We sometimes feel like change is made and the message isn’t communicated. We find out later and have to quickly learn and adapt. We are told to execute but often don’t know the how or why and have to ‘figure it out,’ and fast!”
Incorporating new technology to improve internal processes Implementing new Workplace Health & Safety initiatives Remote workforce management and international recruitment Revamping employee benefits, including pension plans Implementing new engagement/ reward & recognition programs 0
1
2
3
4
5
“HR practitioners are often young, qualified but inexperienced. This places them at a disadvantage in communicating at the boardroom table. There is confusion in their minds about their role. Is it to ‘serve’ management or support staff ? When difficult situations arise far too often we see HR staff ‘supporting management’ by leaving their poor and ill-informed decisions go unchallenged. It is about organizational credibility. There has been a ‘dumbing down’ of HR at great cost to organizations who get themselves into trouble”
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HEALTH AND SAFETY / SPECIAL PROMOTIONAL FEATURE
OCCUPATION:
HEALTH AND SAFETY
Workplace injuries are one of the largest costs for Canadian organizations, amounting to $19 billion a year. What can HR leaders do to implement better health and safety systems that reduce risks to workers and lower costs to companies? If you’ve ever had a co-worker or an employee who was critically injured at work, or if you’ve witnessed a near miss, you’ll understand the impact occupational injuries can have on workers and on the company. Take a look at your province’s Ministry of Labour convictions and the financial impact of an occupational injury becomes clear. “Construction company fined $90,000 after a worker died following a fall through a skylight”; “Manufacturer fined $65,000 after a worker was injured by machinery”; “Retailer fined $90,000 after a worker was injured by falling merchandise.” By taking effective steps and implementing the right policies HR professionals can make sure employees are as safe as possible, and that their organization’s liability is reduced.
A PROACTIVE APPROACH Having an effective health and safety management system in place is the best way to mitigate the health and safety risks associated with your day-to-day operations. It becomes even more crucial when your business involves high-risk activities, such as working at heights, working with high-voltage electricity, or transporting dangerous goods. Many employers are taking proactive steps to ensure
they meet specific requirements such as taking part in a health and safety audit. “An audit ensures that the company meets a standard within health and safety. It’s a way of reducing their liability to a certain extent,” Infrastructure Health & Safety Association consultant Carlos Figueira says. “It’s definitely a proactive approach.” The Certificate of Recognition program, one of Canada’s most recognized validation programs, was created to provide companies with a standardized benchmark against which to measure their health and safety performance. Popular with construction companies, it’s also being adapted for manufacturers, transportation firms, and other organizations because of increasing demand for standards. This type of workplace audit is not only an effective H&S tool, but an effective business tool as well. While some organizations go through the process to ensure they are being good employers, many others find it’s increasingly in demand from potential clients and can be an advantage in a bidding process. Infrastructure Ontario and the Toronto Transit Commission both require contractors to have COR certification. “Buyers of services are saying if you want to work
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for us you have to be certified,” Figueira says. “If you don’t meet that standard then we can’t do business.” When employers are able to demonstrate to potential buyers that their health and safety management system has been developed, implemented, and evaluated on an annual basis through comprehensive internal and external audits, it’s a strong indicator of the organization’s commitment to safety. That’s a win for HR and the CFO.
THE AUDIT PROCESS A typical audit starts with the application and training. An organization then completes an internal audit to assess existing risks and the effectiveness of processes within the health and safety management system. Once those steps have been completed and submitted, an expert such as one of IHSA’s auditors will complete an external audit to observe the workplace, interview employees, and gather information. “We’re making sure they are following established practices. The external audit is where we measure where the rubber hits the road,” Figueira says. “Because it’s evaluated by a third party, it’s an objective validation of the program, and a validation that the workforce understands and are following the program.” An audit serves as a good gap analysis to ensure your HR department is meeting requirements. It’s a
ELEMENTS OF SUCCESS What makes an effective health and safety program? Under the Certificate of Recognition program, IHSA will evaluate your program based on 19 key elements. To receive certification, your health and safety program must attain a passing grade of 80 per cent or more. Policy Statement Hazard Analysis Safe Work Practices Safe Job Procedures Company Rules Personal Protective Equipment Preventive Maintenance Training & Communication Workplace Inspections Investigations & Reporting
Emergency Preparedness Statistics & Records Legislation Occupational Health First Aid Health & Safety Representative/Joint Health and Safety Committee Workplace Violence & Harassment Return to Work Management Review
“Buyers of services are saying if you want to work for us you have to be certified. If you don’t meet that standard then we can’t do business” Carlos Figueira great way to identify any weak points. There are a number of “intangible” benefits to going through a process like COR, Figueira says. “It improves morale – workers can see the company doing something and they appreciate it,” he says. “They feel protected and safe. It also helps develop a culture of safety so people are automatically doing the safe thing. You put your seatbelt on before you start your car because it’s automatic. This is the same thing.”
MORE THAN BOX-TICKING It’s not enough to have good processes in place. The participation of employees and their commitment to safety is key to its success. When going through an audit process it’s vital that it does not focus just on leadership and managers. Employees at all levels should be involved throughout the process so that when it’s complete, every worker understands what is expected of them and why. You may be surprised by the insightful input you get from front line workers. It’s their bodies on the line, so they’ve likely given safety a lot of thought. Annual re-assessments ensure consistency and make sure that any problem areas are addressed. For example, the COR program requires an internal assessment each year, which demonstrates the organizations adherence to the program over the previous 12 months. Protecting the health and safety of all workers at all times is the right thing to do, but it’s also good for business. From reducing liability and disability costs, to improving employee morale and loyalty, effective development and maintenance of a health and safety management system is a proactive approach to eliminating workplace injuries and illnesses. Visit ihsa.ca/COR to find out more about the COR™ process and how to get started
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HR STRATEGY / HUMANIZING HR
SWINGING THE PENDULUM BACK:
HUMANIZING
HUMAN RESOURCES At a time when big data and financial analytics seem to be overtaking every role in the corporate world, many HR executives are feeling removed from what attracted them to their chosen profession in the first place. How can they put the ‘human’ back into ‘human resources’?
For years, the best way to obtain a job at Google was to receive a degree from a top-tier university, earn a 4.0 GPA, and gain several years of highly esteemed, relevant experience. This is because the internet giant used a series of quant-based formulae to determine whether a candidate was a good fit for their organization. What they found, though, was that these analytics were ineffective. While data-driven processes were able to identify remarkably intelligent candidates, they failed to capture those with other important attributes, such as learning capacity, humility and curiosity.
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“GPAs are worthless as a criteria for hiring, and test scores are worthless,” Laszlo Bock, senior vice president of people operations at Google, told The New York Times. “We found that they don’t predict anything.” Google now seeks candidates the old-fashioned way, using behavioral interviews to evaluate whether potential employees can think outside of a traditional mindset while also working in a collaborative setting. This reversion is an important lesson for HR leaders everywhere: although new methodologies and skillsets can be advantageous, when HR executives lose sight of the ‘human’ element inherent in its job duties, business suffers.
erupted in scandal and resulted in him serving six months in jail on a fraud conviction. While certainly a setback, the experiences taught him the consequences of placing profit before people – a cautionary tale he now extends to business executives throughout Canada. “In my previous life, I was your typical command and control leader. I was driven by fear and greed, and wanted to make as much money as I could,” says Meir. “I did care about people and was told I had a good heart, but I was clouded by the fear and greed that operates in a lot of businesses today in the Capitalism 1.0 model.”
SEPARATING HR FROM THE REST
Meir worries that in attempting to fulfill the executive board’s thirst for “cleverness and metrics,” HR frequently sidesteps the people part of business. Although he recognizes the need for strategy and operational refinement, Meir cites the Peter Drucker idiom, “Culture eats strategy for breakfast.” To attain this, he first suggests that HR leaders carry out an assessment of the extent to which the organization’s clearly defined core values and
HR leaders are now consistently challenged to prove the value and ROI of specific programs and initiatives. “Working with finance is so critical. I think our team has to continue to develop skills so they understand how the organization makes money and how they lose money,” SVP leadership and organizational development at RBC Helena Gottschling said at an HRD roundtable in 2013. However, while a robust understanding of numbers and data proves helpful to many HR professionals, when isolated from overarching values and cultural goals, accompanying outcomes often are fruitless. Cliff Stevenson, senior research analyst at the Institute for Corporate Productivity, says he believes this data focus could see HR lose its connection to the psychology and knowledge of what actually motivates employees to perform better. “It’s still good to have a really good grounding into how people think because it is one of the only departments that is completely focused on people,” Stevenson says. “As we’re pulling more and more people into the HR field from finance, accounting and operations, some of that expertise may be lost.” It’s a sentiment echoed by Mikael Meir, an executive coach to many of the country’s top CEOs and an instructor of ethics at the Schulich School of Business. “The best path to prosperity is one that includes the fulfillment of people, as well as making money,” he says. Meir is well-versed in business ethics, having co-founded Portus Asset Management, which
A CONSCIOUS CULTURE
TIPS FOR A MORE-ENGAGED WORKFORCE 1. Become a ‘Chief Purposologist’ – Center all business functions on a core purpose, and have that purpose remain the organization’s primary reason for existence. 2. Provide acknowledgment from the heart – Employees want to believe that their hard work and effort is noticed and appreciated. Routine acknowledgement and praise will inspire workers, who will feel a heartfelt connection to the organization’s goals. 3. Use engagement as a strategic device – Strategic planning typically focuses on market trends and developing a competitive advantage, but engagement should be a key component as well. Development of talent and aligning culture with values are two ways that human-oriented policies can improve prosperity. 4. Be humble – Instead of a cutthroat, “how do I get what I want from my staff” mentality, adopt a more empathetic viewpoint. Workers will be more productive and loyal when they feel reciprocal care and concern. 5. Feed workers’ intrinsic motivation – While a certain percentage of employees will always be motivated by money, the majority require fulfillment on a deeper level. To motivate these workers, grant them autonomy to exercise strengths and skills, provide learning opportunities, and guide them to implement the organization’s purpose in all their duties and responsibilities. Source: mikaelmeir.com
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HR STRATEGY / HUMANIZING HR
DON’T FORGET THE SOFT SKILLS While the ability to do quantitative, data-driven work can be invaluable in HR, there are still several ‘soft skills’ that can help thrust HR professionals into executive positions. These include: PUBLIC SPEAKING – the ability to deliver authoritative, persuasive speeches in front of a large crowd. Many HR professionals are responsible for getting employees on board with new initiatives, as well as representing workers’ interests to other members of the C-Suite. Intelligent oral communication can help accomplish both. PEOPLE READING – knowing how to understand an employee’s mannerisms and gestures, and understanding when they’re being genuine or disguising what they really want COURAGE – being able to stand up to other managers and initiatives, and voice unpopular opinions. There are times when the C-Suite can become overly concerned with the bottom line or their board of directors, and HR needs to be the defender of the organization’s values and culture EMPATHY – never losing heart, or the ability to create an enjoyable, engaging workplace for employees LISTENING – hearing the concerns of others, and being open enough to hear unspoken cries for help associated behaviours are imbibed by its people. After measuring this, they should then employ strategies that drive those core values into action, which in turn, he believes, should increase employee engagement and enhance the culture with a deeper connection among individuals. This, he says, maximizes the ability to increase revenue, profit and enterprise value. “Come up with specific processes to put values into action. Hire against them, onboard against them, evaluate performance against them, and award against them,” Meir says. HR will know if it succeeded in implementing a purposeful culture if it’s distinct, widely subscribed to, and possibly even viewed as divisive. If a company’s virtues make up its structural backbone, employees who come on board either understand it and live up to it, or think, “these people are weird; they are freaks.” “Polarization is good, it shows you have a defined culture,” says Meir.
CREATING A CULTURE In addition to workplace culture, HR professionals should be accessible to workers and maintain a human connection with them. “Employee engagement is not simply finding ways for your employees to connect to the company, it is also about finding ways for the company to
“The best path to prosperity is one that includes the fulfillment of people, as well as making money” Mikael Meir
connect to the employee,” says Symbolist VP of solution design Paul Hebert. “If all we do is reward behaviours that benefit the company without the reciprocal effort of creating things that benefit the individual, we’ve created a very one-sided relationship.” Even small efforts put forth by managers, such as personalized holiday gifts or inquiring about an employee’s marathon training, can provide significant validation among workers, which leads to increased satisfaction and engagement. “Every company needs to adopt an attitude of giving back and understanding that employees are not Pavlov’s pets who only work for scraps,” Herbert says.
KEY TAKEAWAYS Hebert suggests five ways that HR can help ‘humanize’ the workplace. These include: yyMake it clear that empathy is a company-wide priority by rewarding employees for contributions that supported other workers or departments yySet up a system that encourages employees to show gratitude for one another, and rewards altruistic behavior yyEncourage employees to think outside their immediate teams and lend a hand or support to other divisions and departments as needed yyModel ethical behaviors by admitting to mistakes and establishing trust through mutual respect yyDevelop training programmes that teach employees how to deal with conflict at work and build emotional intelligence
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November 7th, Liberty Grand Toronto
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To book your table online, visit: HRAWARDS.CA P: 1855-283-2721 E: jessica.duce@kmimedia.ca 34-37_HRStrategy.indd 37
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COMPANY CULTURE / BRUCE CROXON AND JASON ATKINS
Culture club:
DOES YOUR COMPANY CULTURE DETERMINE SUCCESS? What makes an organization successful? Canadian entrepreneurs Bruce Croxon and Jason Atkins say it’s a no-brainer: culture is the key predictor of success
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From Lavalife to Dragon’s Den, Bruce Croxon is the face of successful Canadian entrepreneurship. In January 2013, Croxon’s investment firm OMERS Ventures announced it had backed Canadian startup 360 Incentives to the tune of $7.66 million. What made Croxon so confident in his investment? It was the company’s culture as much as its business plan. “There are so many good ideas and very few make it,” Croxon says. “When you’re growing and you’re on the way up it’s not hard to have a happy workplace, but that inevitable dip that we face where the grind is on – it’s the culture gets you through.”
“When I look back on what got us through the inevitable ups and downs of growing a small business it was our culture. Whenever I veered from our core values I paid the price very heavily”
CULTURE = TANGIBLE RESULTS
Bruce Croxon
Culture is more than just a buzzword for 360 Incentives founder and CEO Jason Atkins. It’s a key budget line, and one that translates to results. “People spend most of their lives working. No matter what you do in life and why, it’s always about happiness. People tell stories about going to work and they hate it,” Atkins says. “What if we build a company where we enjoy it and we’re happy? If people are happy in the office, how does that transpire for the customers, for their lives at home? How does it transpire to your business?” His approach, which includes a team of eight people and also a ‘culture budget,’ is paying off in national recognition – the company recently topped Best Places to Work 2013 list. However, there are more tangible results to the organization’s approach. Atkins offers one particularly impressive statistic to back up his culture claims: 360 Incentives has never lost a customer. The industry average for customer turnover is 15 per cent. “If you equate that to dollars and cents in our world, that’s probably two to three million dollars,” Atkins says. “When things go wrong – and things will always go wrong – in our world, the customers are so connected to us that they call us and say, ‘if you were another vendor and not a partner, you wouldn’t be here.’ “It’s all about our business and our commitments, the values and what we’ve done. Our customers think our team is phenomenal, because they feel
like we’re part of their organization and we’re an extension of their business.” The commitment to values and culture reminds Croxon of his early success with Lavalife, one of the first online dating sites. “I get asked a lot what made [Lavalife] successful,” Croxon says. “There’s no easy answer, but when I look back on what got us through the inevitable ups and downs of growing a small business it was our
The 360 team celebrates its Best Employer win
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COMPANY CULTURE / BRUCE CROXON AND JASON ATKINS
“People spend most of their lives working. No matter what you do in life and why, it’s always about
happiness” Jason Atkins
culture. Whenever I veered from our core values I paid the price very heavily.” The decision is not always easy in a small growing company because it “doesn’t keep investors happy this quarter,” Croxon says. “It is longer term thinking. You’re building something to last and that can be a tough discipline to adopt.” The core of 360 Incentives’ culture comes from a values exercise developed by Zappos, itself famous for its successful company culture, to align individual and organizational values. Asked about any regrets during the development of the company, Atkins says he wishes he’d implemented the values system earlier. He lists having an unbelievable experience for clients, an unbelievable workplace for his team and making a difference in the world as the core values. The values the company established are more than words painted on the wall. They hire, promote and make major decisions based on them, and part of each employee’s performance review is a peer review of how they meet company values. Both entrepreneurs express disdain for companies that think they can list the values they want employees to have, without either looking at
the real culture of the organization, or doing anything to make the changes they want to see. “Culture leading to performance doesn’t happen by accident,” Croxon says. “It takes a dedicated commitment to do it. [It takes] the discipline to take a couple of days a year to set a path for the year, reinforce the vision, check in on the core values, create systems to integrate how you run day to day. “Without that commitment from the leaders of the organization, all the words on the wall don’t mean anything if they aren’t lived.”
TIPS FROM LAVALIFE: THE SURVIVAL ON THE MOON TEST When Lavalife first launched, Bruce Croxon and his co-founders mostly hired on intuition, but as the company grew it was impossible to be involved in every new hire. The company leaders relied on specific values-based hiring processes. For example, Lavalife applicants had to prove their problem solving and teamwork abilities with NASA’s Survival on the Moon test. The test involves a scenario where a spaceship has crashed on the moon. Participants must rank 15 items in order of importance for allowing them to survive the 200 mile journey to the base. Applicants were brought into the office as a group and would first complete the exercise independently, then in small teams. “In 15 years I never once saw an individual score beat a team score,” Croxon says. “We got to watch everyone interact. The guy that insisted that a power bar was the most important thing for survival while you froze to death – there’s something else going on there. It’s a good indication that that person is not going to be a good fit for our organization.”
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EMOTIONAL INTELLIGENCE / SPECIAL PROMOTIONAL FEATURE
THE POWER OF EMOTIONAL INTELLIGENCE AT WORK Mary Ann Baynton, program director, GreatWest Life Centre for Mental Health in the Workplace, highlights why every manager needs to develop their emotional intelligence The emotional intelligence of managers has an effect on the psychological health and safety of employees. It encompasses skill areas such as the ability to deal with other people’s negative emotions and reactions, understanding and managing our personal reactions, and learning how to communicate effectively, including conflict resolution. Most managers and supervisors understand the importance of emotional intelligence in their roles. Unfortunately, a majority also believe they are strong in this area, when the opposite is true. A 2012 Ipsos Reid survey commissioned by the Great-West Life Centre for Mental Health in the Workplace (the Centre) measured the emotional intelligence of managers in Canada, specifically relating to how they may respond to the emotional distress of their employees.
Across all sectors, managers and supervisors were rated as having more weaknesses than strengths in all measured emotional intelligence skill areas, including dealing with other people’s negative reactions and emotions, understanding and managing one’s own reactions, communicating effectively and resolving conflict. Almost half of respondents were rated as challenged in one or more of these skill areas and only 1 per cent was rated as strong across all measured areas. The skill areas where respondents experience the most challenges in working with distressed employees are communicating effectively and understanding their own emotional reactions. Survey results showed that nearly one third of managers/supervisors had some challenges in these areas. The good news is that 91 per cent of Canadian managers and supervisors recognize the importance of improving their emotional intelligence in the workplace and believe it is possible to do so. One resource leaders can use to help assess and improve their own emotional intelligence is Managing Emotions, part of the Centre’s free, evidence-based Managing Mental Health Matters program. Managing Emotions was developed by researchers in collaboration with leading experts in emotional intelligence. All of the Centre’s tools and resources are available in English and French to anyone, anywhere, and at no charge at www.workplacestrategiesformentalhealth.com
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WORKFORCE MANAGEMENT / PAYROLL
Payroll for the modern age
Many companies neglect to examine the state of their payroll system for years at a time, even though outdated processes cause them to squander hundreds of thousands of dollars every year. HRD outlines when it’s time to overhaul a payroll system and how to implement the best solution for your organization Pfizer, one of the largest pharmaceutical firms in the world, employs around 110,000 workers and operates in over 180 countries. Although the company has experienced incredible business success in the past decade, when it performed an internal audit of its payroll practices, it realized that its European markets used dozens of vendors for only a handful of countries. As a result, the company looked at ways it could reduce operating costs, and found that local regulations made one standardized solution impossible. However, the firm could still consolidate payroll practices in many regions. Pfizer consolidated its use of 25 vendors to a mere four or five, and accumulated significant savings in payroll costs and labour in the process. This case study, featured in a recent report by PricewaterhouseCoopers (PWC), highlights the need for companies to routinely assess their payroll practices, and ensure that they are operating as efficiently and cost effectively as possible. “The risk is that it’s very, very expensive. Many companies have more than one system, and these systems are getting older and not keeping up with technology. It’s costing them a lot of money,” says Elizabeth Williams, director of corporate communications at ADP Canada. Fortunately, there are steps that companies can take to drastically reduce visible and hidden costs, and implement a payroll system fit for a modern workforce.
EVALUATING THE STATUS QUO In this automated age, it’s disheartening to learn that 58 per cent of HR professionals’ time is spent on administrative work, particularly data collection and entry. Improved payroll systems require less manual input from HR, allowing managers to use these hours for workforce planning and other value-added purposes. Before shopping for a new platform, however, organizations should put their current system through an assessment or audit process to see whether it is sufficiently up-to-date and compliant, or if not, where it falls behind. “It’s as simple as building test scenarios in the system and following those through. You don’t even have to have a test system to do this,” says Tracie Sawade, customs business analyst with Ultimate Software. “You can just say, in this live payroll, we’re going to check 15 things, and then check them all the way through the system – making sure it’s entered correctly, processed correctly, and getting the results you’re expecting.” In addition to these technical questions, it’s important to investigate whether payroll processes are effective from a business standpoint. HR should investigate if workers are paid properly, on time, and whether employees and their managers can easily access personal information. Payroll-related smartphone apps are on the rise, with ADP’s alone
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“Many companies have more than one system, and these systems are getting older and not keeping up with technology” Elizabeth Williams boasting 2.7 million users and holding a top 20 spot in the Apple Store’s most popular business apps. This indicates a growing trend toward mobile, and as a result, employee preferences regarding self-service should be a key consideration as well.
IMPORTANT DECISIONS Companies that make the decision to implement a new payroll system have numerous factors to consider before choosing a vendor. In addition to the initial cost of setup and installation, there are ‘hidden costs’ that account for 50 per cent of the ‘Total Cost of Ownership’ (TCO) according to PWC (see boxout). One way to reduce these costs is to outsource payroll processes to an external vendor. “If you’re using your own systems internally, it can cost up to $1,200 per person per year. If you put a unified system in place, those costs drop a bit to $1,000 per person per year. The real savings come when you outsource it to someone else, then with that system, costs can go down to $900 per person per year, which amounts to pretty big savings,” says Williams. The question for companies is whether they want to give up so much autonomy. One of the major drawbacks of outsourcing payroll is that HR doesn’t have access to configure the system or make changes to it, and thus they are required to contact the vendor every time they want to perform one of these functions. “I’m not a proponent of outsourcing, personally,” says Sawade. “I like having the control to run my payroll all the way through to the end, and don’t want to rely on a vendor to ship cheques or process taxes.”
CHOOSING A VENDOR After making the choice between in-house or external, there are a couple other steps before finally settling on a system. First off, Sawade recommends that organizations thoroughly test potential vendors’ services to ensure they work exactly as advertised. “Do an RFP and when you get results from vendors, analyze them, set up demos of the system, ask the vendor to show you how to do 10 things, the 10 things most important to your business,” says Sawade. She also suggests that HR check references for the vendor, both with current customers and those who
either rejected the product or left it. That way, companies can gain a thorough understanding of that particular payroll system’s various advantages and drawbacks. Finally, the last critical consideration that HR needs to think through involves analytics. A recent report from Deloitte found that two-thirds of HR leaders hope to make better use of big data, and payroll can play a big part in that. Comparing absentee rates between work sites, for example, can provide an early warning sign of workplace issues in particular locations. In addition, examining trends in hourly wages, overtime, and holiday time, and benchmarking that information to similarly sized firms, can allow HR to understand where their company fits in its industry. “This is a way HR can add value to an organization, and keep labour costs competitive in the market,” says Williams.
ADDING UP ALL THE COSTS The Total Cost of Ownership (TCO) of any payroll system is made up of visible costs, which appear on the surface, and hidden costs, which often go unnoticed. Forwardthinking organizations should consider both when instituting new payroll solutions, in order to have a maximum impact on total HR operating costs.
Visible costs: yInstallation y – the one-time fee of acquiring software and setting up new technology ySystem y upgrade – time and money lost as a result of software upgrading to a more current version yDirect y labour – the costs associating with paying workers to operate payroll systems and carry out administrative functions.
Hidden costs: yMaintenance y – the costs needed for IT to support and sustain payroll technology yTraining y – teaching HR how to use payroll systems, and refining skills when software is updated yIndirect y labour – workers who are not primarily employed to work with payroll, but do supporting functions such as collecting data or answering questions about wages and benefits y‘Seams y Costs’ – the costs of integrating disparate systems, both within HR and in the overall organization. For example, gaps may exist between payroll and HR data administration, and technology or human processes are needed to bridge the two.
Source: PwC/ADP Study
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INTERNATIONAL PROFILE / CORNING
THE FUTURE IS CLEAR AS GLASS Jill Gregorie goes behind the scenes of glass production in the ‘crystal city,’ where global behemoth Corning produces glass for everything from the Hubble Space Telescope to the humble smartphone. HR couldn’t be busier Corning is such a small city in the Southern Tier region of New York State that the last US census pegged its population at just over 11,000 residents. Yet this municipality, nicknamed ‘Crystal City’, is home to Corning Incorporated, a Fortune 500 company that produces glass for more than 1.5 billion smartphones and tablets, and produces optical, wireless technologies and connectivity solutions for high-speed communications networks; trusted products that accelerate drug discovery; and emission control products for vehicles. It has also manufactured materials for US Space Shuttle windows, and the Hubble Space Telescope.
Christine ‘Christy’ Pambianchi, Corning’s senior vice president of HR, has been with the company for 14 years, and has experienced many of the highs and lows that come with managing the staff of a firm subject to volatile and sometimes unpredictable market fluctuations. She explains that Corning was originally founded more than 160 years ago by the Houghton family, and innovation has been central to the company’s success since then. Some of its notable accomplishments include the production of Thomas Edison’s light-bulb encasements, the invention of the first low-loss, viable optical fibre, and development
THE HISTORY OF CORNING: A TIMELINE OF INNOVATION
1851
1868
1879
Wood and coal trader Amory Houghton Snr purchases Cate & Phillip, which later becomes Bay State Glass and the Union Glass Works. These two small companies lead to the purchase of Brooklyn Flint Glass Works in Brooklyn, NY
The company moves to Corning, NY, and changes its name to assimilate with the community. Management decides to focus on items for railroads, as well as scientific and industrial glassware
Corning develops the glass encasement used for Thomas Edison’s lamps
1915 During World War I, Corning debuts PYREX as an alternative to German-owned Duran
1926 Corning starts making the glass bulbs used in cathode ray tubes, one of the uses of which is experimental TV sets
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of ceramic substrates used in catalytic converters that removed smog from the US atmosphere in the 1970s. “Our business model is one where we’re making big investments in material science programs. We actually invent materials, so we’re hiring mostly engineers and scientists who are experts in their fields,” Pambianchi says. “As a company, we take a very long view of how we use those assets and how we use talent in the company. We talk to people about their careers being marathons, not sprints.”
ASIAN EXPANSION Of the 34,000 workers that Corning employs worldwide, about 23,000 are located outside of the US. Given the nature of Corning’s production processes, it’s imperative that they have units and staff around the world, close to their purchasers. “We tend to locate our operations based on where our customers are. We typically manufacture a material that then goes into somebody else’s system,” Pambianchi explains. “For example, the ceramic substrate we make goes into a catalytic converter that is used in an automotive company’s car.” Although Corning invented a system of liquid crystal display glass prior to the turn of the century, it wasn’t until about 2004 that “it really began to take
1961 Corning manufactures heat-resistant windows for NASA’s Mercury spacecraft. Corning has also produced windows for Gemini, Apollo, and other manned space vehicles
1970 Three Corning scientists develop the first fibre optic cable with the capacity to transmit information over long distances without sacrificing signal strength
off, and you saw the mass institution of LCD television screens.” As a result of this upsurge in demand, Corning had to develop a number of facilities in the Asia region to support the panel makers and television manufacturers. Entering a new region can present an extensive set of challenges, but Pambianchi says keeping her company’s values at the forefront of every initiative helped maintain a cohesive workforce and provided new employees with direction and guidance. “First you have to begin to build awareness of who your company even is in the country,” Pambianchi says. “We did some branding efforts, particularly in Taiwan back in the 2004–5 timeframe when we were building out there. The way we’ve tried to approach the market is to have the right branding, the right presence with universities, and we sell our story: we’re a values-driven company with a 160-year-old history and commitment to technology and innovation, and we want people to work for us for their whole careers.” She refers to such endeavours as the China Leadership Development Program, the Regional Emerging Leaders Program, as well as involvement of senior leadership in the region – Pambianchi herself spends about eight weeks a year travelling to 45 factories worldwide – as having a large effect on
2007 Steve Jobs chooses Corning’s Gorilla Glass to serve as the protective barrier on the iPhone
2010 Corning produces the glass for 20 per cent of the world’s mobile handsets
2013 Forbes reports that Corning glass covers 1.5 billion smartphones and tablets worldwide
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INTERNATIONAL PROFILE / CORNING
workers’ professional mindsets. “What we find, particularly in Asia, is that it’s very, very appealing to folks. And that’s contrary to what you read and hear in a lot of articles. “Given the high growth, most MNCs in Taiwan or China have 14–25 per cent turnover. We have 7 per cent.”
DEVELOPING TALENT, GROWING LEADERS
CORNING AT A GLANCE »» 34,000 employees worldwide »» HQ in Corning, NY »» Ranked 236 on Fortune 500 »» US$8bn in revenues in 2013 »» Four major business areas:
- Display technologies - Environmental technologies - Life sciences - Telecommunications
One of the successes from Corning’s European operations, on which Pambianchi modelled many of her directives in Asia, was the development of leaders to run businesses in their home countries. “As we were building our business in Asia, we sent in a number of expatriates to build out the organization and lead the businesses that we had there, but we wanted to accelerate the readiness of having local talent available to run the operations, whether it be plant managers, commercial leaders, and eventually general managers in the region.” This led Pambianchi’s team to create the China Leadership Development Program and the display business’s Regional Emerging Leaders Program, which consist of a one-year initiative aiming to target highpotential individuals and groom them for eventual leadership positions within the company. “Typically the cohort has anywhere between 20 and 25 candidates in it, and we do a combination of three things: first, there’s in-depth, 360-degree feedback for the individual, so they come into the program with a high level of self-awareness,” says Pambianchi. “Plus, the 360 comes with a specific, individual coach that’s going to work with the candidate throughout the year of the program.” After this precursory self-discovery period, employees are assigned a case study or project that reflects an existing problem in the business world. “It’s not a fictitious, made-up case study; it’s a real business problem, or two, depending on the size of the class, that they’re actually working on solving,” Pambianchi explains. Finally, this hands-on training is complemented by approximately three weeks of classroom training, featuring outside lecturers, business experts, and discussion with senior executives.
“And after they graduate the program, we obviously track their careers very closely and monitor the movement of their jobs so that we can be planning and putting them in the roles that are going to make sure they achieve the level of leadership we want them to obtain in the region.” In addition to these region-specific initiatives, employees at Corning have access to a digital tool called ‘My Development’, which allows them to see their role profiles, view suggested career paths, and outline a plan to reach each goal.
MANAGING A CRISIS A trying time for Pambianchi, and Corning as a whole, was the market crash that followed the internet and telecom bubble of 1999–2000. This collapse had a marked effect on Corning, which had to deal with the repercussions of a sudden decline in the demand for fibre optic cables. According to USA Today, stocks dropped from $113 a share in 2000 to a mere $1.10 in October 2002. Pambianchi describes this period, when Corning had to lay off approximately 22,000 employees – half its workforce – as “the most difficult thing I ever had to manage in my 24-year career in HR.” Very few companies could have survived the blows Corning endured, but Pambianchi and other leaders made it clear they were going to persevere by way of transparency and open communication. “Every time there was an industry issue, we would get in front of the workforce and tell them, ‘This company just cancelled all their orders and went out of business; this number of telecommunication companies just went bankrupt, etc.; and as a result we’re going to have to take this much capacity offline or take these very difficult actions’.” The HR team, in addition to providing as much advance notice of tough decisions as possible, also made sure to provide both departing and remaining employees with as many services as they could. In addition to aligning severance pay and separation benefits with market forces and the communities in which it operated, Corning also offered extensive career support services, including counselling, résumé workshops, and training.
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Moreover, they created a physical job placement centre to help transition departing staff into new positions. “We took our entire talent acquisition staff and turned them into the outplacement team, and they worked there for two years with all the employees, many of whom they had helped hire. They then worked to help place them with other companies,” Pambianchi says. While these actions helped mitigate tension between supervisors and those who were leaving, they also proved beneficial to employees who remained at the company but may have struggled with that fortune. Pambianchi calls this feeling “survivor guilt.” She describes the feeling: “I’m the employee who didn’t get let go, but I just lost three of my closest colleagues, and I know what’s happening to their families – I know they have to sell their house and move, or take their kids out of school. So for the employees who are left, they’re pretty distraught, and sometimes they get overlooked.”
PREDICTING TALENT GAPS IN AN UNPREDICTABLE MARKET Even though many technical-based firms need to innovate to survive, Corning faces a unique challenge as glass products can be easily commoditised and replicated. This requires Pambianchi to think several steps ahead to identify what talent will be needed to make products and materials that may not exist or are yet to be invented. She has several strategies for remaining ahead of her competitors. “Internally, we have forums to manage that – like our Growth Execution Council – and I participate as a leader on that council. I’m always aware of what programs are coming down the pipe,” Pambianchi says. She also notes that it’s important to have field HR leaders in each technical community to monitor developments in every part of the company, to ensure they know what’s happening with each product. Pambianchi says that most of the time, if the
“If there’s a bad management situation, or a compromise to values, or any other issue going on, one of the roles in the company that I expect to be flagging that is the HR community” Christy Pambianchi committee does identify a skills gap, Corning will train and educate workers to compensate for the missing talent. Sometimes, though, there isn’t enough time. She points to the recently deployed ONE Wireless Platform as an example. “We realised RF technology was going to need to be a key element of that, and we didn’t have any radio frequency expertise in-house. That’s a niche area; there was no way we could try to build or grow a capability in that overnight, so we acquired a company named Mobile Access to basically buy their technical expertise in RF technology. We then embedded them in our optical communications and solutions business, and that’s been a great success.”
THE COURAGEOUS LEADER In her talks and interviews on HR leadership, Pambianchi frequently espouses the virtue of courage. She says bravery helps HR managers balance what should be their three main objectives: helping allocate talent; navigating processes and systems; and monitoring the company’s mood and sentiment. In addition to these responsibilities, however, she also recognises that, in the post-Enron era, HR leaders need to make sure their organization is ethically and culturally sound. “If there’s a bad management situation, or a compromise to values, or any other issue going on, one of the roles in the company that I expect to be flagging that is the HR community.” As she reminds others in her field: “It takes one rogue employee to bring down an enterprise.”
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WORKFORCE STRATEGY / FLEXIBLE WORK
Anywhere, anytime:
FLEXIBLE WORK OPTIONS
Flexible work options boost worker productivity, enhance morale, and have the potential to save Canadian employers $53 billion per year. HRD talks to three employers about how to implement flex-work programs that provide substantial benefit to workers and the bottom line Fans of the 1999 comedy Office Space will recall the protagonist’s boss frequently interrupting his work to inquire about ‘TPS reports’ or check his availability to come in on the weekend. In fact, at one point, the disgruntled worker tells a friend, “I’d say in a given week, I probably only do about 15 minutes of real, actual, work.” While Canadian employees typically work much longer than 15 minutes per week, many can relate to the frustrations caused by distractions in the workplace. As a result, employers such as Telus, Molson Coors, and KPMG are turning to flexible work options as a way to re-energize their workers and boost productivity. The demand for these programs has never been higher – and for once there are benefits for both employee and employer. Ninety per cent of workers would choose to work from home if given the choice, and 67 per cent feel more loyal to organizations that offer flexible work arrangements. The resulting cost savings from the reduced turnover, in turn, equals $1.8 billion, according to WorkShift Canada.
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Flexible work options can take many shapes and forms in the modern workforce but one fact is certain: organizations that ignore them risk being left behind.
WORK AS AN ACTIVITY, NOT A PLACE The City of Calgary has demonstrated how multifaceted and versatile flexible work can be by offering a range of formal and informal options to its employees. These include: • The Compressed Workweek – allowing employees to work longer hours, but fewer days per week • Job sharing – splitting a full-time job between two employees, who are then considered parttime • Part-time – employees can temporarily reduce their workload and assume a prorated salary if life circumstances necessitate fewer hours on the job • Telework – allowing employees to work off-site. The final option on the list has proven particularly successful, as employees not only relish the opportunity to work from home, but also various sites around the city. While government operations are headquartered in City Hall, the city has various “hubs” that allow workers to perform job functions in locations across Calgary. “Lots of people do flex-work informally, not at an assigned work station but from one of several hotelling spaces where they can log into any computer in the building and still accomplish the job,” says human resources advisor Joy Reneker. “That way, even if someone has half an hour between off-site meetings, they can still be productive instead of just sitting around waiting for the next appointment.” The benefits of flex-work became clear in June 2013, when severe flooding shut down several portions of the region, including Calgary City Hall. Thousands of workers were displaced, but since government workers already had the infrastructure for flex-work and telework in place, transitioning them into remote work was essentially seamless.
“Telus has been able to reduce its office space by 1,000,000 square feet, and in doing so, has saved approximately $40 million per year” Surveys conducted after employees returned to their desks found that 90 per cent of employees wanted to continue telework practices at least part-time in the future. “Those who didn’t think it would work but were suddenly forced into it found it did, and they enjoyed it. It was a huge boost for the program,” says Reneker.
TELUS: A LESSON IN SUCCESS Another leading organization reaping the benefits of flex-work options is Vancouver-based telecommunications firm Telus. After an initial experiment with 170 employees in 2006, the company found that mobile workers were more productive, had increased morale, and took up less space in corporate offices, saving money. “Many people were already working on a mobile basis, but at the time, we didn’t have a structured program in place,” says Andrea Goertz, SVP of strategic initiatives, chief communications and sustainability officer, TELUS. “That’s how we came to pilot Work Styles, and it has been a great success.” The company set the goal of having 70 per cent of employees working either remotely or from home by 2015. Today, that percentage is at 60 per cent, and is on track to reach next year’s target. “In terms of feedback, we’ve had very positive results. We stand at 83 per cent employee engagement, which puts Telus number one globally among organizations of our size,” says Goertz. In addition, the company has been able to reduce its office space by 1,000,000 square feet, and in doing so, has saved approximately $40 million per year.
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WORKFORCE STRATEGY / FLEXIBLE WORK
MITIGATING RISKS While there are numerous upsides to offering flex-time for workers, companies need to take several measures into consideration to avoid encountering common pitfalls. “Only 40 per cent of managers have received training or guidance on how to use flexibility well,” says Cali Williams Yost, chief executive of Flex + Strategy Group/Work + Life Fit. “Managers need to be trained to set clear goals and objectives, and hold people accountable to them. HR can provide that training in core fundamentals of management, which they should be doing anyway.” On the employee side, workers who do their job remotely often fear lagging behind or missing out on training and recognition. An ‘out of sight, out of mind’ mentality can creep in. “What we did in the HR area is roll out very particular programs for personal development,
including customized career development programs so everyone has their own individual career plan for Telus. They also have customized objectives,” says Goertz. Finally, employers should take steps to secure devices that contain proprietary information. If employees access work information on their personal devices, and those devices are then breached, a question arises as to whether the organization can or should remotely erase all the information on that device, which may include photographs and other personal materials. “Home offices make it challenging, especially if there are family members or small children around. We go a step above and reiterate our security policies and emphasize practical ideas like locking work files and placing papers where kids can’t disturb them,” says Reneker. “But in the five or so years that we’ve been doing this, we’ve never had any issues.”
STAY SAFE: LEGAL CONSIDERATIONS FOR A FLEXIBLE WORKFORCE
A recent federal court ruling now mandates that employers schedule shifts during times that accommodate parents’ childcare needs. Many experts feel this decision will pave the way for more rulings in favor of employees who need flexible work arrangements to take care of aging family members or children. Here are some of the legal provisions every organization should keep in mind when instituting flex-work options: To ensure that flex-work options are available to employees on a fair and non-discriminatory basis, write clear, detailed policies that outline which jobs are available for flexible work arrangements and which are not. Consider establishing a committee to draft these policies, and seek input from diverse sources. Employees should discuss intricacies of their flexible work arrangement, such as expected working hours, how performance will be measured, and details of the transition with their relevant manager or supervisor and HR. All parties should then sign documents with those elements clearly expressed in writing. Consider a short-term trial period with regular check-ins before implementing any large-scale initiatives. Be aware of the laws requiring employers to accommodate based on family status, such as the parent of a child with medical needs. While the case law on this is still developing, it appears
beneficial for employers to err on the side of caution and provide flexible arrangements for caretakers whenever possible. Host frequent town hall meetings and workshops to discuss concerns arising from flex-work, including opposition from non-participants. An open dialogue will help reduce friction and clarify any misconceptions about what these arrangements entail. While employers are not liable for employee safety inside the home, businesses can create a checklist of provisions for workers as a precaution. This can include such considerations as functional smoke detectors, ergonomic desk and chairs, and effective lighting. Implement extra security measures for employees who obtain and transmit confidential data and information remotely, such as the creation of a controlled virtual network. Also, encourage employees to remain up-to-date on virus protection and computer security updates. Sources: stanford.edu, OHRC, CBC, Law Society of Upper Canada
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CASE STUDY: CISCO HRD talks to Jennifer Dudeck, director of human resources at Cisco, about how her company has embraced teleworking HRD: Can you outline some of the flexible work arrangements Cisco offers employees? Jennifer Dudeck: We have some different flexible work arrangements – it’s more than just teleworking. We offer employees traditional work arrangements where they’re coming to a defined space pretty much every day. They can work as a mobile worker, which means they don’t take an assigned space and they go wherever space is available in much more of an activity-based situation. Or they can be a fully remote worker, like myself, where we work from a home office, and we don’t have any expectations of space other than a conference room every now and then. HRD: Why has Cisco invested in this form of undertaking work? JD: We know our workforce is changing, especially those entering the workforce. From an attraction and retention perspective, for those new entrants in particular, they view flexibility as a right rather than privilege. They expect it. Upwards of 40-50 per cent of new entrants would take lower paying jobs with that level of flexibility and mobility over a higher paying job. Sixty-nine per cent of employees polled in a Cisco survey indicated they believe it is unnecessary to be in the office in order to be productive, and 60 per cent of students polled believed they should have the right to work remotely with a flexible schedule. Secondly, we believe so strongly in adopting our own technology first before we sell it to other customers, it’s obviously a driving factor. The notion of virtual offices is something that is core to our business strategy. Then environmental and real estate considerations. We can’t grow at the rate we’ve grown from an employee perspective and expect to have space. We’re not looking to contract space necessarily but we can’t continue to add space at the growth rate we have been.
HRD: Have you had to change the way people are managed? JD: We’re looking to redefine the role of the manager. I think Cisco has come as far as we have because we’ve got managers who are able to look at work for work, and are not viewing work as being dependent on a space. We already have good capability with most of our managers looking at results and being results focused. The role of manager will need to have the ability to manage this set of personas on a team that are very different. Not everyone wants to be a teleworker, not everyone wants to work in an office. But our managers need to be able to manage that diversity. Not just for teleworking I should add but for many things we need to drive as a company – the role of the manager has got to change. HRD: You telework yourself – can you outline some of the benefits? JD: The benefits are significant in terms of having a family. When I’m talking on this subject I always start by saying I’m a mom with two sons aged seven and nine. That is who I am. What teleworking has enabled me to do is I can continue to be a mom and have a great career where I can continue to accelerate and grow, and be there for my kids. I get to drop them off at school in the morning, and get to be at home when they return. HRD: And how about the pitfalls? JD: It’s important to note not all jobs are suited for teleworking, and not all teams will be able to use teleworking. Managers need to be sophisticated enough to know what will work with their team. Also, it has not really equated to having better work-life balance; in fact I would argue having that flexibility can erode that worklife balance. I don’t leave an office now and come home – I leave an office in my house but that computer is always sitting there. Flexibility without having work-life balance will not accomplish what we hoped to from the employee experience perspective.
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WORKFORCE PLANNING / RETIREMENT
Set phasers to
‘RETIRE’
Phased retirement is back on the agenda following the recent prolonged economic slowdown. Gary Taylor outlines one best practice approach
DID YOU KNOW? For baby boomers, funding retirement is a top priority. Mercer’s Benefits Outside the Square study found that 40 per cent of employees aged 50 plus are unsure how much they will need in retirement, and furthermore an increasing number of people expect to delay retirement until their seventies.
The GFC paused the widespread plans of many employers looking to introduce phased retirement as a solution to the impending crisis of retiring baby boomers. However, it appears the pause button is being released, with some 61 per cent of employers now considering strategies to deal with the problem. The issue centres primarily on the likely skills loss when these boomers with 30 years of experience retire from their present employers. Traditionally, we have thought of employment and retirement as being two consecutive states – you work full-time until a particular point, and then retire fulltime. If the retiree were to get employment elsewhere, that would be their own business, even if working for the opposition. Phased retirement, on the other hand, transitions the employee into a different set of circumstances, which may see the role changing to one of less executive authority, with working hours probably being reduced, remuneration reduced, and possibly an extended period of employment.
KEY BENEFITS
1
The employer creates career-path space at the senior level to attract or retain a talented younger high-flyer, while retaining the experience and organizational wisdom of the age-50-plus incumbent for the purposes of mentoring, continuity, client comfort, etc.
2
The baby boomer is probably ready for the shift in work-life balance, has previously enjoyed the
title, power and salary but is now looking forward to smelling the roses, taking more time off and avoiding daily traffic. At the same time, he gets to extend his earning power and still be valued for making a professional contribution.
3
Both parties benefit from the flexibility that is built into the new contract, which customarily does not exist in regular employment conditions of service. Phased retirees will be willing to work full hours or more during the employer’s peak periods, if they can get long weekends, extended vacations and other lifestyle-enriching perks. Some employers see phased retirement as being of limited duration, and for a specific purpose; for example, managing an organizational restructure or other short-term business need. Other employers see this as an open-ended employment category designed to harmonise employer needs for succession planning with employee desires to scale back. Still others see this as a palatable means of incentivising voluntary retirement.
STEPS TO DESIGNING A PROGRAM By definition, flexible retirement solutions themselves need to be flexible. While you don’t want to reinvent the wheel for every phased retiree, we need to understand that different employees are motivated by different ‘buttons.’ One might want a shorter day, while another wants full days but more days off. Some might want to work from home, others not. Likewise,
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your own managers will want different deliverables from phased retirees, and HR needs to be flexible enough to accommodate their operational needs if you want the program to work. The following steps would be useful when intro ducing a phased retirement program: 1. AUDIT THE CURRENT STATE. Get a handle on your labour demographics by means of whatever workforce planning tools you use. Look ahead for at least three to five years. Remember that you might need to be more subtle than just looking at headcount, and consider assessing what skills and knowledge you need to meet the strategic plan. 2. RESEARCH EMPLOYEE PERCEPTIONS. Data mining or focus groups might help you test HR’s ideas against reality. If possible, benchmark against other employers, and verify any proposed solutions with legal expertise, to avoid problems later. Make sure that any flexibility is carefully addressed in the wording of the contract. 3. IDENTIFY BARRIERS AND DEVELOP SOLUTIONS. You will want to give comfort to leadership that the program is going to work – this is not something you want to launch with a fanfare, only to then retract under challenge. You want maximum flexibility yet do not want to be accused of inequitable practices. 4. COMMUNICATE. This should be well received, so optimize your chosen message and channels of communicating the program. Everyone should know clearly who is eligible; who initiates a request; and the process for approval, reviews, disputes, etc. If possible, have at least one case ready for implementation, so that all parties see the program in action. Having an advocate from within the program will go a long way towards gaining acceptance. 5. BE THOROUGH IN YOUR ADMINISTRATION. Dry-run the entire process. For instance, is the person regarded as a full-time employee or a 50 per cent FTE on your HR information system? Do they apply for leave over and above what is in the contract, and can the system handle pro rata leave? Are they on a separate payroll? How do fringe benefits apply? Is there more than one
It would be naive to suggest that phased retirement programs are easy to conceptualize and implement step to full retirement they can take – for example, from 30 hours per week to 20?
CASE STUDY: BASF This large multinational employs more than 100,000 people globally, and introduced phased retirement as part of its talent management initiatives. It was implemented selectively within the US, specifically for its manufacturing workforce. After an inventory of the current state, they determined that a large percentage of their skilled workforce would retire by 2020. They had concerns regarding succession and replacement, which highlighted production and even safety risks. During 2011, BASF convened a multidisciplinary working group that included employees from the targeted areas. The group generated 35 options that were analysed and prioritised based on the impact on the business and ease of implementation. Some of the benefits gained from the program include: • Employees give advance notice of intention to retire, particularly avoiding problems of short notice from those retiring early. • Skills transfer programs can now be devised in a collaborative fashion. • Culture is enhanced to facilitate discussions about retirement or phased retirement plans. The smooth transfer benefits the employer, the retiree and aspirant talent. It would be naive to suggest that phased retirement programs are easy to conceptualise and implement. Not only are you dealing with legal and operational issues, but there are all the understandable emotional factors associated with major career transitions. Nevertheless, the benefits seem to be material, and therefore worth the journey. Old man river.
Gary Taylor is an HR director who has worked for Australian, South African and British multinationals on two continents, including the Middle East. He is registered as a Master HR Practitioner with the South African Board for People Practice, and served as vice president of the Institute of People Management
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LAST WORD / BENEFITS
THE LAST WORD
Benefits for the ‘I
want
it
now!’
generation
Hardwired for instant gratification, some people will just never ‘get’ benefits that don’t provide an immediate pay-off. Amanda Schaake outlines why We are wasting our time promoting long-term employee benefits to some people. According to recent research, a good chunk of our population is wired to think differently, and there is not a darned thing you can do about it. Benefits should interest everyone, right? Most of the time, yes. But in many cases we find ourselves trying to ‘sell’ the benefits of a future, a better state, to our people, often with limited success. If recent scientific research is correct, the chemistry of the human brain is responsible as it directly impacts on our attitude to planning ahead and preparing for our future. We are all acutely aware of how, as a society, we are becoming more fixated on instant gratification. We instant-message our mates, have shopping delivered to our door overnight, and we have a world of internet information available to us using our mobile phones 24/7. Neuroeconomist Paul Glimcher of New York University recently ran a social experiment to test what it would take for people to willingly delay gratification. He gave volunteers a choice: $20 now or more money later.
At one end of the spectrum were people who agreed to take $21 in one month’s time; to essentially wait a month in order to gain just $1. In economics speak, these people valued tomorrow almost as much as today and therefore they had no problem delaying gratification.
NOW
1 month
$68
Low value of future money
$20
$21
High value of future money
54 | SEPTEMBER 2014
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LAST WORD / BENEFITS
At the other end of the spectrum were those who were willing to wait a month but only if they received up to $68, a premium of $48 from the original offer – meaning the value these people put on the future (and having money at that point) was dramatically less than the value they placed on today; when they wanted something, they wanted it now. One of the $21 people was, tellingly, an MD-PhD student. “If you’re willing to go to university for eight years, you’re really willing to delay gratification,” said Glimcher.
THE BRAIN IS THE KEY It’s not just down to types of personalities; there are some interesting things going on inside people’s brains as a result. During a second stage of the study, scientists used functional magnetic resonance imaging machines to map brain activity during the subjects’ decision-making. For the ‘spend money now – to hell with the consequences’ people, activity in the area of the brain that processes immediate gratification (the ventral striatum and the medial prefrontal cortex) plunged when they were offered cash a week or a month later. For the ‘invest in your retirement and save for a rainy day’ type people, activity in those areas of the brain remained constant, regardless of when the cash reward was offered. People’s brains work differently when it comes to thinking of their future. Sometimes, no amount of explaining the benefits or importance of saving for your retirement, taking a lower salary in favour of a higher bonus, attending a training course, investing in share schemes, doing anything now for a future benefit, will work.
A LOST CAUSE – OR IS IT? Amanda Schaake is an independent communications consultant and award-winning senior communications leader specializing in complex change and employee engagement. Contact her at amandaschaake@ gmail.com
How do we engage with these impulsive people if expensive education campaigns or the usual communications and engagement activities don’t work? They know they should attend the training course or make an effort to understand the new business strategy, but they won’t, because what’s happening right now is far more important. Trying to convince people to invest more in their pension plan or retirement fund for example, is like asking them to give their hard-earned money to a stranger. Here are some ideas to help your employees see the point of future benefits: • GIVE THEM A START POINT, AN END POINT AND A DEADLINE FOR THEM TO FIND THEIR OWN WAY THERE
Lasting change can be achieved when people are allowed to find their own solutions. Just as I will no doubt purchase the iCandy pram, use it for a few months and then gratefully revert to my husband’s recommended stroller, instantgratification-seeking colleagues will work through the change curve under their own steam and often only need a little support from their line managers. • COMMUNICATING FUTURE BENEFITS IS A WASTE OF TIME They understand the benefits; they just don’t see the value. Help them see the value of the future in the here and now by spelling it out in today’s terms. For example, determine what their weekly pension payment is in today’s money. Take the employee through an exercise to get them to work out what it would be like to live off the proceeds of that contribution come retirement. A reality check can help with their brain-training. • HAPPY COWS PRODUCE MORE MILK Farmers know it and we need to learn it. Oxytocin, the ‘love drug’ chemical that is released when we’re happy, fools our brains into being able to think long-term. An employee whose health and wellbeing needs are being met is more responsive to planning for their future. Engage with your audience at a time when stress levels are not through the roof and you’ll get a better response. • REWARD LONG-TERM THINKING AND PLANNING Providing an immediate incentive for plans, training or meetings completed ahead of schedule can help. Likewise, early-bird incentives can flick the switch needed for our ‘spend now, repent at leisure’ friends. If we are serious about being responsible businesses and looking after our greatest asset, we need to come up with ways to give people that instant gratification when the actual pay-off might not happen until the future. Any education or engagement campaign will need to be well thought out and take time. Teaching people willpower and patience, and that deferred gratification is just as important as the instant kind, will take longer than many of us dare to imagine. References: Proceedings of the National Academy of Sciences, scientists led by psychobiologist B. J. Casey of Weill Cornell Medical College, August 2011; Desire for Instant Gratification May Be Hard-wired, by Rick Nauert, PhD, senior news editor, Psych Central, September 2011.
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