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STEPPING UP HR LEADERS ROUNDTABLE CEO relationships / Big Data and analytics HR disruptors / Managing millennials GUT INSTINCT OR ALGORITHMS? HR’s delicate balancing act in the digital age

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STEERING A GLOBAL GIANT Johnson & Johnson’s CHRO reveals his company’s guiding philosophy

START WITH THE END IN MIND Why it’s time to embrace design thinking for HR initiatives

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ISSUE 5.02

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CONTENTS

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SPECIAL REPORT EDUCATION GUIDE 2017

UPFRONT 02 Editorial

Why machine learning is the future

14 FEATURES

OVERHAULING REVIEWS

24 COVER STORY

HR LEADERS ROUNDTABLE

Leading HR practitioners share their thoughts on CEO relationships, how they use data analytics, how they meet the needs of millennials and a whole lot more PEOPLE

GLOBAL HR LEADER

One HR director shares her successful method for replacing annual performance reviews

Does HR have a role to play in fostering a culture of innovation?

06 Statistics

Trust in established institutions is slipping worldwide, and business is hardly immune

08 News analysis

HR decision-making is leaning ever more heavily on Big Data, but do algorithms really beat instinct?

10 Employment law update

What will the legalization of marijuana mean for Canadian employers?

12 Technology update

36 FEATURES

BENEFITS AND BETTER HEALTH

Top ways companies can benefit by investing in their employees’ physical, mental and financial health

Johnson & Johnson’s Peter Fasolo explains how the company’s credo has kept it on the right path for the past 75 years

04 Head to head

Advice on getting your CEO onboard with HR tech

17 Opinion

How to re-engage employees who have checked out

FEATURES 40 Inside HR

GE has always had a pioneering approach to HR – so how is it adapting that to the 21st century?

PEOPLE 46 Career path

Whether working for a hockey team or an insurance firm, Kristin Coulombe has always put people first

48 Other life

Around the world on two wheels with consultant Amanda Prenty

FEATURES

START WITH THE END IN MIND

What can HR learn by mirroring the tech world and designing initiatives around the user experience?

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742-1

UPFRONT

EDITORIAL www.hrmonline.ca SUMMER 2017

The machine that learns

he concept of machine learning sounds like something out of science fiction. When I hear those words, my brain jumps to machines like HAL in 2001: A Space Odyssey or the Terminator in James Cameron’s film series. The reality, of course, is not quite as dramatic or sinister. Machine learning is a method of data analysis that automates analytical model-building. Using algorithms that iteratively learn from data, machine learning allows computers to find hidden insights without being explicitly programmed where to look. All of the technology that is currently providing HR with data analysis could be considered part of the machine learning phenomenon. The more information these machines gather, the more they learn,

Machine learning allows computers to find hidden insights without being explicitly programmed where to look which in turn helps to hone the decisions that are made. However, rather like a ‘choose your own adventure’ novel for kids, different data inputs can produce different outcomes – and it’s those inputs that are a possible red flag for HR practitioners. Any time humans are involved in decision-making, there is inherent bias involved, and selecting the data points that go into the machine will invariably involve human input. As our News Analysis on page 8 reveals, while data insights from HR are certainly adding to its standing in business, the human input that remains also needs to be considered.

Iain Hopkins, editor

EDITORIAL

SALES & MARKETING

Editor Iain Hopkins

Business Development Manager Sarah J. Fretz

Senior Writer Nicola Middlemiss

National Account Manager Andrew Cowan

Writers Libby Macdonald Joe Rosengarten Hannah Go

General Manager, Sales John MacKenzie

Copy Editor Clare Alexander

CONTRIBUTORS Chester Elton Adrian Gostick

ART & PRODUCTION Design Manager Daniel Williams Designer Marla Morelos Production Manager Alicia Chin

Associate Publisher Trevor Biggs Marketing and Communications Manager Melissa Christopoulos Project Coordinator Jessica Duce

CORPORATE President & CEO Tim Duce Office/Traffic Manager Marni Parker Events and Conference Manager Chris Davis

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Human Resources Director is part of an international family of B2B publications and websites for the human resources industry HRD AUSTRALIA iain.hopkins@keymedia.com.au T +61 2 8437 4703 HRD SINGAPORE hrdmag.com.sg HC AUSTRALIA ONLINE hcamag.com HRM NEW ZEALAND hrmonline.co.nz Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as HRD magazine can accept no responsibility for loss.

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UPFRONT

HEAD TO HEAD

What can HR do to foster innovative thinking? Be it the next winning product or the way business is conducted, what role should HR play in driving a culture of innovation?

Director, business development WORKshift Canada

David Potter

Head of people operations Jobber

Danielle Strang

Brian Scudamore

“Great innovation can come from anywhere in an organization; HR has a key role to play. HR can contribute to innovation by helping managers and executives get out of the way. Too often HR is asked to focus on rules that make things easier for managers but constrict ideas, experimentation and risk. Instead, HR should help establish principles and ideas that provide a flexible framework for innovation. Encouraging employees to question the status quo, a focus on results rather than presenteeism, and an environment – culturally, technologically and physically – that provides opportunities for both collaboration and independent thought are some examples.”

“The role that HR leaders play in fostering innovation is much more than encouragement. It’s our responsibility to embrace innovation ourselves to lead the way. When we embrace innovation, we stop asking, ‘How do we make this process better?’ and start asking, ‘How do we better the employee experience?’ Think about it this way: We are typically the stewards of an employee’s first experience with our companies. If that experience is founded on innovative thinking versus process, the employee will be able to feel the innovation immediately and build off that momentum. I wouldn’t want to play any other role.”

“We’d be nowhere without the innovation of engaged, happy employees, so we actively seek out creative ways to inspire them. For us, this means creating space for them to get outside their comfort zones, because new experiences expand minds. We started our 101 Life Goals program to challenge our employees to reach for their wildest dreams; this makes them more motivated and forward-thinking. We believe innovation comes from a culture of learning and that learning is a lifelong process. Our leadership & development programs are designed to foster a culture of inspiring out-ofthe-box thinking.”

Founder and CEO O2E Brands

CHANGING THE WAY EMPLOYEES CONNECT AND THINK In a study conducted by the Institute for Corporate Productivity, two-thirds of business leaders agreed that fostering innovation and creativity is integral to adaptability and competitiveness. The use of technology-enabled collaboration or social media tools to share knowledge was the top practice employed by high-performing organizations to increase innovation – 36% of high-performing organizations used this approach, compared to only 14% of lower-performing organizations. Promoting innovation as a corporate value was also key. “My thought is that employees are more comfortable about being creative and innovative once the organization has expressed its importance,” says Cliff Stevenson, senior human capital researcher at the Institute. “It takes the fear or risk out of suggesting a creative or new idea.”

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UPFRONT

STATISTICS

Where has the trust gone? Faith in established authority is falling around the globe, necessitating a new approach to how business is conducted ACCORDING TO the most recent Edelman Trust Barometer, trust in four key institutions – governments, businesses, media and NGOs – is dropping worldwide. While business doesn’t currently suffer from the same level of distrust as governments or the media, Edelman did discover that trust in business had declined in 18 of the countries it studied. What’s more,

CEO credibility dropped 12 points globally to an all-time low of 37%, plummeting in every country surveyed. The good news? Respondents had faith that businesses can win back that trust: 75% agreed that companies have the power to improve economic and social conditions in the communities where they operate.

Global

2016 2017

50 47

2016 2017

49 52

A WORLD OF ERODING TRUST In the last year, the average level of trust in institutions dropped three points globally. The global trust index is declining in 21 out of 28 countries, and two out of every three countries surveyed now fall into the category of ‘distruster.’ TRUST INDEX

50%

53%

of respondents feel that globalization is taking us in the wrong direction

of survey respondents feel the pace of change in business is too fast

53%

of respondents think it is “completely true” that the system is failing

100%

of the 28 countries surveyed exhibited declines in CEO credibility

Truster Neutral Distruster

60-100 40-60 0-40

Source: Edelman Trust Barometer Global Report, 2017

DRIVING COMMON FEARS

BUILDING TRUST

Business plays a role in stoking societal fears – more than half the global population worries about losing their jobs to factors such as automation, offshoring and cheaper incoming labour.

Respondents who say they’ve lost faith in the system generally have higher expectations for what companies must do to build trust with the general public.

60%

50%

58%

55%

54%

Offers high-quality products/services

Listens to its customers

30%

System failing: 67% General population: 58%

20%

Pays its fair share of taxes System failing: 66% General population: 56%

10%

Has ethical business practices Lack of Foreign Immigrants Jobs moving Automation training/ competitors who work to cheaper skills for less market Source: Edelman Trust Barometer Global Report, 2017

System failing: 72% General population: 62% System failing: 68% General population: 59%

40%

HOW IMPORTANT ARE THE FOLLOWING ATTRIBUTES TO BUILDING TRUST IN A COMPANY? Treats its employees well

System failing: 65% General population: 56% Source: Edelman Trust Barometer Global Report, 2017

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Russia

Canada 2016 2017

2016 2017

56 49

Hong Kong

China UK

2016 2017

42 40

39 34

2016 2017

73 67

47 44

UAE

2016 2017

66 60

Singapore

2016 2017

64 60

India

Australia

2016 2017

65 72

2016 2017

49 42 Source: Edelman Trust Barometer Global Report, 2017

MOST CREDIBLE? EMPLOYEES

TOP 5 BUSINESS NO-NOS

Respondents across the globe agreed that the most credible source to communicate on a topic related to a company is an employee. That was consistent across subjects ranging from a companyâ&#x20AC;&#x2122;s treatment of employees to views on industry issues.

Survey respondents were asked which actions taken by businesses would damage trust the most â&#x20AC;&#x201C; these were the top five.

CEO Senior executive Employee Activist consumer Academic Media spokesperson

% OF RESPONDENTS WHO WOULD TRUST THIS SOURCE 53

21 17

29 22

32 26 26

25 21

30 29 22 23

16 9

Treatment of employees/customers

2. Paying executives hundreds of times more than workers

37 29

1. Paying bribes to government officials to win contracts

Financial earnings and operational performance

Business practices/ crisis handling

Innovation efforts

21 23

Views on industry issues

3. Moving profits to other countries to avoid taxes

22 14

Partnerships/ programs to address societal issues

Source: Edelman Trust Barometer Global Report, 2017

4. Overcharging for products that people need to live 5. Reducing costs by lowering product quality Source: Edelman Trust Barometer Global Report, 2017

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UPFRONT

NEWS ANALYSIS

Do algorithms beat instinct? HR has been urged to drop gut feelings from decision-making, but have we gone too far?

THE ANALYTICAL capabilities derived from Big Data have been a revelation for HR professionals, and many credit them with finally giving the function the insights that will help it talk the language of business and thus help sustain its position at the executive level. However, there is a growing concern that by using algorithms – which assist with machine learning used in HR data analysis – HR is relying on automated decision-making and therefore exposing itself to a degree of risk. Conventional thinking posits that algorithms are objective, efficient and remove bias from the decision-making process. For example, businesses are increasingly using algorithms to identify their ideal job candidate, believing that doing so removes manager bias from the process. However, there’s a problem. Uri Gal, an associate professor in the discipline of business information systems at the University of Sydney Business School, says these same algo-

actually involves a significant amount of human judgment.” Gal cites the example of a manager who wants to assess the performance of his employees over the previous year. There are a number of ways in which he can do that, including collecting data on how much revenue they have generated for the company over the last 12 months, how many clients they have interacted with or how many leads they have generated. “So we have three data points to access what we call performance, but why these three? We could have used any other combination of data points,” says Gal, who suggests equally valid alternatives such as feedback from customers, feedback from colleagues, how much time they spent on email or how many days they were absent from work. Furthermore, when algorithms rely on inaccurate, biased or unrepresentative data, they may systematically undermine racial and

“Algorithms are not really objective ... collecting Big Data actually involves a significant amount of human judgment” Uri Gal, University of Sydney Business School rithms might be rejecting candidates without HR being aware of it. “Ostensibly, the process is meant to be objective and rational,” he says. “But the problem is that algorithms are not really objective in the sense that collecting Big Data

ethnic minorities, women and other historically disadvantaged groups. An additional contentious issue is the weight applied to each data point. In the above performance example, do each of the three data points deserve equal value or importance?

Or is one more important than the others? “We might or might not decide that one data point is twice as important as the other one, and the third one is only half as important as the second one, which again involves human judgment,” Gal says, adding that there is no one correct way to assess the performance of employees. “This definitely involves human judgment, which is subjective rather than objective.” Aaron McEwan, senior director at CEB, agrees there are some dangers inherent in an over-reliance on data analytics in decisionmaking. While he’s an advocate of the use of HR data analytics, he says that “about 54% of heads of HR or heads of data analytics are concerned about the data quality.” He also stresses that it’s critical to understand what decisions HR is trying to shape with the data. Where is the organization going, and what data is going to help inform decisions

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REMOVING BIAS An analysis of 17 studies of applicant evaluations showed that a simple equation outperforms human decisions by at least 25%. The success rate holds in any situation with a large number of candidates, regardless of whether the job is on the front line, in middle management or the C-suite. The study results, published in Harvard Business Review, cite the human propensity to be thrown off by cognitive biases, irrelevant data points, arbitrary comments in conversation and candidate compliments as reasons why we might need some objective help in our hiring decisions. ALGORITHMS SELECT BETTER EMPLOYEES THAN HUMANS Supervisors’ ratings 29% 22% Number of promotions 33% 29% Ability to learn from training 25% 14% Algorithms

Human judgment

The bars above show the percentages of above-average employees (as gauged by three different measures) hired through algorithmic versus human judgment.

about that direction? “That’s the most important thing,” McEwan says. “If you are asking the wrong questions, you are going to be collecting data that doesn’t actually support the decisions you are trying to make.” As for the human element involved in

the initial hypothesis and reject data that doesn’t confirm it? “There is always a human element both in the selection of what data we choose to analyze and then also in the analysis of that data,” he says. However, the alternative – and the traditional means by which decisions were made

“About 54% of heads of HR or heads of data analytics are concerned about the data quality” Aaron McEwan, CEB data-based decision-making, McEwan agrees that there is a genuine risk of making poor choices. For example, a manager might make a decision about whether or not someone has the potential to be a high performer. Does the manager start collecting data that confirms

– is not ideal. “Traditionally, you’d have had a group of leaders with their own personal biases making subjective decisions about people’s futures in terms of pay raises, promotions and so on,” McEwan says. “The addition of objective

data, even if it’s not perfectly objective, I think increases the accuracy of these decisions.” The key, he adds, is evidence-based collection practices and evidence-based analysis to minimize at least some of the subjectivity. Gal agrees that there’s room for technology to assist people in making decisions. However, he urges a greater awareness of what these technologies are being used for. “It’s fine to have certain tools in place to help go through large amounts of data because computers and algorithms are more effective at that than human beings,” he says. “But I think it’s probably wise to maintain some sort of human oversight over this process.” He adds that, inevitably, algorithms are trying to construct models of human behaviour. These models are always going to be simplified versions of a very complex phenomenon that occurs in reality: the way in which people behave in organizations.

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UPFRONT

EMPLOYMENT LAW UPDATE NEWS BRIEFS RCMP begins Labour Code trial for Moncton shootings The 2014 Moncton massacre will be relived in court over the coming months as the RCMP faces allegations that it may have inadvertently contributed to the deaths of three Mounties. Employment and Social Development Canada claims the force failed to provide employees with appropriate equipment, training or information, and was ultimately unable to ensure the health and safety of its members. Nadine Larche, a widow of one of the Mounties killed, said she hopes the trial will lead to changes to ensure officer safety and better working conditions.

Temporary Foreign Worker program sees more changes

The government has confirmed yet more amendments to the Temporary Foreign Worker Program that will put even more obstacles in front of employers. The new amendments will require employers to do more to recruit Canadians – particularly those who are typically underrepresented in the workforce, such as youth, newcomers, women, indigenous people and people with disabilities. On-site inspections are also set to increase for organizations that employ foreign workers as the government doubles down on its commitment to “better protect vulnerable foreign workers.”

Alberta bans international hiring for 29 jobs Employers in Alberta will no longer be able to hire temporary foreign workers for a number of occupations after the provincial government introduced an initiative that will match qualified locals to companies that are hiring. During the 24-month pilot, an employer that attempts to hire a temporary foreign

worker in one of 29 protected categories will have their application refused before being directed to potential hires in the local area. While the initiative is still in its early stages, Patty Hajdu, the federal minister for employment, workforce development and labour, said she would consider a similar national scheme if the Alberta initiative is successful.

Toronto Transit Commission adopts random drug testing

The Toronto Transit Commission has been given the go-ahead by an Ontario Superior Court judge to adopt random drug and alcohol testing. Associate chief justice Frank Marrocco rejected an application from the Amalgamated Transit Union to block the policy, agreeing that the TTC had “a demonstrated workplace drug and alcohol problem.” The ATU had argued that random drug testing would be “an abuse of employer power” and would violate basic human rights if implemented, but Marrocco said public safety outweighs the risk of infringing on employees’ privacy.

BC officially bans high-heel policies The British Columbia government made headlines around the globe after banning workplace policies that make it a requirement for women to wear high heels. Rather than introduce a new bill that specifically targets high heels, the government amended the footwear regulation under the Workers’ Compensation Act to state that an employer cannot force workers to wear footwear with a design, construction or material that inhibits their ability to safely perform their job. The amendment also says employers have to consider slipping, ankle protection, foot support, muscle or bone injuries, and electrical shock when considering mandatory footwear.

Canada moves to legalize cannabis Many employers have been questioning how their drug policies will stand up once marijuana is no longer illegal

On April 13, the federal government made a significant step toward legalizing marijuana when it introduced the Cannabis Act. While the amendment has been praised by many, some employers have been left wondering how their workplace drug policies will be affected. “Employers are currently assessing what the proposed legislation means for them and their businesses,” says Daryl Cukierman, a partner with Blake, Cassels & Graydon in Toronto. “If the legislation passes, it can be expected that employee attitudes may change regarding what constitutes acceptable workplace behaviour.” While employee attitudes may change, employer expectations might not have to – Cukierman says organizations will still be within their rights to ban the use of recreational cannabis in the workplace. “The Cannabis Act does not require an employer to allow employees to use cannabis for recreational purposes at work,” Cukierman says. “Employers will therefore continue to have the ability to prohibit the use of recreational cannabis in the workplace.” However, that doesn’t mean that current policies can stay the same. “Employer expectations about the relationship between cannabis use and the work-

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place should be clearly communicated to employees, and updates to workplace policies may be required,” Cukierman says. Examples of workplace policies that should be reviewed, he says, include those related to possession and use of drugs at work, those related to reporting the use of drugs for medical purposes that could lead to potential impairment, drug testing poli-

“Employee attitudes may change regarding what constitutes acceptable workplace behaviour” cies, OHS policies related to both smoking at work and workplace impairment, vehicle use policies, and client entertainment and social host policies. Cukierman says drug testing policies may become particularly pertinent if the Cannabis Act leads to increased usage by employees – however, he says employers must be wary of violating employment law. “As with testing for other substances that can impair an employee’s ability to perform his or her duties safely and effectively, employers seeking to implement cannabis testing should carefully consider the legality of the testing and the testing methods to be used,” he says. If passed, the Cannabis Act is likely to come into force at some point before July 2018. While that’s still some time away, Cukierman urges employers to begin reviewing their policies now. “Employers would be wise to start considering now if they need to be implementing any changes to their workplace policies and procedures in preparation for the new legislation,” he says.

Q&A

Erin Kuzz Founding member SHERRARD KUZZ LLP

Fast fact Widely recognized as one of Canada’s leading employment and labour lawyers, Kuzz wrote the Bar Admission Licensing Examination study materials for labour law and served on the human resource committee for the 2015 Pan/Para Pan American Games

Random testing: how to get it right Under what circumstances can an employer introduce random drug or alcohol testing? Although we are on the eve of the legalization of marijuana in Canada, there are still very limited circumstances where it is permissible to engage in random workplace testing. Generally speaking, an employer must be able to meet the following criteria: First, that the workplace is inherently dangerous, and employees who will be subject to testing work in safety-sensitive positions; second, the employer can demonstrate that there is a significant issue with the use of drugs or alcohol in the workplace; and third, that less intrusive means, including initiatives like education programs, have not been successful in addressing the issue. One other circumstance where random testing is permitted is as part of a return-to-work program established after an employee has participated in an addiction treatment program.

Are there any common mistakes that render such policies unfair or unlawful? Some of the most common mistakes employers make when crafting random testing policies are failing to ensure the least intrusive testing method is used (i.e. a Breathalyzer test versus a mouth swab); failing to ensure the testing method can actually demonstrate that the employee is impaired at the time of the test, as opposed to simply having the intoxicant in their system, which may not actually mean the employee is impaired; and failing to treat the possession of intoxicants (such as drugs or alcohol) in the workplace as a separate issue from being under the influence of an intoxicant. While an employer is generally allowed to tie disciplinary conse quences to possessing illegal drugs or alcohol in the workplace, an employee being under the influence of an intoxicant needs to be treated differently and should not automatically lead to disciplinary results. Where an employee is found to be under the influence, the first step should be exploring whether or not they have an addiction and, depending on the surrounding circumstances, the next step may require the employer to engage in accommodation of the employee’s disability, such as an unpaid leave of absence to seek treatment.

What risks do employers face if their policy is deemed unreasonable or discriminatory? If an employer’s policy is off-side, it can mean that an arbitrator or human rights tribunal can strike it down and order the employer to stop doing any testing until the policy is compliant. Depending on the circumstances, it can also mean that the employer has to pay damages to employees who were subjected to testing under the faulty policy. Finally, to the extent that the employer has disciplined or terminated an employee under a non-compliant policy, that action can be reversed, and the employee can be reinstated to employment, including the payment of back wages and potentially additional damages for any breach of the employee’s human rights protections.

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UPFRONT

TECHNOLOGY UPDATE

How to get your CEO to invest in HR tech The SVP of HR at NexJ Systems advises HR professionals on how to prove the value of tech to senior leaders

toward modernization or introducing new ones,” she says. “What you don’t know, however, is whether others share your pain and see the same opportunities.” In order to close that gap, Bouyoukos says HR professionals need to be proactive. “Get out there and talk to people,” she says. “Understand how HR technology would alleviate pressures in the organization and who would benefit most. Describe to these groups what life would be like after HR technology and ask those senior executives to champion it.”

“Understand how HR technology would alleviate pressures in the organization and who would benefit most” Over the last few years, HR technology has pushed the industry to new heights – but some HR professionals still face an uphill battle when it comes to securing senior-level buy-in. According to Jennifer Bouyoukos, senior VP of HR at NexJ Systems, one obstacle that often stands in the way of securing top-level investment is HR’s inability to show how technology can solve major organizational challenges and avoid costly problems down the road. “Data is key here,” Bouyoukos says. “Show where the key bottlenecks are in measures like delays in hiring and productivity, add up the

NEWS BRIEFS

employee hours it takes to work collectively on one process, turn that number into dollars, and show a cost savings. Then show the same scenario if you don’t do anything. The data creates a compelling argument.” Another hurdle is the failure to secure internal sponsorship, Bouyoukos says – if others are on board, the CEO is more likely to see HR tech as a company-wide benefit, rather than just an improvement for one department. “As the HR leader at an organization, you instinctively know when it’s time for technology, whether it’s moving manual processes

Tech putting HR under extra pressure

Organizations across Canada might be using technology more than ever before, but many leaders still worry that they’re unable to keep up with the latest technological developments. According to a report from the Conference Board of Canada, one out of every four Canadian HR leaders is concerned with their organ ization’s ability to respond to the pace of change. The study found that 26% of HR leaders placed the impact of technological change as a top organizational challenge, up from just 4% in 2005.

Bouyoukos says it’s also important to remember that CEOs have seen many tools come and go. “They worry whether the HR team has the necessary selection and change management skills to ensure the right product was chosen and that users will adopt,” she says. “Collecting internal and external research to help present your decision will be critical.”

Jennifer Bouyoukos will be hosting a workshop on how HR can build a solid business case for technology, including showing ROI, at the upcoming HR Tech Summit in Toronto on June 27. For more information, visit www.hrtechsummit.com.

Automation puts 40% of jobs in Canada at risk The head of the government’s economic growth advisory council has warned that as many as 40% of existing Canadian jobs could disappear over the next 10 years as a result of automation.“Are our institutions ready to deal with that disruption?” asked Dominic Barton, just before the panel released a report outlining ways to help increase labour market participation. Both Barton and the report point to a desperate need for educators, employers and government leaders to find ways to help workers upgrade their skills in order to remain relevant.

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Q&A

Lilia Stoyanov CEO

New tech is making remote working the norm

TRANSFORMIFY

Fast fact Previously an auditor at EY, a director at Coca-Cola and GM, and CFO at Skrill, Stoyanov founded CSR platform Transformify in 2015 to provide remote jobs to people worldwide

As technology continues to advance, how do you predict this will impact remote working – and ultimately organizations – over the next 10 years? Remote working or flexible working hours are no longer a perk – they are the norm for many organizations worldwide. It is not surprising, as everyone benefits from the arrangement: Employees have better work-life balance, and companies optimize administrative costs. With the new technology in place, it doesn’t matter if everyone is in the same room or miles away. Businesses can effectively monitor the time management and performance of their remote employees using solutions such as TimeDoctor, JIRA Atlassian, etc.

Remote working would never have been possible without technology. Do you think there are any other workplace revolutions on the horizon that will be driven by tech? People are social creatures, and consolidating remote teams in co-working offices is one great trend. Thus, traditional businesses feel more comfortable going remote, as their team may be miles away but still working together. Another interesting trend is the ‘office nomadism’ embraced by many young technology companies. Their teams have access to all co-working offices of a certain provider around the world and enjoy working

Is technology preventing deeper thought?

Technology is “dumbing us down,” and employees need to regularly disconnect, says Dr. Jenny Brockis, author of Brain Fit! How Smarter Thinking Can Save Your Brain. “If speed is the order of the day, then certainly accessing the technology is the way to go, but if you want to have that deeper, more reflective thought, then removing yourself from technology is important,” Brockis says, adding that organizations could see a meaningful difference if employees switched off for just a few minutes throughout the day.

and travelling as digital nomads all the time. Some have gone a step further, providing an app so their team can plan travels and ‘co-working meetings’ around the world to enjoy spending time together and getting to know each other better.

What advice would you give to any employer with reservations about rolling out a remote working program or employing a remote employee? Transformify is a completely remote company, and our team has never met. It is an advantage, as we hire the best talent, no matter the location, and keep the bottom line low. All you need is proper communication, planning and the right tools in place. We launched a complex technology platform in less than one year, relying on remote contractors only. The concerns are usually around security and control. Both are quite well addressed by the existing technology solutions – VPN, time tracking and time management software, video conferencing, etc. In reality, remote teams communicate more than the average in-house team, as their perception is that they need to stay connected and use all internal chats, video conferencing, etc. On the contrary, we are all familiar with open-space offices where everyone wears a headset all the time and doesn’t exchange a word with the person sitting next to her or him.

More companies using augmented reality to boost L&D

Companies are increasingly leveraging augmented reality tools as a way to improve L&D, according to a report by global IT firm Cognizant. “Businesses across multiple sectors are now able to tap their vast potential to help users visualize data and instructions that overlay physical assets in real time,” the report said. Gartner research also shows that AR is poised to become an important workplace tool, now that it has matured to a point where firms can use it to complement and enhance key business processes, workflows and employee training.

Aviva to retrain those losing jobs to robots

Global insurer Aviva is offering employees retraining for another role in the company in the event that their jobs are replaced by automation. Aviva has extended the offer to some 16,000 of its employees in Britain. The offer is considered the world’s first, as most employers have introduced automation without consultation. Aviva’s staff who work in call centres, assess customers’ credit ratings and calculate the price of insurance policies are most likely to have to retrain.

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FEATURES

TECHNOLOGY

Overhauling the employee review process One HR director explains how she redesigned her firm’s performance management process so employees feel empowered rather than overwhelmed FROM IBM and Accenture to Microsoft and JP Morgan, a bevy of blue-chip firms have scrapped annual performance reviews in the past few years – but innovation isn’t just for the global giants. Canadian design firm DIALOG has also abandoned annual reviews and employee ratings, choosing instead to implement a future-focused strategy that takes the stress out of performance management for all 700 of its employees. National HR director Tania Oppedisano was responsible for developing the program, alongside a team from York University’s School of Human Resources. Here, she

explains the inspiration behind the major change and offers advice to anyone who plans to follow suit.

HRD: What was the motivation behind overhauling DIALOG’s performance review process? Tania Oppedisano: I was on the verge of completing my master’s of HR program at York and had just recently moved into the HR director role, and we were looking at overhauling our HR strategy. One of the components I was looking at was retention, and while I was researching various retention methods, development kept coming

NOT SO FAST … Analysis by CEB shows that eliminating ratings may lead to three unintended outcomes: An average of 10 fewer hours spent by managers on performance-related conversations, despite having more time available to them. Managers do not shift that extra time toward ongoing, informal performance conversations. An 8% decline in top performers’ satisfaction with pay differentiation because managers have trouble explaining how pay decisions are made and linked to individual contributions. A 6% drop in employee engagement because managers are unable to do the very things that are proven to engage employees, such as set expectations for their employees, hold clear performance and development conversations, and provide appropriate rewards and recognition. To guard against this, CEB recommends providing ongoing, not episodic, performance feedback; making perfor mance reviews forward-looking, not backward-looking; and including feedback from peers, not just managers.

up in so many different ways – that it not only drove retention, but also performance. We’d always had a performance review process once a year, where everyone was rated on a scale of one to five, and I knew nobody liked it – including myself – so it felt like a low-hanging fruit. I figured we could really incorporate the concept of development through our performance program, and I found a study that one of my professors had published about being feet-forward and focusing on development conversations rather than looking at the past.

HRD: What were the major changes? TO: We removed the idea of having conversations just once a year – now there are four major touchpoints. As a result, it’s no longer focused just on talking about the past – instead, we focus on goals employees are going to set for the next 12 months. We’ve completely scrapped ratings – there is no more ‘needs improvement’ or anything like that, and the consistent conversation is more focused around where they lie within the goals they set for the coming year. We’ve also switched to an online system. Before, it was a manual paper form, but now that the goals are online, they are directly connected to our learning objectives, so when we see consistencies, we’re able to pull out where we need to focus our learning & development programs, and we’re able to connect the two to each other. Employees are also significantly more accountable now because of the touchpoints they have within the year – they’re actually accountable to set up those conversations. So not only are we focusing on employee goals, but we’re empowering them to help drive their development as well.

HRD: Why the specific push to abandon employee ratings? TO: Something I found interesting was that ratings are more of a reflection on the supervisor than employees. As a supervisor, you don’t want to say people that work for you are all horrible because it’s a reflection on yourself,

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THE PERILS OF PERFORMANCE REVIEWS Researchers from Kansas State University, Eastern Kentucky University and Texas A&M University found that even people who are motivated by a genuine desire to learn respond negatively toward less-thanperfect performance reviews. “We thought, if anything, they’d be able to take it and apply it to their own jobs,” says management professor Satoris Culbertson. “But they simply don’t like negative feedback, either.” Culbertson and her team concluded that much of the time and energy spent on the performance review process is often wasted, as employees tend to forget the helpful elements of a discussion as soon as they hear criticism. “For a really strong performer, getting a four on a five-point rating scale can be devastatingly bad,” Culbertson says. but you never want to say someone’s amazing because they might take over your job – that’s why everybody always fell in the middle. That one always stuck with me, and that was something I communicated when we were going through the concept of getting rid of ratings, which was a really big deal.

“Buy-in is extremely important – you have to communicate it at a senior level as much as possible, and it’s really important to support your message with research”

HRD: What impact have these changes had on the workforce?

Tania Oppedisano, DIALOG

TO: It’s much more positive. Everybody dreaded annual reviews – I’ve been a supervisor and an employee, and I dreaded it from both sides. It was very stressful. Since we changed the conversation – it used to be ‘reviewer,’ and now they’re called ‘development coaches’ – we’re making really strong connections between coaches and employees. What it’s actually driven home is that we’re trying to develop a culture of coaching. Now, everyone says it’s such a great conversation because essentially they walk away with an individual development plan, and employees have really taken well to it.

to communicate it at a senior level as much as possible, and it’s really important to support your message with research. I think as HR people, we need to be focused on research – not just general articles that come up, but really diving deep into different research from different studies that you can use as examples. Ensuring your communication method fits with individual office cultures is also crucial. We have four studios across Canada, and we had to recognize that every location is different and they use communications channels very differently. We had to acknowledge that and communicate in the most effective way based on their individual culture.

HRD: What advice would you give to other employers embarking on a similar change initiative? TO: Buy-in is extremely important – you have

HRD: What would you say the risks are to organizations if they don’t update their performance reviews?

TO: With millennials, they really want to focus on development, so I think you’ll have a massive retention issue if, going forward, you’re not doing it. A lot of workplaces are starting to change this process, and it isn’t only millennials who want development – it’s everybody at all levels of their career. I truly think organizations will start seeing some serious retention issues if they don’t make this change. Tania Oppedisano will be part of an expert panel at the upcoming HR Tech Summit in Toronto on June 27. There, she and two fellow senior HR leaders will discuss how they applied design thinking to put employees at the centre of HR systems and ensure experiences address the core needs of staff. More information on the event – which includes workshops on technology trends and artificial intelligence, among many others – can be found at www.hrtechsummit.com.

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EXPERT INSIGHT

BIG DATA

What’s the big idea? Data analytics has been hailed as the latest advancement to revolutionize HR, but one global expert says few firms are using it to their full advantage THE RAPID rise of data analytics has changed the face of HR forever, but many employers still have doubts when it comes to practical implementation. Numerical Insights founder Tracey Smith may be able to help. With more than 25 years of experience in mathematics, statistics and data visualization, Smith is widely regarded as a key thought leader in the field of analytics – here, she offers advice on effective workplace implementation and explains why Big Data will never fully replace that gut feeling.

HRD: Which areas do you think have the most opportunity for improvement in terms of using Big Data? TS: The answer to this question will differ from company to company. Each company faces a unique set of workforce challenges, and therefore the value in answering each type of business question will also be unique. For example, if a company has a very high termination rate, there is value – money to be saved – in using analytics to guide a root cause analysis of turnover. For a company with a

“In five years’ time, I see Big Data being at the fingertips of almost every employee and business leader” Tracey Smith, Numerical Insights HRD: The vast majority of HR professionals are now tuned in to the importance of Big Data, but are they using it to its full advantage? Tracey Smith: While the vast majority of HR professionals have heard about the importance of Big Data, year after year, more than 80% of companies continue to report that they have no analytics capabilities inside HR. Of those that do have analytics capabilities in HR, some struggle to show value with it. This struggle comes from a lack of focus and prioritization on answering the right business questions with data.

very low termination rate, there is little to be gained by using analytics resources to study turnover. The company with low turnover should focus their analytical efforts on a different business problem.

HRD: Even though HR professionals are increasingly aware of the importance of Big Data, many still let gut instincts guide their decisions – do you think this is a mistake? TS: Using only gut instinct for decision-making is obsolete in today’s business environment. That said, most business problems cannot be

solved using only analytics. In many cases, analytics allow companies to hone in on where an issue has the most impact to their bottom line. This allows companies to test and confirm potential root causes of their business issue in order to determine the ‘actionable insight.’

HRD: Are there any common mistakes employers tend to make in regard to Big Data – and if so, how can they correct them? TS: There are several popular mistakes companies make as they enter the world of Big Data. First, many companies purchase an analysis/business intelligence tool before they’ve even determined what they need the tool to do. Second, some companies believe that purchasing a data visualization tool provides them with actionable insights and their analytics journey is done. This is incorrect because you still need someone to interpret what the data results mean inside your company. The software tool won’t do that for you since it doesn’t know your business and its history. The final popular mistake is to put analytics projects on hold while you conduct a companywide data cleanup project. Data is a living set of information. It is constantly changing and growing. It will never be perfect.

HRD: What role do you see Big Data playing in five years’ time? TS: In five years’ time, I see big data being at the fingertips of almost every employee and business leader. Those who know how to use data to gain valuable insights will be winners in the future. I see a better connection of data systems in five years, easing the pain that comes with today’s disparate business systems. I don’t see the merging of many business systems into ‘the one solution’ for business, so the people who make it easiest for multiple systems to speak with each other will also be winners in five years. Tracey Smith will be presenting a workshop on how to use Big Data in a truly strategic way at the HR Tech Summit in Toronto on June 27. For more information, visit www.hrtechsummit.com.

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UPFRONT

OPINION

GOT AN OPINION THAT COUNTS? Email editor@hrmonline.ca

Checked out? Check back in Re-engaging employees who have ‘checked out’ isn’t easy, write Chester Elton and Adrian Gostick, but it can be well worth it IT TAKES a concerted effort to re-engage people who have checked out. It forces leaders to become coaches rather than players. However, the results can be worthwhile, as you learn to harness the full power of all the people in your care. Here are just a few of the steps we’ve found that can have a powerful effect on helping checked-out employees check back in:

Believe in them again

Can you teach an old dog new tricks? Often you can. A few years ago, we met Ty (not his real name), a sales rep at a mid-size company. He had worked for his organization for 20 years and had been a top producer, but a new strategic sales direction had left him floundering. Ty had gone from being in the top 10 in sales to the bottom 10, and the leadership team believed that Ty couldn’t cut it, confiding that they were about to let him go. “Salespeople don’t forget how to sell,” we argued. “He’s still got it in him – you just have to bring it out.” We worked a little with Ty, but more important, his sales leaders invested their time. They let him know they cared and that they believed in him, they actively listened to his concerns, and they started to find ways for him to sell in this new world by playing to his strengths. Two years later, Ty was the number-one salesperson in the company (out of more than 100 areas). We were there when he accepted an award for that achievement, and he couldn’t hold back the emotion in his appreciation for leaders who believed in him when he was struggling.

Learn what their aspirations are

Great managers think differently about their employees. They believe their team’s success is not the result of their own genius, but a direct outcome of their people’s ingenuity and talent. As a result, they treat people like individuals with their own specific goals and aspirations, and they create opportunities for their people to grow and develop, thereby retaining more of them – and certainly engaging more of them.

Root for them

In our research, we’ve found that more than two-thirds of managers believe they are above average at recognizing great work. The percentage of employees who agree? Less than one-quarter. Most of us aren’t as good at appreciating our employees’ contributions as we think we are, and that can be one reason why someone has become disengaged. Frequent complaints we hear in our qualitative research include, “I do work I don’t get credit for,” or “A simple thank you from my manager would mean a lot.” To rebuild positive, productive relationships with checked-out team members, praise should outweigh criticism by a five-to-one margin. They’ve been beaten up long enough. Recognition is not only good for the disengaged, it’s a good overall business practice, says Rosabeth Moss Kanter of the Harvard Business School. “In the most innovative companies, there is a significantly higher volume of thank yous than in companies of low innovation,” Kanter says. In our studies, we have been thrilled to find higher levels of appreciation and celebration in not only the

“Great managers believe their team’s success is not the result of their own genius, but a direct outcome of their people’s ingenuity and talent” Before a checked-out employee will buy back into the culture, that person must be able to answer the WIIFM question for him or herself: “What’s in it for me?” What the best managers do is learn specifically what motivates each of their people – especially those who are disengaged – and then sculpt the nature of their employees’ jobs just a bit to better meet their motivating drivers. It’s not that all distasteful tasks are thrown out and nothing but plum assignments are handed their way, but savvy leaders are wise enough to know that by adding a few motivating elements or removing a few demotivating activities, they can often re-engage people. As for their employees, who wouldn’t want to work for a manager who really wants to help you achieve your specific career goals?

most innovative places, but also in cultures of high employee engagement. In the best workplaces, teams have much higher levels of camaraderie, and managers spend much more time thanking their people for strategic behaviours that move the company forward. These seemingly soft skills create tangible esprit de corps and a single-mindedness about achieving the right behaviours.

Chester Elton specializes in organizational culture, employee engagement and leadership. Adrian Gostick is an organizational culture expert. They have collaborated on bestselling leadership titles All In and The Carrot Principle.

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PEOPLE

GLOBAL HR LEADER

Guided by a credo Iain Hopkins chats with Johnson & Johnson’s Peter Fasolo about why his company relies on a 75-year-old credo, how Big Data is helping to debunk myths and how stepping out of his industry helped to shape his career

JOHNSON & JOHNSON is a behemoth of an organization. With over 127,000 employees working in more than 265 operating companies located in 60 countries, it is one of the few companies that can rightfully claim to be truly global. Among its well known consumer products are Band-Aid, Tylenol, Johnson’s baby products, Neutrogena skin and beauty products, and Acuvue contact lenses, to name just a handful of household names. First incorporated by brothers Robert, James and Edward Johnson in 1887, the company is celebrating its 130th anniversary in 2017. For executive vice-president and CHRO Peter Fasolo – who heads Johnson & Johnson’s 2,400 HR professionals globally – the secret to his company’s longevity is not just the innovation of its people, but its credo, which turns 75 years old in 2017. While some might scoff that a company credo veers too closely to a mission statement or vision – empty words spouted at corporate get-togethers – there’s little doubt that the Johnson & Johnson credo is the foundation of the company. “If you are to know anything about Johnson

& Johnson, it’s that our values define who we are as a company,” Fasolo says. “They were written down by the son of our founder, Robert Wood Johnson, 75 years ago, and they are as relevant today as they were back then.”

HRD: Can you briefly outline your role at Johnson & Johnson? Peter Fasolo: I have global responsibility for HR at the company. I report directly to our chairman and CEO. I’m a member of our exec-

HRD: Can you outline the Johnson & Johnson credo and why it’s so critical to how the company operates? PF: The first and foremost responsibility we have as a company is to ensure we’re providing high-quality, innovative products to the nurses, doctors, mothers, fathers and families that we have the privilege to serve. The second responsibility we have is to the employees in our company around the world. Our responsibility is to provide them a safe

“Be willing to get your hands dirty, because no speech ever moved a company. A speech gives a vision, but then you have to go in and dig deep ... and really support your people to make that real” utive committee, and I chair our pension and benefits committee. I’m also a member of our management compensation committee. Probably most importantly, I have the real privilege of helping to look after our 127,000 employees and their families around the world.

environment. We therefore pay close attention to their careers and give them a sense of security, and create an environment where their careers can flourish. The third responsibility we have is to the communities in which we serve around the

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PROFILE Name: Peter Fasolo Company: Johnson & Johnson Title: Executive vice-president, CHRO HR experience: 25 years Previous roles: »»Chief talent officer, Kohlberg Kravis Roberts & Co. »»VP, human resources, Johnson & Johnson »»Various HR roles, Bristol-Myers Squibb Qualifications: Doctor of philosophy, University of Delaware; master’s degree in industrial and organizational psychology, Fairleigh Dickinson University; bachelor’s degree in psychology, Providence College

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PEOPLE

GLOBAL HR LEADER debate the variety of ways to do performance management, employment relations or comp admin or recruiting – we’ll have the best practices and be able to scale up.

HRD: How does Johnson & Johnson’s HR team tap into Big Data for decisionmaking?

“What the analytics team has found is that teams with the best credo scores also have higher engagement” world. We give back to our communities. Well over 85% of our employees are involved in some level of community engagement and volunteer work. We give over US$1 billion worth of products and services back into our communities each year. We are a company that is committed to sustainability and to alternative forms of energy and water conservation. Fourth is a responsibility to our shareholders. Our credo guides us. If you take care of your patients with high-quality, innovative products and you are committed to your employees and give back to your community, the shareholder will get a fair return. Those constituents and stakeholders are ordered in this way for a reason. That credo, that guidance, has been a real North Star for the company for decades. It served us well then, and it serves us extraordinarily well today.

HRD: What’s on top of your HR agenda in 2017? PF: We are literally halfway through a big transformation journey of our own HR function. We are disaggregating the HR function, meaning we’re putting the more transactional, administrative work into a shared service environment in places like Tampa, Florida; in Prague, Czech Republic; and Manila in the

Philippines. These high-service, repetitive support functions – things like recruitment, performance management, comp management – can be done universally and very effectively. It also allows our corporate centres to focus on the talent agenda, for example, the comp strategies, and then our business partners can support their businesses more effectively.

HRD: Where have those shared services functions been based up to this point? PF: The HR business partner was essentially doing everything on behalf of the function. We did have centres of excellence – in recruiting, in compensation – where there were global policies and frameworks in place, but the fact of the matter is that before this transformation, our HR business partners were doing a lot of this work themselves. What that resulted in was unevenness in service levels and lots of different approaches to things like performance management or succession planning. I want our HR leaders to be in the talent game, to be rewarded for outcomes rather than process. I want to invest in software as a service and cloud technology so we can leverage the scale of J&J and not have to

PF: We’re currently building out a pretty robust people and data analytics capability, because as you go and disaggregate the HR function, you have HR business partners focusing on the agendas I’m describing, and you have to build out capabilities to ensure line leaders and HR leaders have insight into their workforce. So we now have a 15- to 20-person data analytics group, which is providing insights into what works and doesn’t work, what are the best predictors of success, and how people are moving around the globe in terms of their careers. At J&J, we do around 25,000 job placements a year: 60% on the outside, 40% on the inside. That’s a huge number of movements to keep track of. We have thousands of people who are on expatriate assignments, who are third country nationals, as well as undertaking inpatriate assignments. We want to make sure those movements are being tracked and outcomes are being understood so we can leverage insights for maximum impact.

HRD: This is a new area for HR – where have these people been drawn from? PF: They are a mix. Most of them are PhD industrial-organizational psychologists, some have MBAs, some have come from business, and others come from data analytics. It’s a mix of capabilities, and we’ve realized a few things that have become apparent as part of this HR transformation. First, we needed to get a lot better in what I call customer service and service-level agreements. Just because your customer likes you – in our case, our internal customers, the employees and line leaders – doesn’t mean you are providing world-class service. Working with our leaders in the customer service and logistics area, we’ve tried to establish what world-class customer service means

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and the outcomes we should be working to. Then we’ve been building up this data analytics group, who take a series of our policies and our actions and outline what is working and what isn’t working. Then we make adjustments along the way.

HRD: Can you provide some examples? PF: Our data analytics group has provided really good insights to our workforce on areas like performance management. Does selfrating really work or not? Or recruitment – is it better to hire an experienced person in a certain part of our organization or to hire college graduates and train them? We were able to break some myths in this area. Our line leaders in some parts of the organization had a bias of hiring experienced people at the expense of college or university graduates. What we were able to show them is that they were right – for the first year, an experienced hire will give you a higher performance level. However, after 12 months, those lines started to cross, and the college or university hires ended up being higherperforming and more committed. In addition, retention rates were higher, and they were more likely to stay with us for a longer period. We’ve since expanded our university hiring and have almost debunked that myth. Not only is our credo an important part of our values system, but we measure it. Every other year, we do a global credo survey. Essentially, we’re asking our employees whether we live up to our credo for those four constituents: our patients, our consumers and customers; our employees; the community; and our shareholders. We get surveyed responses back, and we analyze those responses. Although it’s confidential, every manager gets a score of how well they’re doing. What the analytics team has found is that teams with the best credo scores also have higher engagement, and they also happen to have the highest level of innovation and strategic alignment. So it’s great to have impressive credo scores, but there are also variables that are related to it. It’s hard to say it is cause and effect, but we’re learning that if you can get really good credo engagement, then you’re

ALL ABOUT HEALTH Johnson & Johnson has a company-wide goal to become the world’s healthiest company by 2020. There are four strands to J&J’s holistic approach to health and well-being: monitor the employee’s own health, educate employees about correlations between health and performance, create an environment that fosters well-being and encourages employees to take ownership of their health, and maintain efforts on health initiatives. Although benefits vary depending on location – J&J in the UK, for example, has its own health trust with HR directors as trustees – certain benefits are global. Flexible transition back to work, part-time working, and job-sharing for new mothers and family caregivers are offered around the world. Other benefits for mothers in the US include:

Parental leave Eight weeks of paid leave during the first year of birth/adoption, as well as 17 paid weeks off for mothers

Fertility benefits Maximum of $35,000 for couples

Breast milk shipping Temperature-controlled delivery service for moms travelling for business

Adoption benefits $20,000 for each adopted child under 18

Children with special needs Speech, occupational and physical therapy, as well as applied behaviour analysis

more likely to have an innovative environment where people understand where you’re going at a strategic level. That’s a recipe for success.

HRD: On a more personal note, you could be described as a boomerang employee – you left Johnson & Johnson at one point but have since returned. How do you think that has helped your perspective on working at Johnson & Johnson? PF: I think it’s always good to get outside perspectives and learn from other companies in other industries. I stepped out of the industry, but I also stepped out of the traditional global corporation and went into private equity [at Kohlberg Kravis Roberts & Co.], which has a whole different set of business principles. I came back here with a greater appreciation of the power for good that a company can have on a global scale. J&J has been here for 130 years – this just happens to be my time, our time, right now guiding the corpor-

Surrogacy assistance benefits $20,000 reimbursement per child for services related to the surrogacy process

Childcare benefits Six childcare centres across J&J campuses; discount offered with national provider

ation. We feel a strong responsibility to the leaders who gave us the helm, and we have an equal responsibility to hand over this company to the next generation and leave it in a better place.

HRD: What do you believe you’ve personally brought to the executive team due to your experiences elsewhere? PF: I’ve brought other learnings from other industries, especially in the M&A area and the innovation space – things like speed and agility, and accountability. Our job at the top of the organization is to articulate where you want to go – call that a vision or strategy, but then you have to allocate people and financial resources to make that vision real. You have to be very good strategically, but also operationally. Be willing to get your hands dirty, because no speech ever moved a company. A speech gives a vision, but then you have to go in and dig deep, layers down, and really support your people to make that real.

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Transforming the HR function in Canada KPMG in Canada’s People and Change practice helps leaders drive value and enhance success by advising on their people and change agendas. From developing organization strategies, leading transformational change to optimizing the workforce and HR function, we bring thought leadership and practical solutions to help leaders develop programs that enable their talent to flourish and meet their business needs. Our team is personable yet professional and brings experience and insights from all industries across private and public sectors. To learn more about issues affecting the HR landscape and how we can help your organization, visit our website at kpmg.ca/peopleandchange

Contact Soula Courlas National Lead, People & Change KPMG in Canada scourlas@kpmg.ca linkedin.com/in/soulacourlas

© 2017 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 16801 The KPMG name and logo are registered trademarks or trademarks of KPMG International.

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FEATURES

COVER STORY: HR ROUNDTABLE

2017

HR LEADERS ROUNDTABLE HRD invited four HR leaders to a roundtable event at Toronto’s exclusive Spoke Club. The panel discussed a wide range of timely HR topics, including the importance of CEO relationships, how they’re using analytics and the best ways to manage HR disruptors

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ABOUT OUR SPONSOR KPMG Canadaâ&#x20AC;&#x2122;s People and Change practice helps organizations across the public and private sector drive business value and achieve strategic goals through the optimization of their people and HR agenda. From developing organization strategies and leading transformational change to optimizing the workforce and bringing innovative solutions to the HR function, we bring thought leadership and practical solutions to help leaders develop programs that enable their talent to flourish and meet their business needs. In Canada, KPMG has more than 60 People and Change practitioners across the country, delivering strategic and operational consulting services. We work together, utilizing a single set of leading practice global methodologies, tools and accelerators to deliver a consistent client experience across multiple geographic locations and different languages. The professionals in our People and Change practice are personable yet professional, and believe that HR programs, policies and processes must be connected into a coherent, value-driving whole. Our team helps drive business value and enhance success through five core service lines: yy Organizational design for performance: Developing, implementing and integrating organizational structures and systems that deliver the capabilities and performance required by the organizationâ&#x20AC;&#x2122;s strategic intent yy Behavioural change management: Accelerating the successful implementation of change by developing strategies that deal with the impact on people from changes to strategy, structure, processes and technology yy Talent management: Developing human capital within an organization to help ensure that the current and future needs of the business are met and strategic goals achieved yy HR strategy and function optimization: Enabling the optimal HR function by transforming the delivery of HR services to utilize leading practices and enable delivery of the organizationâ&#x20AC;&#x2122;s talent and human capital strategies yy Workforce intelligence: Developing the workforce strategy, operations and supports needed to optimize people and organizational performance

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FEATURES

COVER STORY: HR ROUNDTABLE PARTICIPANTS

Kelly Davis SVP, human resources, loss prevention and customer service Town Shoes Limited

Lisa Butler Chief talent and diversity officer Manulife

Anna Crane HR director Lumenix

MODERATOR

HR DISRUPTORS IN 2017 In most years, there seems to be one overarching factor or challenge that impacts the way HR leaders are forced to approach their role. But in 2017, the changes are coming from every angle. Technology, for example, is changing the world of work (and the world itself ) at a rapid rate, and those who fail to adapt to this digital era face the real risk of being left behind. From job automation to fintech, technology is forcing organizations to rethink their approach in order to compete. HR is playing an increasingly important role in making those strategies become a reality. The word ‘disruption’ gets thrown around a lot, but from an HR perspective, societal and market forces can only be described as being truly disruptive. Customers, employees and senior management expect more from the HR function – and HR leaders are being forced to step up. Anna Crane: Being a startup organization, we’re always looking to technology. It has advanced so much, and we’re at an exciting time right now with people using interactive screens, mobile apps and showcasing their brands in new ways. For us, building the foundations of an HR infrastructure system, we are always looking at what technologies we can use today to be ahead of the curve; that’s really

important to us. Technology has progressed, and so have the different tools we’ve used since the 1980s, 1990s and 2000s. How do we stay ahead of the curve and become interactive and engage with our employees, who are millennials? Lumenix is a clean tech energy company, so we’re always looking for ways to teach the consumer how to conserve energy. However, it’s not just about that; it’s about changing behaviour and showing we can help people cut energy costs in an agile environment. Kelly Davis: As an industry, retail is being disrupted every single day. In the last few years, we’ve seen omni-channel or multi-channel shopping become the norm. It doesn’t matter what you call it – our customers want whatever they want, when they want it, at the tip of their finger. Everything from the organizational perspective has to be super-mobile. How we market and where we market our dollars are all completely different now. Of course, that hands off into the HR piece as well. Lisa Butler: Interestingly, the financial services sector is not that different. When Kelly was talking about retail, I could completely relate to the customer and their requirements. In the financial services world, people want end-to-end solutions, and they want them in a technology-enabled way. That’s something we are focused on, and it also applies to our employees. Our employees

WHAT DO EMPLOYEES WANT?

47%

of employees worldwide told Mercer that the number-one thing that would make a positive impact to their work situation is fair and competitive compensation. Below are the top seven responses: FAIR AND COMPETITIVE COMPENSATION OPPORTUNITY TO GET PROMOTED LEADERS WHO SET CLEAR DIRECTION WORKING WITH THE BEST AND BRIGHTEST TRANSPARENCY ON PAY CALCULATIONS

Soula Courlas National lead, people and change services KPMG Canada

CAREER PATH INFORMATION

#1 for employees

in Canada, China, France, Germany, Italy, Singapore and the US

for employees in Brazil, Mexico, India and South Africa

for employees in Australia, Hong Kong and the UK

#1 for employees in Japan

MORE FLEXIBLE WORK OPTIONS Source: Talent Trends 2017 Global Study, Mercer

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are customers, and we are focused on how we respond to them, as well as how we respond to our customer base. They are customers of our internal services, and they are also expecting technology-enabled solutions from their employer. We have to think about the skills that our employees need, but we also have to think of our employees as customers within our organization. Anna Crane: As opposed to other generations, millennials have a voice, and they try to look for companies whose values resonate with their own. At Lumenix, we’re always giving back to the environment and the energy sector, so the millennials we attract are passionate about energy and how to save the environment. We’re really privileged to have a group of passionate people who are working towards a great cause. Most of the students do come from universities and colleges, and bring in innovative and creative ideas, which is what we want to see. Lisa Butler: Millennials are shaping our work environments in a great way; they expect flexibility in their workplace. In any given area, we have 20% to 30% of our workforce working from home. Fitting work with life is no longer about work-life balance, but about how one works with the other. For some roles and people, being able to work from home and having that flexibility is key to their success and their ability to add value in the organization. Millennials have begun to shape that in a more profound way. They want to do be able to do meaningful work, but in the way they want to do it. So we have to adjust to that, and it’s having an impact beyond the millennial gener-

TOP HR INITIATIVES KPMG’s annual HR Transformation Survey polls more than 800 organizations; respondents to the 2016 survey listed these as their top HR initiatives. Initiatives to improve line managers’ people management capabilities

53% 52%

Re-engineered key HR processes

39%

Refocused the role of the HR business partners

38%

Implemented and/or further leveraged manager sell-service

23%

Outsourced activities previously handled internally

21%

Implemented a workforce analytics capability within HR

Source: 2016 HR Transformation Survey, KPMG

ation; it’s having a positive impact on other generations in our workforce.

Soula Courlas: I’m not a millennial, and that’s what I want! Kelly Davis: The oldest millennials turn 37 this year, and in a lot of countries around the world, those people can be grandparents. In our workforce, we are 80% millennial, but we try not to use the term. Our belief is that we employ a ‘millennial-influenced’ generation.

HR PRIORITIES FOR 2017

The older generations have their own issues and want a flexible work life too, but it wasn’t part of the conversation 10 to 15 years ago. Everything we try to do is about connecting generations. One of my favourite examples of that is our most active associate on social media, who is 62 years old. They run an amazing social media campaign, inspire people every day and are very brand-aware. That’s how we try to approach it. We have flexible work times and communicate with our associates in a very different way, but it’s not just for the millennials; it’s what everyone wants.

According to Mercer, these are the issues HR practitioners are most concerned about this year:

Attracting top talent externally

Developing leaders for succession

Identifying high-potential employees

Building skills across the workforce

Supporting employees’ career growth

Increasing employee engagement

Soula Courlas: I love the term ‘influenced generation’ because every generation influences the other. There is a real opportunity to bring that to the workplace and create an employee experience that increases retention, engagement and the value proposition of the organization for the employees. Are you doing anything formal around the employee experience?

Source: Talent Trends 2017 Global Study, Mercer

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FEATURES

COVER STORY: HR ROUNDTABLE EMPLOYEE ENGAGEMENT TRENDS IN NORTH AMERICA 2016 engagement

64%

-1 from 2015

Top engagement opportunities Enabling infrastructure

Rewards and recognition

-1

EVP

-2

Senior leadership

-2

Performance management

-5

Source: 2017 Global Trends in Employee Engagement, Aon Hewitt

trying to create collaborations where we get together with other remote offices and really share ideas in real time. We feel that works.

“If you don’t love our brand, you’re not going to tell your friends and family to love our brand – it’s a full circle in today’s world” Kelly Davis Kelly Davis: It’s something I’m super passionate about. Our biggest thing is listening to our associates and being connected to them every single day. I talk a lot about associate surveys and the old model of surveying associates once a year and then correlating results. The world today is about instant likes and instant feedback. We’re trying to adapt how we interact with our associates in that manner, and we’re moving away from formal surveys. We want to know if someone is happy or not today, like when airports have ‘happy’ or ‘not happy’ signs. I’m also interested in the research around purpose, and associates wanting to work for a company that has a greater sense of purpose than just dollars in the register. We’re starting to do some work with [author and employee engagement pioneer] Dr. John Izzo to build experience around feedback and purpose. It’s very important that our associates love

our brand first. We’re proud when people come into our company and love shoes. Even if you’re a finance manager, if you have zero interest in shoes, don’t work here. People say, “Kelly, how you could say that?” But if you don’t love our brand, you’re not going to tell your friends and family to love our brand – it’s a full circle in today’s world. Anna Crane: We try to really create a sense of culture from the very beginning and find people whose values resonate with our brand. We have a culture where no one sits in cubicles – everyone is in an open forum in teams – and the goals and values are all team-based. Millennials and younger generations tell us what their goals are. We believe strongly in coaching and mentoring, real-time feedback, and having strength-based conversations. We train our managers to hone in on strengthbased conversations, and we do a lot of great things in terms of engagement surveys. We’re

Soula Courlas: Anna, you mentioned employing students at Lumenix. Could you speak to how you attract students? Anna Crane: We partner with Humber College and Ryerson University, and we see students come to us through various programs because they are passionate about energy and want to get into this space. We have big programs with different universities in Manitoba and Calgary as well. We have a learning culture and have experts in the field who are training our younger generation. Lisa Butler: We’ve had programs in place for a number of years, and those have been a mainstay of our organization, but we’re also attracting students from different fields. Although you may not associate financial services with technology, there is so much customer-service-focused work happening on the tech front, and we now have Labs of Forward Thinking [LOFT] in a number of our major locations. A lot of the millennials and students are having online conversations and then joining our LOFT spaces to contribute to the technological advances at our organization. They are also attracted to the global nature

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FEATURES

COVER STORY: HR ROUNDTABLE of Manulife; our business is in Canada, the US and across Asia in 10 different countries. We attract a very particular type of students and employees, who are interested in contributing to the organization in a number of different countries. They may be interested in an opportunity in Hong Kong or China in years to come. When we’re thinking about our students, we look for people who are globally minded and interested in contributing to the organization from a number of different lenses. Kelly Davis: E-commerce is a huge part of our business, and every retailer in Canada is looking for the top e-commerce people; it has become a massive war for talent. We’ve tried to refocus internally on how to groom the best merchants and retailers of tomorrow. Not to say we don’t partner with schools – we do for key roles – but even for that, our practice of attracting talent is very different. Old mall postings and advertising in newspapers are a thing of the past – it doesn’t work anymore. We’re trying to be modern and digital in our approach to everything. Lisa Butler: We have to be aware of the forces that are impacting our organization and then test ourselves and learn. One of the experiments we’re toying with at LOFT, as well as in HR, is organizing our teams in an agile and different way. If we can do that within HR and then provide insight to the business, I think that’s of huge value. Another thing impacting us is the huge focus on change management. It’s an expertise that HR professionals should have, and I think it’s being called upon now more than ever. I think creating expertise with regard to change management and then influencing our businesses is so important. Becoming the expert and then providing expertise to the business is of huge value in these times, when keeping up with the pace of change is so important. Anna Crane: I’m in a unique position because we are a very entrepreneurial startup organization, so I’m a one-man show. As I’m building my team, it’s about being able to put my thumbprint on the latest and greatest in terms of technology and setting out the employer value proposition. I’m working on how our brand is deciphered in the marketplace as we are maturing as an organization.

“Becoming the expert and then providing expertise to the business is of huge value in these times, when keeping up with the pace of change is so important” Lisa Butler For me, it’s about being at the table with the leadership team and making an impact. We’ve spoken a few times about technology, but in a startup organization, it’s really critical to hire the best people because if you make a mistake, it’s obvious. I’m at an interesting point within the company because I’m building those blocks, and it’s great to have such good leadership that understands HR and wants HR at the table. It’s about how you take data and break it apart to show the leadership team as we grow and mature as a business. Kelly Davis: Five years ago, a popular HR position was chief talent officer; everyone needed one. I’ve seen that morph into chief

innovation officer and chief strategy officer, which I find interesting. I heard something recently that really resonated with me: “To be a great HR leader of the future, you need to think of yourself as the CEO of a talent company.”

THE CEO-CHRO RELATIONSHIP Soula Courlas: With business models changing, what do CEOs expect from HR leaders in 2017? Lisa Butler: CEOs have certain expectations of the HR function, as they should. I remember what my dad told me when I was entering HR: You need to be human, and you need to be

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IS HR MEETING EXPECTATIONS? In its burgeoning role as a strategic business partner, HR is increasingly under pressure to demonstrate ROI for new HR initiatives. Of those respondents to KPMG’s 2016 HR Transformation Survey who implemented new initiatives:

63%

of those who took initiatives to refocus the role of HR as a business partner felt they met expectations

74%

of respondents who set out to re-engineer key HR processes in the past 18 months said they met expectations

20%

of those who implemented workforce analytics within HR said it didn’t meet expectations

65%

of respondents said they achieved the results they were hoping for following the implementation of a new cloud-based HR system

TOP 5 EMPLOYER CHALLENGES IN MANAGING MENTAL HEALTH 49% Lack of employee knowledge and/or willingness to use counselling and resources 48% Inadequate manager knowledge and behaviour when an employee is struggling 46% Stigma regarding mental health issues 42% Inadequate co-worker knowledge and behaviour when an employee is struggling

Source: 2016 HR Transformation Survey, KPMG

resourceful. I keep that in the back of my mind as something comical to remind me of how to succeed in the profession. I do think it’s what our business leaders are expecting of us: insight both on the human front and the broader talent trends. The relationship with the CEO is based on trust, and an HR leader is in a unique position to provide insights on both a personal level and from the organization’s perspective. Providing insights on all of those levels is of huge value to any CEO. Anna Crane: For me, being in a newly created HR role, business leaders definitely want to be challenged on stuff that’s happening in the business and for me to have a voice. When I started in HR, sometimes you wouldn’t get a seat at the table until a month or two months into a decision-making process. Here, they want me at the leadership table every day; they want my views. We are an organization that’s driven by ethical governance, and we want that to be maintained as we grow and expand in different markets. It’s important to form trusting relationships and to give your viewpoint, not only with the leadership team, but with people at the employee level too. Kelly Davis: Our executive team doesn’t like silos. In the past, we’ve had leaders who didn’t want the HR input on certain conversations, but our current CEO has changed that. He expects us to be pushing CEOs every day.

Soula Courlas: What is the key to a successful CHRO-CEO relationship? Lisa Butler: It has to be trust. I remember a business leader once saying to me, ‘I count on you to be my additional conscience – I need you to bring a different lens to how I approach the business.’ It takes time to build a trusting relationship, but it is something that is critical. Anna Crane: I agree. Trust is something that is earned, not something that happens overnight. Kelly Davis: There is so much conversation around what CEOs expect from an HR leader, but I like to have a CEO who feels it’s equally important to consider what the CHRO expects from the CEO. It’s nice to have a CEO who wants to know what HR expects from them – it’s a two-way street. Having that open conversation, with equal push and pull in terms of feedback, is the key to a successful relationship.

MENTAL HEALTH AND WELL-BEING Soula Courlas: How is your HR team helping employees with their psychological well-being? Lisa Butler: It’s a huge priority. The latest figures show that one in five Canadians will suffer from a mental health issue in their lifetime; it’s also the leading cause of disability within organizations. One of the things we’ve

26% Poor employee coping skills in adapting to change % who see this as a priority Source: Human Resources Trends for 2017, Morneau Shepell

done is to give Manulife employees up to $10,000 in benefits focused solely on mental health. With that sort of amount, people are able to get the help they need, and it goes a long way to reducing stigma when you have that amount of money to use. There are a number of companies that we should be proud of that are forging the way on this front. Anna Crane: We always look at the job and its responsibilities when trying to understand the issues that are leading to stress. Does the employee have control over the tasks they do on a day-to-day basis? As much as we can, we give them the autonomy to do their jobs without micromanaging. Our CEO has stressed that no one will ever be on the chopping block for making a mistake. We are trying to create a safe environment free from finger-pointing and people being ashamed of making mistakes. We are coaching and training our managers on that and situations where they may see stressors evolve. We have also created wellness committees, which have been spearheaded by employees. Kelly Davis: We have wellness committees, healthy food vending machines and exercise programs, but I think the most important

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FEATURES

COVER STORY: HR ROUNDTABLE

TOP 5 PRIORITIES FOR IMPROVING HEALTH, ENGAGEMENT AND PRODUCTIVITY IN 2017 Improve employee engagement Improve learning & development programs Improve the physical health/ wellness of employees Improve mental health of employees Improve communication of Total Rewards

76% 56% 49% 41% 34%

% who see this as a priority Source: Human Resources Trends for 2017, Morneau Shepell

part of our philosophy is that it has to be up to the associates. We are moving toward individual plans. Everyone’s world is so different, and by asking the right questions and listening, you can find out the different issues people have in their lives. It’s about being flexible. We go with the flow and make it about each individual, and that’s allowed us to attract the level of talent we have.

“There are so many tools coming out that are real-time, and this is what CEOs and presidents want to see” Anna Crane WORKING REMOTELY Soula Courlas: With a lot of us now working in nontraditional environments, how do you still maintain a strong workplace culture but also allow the individual perspective to take hold? Kelly Davis: Top performers are going to perform whether they’re at home, in the office or working at Starbucks – we really don’t care. It’s based on business needs, so we do have some roles that need to be in a certain place, but outside of that, we are super flexible. We have an Instagram account where we ask employees to share fun things and post about products. It creates a sense of being bigger than just one office. As long as employees are socially connected and telling their stories, it

doesn’t matter where you are physically are in today’s world. Lisa Butler: Culture is critical, regardless of the work arrangement. You have to make sure you are learning from a technology standpoint so that your tech supports people being able to learn from wherever they are. You do need to balance that with some amount of face-to-face, because no matter where your teams are, whether it’s online or on Skype, seeing people’s faces and being able to connect is important. Whether it’s a birthday or some other personal event, ensuring you’re recognizing that is perhaps even more important. Anna Crane: It’s all about sustaining the culture the CEO has created. Employees value face time; it’s meaningful and valuable. As we grow globally, we are trying to find ways to integrate our offices, and we are still small enough where we can bring employees to

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WHAT TYPE OF PEOPLE ANALYTICS DO YOU PRODUCE? A 2016 study from the New Talent Management Network found that 85% of organizations are using some sort of people analytics, a 34% increase over the previous year. But how exactly are those organizations using the talent data they gather? Basic turnover analytics (i.e. desired and undesired turnover)

84%

Basic talent acquisition analytics (i.e. time to fill, cost per hire)

75% 43%

Identify development needs of groups Workforce plannning (not including leadership succession) Estimates of individual potential to advance (i.e. likelihood of promotion or upward movement) Advanced turnover analytics (i.e. identifying key turnover drivers for a select group) Identification of factors correlated with high-performance employees

35% 31% 28% 26%

Advanced talent acquisition analytics (i.e. source of hire versus performance and potential)

23%

Workforce productivity statistics

23%

Basic analytics dominate the HR analytics work being produced today

Source: Still Under Construction: The State of HR Analytics 2016, New Talent Management Network

Toronto for parties and picnics. We have a 0% attrition rate to date, and we encourage employees to share stories of how teamwork has resonated and why recognition and empowerment are critical to them.

HR METRICS AND ANALYTICS Soula Courlas: What are you currently doing in this space, and how would you assess your analytical capabilities within the HR team? Lisa Butler: It’s not about producing HR metrics for HR metrics’ sake anymore. It’s about making sure leaders have access to data they can use to their advantage. It’s also about learning about the business. Most of our businesses have strong marketing functions, so it’s a great opportunity for HR to partner with the other business groups in order to learn from them. It’s an exciting time. Anna Crane: Being a startup company, technology dictates where and how employees work and how we’re measuring employee performance. There are so many tools coming

out that are real-time, and this is what CEOs and presidents want to see; they want to understand the pulse of the organization. That’s really critical to the success of the business. There are so many different ways we can use data, but that is one that is close to the hearts of our president and CEO. Kelly Davis: Five years ago, HR leaders were pushing business leaders so hard to look at our turnover and succession planning metrics, and now that the business finally loves those, we actually think those are old metrics that don’t matter anymore! The challenge is to find the new metrics that do matter. How many of our associates are shopping with us? What percentage of their disposable income are they spending with us? How many are active on social media and liking our brand? Those are very important cultural health metrics for us.

BENEFITS Soula Courlas: What are your organizations doing to improve your benefits packages?

Anna Crane: We have no plan at the current time, but we are going to be creating a healthcare spending account. It’s not a traditional benefits program where you have health, dental and long-term disability – each employee gets a dollar amount for healthcare spending, and they can use it how they wish. Lisa Butler: There is a trend in work and society toward more choice. We are giving more choice in benefits plans, which speaks to the needs of our employees. Similar to ensuring things are customizable for customers, employees are from all walks of life and require different things. Like many others, we’re moving towards packages that provide more choice and put the employee in the driver’s seat. Kelly Davis: We’re a small business, and retail does not typically have super deep pockets for benefits, so we have to pick the areas we are going to play in. We do a solid benefits plan and try to identify where we can be special by having transparent conversations and asking employees exactly what they want.

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FEATURES

SECTOR FOCUS: HEALTH BENEFITS

Linking benefits to better health More and more organizations are realizing that investing in employees’ well-being can help their bottom line. Here’s how to design a benefits strategy that keeps employees healthy, wealthy and wise JOHNSON & JOHNSON, profiled on page 18 of this issue, aspires to be the healthiest workplace in the world. That might seem like a lofty goal, but the company’s leaders realize that having healthy and happy employees is good for the patients and consumers the company serves, so they’ve put their money where their mouth is. In addition to providing on-site gyms,

changes to fulfil their ultimate mission in life. So far, participants have recorded lifechanging developments, including improved relationships, better nutrition, enhanced stress management and healthier living. It’s no secret that employers have started noting their own role in the general well-being of employees. While this interest started with physical well-being, it has since progressed to

“From the research and industry trends we have reviewed, we have consistently seen that the number-one source of stress reported by employees is financial stress” Joe Parent, Venngo health screenings and a variety of health promotion programs throughout the year, Johnson & Johnson provides a unique training experience globally through its Energy for Performance in Life program. The program supports employees in taking stock of their emotional, spiritual, physical and mental wellbeing and committing to making lifestyle

interlinked areas like mental and financial well-being. A survey by Morneau Shepell makes the reason for this development clear: 46% of Canadian workers have taken time off work or have noticed their colleagues take time away to tend to their mental health following workplace changes, specifically a change in job roles.

Indeed, when changes sweep the workplace, negative implications for employees often follow. Depression and anxiety were reported as the most prevalent mental health conditions that affected employees in the workplace. Joe Parent, vice-president of sales and marketing at Venngo, confirms that supporting mental wellness is becoming more of a theme in progressive and innovative companies, where he says “the leaders have come to understand that there is benefit to them and their employees by doing so.” Yet while employers recognize the need to take action with preventative measures, it appears there’s still confusion about what direction to take. Lee-Martin Seymour, CEO and co-founder of Xref, says he can “reel off all the usual suspects” when it comes to what an employer can offer to workers, including fruit deliveries, filtered water, in-house fitness groups and charity sporting events. While these are all found at Xref, “they don’t set us apart from any other well-meaning corporate,” Seymour says. Instead, he prefers something deeper. “We all know that a healthy body starts with a healthy mind,” Seymour says. “So at Xref, we challenge the way people think – we nurture creativity and have a huge appetite for ideation. We help people achieve things they never thought they could and encourage celebration. We recognize that if our people are excited and energized by the Xref journey, it’s natural for them to want to feel ready, physically and mentally, to take on the next challenge.”

A holistic approach How can employers provide a holistic approach to managing employees’ well-being? Because financial, mental and physical health are so closely intertwined, Parent suggests looking at the root causes of poor health in employees. “From the research and industry trends we have reviewed, we have consistently seen that the number-one source of stress reported by employees is financial stress,” Parent says. “People are worried about the stability of their jobs and of their companies. People also worry

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HOW IS TECH SHAPING BENEFITS DELIVERY? about being able to afford their retirement. They are concerned about supporting family members, whether it’s kids going off to university or aging parents. In some cases, it’s just about making ends meet on a weekly or monthly basis.” There is a clear connection between stress and mental and physical wellness – indeed, research suggests that more than 20% of absenteeism is caused by mental health issues. High levels of stress also correspond strongly with high levels of cardiovascular, respiratory and circulatory health issues.

Help with relevant benefits HR service providers are becoming more adept at offering tailored and relevant solutions to corporations in order to help them

The benefits industry is fast becoming a tech-driven industry, which has several implications for service providers. “Society in general expects and demands fast, easy and ubiquitous access to everything, and they expect their employer to support that,” says Venngo’s Joe Parent. “They want access to their benefits online, and they want to be able to transact when and how it is most convenient for them. So we’ve invested in developing a platform that provides universal access. Employees can take advantage of the program at work, at home, while travelling on business or on the go. Virtually all the talk right now is about technology and how it is being leveraged to create not just efficiencies for the business, but as a competitive advantage for businesses looking to attract and retain top talent.”

overcome specific challenges. In the case of employee well-being, benefits are an obvious starting point. Venngo, which has built a digital platform that delivers savings opportunities to large employee groups, offers more than 1,200 discounts from a broad range of businesses. Employees can gain access to the network online or via a mobile app. As anyone

who has suffered from financial stress knows, anything that saves a dollar is welcome. Discounts are available on everything from simple everyday purchases (clothing, shoes, restaurants, telecom) to entertainment (movies, sporting events, theatre) and travel (package vacations, hotel and car rentals, flights). There are even discounts on

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FEATURES

SECTOR FOCUS: HEALTH BENEFITS

BENEFITS TRENDS Many organizations (41%) spend 10% or more of their total employment costs on the employee benefits listed below, and 9% spend double that. However, less than one out of every 10 HR directors say their employees have a great understanding of the benefits they are provided, and almost half believe their employees are less than satisfied with their company’s current benefits offering.

Only 50% or fewer of employers provide the following benefits:

big-ticket items like mortgages, electronics and vehicle purchases. Just as important, Venngo’s program can be integrated with and can complement a company’s existing wellness initiatives by offering a range of health and well-being products and services. “We have partnerships with over 300 health- and wellness-related vendors,” Parent says. “We offer savings on things like healthy meal options, nutritional supplements, eye care, dentistry, massage therapy, spas, wellness centres, yoga studios and gym memberships, which are consistently one of the most popular ‘perks’ with our users.”

The carrot approach Ultimately, the decision to pursue a healthier lifestyle rests with the individual. Anyone Health insurance

Additional salary package

Life insurance

Additional retirement fund contributions

of life. For example, a millennial might get healthy meals delivered to their home, save money on restaurant visits and book an adventure vacation. A family might use the program to save on kids’ clothing, laptops for university students or to get tickets to family attractions. Another household might be interested in finally getting that luxury car they’ve dreamed of for years. Venngo’s program is innovative in other ways. With most medical/dental and eye care or EAP programs, the economics often work better if fewer employees use them. With Venngo programs, the more people who use them, the more value there is to a client. “We work hard to ensure as many employees as possible are aware of and participate in our programs,” Parent says. “Some of our clients have participation rates above

“We recognize that if our people are excited and energized by the Xref journey, it’s natural for them to want to feel ready, physically and mentally, to take on the next challenge” Lee-Martin Seymour, Xref

Financial advice

Share plan

Additional leave

Child care

Source: The International HRD Forum and Flare HR Benefits Survey, CEB, 2016

who has attempted to ‘force’ a friend or family member to get healthy knows it’s destined to fail. They can, however, clearly outline the advantages of making healthier choices. In much the same way, an employer can make healthier lifestyles compelling, attractive and rewarding. “This isn’t a selective program like rewards & recognition,” Parent says. “It’s universal. That means every employee has the same opportunity to take advantage of the savings and healthy opportunities.” The benefits are also extended to employees’ spouses and families. The key is accessibility and customization – meaning there are benefits for everyone at every stage

90%, compared to target participation rates for other benefits programs of anywhere from 3% to 20%.” He adds that it’s a great “light bulb moment” when clients get excited to see just how many of their employees are willing to participate, knowing that the benefits to their organization will increase without a concurrent rise in their costs. The research is clear: People who achieve a sense of well-being at work are likely to be more creative, more loyal, more productive and provide better customer service. Once employers appreciate their role in getting employees to a healthier state – financially, physically and mentally – it’s win-win.

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24/05/2017 AMPM 18/05/2017 12:54:20 11:51:34

FEATURES

INSIDE HR

Learning on the job There’s a good chance the last locomotive you saw or the diesel engine that propelled the last boat you travelled in was powered by GE. Iain Hopkins discovers why GE’s global leadership institute at Crotonville lies at the heart of the global giant’s operations 40 40

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ASK MOST HR professionals what they know about General Electric, and the answer will invariably be either “Jack Welch” or “performance management” – and sometimes the two are tied together. Welch was the visionary CEO and chairman of GE from 1981 to 2001. A pioneer in the company’s use of the formally known ‘vitality curve’ – less formally known as ‘rank and yank’ – GE’s approach to performance management was groundbreaking for the time. Key to the process was the annual performance review – from there, each employee’s performance was tied to a number, which was judged and ranked against peers. Under-

resources leader at GE Transportation and a 21-year company veteran, the spirit of Jack Welch is still very much alive and well. Having been at the company during Welch’s reign, Kaviris can see a distinct difference from during and after his time. “People still believe that Jack Welch approach is still very much alive at the company,” she says. “One consistent element from when Jack was here to now is that GE has always very much been a meritocracy. However, the difference in the approach today is that it has moved from a once-a-year performance management process to a process of continuous

The average GE employee will likely visit Crotonville a number of times throughout his or her career, and the leadership programs are pitched at each level performers in the bottom percentage (10% in GE’s case) were then fired. GE disposed of formal, forced rankings around a decade ago, and over the next few years, the company will be matching other players on the global stage by abandoning formal annual reviews and its legacy performance management system for its 300,000strong workforce. In their place will be a less regimented system of more frequent feedback via an app. For certain employees situated in smaller experimental groups, for example, there will no longer be numerical rankings. For Athena Kaviris, senior human

feedback and insights all year long.” Kaviris adds that the ability of employees and managers to share real-time feedback has been much more impactful than a single discussion. “People have a stronger opportunity to then act on a specific insight given in the moment versus something they may have had months ago,” she says. “It’s fostering a sense of actionable insights, which we label as ‘continue to considers,’ around a very specific example where someone is doing well and where they might have the opportunity for improvement.” GE’s contemporary feedback loop also supports the notion of constant calibration of

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FEATURES

INSIDE HR L&D AT GE

$US1 billion

Amount invested per year in employee development worldwide

1,800

Number of courses offered on campus and virtually from Crotonville, GE’s global leadership institute Akin to a college campus, GE’s Crotonville facility offers a number of different settings for learning & development

1956

Year GE’s first corporate university was established

74%

Percentage of in-person leadership development sessions delivered outside the US

198

Global locations where leadership development opportunities can take place on-site

individual performance against business goals. “I think that’s probably been the most meaningful change beyond the fact that it’s now real-time feedback,” Kaviris says. “It’s really set up to be based on the business priorities and adjusting those as the priorities change.”

GE Transportation in context GE Transportation is a global digital industrial leader supplying the rail, mining, marine, power and drilling industries. With 10,000 full-time employees located in 65 sites worldwide, GE Transportation is considered a Tier 1 GE business, alongside digital, aviation, healthcare, oil & gas and renewable energy. Beyond the talent that streams seamlessly across GE business divisions – Kaviris herself has worked in six

divisions during her tenure – a common linkage is the ‘GE store.’ This is where various businesses can come together to support GE client needs. “Because of our cross-industry expertise and scale, we try to transfer intellect and technology across our industries and around the world,” Kaviris says. “These could be from advanced technology material, software, analytics, or from commercializing our products and leveraging best practices. What this allows us to do is drive innovation, performance and outcomes regardless of the business and the geography; it allows us to show one unified face to the customer and the communities in which we play.” The 70 HR professionals in Kaviris’ team support all aspects of business operations,

from manufacturing to commercial and functional teams. The GE Transportation team also partners with the corporate HR team for expertise within GE’s centres of excellence – for example, support for recruitment, compensation, benefits, OD and L&D. “We have the best of both worlds – the HR talent sitting resident in the GE Transportation business, supporting those teams 24/7, and then we have access to centres of excellence for other layers of expertise when needed,” Kaviris says.

Grooming next-generation talent GE has recognized that its people will be critical to staying ahead of the pack. When asked which tenet of HR GE excels in the most, Kaviris doesn’t hesitate: “Our ability to

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invest in our talent,” she says. “A key part of our mission is to build strong leaders.” It’s more than words. GE’s legendary Crotonville Corporate Campus, located an hour north of New York City, is like having a world-class educational institution embedded within the organization. The facility is a lab, a continuous learning environment where GE brings employees together from different segments of the company – Kaviris says it would be rare to have an intact team go through training. “We think this is a big part of the experience,” she says. “You go through this learning & development experience with people who come from all different industries at GE. The courses can range from a couple of days in some cases to a couple of weeks, but the benefit does not just come from the classroom experience; it’s about immersive leadership development and plenty of best practice knowledgesharing between peers. We also engage many external speakers because we feel like our markets are changing to the point where we need to bring in either customers or other subject-matter experts to the process.” The average GE employee will likely visit Crotonville a number of times throughout his or her career, and the leadership programs are pitched at each level, from first-time leaders to more experienced leaders. The Accelerated Leadership Program, or XLP, is one example. Launched two years ago, the program aims to take in students from various functional disciplines. The course is complemented with on-the-job experiences, stretch assignments and cross-functional rotations. Another option is Leadership Exploration, intended for more experienced leaders, who are able to immerse themselves in a particular market for a period of time while studying. So proud is GE of the facility that even customers are entertained at Crotonville; alternatively, they may be brought in to try to resolve a particular challenge alongside the GE team. Kaviris herself has been fortunate to attend several courses at the recently renovated facility throughout her career. “I don’t know if it was by design – and you certainly go there for the content – but inevitably by participating with other colleagues

GETTING WOMEN INTO STEM “We feel that a company that wants to change the world really needs to reflect the world,” says Athena Kaviris. With that guiding principal in mind, GE has set a goal of having 20,000 women fill STEM roles at GE by 2020 and obtaining 50:50 male/female representation for all technical entry-level programs. “It’s not simply the right thing to do; it’s a strategy,” Kaviris says. “It’s necessary to inject urgency into addressing the ongoing gender imbalance in technical fields and ultimately transform ourselves into a digital industrial company.” A number of initiatives have launched in recent years with the specific purpose of building talent pipelines amongst young people. The Women’s Network was created in 1997 to help the women working at GE advance their careers and the company’s business. In 2011, the Women’s Network implemented a series of STEM day camps for junior-high-school girls. Hubs and GE partner universities develop curriculum that fosters girls’ interest in STEM with the long-term goal of encouraging more women to enter those career fields. Further up the chain, Kaviris says progress is being made. GE’s long-standing Edison Engineering program, for example, was able to achieve a gender ratio of 50:50 in 2016. Even more critically, GE’s CEO, Jeff Immelt, has said that putting more executive women in powerful roles is a crucial aspect to the company’s transformation. Jamie Miller, president and CEO of GE Transportation, has been featured prominently in this push, sharing her GE career evolution and outlining how being taken out of her comfort zone has helped her become a business leader.

“One consistent element from when Jack Welch was here to now is that GE has always very much been a meritocracy” Athena Kaviris, GE Transportation from around the globe and different businesses, you’ll discover pretty quickly that you’re facing a similar opportunity or challenge,” she says. “That connection is sparked there and continues once you move back to your normal roles.” She adds that another benefit of the collegiate atmosphere is that it has helped to accelerate her own learning. “Oftentimes I’ve been through classes we’re I’ve made a connection with someone who happens to be working on something I just happen to be starting,” she says, “and I can accelerate my progress by tapping into them after the class.” For those not based in the US, leadership development courses are offered on-site in 198 locations spread across 50 countries, including global learning centres in Munich, Shanghai, Bengaluru, Abu Dhabi, Rio de Janeiro and elsewhere. Despite the infrastructure and support offered to high-potential and high-performing

employees, Kaviris says the average progression from intern to senior leader is “not as scripted” as some might believe. “There are many development avenues to potentially go down,” she says, adding that there are decades of stories of GE employees who have moved up through the ranks – intern-to-CFO-type stories – which demonstrate that if employees know how to navigate their career and they are provided with great mentoring and coaching and stretch assignments along the way, the sky is the limit. Kaviris speaks from experience. Although she currently resides in Chicago, where GE Transportation is headquartered, her tenure at GE has taken her to posts in Europe and other parts of the US. “My time in Europe was truly developmental – it changed me and made me the global leader I am today,” she says. “What keeps me with the company is truly the people, the beliefs and the unyielding focus on integrity.”

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FEATURES

HR STRATEGY

Start with the end in mind With the user experience now a key priority for technology vendors, HRD chats with one expert about how HR is starting to adopt the same ‘design thinking’ into its own processes

BERSIN BY DELOITTE is a name synonymous with HR thought leadership. The man spearheading that innovation is David Mallon, the firm’s head of research. Mallon is the former steward for Bersin by Deloitte’s L&D research practice, and has been central to the firm’s thought leadership relating to HR operating models, governance and the evolution of key roles such as the HR business partner. HRD spoke to Mallon to find out why, in an age of disruption, HR should be incorporating design thinking into all of its practices.

HRD: Today, not only must HR ensure the organization’s people are ready to face up to disruption, but they must also look at their own processes, structure and ways of delivering service. Is HR ready for this? David Mallon: This is an important question for HR. Does HR want to just play catch-up, to be seen as just helping the organization along, or does HR want to be a source of value or even innovation? The problem is that by and large, HR itself is being just as disrupted as the rest of the organization. Employees have come to expect a frictionless experience from HR, similar to what we’ve come to expect from our banks, for instance, or online shopping or any other source of information in our lives. We expect it to just work. We don’t expect there to be a lot of process or fuss about it. Why is it that when we go to work, all of the similar transactions are actually really hard, especially HR, which is remarkably difficult to work with? This is challenging when, by and large, the HR function itself is populated by people who are stewards by nature. They see their role to protect the organization, to avoid risk and ensure consistency. All of that is not really needed right now – what’s required is an HR function that is willing to experiment, is willing to listen on the ground and become knowledgeable about what’s going on in that world.

HRD: One way HR can transform itself is by incorporating design thinking into people strategies. Can you outline what this means?

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DM: There are a number of theories about design thinking out there, but regardless of which of those existing theories you take onboard, there are some common threads. One is the notion of empathy – not empathy in the emotional sense, but rather walking in the shoes of the people you serve. In this case, rather than HR looking to solve a problem by creating a top-down process based on consistent step-by-step guidelines, HR instead should embed themselves with the employees to gain intimate knowledge of everything happening in the employees’ world – all the disruption they are facing and what competes for their attention. Designing with employees in mind, how can you then help them be successful, productive and engaged employees? It’s about having a relentless focus on the people you serve. Another part of this is experimentation and iteration. A key element of design thinking is that you go into whatever the problem is without thinking that you have the perfect solution. Instead, you should generate many possible solutions, try to test as many as you can, as fast as you can, and then constantly iterate. That process never ends. It’s frankly something that HR is not naturally predisposed to being good at.

HRD: Can you provide some examples of how this might work? DM: On the transactional side of HR, there are plenty of great examples. Let’s say you’re an employee and you want to obtain a verification letter in order to buy a house or car, or you want to change your schedule or request leave. Many HR functions are looking to put these transactions into mobile apps, for the simple reason that this is what employees now expect. It should mirror how they do their banking, for example. It requires thinking about how to make the employee experience so easy that people barely know they are doing HR tasks. HR blends into the woodwork, and employees don’t think about it; it’s just there and it works. But you’re also now seeing it show up in the more substantive things like career

DESIGN THINKING: DAVID MALLON’S TOP TIPS David Mallon suggests three ways to introduce design thinking into people strategies:

1. UNDERSTAND YOUR WORKFORCE “Don’t be afraid to talk to people. It’s odd to say this in the context of HR, but don’t be afraid to go out and talk to your employees and spend lots of time with the people you serve. Be willing to use their feedback in the design process. Be willing to bring them into what you’re doing. You cannot have too many conversations with the users of whatever it is you do.”

2. DON’T DO IT ALL AT ONCE “You can find individual aspects of the talent experience to tackle first and learn from that. It’s OK to learn as you go, to try new things. It’s also OK to put out a project that isn’t 100% complete; it may only be 80% complete, and that’s OK. Tell the employees it’s 80% done, and you’ll figure it out and make it better as you go. You see that a lot in performance management. What’s interesting is it’s one of the few areas where HR has been willing to experiment. They’ve been willing to say, ‘OK, let’s try it – let’s try a different process in three parts of the company and see which one works best’.”

3. DON’T FORGET TO ASK WHY “It’s a good opportunity to hit reset. Why do we have these processes and policies in place? Often the answer is not clear, and when HR starts to ask itself, we often find that it’s not the value they want to be driving. They want more productivity, they want people to spend less time on the transactional, they want them focused on the day job, and that’s not what they’re doing. That’s not how you’ve designed all of this.”

“Designing with employees in mind, how can you then help them be successful, productive and engaged employees?” David Mallon, Bersin by Deloitte conversations. Rather than the HR person being someone you go to when there’s a problem, increasingly HR is someone you go to when you need counsel, when you need to think about where you might grow in the organization. HR provides guidance as to the paths the company would like you to go on, the tools available to you and the internal steps you need to take.

HRD: Should HR feel threatened by this, or is it an opportunity for them to have different sorts of conversations with staff?

DM: I don’t think they should feel threatened at all. The skills required in HR, and the kind of skills required in the rest of the business for that matter, are becoming essentially more and more human. There have been studies done that show that wherever new technology – such as robotic process automation or cognitive technologies like machine learning or AI – has been introduced, there have been more jobs generated, not less. But those jobs being generated are requiring different skill sets: relationship-building, storytelling and data analysis.

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PEOPLE

CAREER PATH

PEOPLE PERSON A diverse career has taken her across various industries and nations, but for Kristin Coulombe, it’s all about the people An early experience working at a local youth counselling centre as part of a school co-op left its mark on Coulombe “I really liked the whole concept of helping people find employment, helping them go from a negative position in life to a positive position. The joy they felt and the gratification we got prompted me to start looking into HR as a career”

1999 FINDS HR

2003

JOINS THE BAY A co-op placement with another marquee Canadian brand turned into Coulombe’s first full-time HR job. The opportunity at Hudson’s Bay Company was miles apart from her work experience to that point “HBC had 40,000 employees. Because of the large company size and scope across all provinces, they had niche HR roles. Being exposed to all the different roles and aspects of the HR profession gave me an idea of the different avenues I could take”

2007

ADAPTS TO CONSTANT CHANGE

Coulombe’s time at TUI was characterized by constant change and new acquisitions “There was a lot of change – people were constantly moving between companies and from country to country; it was very fluid in nature. I’d deal with Florida in the morning, LA in the afternoon and Belleville in the evening. I would get a call to get on a flight next day to support a business on an HR topic because they didn’t have local HR support”

2017

STRIVES FOR DISTINCTION Coulombe found that going from a large organization to a smaller one required negotiating different dynamics; however, she has maintained a commitment to excellence. JDIMI made the Top Employer list in 2015 and earned a spot on the shortlist in 2016 “We strive to make every year count. We will be competing for Top Employer in 2017 with high expectations”

2002

SNAGS AN INTERNSHIP When she landed an internship with Maple Leaf Sports & Entertainment toward the end of her college course, Coulombe got her first real exposure to HR. A key part of her role was assisting with the yearly mass recruitment for the winter season “It was insanely busy. The brand made it easy to attract candidates. It gave me a good understanding of how important brand recognition is in the corporate world. Everyone was excited to be there”

2005

JUMPS INTO TRAVEL Deciding she needed a smaller company in order to shine, Coulombe was attracted to Signature Vacations’ proactive approach of cold-calling dynamic-sounding companies. Soon, the company was purchased by British firm TUI Travel, which went on to purchase multiple small- and medium-sized travel companies around the world “They needed HR support, as Canadian employment legislation is very different from British; they decided to utilize our HR team as they bought other companies in Canada”

2012

MOVES TO JONES DESLAURIERS A desire to make an impact led Coulombe to move to insurance – that, and a neighbour in the business whom she shared a glass of wine with one evening. The neighbour brokered an introduction to JDIMI, where Coulombe became director of HR

“What attracted me was that the company was in growth mode with many different initiatives that needed HR to play a key role. It was a very attractive opportunity for me to create and build HR as JDIMI grew”

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2017-05-17 3:39 PM 24/05/2017 12:56:06 AM

PEOPLE

OTHER LIFE

TELL US ABOUT YOUR OTHER LIFE Email editor@hrmonline.ca

ON TWO WHEELS Consultant Amanda Prenty is seeing the world from the seat of a bike FITTINGLY FOR such dyed-in-the-wool travellers, the idea for a global multi-year adventure by bike came to Amanda Prenty and her husband in a cafe in Paris. Observing her devastation that a six-week vacation was coming to an end, Prenty’s husband said, “Let’s not go back.” The plans born that night took three years to implement, but finally, in August 2014, the couple “pulled the plug, left our corporate jobs, sold the house” and hit the road on the first leg of a planned 10-year journey. Prenty has maintained her HR consulting career during her travels with the help of technology, in addition to picking up Spanish, learning to play the guitar and writing a book specifically for cyclists exploring Cuba. The latest leg of the sojourn, which began at Inuvik (the northernmost tip of North America by road), is scheduled to wind up at the southernmost tip of South America early next year. The one aspect of travelling that has left the greatest impression on Prenty has been the human connections that proved so elusive in the corporate world. “At first I wanted to see the world, but now I’m more intrigued by the kindness of people,” she says. “The countries I’m visiting are beautiful, but at the end of the day, most of my memorable stories are about the people.”

Number of times the couple has crossed the Continental Divide

218,000

Total metres climbed (the equivalent of Mt. Everest 24 times)

Number of flat tires on the trip so far

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