People Management Asia: Issue 2

TH E C I P D M AG A Z I N E FO R AS I A

www.cipd.asia/pm ISSUE TWO

Why the good times are (almost) over – and what it means for your reward strategy

PLUS

Clock watchers Calling time on Asia’s long-hours working culture

Secret ingredient How coaching can transform your business’s performance

Register for the free exhibition at cipd.co.uk/IA1

Building HR capability and professionalism

We’re working with the world’s most progressive organisations to build the capability of their HR and L&D professionals.

We can help you: • define the strategic priorities and purpose of your HR function in your organisation’s context • benchmark and assess the capability of your team, identifying gaps and strengths • develop your team’s capability and shape your HR function to meet your business needs.

Working together, we’ll help professionalise your HR function. Get in touch today!

CIPD Asia CIPD HR Hub 43 Niven Road Singapore 228390

+65 6338 4528 cipd@cipd.asia

Welcome

Welcome

Taking the lead Happy New Year to all our members and welcome to the second edition of People Management Asia.

In 2015, we saw a new emphasis on the importance of HR, and this trend looks certain to continue this year, as countries across Asia look to upskill HR practitioners.

It’s a very exciting time to be in HR, as we are hearing across the region that the HR function is finally being seen as crucial to business success. How many times have you asked yourself: ‘Why isn’t HR more involved in making decisions about the people in my company?’ Well, it is now being given the opportunity to step up and be counted.

This means that we have to be ready. We can no longer be the cobbler’s children: we must identify our own skill gaps and look to fill those gaps. It’s not going to be easy. The demands on HR are numerous.

Business needs have to be balanced with the changing expectations of a diverse workforce. The focus on big data means that HR has to be able to analyse trends, make recommendations and act swiftly.

Local talent has to take centre stage without disengaging others. The leadership vacuum

Karen Blal Regional director, CIPD Asia

is growing, and HR has a huge part to play in upskilling leaders for the future.

At the CIPD, our role is to help you prepare for all the changes coming your way. The CIPD Asia team will be actively supporting you in the region, so feel free to contact us. Our research will continue to add insight, our tools will help you navigate the changes and our networks will enable you to share and learn.

I hope you all enjoy our second edition.

We have some great articles and thoughtprovoking ideas to share, which we hope will inspire you and your teams to start thinking differently and raising the bar for our profession.

Visit the website and sign up for the newsletter www.cipd.asia/pm Tweet us @peoplemgt_asia Join our LinkedIn group Search ‘People Management Asia’

Contents TH E C I P D M AG A Z I N E FO R AS I A

www.cipd.asia/pm ISSUE TWO

Why the good times are (almost) over – and what it means for your reward strategy

PLUS

Clock watchers Calling time on Asia’s long hours working culture

Secret ingredient How coaching can transform your business’s performance

About the CIPD p5 News and analysis p6 Tackling the working hours problem Case studies p10 Focus on AIA and Arcadis Debate: HR on the board p14 Is it time to give up on a ‘seat at the table’?

Pay: the good times are over p16 The rules on reward have changed. Are you ready?

Q&A: Shanthi Flynn p22 The former Walmart VP on building HR capability Coaching comes of age p24 Asian businesses discover it’s good to talk The biggest brains in HR p27 The business thinkers you need to read The Knowledge p30 Key workplace skills, with expert commentary The View From Here: Felicity Menzies p34 People Management Asia

3

In partnership with

Stay up to date in the fast changing world of learning and development

The Future of Learning the L&D Professional Development Hub Get the latest industry trends, insights, techniques and content curated for you to make staying up to date quick and easy.

The online Future of Learning hub can be accessed anywhere in the world 24 hours a day, from any device.

Your 12 months access includes monthly live online events with some of the UK’s leading learning and development experts.

1

All in one place, whenever you need it – bite-size learning and skills content.

2

Answers to your challenges from practical ‘how to’ guides.

3

Fresh ideas, innovation and inspiration you can apply directly in your organisation.

Experie nce how dig ital learning really works

Sign up for your 12 months access today at www.futureoflearning.co.uk

People Management is published on behalf of the CIPD by Haymarket Network and Haymarket Business Media, both divisions of Haymarket Media Group Ltd. Registered office: Bridge House, 69 London Road, Twickenham TW1 3SP, UK

Editor Robert Jeffery Deputy editor Cathryn Newbery Art editor Chris Barker Production editor Joanna Kelly Designer Richard Walker Digital content coordinator Emily Burt Picture editor Dominique Campbell Editiorial email: pmeditorial_asia@haymarket.com Commercial director Cathy McDonagh Global partnerships director Nicola Fulker Commercial email: pmsales@haymarket.com Senior production controller Alex Wilton Production manager Trevor Simpson Managing director, Haymarket Network Andrew Taplin Editorial director Simon Kanter Creative director Martin Tullett Account director Issie Peate Senior account manager Julia Saunders CIPD Publishing Margaret Marriott Repro by Haymarket Prepress Printed by Stephens & George Print Group

CONTACT THE CIPD 43 Niven Road, Singapore 228390 (65) 6338 4528 cipd@cipd.asia COPYRIGHT © All rights reserved. This publication (or any part thereof) may not be reproduced, transmitted or stored in print or electronic format (including, but not limited, to any online service, any database or any part of the internet), or in any other format in any media whatsoever, without the prior written permission of Haymarket Media Group Ltd, which accepts no liability for the accuracy of the contents or any opinions expressed herein.

Be part of a global community When you’re a member of the CIPD, you’re part of an international community of 140,000 members working in HR, learning and development, people management and consulting.

The CIPD is the only professional body for HR and L&D in the world that awards Chartered status. It contributes to the development of HR internationally, sets and maintains HR standards, and works with governments, organisations and partners to help fulfil its broader mission of championing better work and working lives.

CIPD professional membership is an achievement you can be proud of and will ensure you stand out in the workplace.

It will give you status and relevance with employers and an edge over your peers.

It’s a badge of your credibility: • It shows that you meet the CIPD’s rigorous standards for good practice and adhere to its Code of Professional Conduct.

• It demonstrates your ability to make a difference to your organisation.

• It inspires confidence in employers, clients and peers.

• It proves a commitment to your continuing professional development.

CIPD professional membership is respected by employers and industry, and can help improve career prospects and earning potential. It is available at three levels: Associate Member, Chartered Member and Chartered Fellow.

When you gain professional membership, you can use designatory letters after your name to highlight your professional standing within the HR and L&D community.

Associate Member (Assoc CIPD) For professionals providing advice to managers across the business, and supporting the HR or L&D function.

Associate membership is the CIPD’s first level of professional membership. It demonstrates that an individual has attained a recognised level of competence as an HR or L&D professional.

Chartered Member (Chartered MCIPD) For experienced professionals, managing, developing and implementing HR policies that support organisational objectives.

Chartered Member is the CIPD’s second level of professional membership. Achieving Chartered Member status demonstrates that the individual has the knowledge and experience to create a real impact in the workplace and make a difference to an organisation’s strategy and people.

Chartered Fellow (Chartered FCIPD) Chartered Fellow is the highest level of professional membership and is aimed at experts who are leading the development of strategic HR and L&D plans that drive business performance.

A Chartered Fellow is a role model for the profession and part of a select group of senior HR and L&D professionals and business leaders who drive innovative people practices to help deliver strategy.

Wherever you are in your career, the CIPD and its members will support and inspire you to achieve your full potential.

For more information about professional membership and how to join the CIPD, please visit: www.cipd.asia/membership People Management Asia

5

Singaporeans have the longest working hours in the world

WORDS VICKI ARNSTEIN

Long-hours culture ‘unlikely to end soon’

not expect to see any draft legislation “for a considerable period” as a result of the ongoing disagreements over working hours.

HR professionals warned of ongoing damage to wellbeing, as high-level “Notwithstanding Hong Kong talks fail to produce results and Singaporeans toil on that the employee reps walked out, I understand that Asian workers put in some of the longest Working Hours Committee (SWHC) the term of the committee has been hours in the world, according to successive was set up in 2013 to look at legislating extended by a few months for their surveys, much of it unpaid. But employee on standard working hours and was due consultations to continue. representatives and HR professionals who to present its findings to the government in “Typically, progress in legal reform in might be hoping for a respite from the March 2016. But that is now unlikely after Hong Kong is slow – it is common for new ongoing toll of overwork on wellbeing have employee representatives from the Alliance legislation to take years to be introduced. been warned that the situation is unlikely for Standard Working Hours – which In light of the lack of detail we have so far to brighten in the foreseeable future. represents 14 labour groups – walked out regarding the likely legislative framework, it In particular, hopes of legislation around of a meeting with Hong Kong employer is too soon for employers to take any action.” working hours in Hong Kong have been organisations at the end of last year.

The government has come under dashed following the collapse of talks Hannah Swift, an employment lawyer increasing pressure to legislate on working on the topic. The Hong Kong Standard at Eversheds in Hong Kong, says she does hours since implementing statutory

6

People Management Asia

SUPERSTOCK

Wellbeing at work

News and analysis Work time in numbers

of staff in Hong Kong work at least four hours’ unpaid overtime each week

The average number of hours worked by the average Singapore citizen in 2015 – the highest level in the world

The number of people in Hong Kong said to be suffering from ‘excessive working hours’

Average weekly hours for employees in the Hong Kong catering industry

minimum pay in 2011. The city currently has no standard working hours legislation, with full-time employees working an average of 49 hours per week – among the world’s longest working weeks – with no entitlement to overtime pay.

Swift says that even when legislation is implemented, it is possible that the regulations would be “light touch”.

“Employers may not want to make anticipatory changes that could turn out to be unnecessarily burdensome. For example, to date the legislative approach has only been linked to high-level requirements for employers to include working hours, overtime and overtime calculations within an employment contract. Most companies will be doing this already as a matter of course.”

Cathy Lui, secretariat to the SWHC, remains optimistic: “SWHC has in principle recommended exploring a legislative approach to mandatorily require employers and employees in general to enter into written employment contracts, clearly specifying terms relating to working hours such as the number of working hours, overtime work arrangements and methods of overtime compensation.”

The situation is little better in Singapore, which at 88 hours per two weeks has the highest level of maximum working hours in the world. The Working Hours Survey 2014 from recruitment firm Morgan McKinley found that 82 per cent of Singaporeans still work longer than their contractual hours, with the majority saying they felt culturally obliged to do so.

The link between overwork and both physical and mental ill-health has been made clear by a range of recent studies, and has been highlighted by the CIPD as a key area of focus in 2016. But Andrew Evans, chief operations officer for South Asia at Morgan McKinley, says: “[Our findings] are indicative of the work culture across Asia, where typically longer working hours and late nights in the office are commonplace.

“While the average professional in Singapore seems dedicated to working extremely long hours, our survey highlights that many professionals are indeed disgruntled with the work-life balance issue.

Unfortunately, there is not much choice at the moment. While a few companies are able to offer working from home or flexi hours, clearly in the majority this policy is not currently implemented well or deemed acceptable by senior management.”

LEGAL UPDATE

Johanna Johnson, senior associate at Taylor Vinters in Singapore, gives an overview of legislation and case law HR professionals should be aware of

Discretion must be used in good faith An employer that terminates an employee’s employment in Hong Kong to avoid paying a bonus may have now breached an implied anti-avoidance term.

Employment contracts in Hong Kong often provide for an employee to receive a bonus at the discretion of the employer, subject to the employee still being in employment at the time of payment. The employer’s discretion has generally been thought to be unfettered.

However, Tadjudin Sunny v Bank of America highlights the need for discretion to be exercised in good faith.

In the case, the employee argued that there was an implied anti-avoidance term in her contract, under which the employer should not exercise its right to terminate her employment to prevent her from being eligible for a bonus. The company counterargued that such a term was inconsistent with its right to terminate her employment under the contract and Employment Ordinance.

The court held that the implied term was not inconsistent with the employer’s right to terminate the contract, but rather it supplemented that right. The implied term was necessary; otherwise, the employee’s eligibility to be considered for a bonus was illusory as it could easily be taken away by the employer exercising its right to terminate her employment.

The discretion to pay a bonus was, therefore, not unfettered and needed to be exercised in a bona-fide manner.

No extension of fixed-term contracts in Thailand Employers may have to rethink the contracts they use after the Thai Supreme Court ruled that a fixed-term contract cannot contain a clause allowing either party to extend the period of employment. Inclusion of a clause allowing an extension will render it a permanent contract. continued overleaf People Management Asia

7

News and analysis

LEGAL UPDATE continued Under the Labor Protection Act, a fixed-term employment contract must contain in writing when the employment period starts and explicitly stipulate a pre-determined period of employment, which cannot be longer than two years.

There must also be a clear indication that the employment relationship will terminate at the end of the fixed-term period. Any ability to extend the period of employment will now result in the contract being deemed indefinite, with likely increased liabilities for an employer seeking to terminate that contract. The consequence of these rules is that fixed-term contracts can really only be used for certain types of work, such as a temporary special project or seasonal work.

Shanghai supports collective negotiations Following a recent amendment to the Regulation of Shanghai Municipality on Collective Contracts, neither employers nor employees can refuse to actively participate in a collective negotiation when it comes to: (1) redundancies of more than 20 employees or 10 per cent of the workforce; (2) labour disputes leading to mass strike action and/or complaint reporting; or (3) a serious potential accident or occupational hazard.

Employers also now face a broader scope for collective negotiation on salary and allowances. In order to make the range of salary and supplemental allowances more transparent to employees, employers are 8

People Management Asia

Facts at your fingertips The latest CIPD research findings required to negotiate with employees when adjusting annual average salaries and salary levels during probation periods, sick leave and holidays.

Further, if an employer fails to participate in a collective negotiation in good faith and without a good reason, the Competent Labour Authority or Federation of Labour Unions may force the employer to carry out the collective negotiation.

Korean labour laws to get a shake-up – or are they?

The Korean Economic and Social Development Commission recently reached an agreement proposing major changes to Korean labour law.

The proposals include using money saved through the ‘wage peak’ salary system to hire more entry-level and recent college graduate workers, relaxing regulations so that it will be easier to terminate employees for poor performance and counting holiday work (which is normally weekend work) as overtime hours.

However, as only one of the two major umbrella labour unions signed the agreement, and that group is now questioning what it actually agreed to, there is some doubt that the process will move ahead smoothly. ✶ Additional material provided by partner firms: Deacons in Hong Kong (Cynthia Chung and Gladys Ching); Tilleke & Gibbins in Thailand (Chusert Supasitthumrong); Martin Hu & Partners in the PRC (Ada Zhang); Kim & Chang in South Korea (Deok-Il Seo and Rob Flemer).

HR is gearing up for analytics The arrival of big data in HR departments is taking place right across Asia, and investment in analytics will continue apace over the coming year, says Evolution of HR analytics: perspectives from Singapore, Hong Kong and Malaysia, a wide-ranging CIPD report on the topic.

In a series of structured interviews and an online survey of Asian HR professionals, 78 per cent said they feel HR data is having a significant impact on business performance. More than a third (34 per cent) expect to increase their spending on analytics over the next year, but only 29 per cent have a dedicated analytics function.

The report highlighted organisations such as Shell, Johnson & Johnson and Richemont Asia Pacific, which are turning to their HR teams to generate information relating to recruitment, retention and workforce planning. However, the report identified challenges such as the need to attract the right talent to build HR analytics capabilities, and the lack of standard terms and measures for reporting and comparing metrics. ✶ bit.ly/Asiametrics

Ethics are taking a back seat Business leaders are prepared to compromise their personal and professional ethics in pursuit of short-term goals, according to a CIPD survey.

A poll of 3,500 business leaders and 2,200 HR professionals spanning the UK, the Middle East, Asia, North Africa and the US was released to coincide with the start of a new ‘Profession for the Future’ framework being constructed by the CIPD in consultation with its members.

It showed that 29 per cent of leaders and 34 per cent of

HR professionals believe they have to compromise personal principles to meet business needs. Fewer than half of all respondents feel their principles cannot be compromised under any circumstances, and 22 per cent of leaders claim such actions are necessary to succeed.

There was better news around intentions, at least, with nine out of 10 of those polled saying they would protect long-term organisational health and reputation given the opportunity.

“Far too many business and HR leaders continue to focus on the short term at the expense of the long-term interests of the organisation and its people,” said Peter Cheese, chief executive of the CIPD. Businesses must tackle bias Understanding unconscious biases in the hiring process is key to generating the best working outcomes for an organisation, says research from the CIPD’s behavioural insights team.

Human decisions and human error are a common aspect of the recruitment process, according to A head for hiring: the behavioural science of recruitment and selection. Introducing safeguards against unconscious bias – such as anonymising CVs and assessing candidates in pairs – can help employers focus on the important information contained in job applications instead of being sidetracked by human instinct.

The report offers advice on crafting job specifications, and eradicating unconscious bias; for example, the inclusion of people in hiring decisions who have not had a hand in assessing the candidates, and steering clear of personal bias when assessing the results of streaming tests.

“Closer engagement with the behavioural science literature can not only help organisations hire the people they really need, but can also guide other areas of decision-making, taking us towards a more behaviourally astute HR,” the report concluded. ✶ bit.ly/hiringbiases

Marmalade Fish is a management and learning consultancy with a presence in the Middle East, North Africa and Asia Pacific. We partner with leading businesses to deliver on their organisational ambition. Our vision is to make work better by creating high performance cultures underpinned by values, enabling employees to be at their best, more of the time.

How can we help you?

PEOPLE CONSULTANT Experts in Learning, Talent, Resourcing, Nationalisation and Organisational Development

TEAM DEVELOPMENT Strategy planning, team effectiveness sessions and off-sites

VALUES AND CULTURE Transforming your business through culture change and values alignment

LEADERSHIP SKILL BUILDING Developing the critical leadership skill to drive high performance

EXPERIENTIAL LEARNING Revolutionising learning through discovery, exploration and action

EXECUTIVE COACHING Facilitating personal and professional development to achieve your potential

Contact us info@marmaladefish.com www.marmaladefish.com

AIA, Hong Kong

“By developing our own talent, we can raise the bar” Asia’s biggest independent insurer focuses on internal development as it moves on from near-collapse at the height of recession

I

WORDS KATE WHITEHEAD PHOTOGRAPHY ISAAC LAWRENCE

t takes about 45 minutes to walk up 1,299 steps – allowing for a breather halfway. Shu Khoo, AIA’s group chief HR officer, knows this with some certainty because it was the distance she climbed last October, along with hundreds of other employees, in a charity fundraiser to mark the company’s fifth anniversary as 10

People Management Asia

an independent entity listed on the Hong Kong Stock Exchange.

The number of steps was significant – AIA’s stock exchange code is 1299 – but the truly “remarkable” thing, says Khoo (above), is that the company is flourishing today. In 2008, American International Group (AIG) was teetering on the brink of collapse and was bailed out by the US

government. It was forced to sell off parts of its business, including AIA, and a new era began for a pan-Asian insurance giant that can trace its roots back almost a century.

A fresh start called for new practices, but AIA was keen to ensure that it retained a sense of its own roots and historic purpose as well as facing the future. “The senior management team uses the phrase ‘respect

Case studies

the past, renew constantly for the future’. There were many parts that needed to be renewed because of the AIG crisis. And because of what people had read in the press there was damage to the brand and customer confidence,” says Khoo, who joined the company from rival AXA in January 2011, just a few months after AIA’s Hong Kong IPO. The first step was for the senior management team to set out strategic priorities for both the short and long term. Once a framework was agreed, an operating model was put in place to execute the business strategy. This marked a radical change from life under AIG; whereas the business had previously been centrally managed, now individual markets have more control and country management teams can make faster decisions.

“The country teams have to be able to respond very quickly to customer needs and the market, as well as changes in regulation, because we are in a tighter regulatory regime now,” says Khoo.

The change has been good for business, and the knock-on effect was seen among employees. Those who were familiar with a centrally managed model were used to being told what to do and executing demands. A more empowered model meant making more decisions themselves. “We have to make sure we have the right people in

“We put a lot of investment into middle managers so that they can be strong leaders”

the right role. We provided opportunities, training and development and also brought in new people. Of course, there was anxiety and uncertainty – changes take time.

We put in a lot of communication on the ground,” says Khoo.

AIA also introduced an operating philosophy: “Doing the right thing, in the right way, with the right people… and the results will come.” It isn’t a blithe message limited to team spirit or collaboration, explains Khoo, but a business imperative: “In your performance appraisal, you are assessed on delivering your performance and goals, but you are also assessed on whether you live the operating philosophy.”

The restructuring was felt right across the business. While Hong Kong had previously been a regional office reporting to New York, now it was the global headquarters, and that called for additional capabilities. Khoo helped initiate development programmes designed around what she calls functional capabilities – the qualifications and practices each area, including HR, needs to become more professional. “The actuaries and finance people all have professional qualifications, so I really encourage our HR staff to go for it

AIA Central Harbourfront Event Space Hong Kong City Hall

AIA Hong Kong

and get a professional qualification and take the CIPD programme,” says Khoo.

AIA is investing heavily in professional development, in part because the financial services industry continues to devour talent and make external recruitment an expensive business. But as the largest independent insurer in Asia, aimed largely at personal protection and savings products for individuals, AIA also says it has a responsibility to set a benchmark.

“Yes, we recruit from outside, but when you do that what you get is only as good as what is in the industry. If we develop talent internally, we can raise the bar,” says Khoo.

While there is broad-based leadership development, L&D interventions, and funding, tend to be targeted at middle managers, she explains. In the financial sector, many people are promoted because of what they do, but that doesn’t necessarily mean they are cut out to be people managers: “When we promote these people, they may not necessarily know how to lead a team, so we put in a lot of investment into middle managers so they can also be strong leaders.”

All employees are affected by the business’s latest twin obsessions: wellbeing and data.

AIA has been using data to better understand its customers for several years, which has helped it move from a purely reactive model – where people purchase insurance but have no further contact with the business until they need to claim or renew – to one where AIA knows who is buying its products and can proactively market to them at any point.

A new AIA Vitality programme tracks customers’ exercise patterns and activities and encourages them to be healthier, backed by an app and Fitbit handheld device. “We translate our commercial purpose into playing a leadership role in social and economic development in every market we operate in. We want our customers and the wider community to lead longer healthier, better lives,” says Khoo.

And that starts with staff: every group employee is given access to the app and product so they can become ambassadors.

At least next time Khoo needs to scale the heights, she won’t have to keep count herself.

People Management Asia

11

Arcadis, Hong Kong

“M&A doesn’t have to be so scary” Good communication can overcome teething problems when buying new businesses, says a highly acquisitive design company WORDS KATE WHITEHEAD PHOTOGRAPHY ISAAC LAWRENCE

M

ergers and acquisitions (M&A) are stressful undertakings for HR leaders. There’s the worry over the financials, the communication with existing staff and the inevitable concern over how a whole new set of employees can be successfully integrated into the business. It’s a state of mind Cindy Kalliecharan, head of compensation and benefits and HR operations Asia for Arcadis, knows only too well.

For many years, the Dutch-headquartered firm – which specialises in managing and undertaking design and engineering projects, as well as facilities and infrastructure management – had only limited operations in Asia. But that changed dramatically in 2011 when it acquired EC Harris, where Kalliecharan worked, and went on to buy two more significant Asian rivals over the next three years.

As the person charged with combining different reward structures, Kalliecharan has played a key role in ensuring that bringing together companies means getting the best from each while creating a common culture.

“We did a little analysis and realised that the companies were quite similar in how we did things, and the end goal was the same,” says Kalliecharan, who joined EC Harris in 2007. “We took time to look at why each one had the culture it did, why it gave them an advantage, and brought the best together.”

One of the keys to culture is the means by which rewards are offered. In Hong Kong, the most common mechanism is an annual 12

People Management Asia

one-month bonus, and rewards are less likely to be performance-based. But at EC Harris, which used a globalised system, rewards were based solely on performance. Kalliecharan is looking at a solution that will see employees offered a one-month bonus with the possibility of a top-up based on performance.

It’s important, she says, to consider each market individually: “I’m looking at what is relevant for each country. You can’t have one-size-fits-all because then you are missing out on best practice and attracting people in different countries. We adapt to the market.”

Benchmarking data has been useful in analysing not only the acquired companies, but also what Arcadis’s competitors are

Arcadis Kwun Tong Promenade

Kai Tak Cruise Terminal

Hong Kong

Arcadis

doing, she adds. And having integrated its acquisitions, the business is now looking to ensure that it is as streamlined as possible, deploying technology to create a consistent way of operating. A new system, the ‘Arcadis Way’, is being rolled out globally this year, beginning with Malaysia and Singapore.

It will act as a hub for all projects, says Kalliecharan, harmonising the workflow from the time a project is identified, to winning it and deciding how to deliver it.

An HR stream sets out the framework for the recruitment and retention of employees.

“It won’t change what we are looking for, but there will be a more structured and global way of recruiting people,” says Kalliecharan.

“We’ve got so many countries globally, so the people we recruit in Asia will have opportunities to work in other locations across the world. Mobility is key for us – the ability to work in any of our locations is one of the central propositions we offer people.”

While talent has been an issue in parts of the world, Arcadis has found Asia to be a more rewarding recruitment market, with the exception of IT staff. Kalliecharan says social networking has proved a fruitful channel, but the most effective method remains an employee referral scheme. “In Asia, we rely a lot less on agencies,” she says. “The referral scheme works well because of the Asian culture, where people tend to recommend and know a lot of people.”

Graduates make up a significant portion of the company’s fresh blood. Arcadis is savvy about the best way to reach out to them, using a combination of social media and visits to

Case studies

Cindy Kalliecharan says Arcadis’s flexible approach to progression helps attract graduates

universities. But Kalliecharan says she has noticed a shift of focus in what graduates are looking for. Salary used to be the deciding factor, but today a career path has become a vital selling point: “They want to know what you can offer them – what the developmental opportunities are. I might come in as a project manager but, if I do the graduate rotation scheme and I learn about quantity surveying, will I have an opportunity to switch to being a quantity surveyor?”

She says graduate hires are often keen to progress quickly. While some companies still retain relatively rigid structures regarding progression, at Arcadis there are no such restrictions – as soon as someone has the necessary skills and qualifications and shows they can perform, they can move to the next level. This, she says, is a big draw.

In Asia, Arcadis now has significant scale, with 5,000 staff across 50 offices. It oversees MRT lines in Malaysia and the Gardens by the Bay in Singapore, among other flagship projects. And Kalliecharan herself has benefited from a flexible approach to progression. She grew up in Trinidad, and worked in the US, Europe, the UK and the Middle East before coming to Hong Kong – the latter three locations while part of EC Harris and Arcadis. “I’ve had the opportunity to work in different countries and the business has never said to me ‘you can’t have that opportunity’. It’s based on skills, performance and ability.”

Indeed, Kalliecharan feels that both mobility and general operational ability can only benefit from the M&A activity the business has been involved in.

Langdon & Seah, one acquisition that operates in 10 countries from India to Indonesia, has an advanced technical skills programme,

“Graduates today want to know what you can offer them… what are the opportunities?”

28,000

Number of global employees at Arcadis, covering 40 countries

3rd

Position of Hong Kong among the most expensive countries to build in globally, according to an Arcadis survey

while EC Harris has an emphasis on softer competencies. Bringing together such strengths creates an even better proposition.

That’s not to say that there weren’t jitters at the prospect of being taken over. But

Kalliecharan says Arcadis focused on good communication, making clear its strategy and vision and being as transparent as possible. Ultimately, employee turnover was minimised through good communication.

And now, the firm is working equally hard at ensuring that the Arcadis message gets out to the wider community.

“People in Asia don’t really know about the Arcadis brand – it’s [about] making sure that we are bringing together all these companies and strengths to form this amazing organisation in Asia,” says Kalliecharan. Given the business’s lively recent history, it seems safe to say that there is more to come.

People Management Asia

13

The debate

Should HR give up on a board seat?

A place at the top table has long been HR’s holy grail. But is genuine influence more important than status? Four experts mull it over

1

INTERVIEWS KIRSTY TUXFORD

Professor Chris Rowley Cass Business School, London, UK; Korea University; University of Nottingham, UK

Not only should HR professionals have a role on the board, they should be considered more often for the CEO role itself HR should have a seat on the board.

The function has long been seen as lacking ‘weight’ and ‘equality’

2

employment systems with long-term planning and decision-making policies. HR might find it harder to get its voice heard in the US and the UK, where CEOs commonly have finance backgrounds.

It is often said that accountancytrained CEOs tend to hold sway in recessions, and marketing-trained CEOs in times of expansion. HR people are conspicuous by their absence. Not only should HR professionals have a role on the board, they should be considered more often for the CEO role itself, given the importance of people and their management to the success of all organisations.

Josephine Chua Director of human resources and quality, Ramada Hotel, Singapore

For HR to contribute effectively at board level, it must have business acumen HR should be involved in strategic decision-making, and therefore it must form part of the board. As with all commercial businesses, the aim is to run a profitable operation.

Human capital is essential in making this happen, as it ensures sufficient resources to achieve the operational, strategic and contingency aspects of a company. HR can provide the human capital perspective, as well as helping to position the human capital plan to drive organisational goals.

14

in the eyes of management and the C-suite. But simply ‘counting the numbers’ of chief HR officers (CHROs) to ascertain their effectiveness may not be that useful: it is who they are and what they do that counts.

HR’s opportunity to influence the board can vary between cultures. For example, in Germany and Korea, CEOs are more likely to be open to CHROs’ ideas, because they emerged from, and operate in, business and

People Management Asia

For example, during our hotel’s pre-opening, the HR director played a key part in positioning leaders in the organisation, shaping the talent-sourcing plan and mapping out the short- and longterm resources requirement and development strategies.

The key is whether the organisation has the right structure and the HR calibre for the function to secure a spot on the board. If the business’s HR department

follows the traditional ‘personnel’ function, executing administrative tasks and following instructions, it will be redundant on the board. For HR to contribute effectively at board level, the HR representative must be up to speed on the latest HR trends, be exposed to industry practices globally and have business acumen. Otherwise, they will not be able to participate actively or champion any cause or decision.

3

Deepak Goyal Senior HR leader with 18 years’ experience at Fortune 500 companies, spanning six continents

HR can win a place on the board by combining solid research and data with business knowhow While HR is used to being a senior management team member, board priorities tend to be different and broad. If HR is managing these priorities, it will be welcome at the board. If not, any board seat will be ineffective.

My priorities for the board have typically covered high-level compliance and identifying and mitigating risks from labour law, unions and people, from an organisational perspective.

Boards are also keen on culture.

4

HR must be able to show that it can optimise people cost, as well as understand the dynamics of senior leadership succession, team effectiveness and key gaps in leadership. HR also has to be the voice of the employees. Boards are usually more open if HR’s argument is based on solid research and data, presented with business knowhow and financial acumen, and if proposals are objective and fair.

Not having a seat often results in HR’s priorities diminishing

in importance, and key HR programmes getting cut, as board discussions are primarily financedriven. In the spirit of balance, all four perspectives are important: finance, customers, learning and growth, and internal processes.

Another important debate is whether HR should be split into administration and strategy [as advocated by US academic Ram Charan]. If strategy is split from operations, the organisation will have very good philosophers or consultants – but I wouldn’t call that leadership. A good leader must know how to drive operational excellence so that administrative distractions are minimal. I strongly believe strategy, operations and people are a must for any leader.

Sanjay Srivastava HR director, Boehringer Ingelheim, India

HR will only be offered a seat when the board appreciates the value it brings, and when the function scales up and delivers on its promises I firmly believe that HR should be on the board. In today’s uncertain and complex world, it’s not enough for the board to focus solely on CEO and senior management compensation and succession planning. It must consider the entire gamut of human capital opportunities and risks. It is important for the board to gain a deeper understanding of the talent and culture issues

facing both the company and the industry to be able to support the executive team in the delivery of the business strategy. This is where HR comes in.

HR’s role has become critical from a talent, culture and leadership perspective, and is essential in driving business growth, innovation and organisational transformation.

HR also helps mitigate many of the risks to organisations that result from either a poor alignment of talent and business

strategies (such as talent gaps and shortages) or from an organisational culture that does not support the desired behaviours.

If invited to the board, HR can offer support in transformation initiatives such as downsizing, restructuring, upscaling for growth, employee engagement, key hiring decisions and dealing with regulatory or government issues.

Ultimately, though, HR will only be offered a seat when the board appreciates the value HR brings, and when the function really scales up and delivers on its promises.

People Management Asia

15

BETTER

K C LU 16

People Management Asia

PAY

SUPERSTOCK, ALAMY

NEXT Pay rises in parts of Asia are likely to barely hover above inflation in 2016. Is it time to permanently rethink the way we reward employees?

WORDS KATE WHITEHEAD

People Management Asia

17

F

irst, the bad news. No matter where in Asia you are, the era of the colossal pay rise is almost certainly over. With generous expat packages having already felt the squeeze, there is a significant question mark over the sustainability of large increases in most of the region’s fastest-growing markets, given the macroeconomic backdrop and concerns over volatility in China.

The good news? It could be much worse.

Pay movements in South America are below inflation, the US is barely keeping up with inflation and in Europe a slow recovery means real-terms salaries are only just increasing after years in the doldrums.

Employees in the Gulf region may experience the first widespread pay freeze

PRESS ASSOCIATION

Doctors in Hong Kong stage a protest to demand an extra 3 per cent pay rise

18

People Management Asia

in a generation in 2016, and yet even in more mature Asian markets, such as Hong Kong, employees can expect to receive 4 per cent this year.

If you’re in China, meanwhile, you’ll likely be looking forward to an 8 per cent pay uplift by the end of the year (though, while that is something to smile about, many may complain that it’s the first singledigit rise they have endured for some years).

Such is the varied state of the Asian pay market, which has been buffeted for years by the rise of China and vicious competition for top talent. It is notoriously difficult to define salary trends that ring true for the entirety of such a diverse set of countries, spanning the full gamut of economic development. And yet, for many experts, there is a sense that a frenetic

market may be cooling down, and that for the first time in living memory larger companies are beginning to ask profound questions about reward that go beyond: how much can we afford?

For Robert Mosley, CEO of Lemon Pip Consulting and a global reward specialist who has spent 25 years advising Asian businesses, that takes several forms. “Are companies spending their money in the right way?” he asks. “Are they getting bang for their buck? Are they actually seeing the right performance in return for those huge pay increases? How long can it go on for?”

Mosley points out that the profitability of Asian businesses has for years been slightly, but sustainably, eroded by the need to raise labour costs above the rate of inflation. That situation is unlikely to change dramatically, unless there is a once-in-a-generation banking crisis. But it is shifting.

Hong Kong, as the forerunner of the modern Asian marketplace, is a salutary case in point. “I remember in the 1990s, if you got a salary increase of less than 10 per cent you would complain. And seldom was it less than 10 per cent,” says Robert Li, talent consulting business leader for Mercer in Hong Kong. As the city became

PAY

How much are you worth?

HR roles are among the most competitive in developed Asian markets, according to recruitment specialist Links International, though Singapore has seen a recent slowdown in demand at HR manager levels compared to Hong Kong. The firm’s 2015 Salary Survey suggests that most HR positions remain lucrative, and points to data analytics capability as a particularly sought-after trait

SOURCE: LINKS INTERNATIONAL

a more mature and stable market, such annual rises were no longer viable – and Hong Kong businesses have adjusted their approach without negatively affecting their competitive position among their neighbours or the overall unemployment rate. On 2016 projections from major consultancies, Hong Kong employees may receive average increases of just 0.3 per cent ahead of inflation.

For Mosley, the subtle shift in attitudes to reward manifests itself primarily in an increasing willingness to discuss performance-related pay. “The first thing businesses are worried about is the market, and whether they are paying employees competitively compared to jobs in other companies,” he says. “At present, it’s only an afterthought to talk about employee performance. But things are changing, and companies are getting a lot smarter about pay for performance.”

Mosley says he sees investment among multinationals and large regional businesses in software systems that recalibrate reward structures. Such performance management programmes are 25 per cent more prevalent than five years ago, he points out: “Good companies are

HR director (10-15 years’ experience)

75-120k+

12-25k

60-120k

HR manager (6-10 years)

35-80k

6-12.5k

20-40k

Recruitment manager (6-10 years)

45-70k+

4-8k

10-20k

Training manager (6+ years)

35-40k

6-10k

15-30k

Compensation and benefits manager (10+ years)

70-120k

14-20k

40-80k

OD manager (7-10 years)

50-70k

8-12k

18-30k

Payroll specialist (3-5 years)

18-28k

3-5k

6-10k

Global mobility specialist (3-5 years)

20-28k

3.5-5k

8-15k

HKD/month S$/month RMB/month

saying ‘let’s start learning how to set KPIs and objectives more smartly, and let’s start embedding competencies into the culture so we start to value the behaviour of our employees’. That is a totally new trend, and it’s a ray of light that businesses realise that they need to link the level of money they spend [on salaries] to performance. But you can only link it to performance when you know that people are performing.”

Businesses are also becoming more judicious in the way they distribute bonuses, according to experts. With a limited pool to hand out, they have learned to target only top performers, though bonuses remain one of the most popular ways of rewarding staff: 51 per cent of employees in Asia say they will give bonuses to more than 50 per cent of their staff in 2016, according to the Hays Asia Salary Guide.

Recent Hays research shows that, in the majority of cases, bonuses are related to employee performance (80 per cent) and employer performance (73 per cent), suggesting that businesses are using performancerelated bonuses to retain their top talent.

What’s more, just 11 per cent of employers said bonuses are guaranteed.

“In the 1990s, if you got a pay rise of less than 10% you would complain”

“Considering the economic growth, inflation and the labour cost in respective countries, we believe this trend will continue, with China remaining the standout in terms of salary increases in the upcoming year and Japan most likely to be restrained,” says Shanghai-based Christine Wright, managing director of Hays in Asia.

Nick Lambe, managing director of recruitment agency Links International in Hong Kong, sees employers being a lot smarter about handing out bonuses. He refers to it as the “hero or zero effect” – while three or four years ago a manager probably distributed bonuses fairly evenly, now they are more likely to seek out a star performer and reward them disproportionately. “The demand for talent is continuing to be very difficult, so if you aren’t rewarding your top performers you will lose them to your competitors,” says Lambe.

And while financial reward – in terms of salary, bonus and benefits – is critical when it comes to recruitment and retention, it isn’t always the deciding factor. Connie Leung, information solutions leader at Mercer in Hong Kong, says staff in China in particular are increasingly more concerned about career development than money.

“China is booming and the employee understands that if they enjoy good career development then the compensation will come. In Hong Kong and Singapore People Management Asia

19

PAY – both advanced, stable economies – the opportunity is still there, but not everyone will be given an opportunity,” says Leung. Younger staff, she adds, are particularly enamoured of development and progression, and may respond well to mentoring programmes that give them access to senior executives.

Overall, Wright predicts a positive outlook for the region in pure salary terms, forecasting a continuation of the steady increases in hiring demand across key sectors and industries that are fuelling wage inflation. “Savvy candidates are taking advantage of Asia’s tight talent market to secure roles offering career progression, which in the long term will ultimately lead to higher salaries,” she says.

And a burgeoning talent market often correlates near-exactly with demand (and reward) for HR professionals. For some, there’s never been a better time to work in HR. Increasing specialisation and a shortage of senior, experienced professionals are driving up salaries, as figures from Links International demonstrate (see page 19).

Li describes three types of HR professionals: those concerned with implementing policy; those working at a strategic level with business heads to

translate business policy into HR policy; and those working at a tactical level, coming up with solutions to problems.

“It’s very difficult to find strategic HR people, very senior HR people, and their compensation may be quite high. The main reason is that the talent pool in Asia is very limited compared to major developed markets like the UK and US,” says Li. This demand is translating into a large number of opportunities for both western and, particularly, Indian HR professionals in Hong Kong and Singapore, though there are signs that businesses in the latter are beginning to slow the number of expats they bring in at all but the most senior levels.

Hong Kong employers, says Wright, are placing a greater focus on retention rather than attraction, which is reflected in a greater investment in L&D capabilities.

“While salary levels are expected to remain steady in the coming months for most job functions, Hong Kong employers will offer a higher salary to secure the right senior HR candidates,” she says.

In Malaysia, it’s strategic HR business partners that are most in demand.

Companies in Singapore, meanwhile, are especially preoccupied with talent management, so HR professionals who can

help engage and retain high performers are in demand. But Wright sounds a note of caution in this market, where she says Hays has noticed a growing number of senior candidates available for work immediately – and this, she adds, could lead to a reduction in senior salaries.

But as strong as the market is for HR professionals in Asia, it’s unlikely those tempted to move from outside the region will be offered what Mosley calls the “full expat package with all the bells and whistles”. The move away from a basket of benefits – including housing, schools, flights home and car allowance – is one of the most profound shifts in senior remuneration among multinationals operating in Asia, and indicative of an economic and political climate that no longer sees expat talent as essential.

“Typically, a multinational company would have posted an average of five to seven expats per country. That is down to about two to three per country today and, in fact, many multinationals are only posting a country manager,” says Mosley.

Natellie Sun, regional director at Page Personnel, says the squeeze on the expat package has been pronounced: “In a city such as Hong Kong, which is quite international, even at the director level it would be rare

Average salary increases by country Percentage rises in last pay reviews across Asian countries 64%

All countries China Hong Kong Japan Singapore Malaysia

59% 56% 50%

48% 43%

31%

22%

22%

4%

13% 8%

6%

13% 9%

8%

3%

Nil

20

21%

People Management Asia

8%

6%

9% 5% 5%

2%

Less than 3%

3-6%

6-10%

More than 10%

SUPERSTOCK

5%

22%

16%

15%

6%

21%

Expats still flock to territories such as Singapore, though the packages on offer to them are reducing significantly

that we place an expat, and if we did it would usually be an international transfer.”

That doesn’t mean Westerners are leaving.

Many former expats have made Asia their permanent home, and there is little research to suggest that the overall number of senior foreign employees has fallen significantly.

But those who are brought into the region from overseas today are more likely to be on a ‘cost plus’ package that reflects average local remuneration with a small uplift on top, without additional allowances.

Two other factors come into play here.

First, expat packages are hugely expensive – often four times the cost of an equivalent local hire – and fees related to houses and schools make them even more out of reach. Second, the concept of the expat itself is dying out. Today, ‘globally

“Employers will offer a higher salary to secure the right senior HR candidate”

mobile employees’ are open to the idea of moving abroad for an assignment but may not want to be permanent globe-hoppers.

And they are less likely to be senior managers from ‘head office’ in a western nation being parachuted in to troubleshoot: they may be Asian, Latin American or Middle Eastern employees gaining experience in a different environment to aid their career development.

“Expats are not as keen on moving every two or three years as they used to be. The work-life balance needs to be focused on.

If you are working a 60- to 70-hour week, moving every few years and upheaving the family and changing house, that balance is going to be terrible. So they are saying ‘let’s get some stability’,” says Mosley. Leung also says she sees more candidates from Europe and the US who choose to move to Asia independently, who may end up in smaller businesses or start-ups.

These are significant paradigm shifts. But it will be some time before the large annual increases seen in China, Malaysia and

Thailand are more closely tied to inflation.

In many ways, such rapidly expanding economies are in the same position Hong Kong was in 20 years ago, with businesses caught in an inflationary pay cycle to keep ahead in the war for talent.

Mosley believes that change will only begin when networked and strategically minded HR professionals come together for a frank discussion: “It’s not going to be one company making a change. It’s going to be the HR community as a whole starting a conversation and asking: ‘Is what we are doing sustainable? Is what we are doing performance-related? Should we collectively plan for the future?’”

Investing in performance management, whether through a formalised system or not, and considering the links between pay and performance at every level, are a good start. And the fact that these conversations are happening could be a sign that what Mosley calls the “oil tanker” of regional pay has applied the breaks. It will be some time, however, before the ship comes to a halt.

People Management Asia

21

Interview

“Asian multinationals won’t succeed without strong HR” Knowing where decisions should be made is the key to going global, says Shanthi Flynn, former Walmart HR leader turned consultant INTERVIEW KATE WHITEHEAD PHOTOGRAPHY ISAAC LAWRENCE

22

People Management Asia

I

t’s a rare HR leader who can bring two radically divergent perspectives to their work. But Shanthi Flynn’s career bridging both east and west – as well as her experience of several very different businesses – means she is already in huge demand, just months into a fully fledged career as a business consultant and academic.

Flynn spent a decade working for Ford in its flagship British plant in Dagenham, where the UK’s equal pay movement was famously born. She focused on succession planning, organisation development and industrial relations in a notoriously tough environment, before spending seven years at retailer Boots in an international HR director role. After moving to Hong Kong to serve as HR director for AS Watson Group, she joined Walmart as senior VP for HR in Asia and today runs her own HR consultancy, as well as leading an executive education programme at Ivey Business School and undertaking a range of directorships. People Management found out how she thinks HR has grown over the past three decades, and where she sees it going next.

Becoming more strategic is seen as the holy grail for HR. How does it get there?

HR’s role is partly about support and partly about being a leader of thinking. Too often, HR professionals see themselves as purely offering support when in fact they are strategic decision makers. When I worked for Ford in the 1980s, I was a business partner even then, at a very early stage of my career, because nothing happened in a car plant without it coming through industrial relations first.

You felt you were at the front end of the business all of the time. Having been brought up with that, I’ve never thought any other way.

How well is HR doing at moving away from the purely functional?

You have pockets of brilliance – companies where HR is a key strategic player, and the

“Local businesses don’t go hell for leather in the way western s have tried How do HR directors firm make themselves to in Asia” more essential to HR plays in helping those people drive that revenue. If you don’t understand those connections, you are never going to make it big.

HR director is making a contribution to the executive team. That can come in part through taking on responsibility for other functional areas such as communications.

I find the Mandarin Oriental Group interesting because it is an Asian group born in Hong Kong that has expanded out of Asia.

It has realised that, to expand a multinational from an Asian base, you’ve got to have HR at your strategic centre.

Having spent 13 years in Asia, how would you benchmark HR capability here against others parts of the world?

You’ve got a lot of multinationals here that have brought with them considerable amounts of HR expertise, and you’ve got many local companies that have learnt quickly from some of the older practices that have come out of the developed markets.

But in many ways it’s still a mixed bag.

What brings it all together is that organisations without HR at the centre of their expansion will fail. HR understands that where and how you make decisions is vital. Do you globalise everything? Do you give your markets complete autonomy?

What’s interesting now is that, if you look at growing local businesses, they don’t go hell for leather, storming around in the way that western multinationals have tried to in Asia.

Are HR professionals also sometimes guilty of neglecting their own development?

If HR sees itself as a support function, it will only invest in itself as a support function. If it sees itself as part of the strategic machinery of an organisation, it will invest in itself to oil the wheels. If you value your strategic contributions to an organisation, you understand it really well – this is how the business makes money, this is how the people drive that revenue and this is the part that

their businesses and ensure leaders understand the value of HR? I’ve been growing leaders for 20 years in Asia and Europe. When I put the HR executive leadership programme [at Ivey Business School] together, it was mostly out of frustration. Most of the people I’ve taught had developed functional technical knowhow that they were relying on to succeed. What they needed was to improve their leadership skillset so that as they became more senior they understood how they play a part in the holistic running of an organisation. When a lot of functional leaders hit the C-suite, for example, they don’t know enough about strategy or finance, how to make decisions around P&L or how that connects to the strategy of a company.

Is there a single leadership style that works every time?

I recently worked for one of the best leaders I’ve ever come across – I won’t mention his name. What made him successful was that he immediately engaged with the front end of the business and knew the organisation inside out and upside down. There wasn’t anything that could get past him – he had such an enormous business knowledge. There’s been a bit of a fad over the last 10 years to appoint CEOs with no business knowledge in a particular sector, but it rarely works.

Another component of success for me is what I call authentic integrity – a true value system that ties in with the organisation.

Doing the right things in the right way.

CEOs who are operating and working as hard as they expect their people to work have to get some balance. They often work too hard, get stressed and become erratic. The best leaders are balanced, objective, inclusive – they will take a view before they share it.

The worst will talk incessantly and not ask a question of someone else. It’s important that they listen before speaking, so they know that when they make a decision they’re making it with all the data.

People Management Asia

23

COACHING

THE KEY TO WORLD CHAMPION BUSINESS PERFORMANCE

One-on-one guidance has become a popular way to nurture talent in the west, but can it work for Asian companies?

WORDS JUSTIN HARPER

24

People Management Asia

led to technically excellent managers who lacked empathy and communicated poorly.

Coaching, with its one-on-one nature and focus on the interpersonal, has come to be seen as the answer to both issues. And today, there are signs that it is becoming more and more popular and accepted among Asian businesses that have been slow to adopt it compared to other parts of the world.

Coaching is decidedly different from pure performance-based counselling – the business equivalent of a sports coach bellowing at you to buck your ideas up – or mentoring, which tends to involve a more experienced individual assisting with career navigation. Coaching is a creative and collaborative, solution-focused approach to business challenges that nurtures high performance and centres around identifying and building on key skills and talents. In essence, it aims to bring out the best in an individual to help raise overall organisational performance.

It is mostly delivered, at first, by external experts, but businesses are increasingly using internal coaching networks comprising both HR professionals and professionally trained employees.

In an ever-more complex and competitive business environment, corporate coaches are finding themselves more in demand, targeting existing leaders while helping to groom future ones. Aarti Thapar, Experian’s head of talent, engagement and culture for Asia-Pacific, says: “We’ve used coaches as part of our talent programme for emerging leaders – an integrated learning programme that combines face-to-face training, mentoring, on-the-job projects and coaching.”

Experian involved coaches in two contexts. The first cohort was split into teams to tackle action learning projects.

Each team was paired with a coach who worked with them on specific themes, such as team dynamics and working in a matrix.

The second group was trained by a coach in influencing and communication skills, helping them prepare for key presentations.

The results, says Thapar, demonstrated both the benefits and the pitfalls of coaching: “Where we used a coach to fill a particular skills gap, the changes were significant – we saw real growth in the individuals with regard to skill development.

I

Tough talk worked in the Rocky films, but corporate coaching is more complicated

ALAMY, REX SHUTTERSTOCK

“A good coach is an astute listener, drawing out the best in the client”

magine you are a high-flying senior executive in charge of a sizeable team and earning a handsome salary. Your career has been a constant upward trajectory of promotions and plaudits.

Until one day, your friendly HR business partner calls you in for a meeting to tell you you’re about to get some corporate coaching. A shiver runs down your spine.

What have you done wrong?

For many uninitiated executives, coaching is still regarded as something that’s used when things have gone awry. It carries a stigma that you’re not doing your job properly and corrective action needs to be taken. And yet, spurred by its ready adoption among Silicon Valley start-ups, in many enlightened sectors coaching has become a positive and widely accepted tool.

Faced with a shortage of talent and worrying turnover among key employees, firms wanted to signal their commitment to high-potential executives by offering increased development opportunities. And they recognised that a traditional reliance on developing quantitative capabilities instead of people-oriented skills had often

But where coaching did not have specific objectives, we saw fewer benefits coming out of it.” It’s better, he adds, to engage coaches that are specialist, rather than generalist, with experience of the particular area you are looking to focus on.

Singapore-based corporate coach Susie Sadler says there are other key characteristics to look out for: “A good coach is an astute listener, drawing out the best in the client.

A coach offers different perspectives, and may challenge a client’s assumptions.

That can open up more choices and better decision-making. A coach may give feedback to a client that he or she has never heard before, or may confirm something they already knew intuitively, but didn’t trust.” Language becomes important in this context, and experts counsel that lack of familiarity in a local language can be a barrier to a deeper coaching relationship.

At present, coaching remains in its infancy in Asian businesses, despite growing enthusiasm. According to coach Andy Ng, this is because many governments do not recognise coaching or mentoring as value-added activities and therefore focus grants on the training end of the L&D spectrum. “The Asian mentality is around tangible stuff – and coaching, being more intangible than training, is considered less valuable,” says Ng. “You see people willing to pay S$3,000 to attend a two-day course but unwilling to fork out S$300 for 90 minutes with a coach. But Asians are open to counselling, so for coaching to work in Asia it has to be packaged as counselling or learning from an expert.”

There may also be cultural barriers that stop locals benefiting from coaching they view as too intrusive or western. A good coach needs to be culturally aware of styles and preferences in different cultures. “I’ve worked in just about every country in the region including China, India, Indonesia, Malaysia and Hong Kong, and have found that people are happy to be listened to by someone outside of their company,” says Sadler. “It’s sometimes like a dam burst.

They open up and say things that they might not talk about with others at work or even their own family. The coaching relationship is powerful.”

Dr Doug MacKie, business psychologist at Brisbane-based CSA Consulting, has worked with leaders from Hong Kong, Singapore, Thailand and Korea. “Much of my work is with the local divisions of multinational companies that already have a strong coaching culture and commitment to the development of their leaders,” he People Management Asia

25

COACHING

“For coaching to work, it has to be packaged as learning from an expert”

18 People 26 PeopleManagement ManagementAsia Asia

rnal Low Peck Kem uses inte in es mm gra pro ng coachi e the Singapore Civil Servic

SIMON DEWHURST

says. “It is fair to say that the vast majority of coaching research has emanated from the US and the UK, partly because of the alignment with western individualism and leader-focused development.”

Research – principally from social psychologist Professor Geert Hofstede – does tell us that there are some wellrecognised cultural differences that may play a significant role in the cultural adaptability of coaching. These include differences in the relative focus on the individual versus the collective good, how much individuals cooperate rather than assert their own needs and the degree to which power (and consequently leadership) is centrally held rather than distributed within the organisation. “Coaching is fundamentally about empowering others and believing that the individual is most effective when their progress is self-determined. These assumptions can clash with organisations that have a more hierarchical and fixed view of talent,” says MacKie. But Asian organisations are steadily catching up with the west. Prominent local organisations that have internal coaching programmes include Temasek and the Singapore Civil Service, where Low Peck Kem, the Public Service Division’s chief HR officer, has spoken admiringly about its impact in embedding new ways of working across government.

“These organisations recognise the value of one-on-one coaching for an individual’s goals and priorities, and often combine a leadership training programme with followup coaching to cement the learnings and action steps,” says Sadler.

In larger organisations, coaching has so far predominantly been aimed at middle managers and above, with group or workshop interventions more prevalent among more junior employees. This is a natural reaction when resources are tight, but it overlooks the enormous value of coaching to highpotential employees who are likely to find new challenges coming at them thick and fast and can benefit from intensive one-to-one guidance. Eric Schmidt, former Google CEO, is quoted as saying: “The best thing I ever did was hire a coach.”

Sadler says her typical client is someone who is successful in their field, with at least

10-15 years of working experience. They come to coaching for a number of reasons: to receive feedback about an area of their performance that is holding them back; because they have been recently promoted and want to make sure they do well in the new role; or when they are looking to elevate their executive presence and visibility to get their next promotion, among others.

Corporate coaches say the crucial factor is that the client has to be ready and willing to be coached.

Evidence has been steadily building over the last decade that supports the effectiveness of coaching in organisations.

The most convincing is provided by controlled studies that contrast a coaching intervention with a controlled group that received no intervention. These studies can be combined into meta-analytic studies that offer great statistical power.

“We currently have three meta-analytic studies in coaching that all found significant effects in terms of coaching’s ability to enhance relevant organisational outcomes like performance, wellbeing and leadership,” says MacKie. But he adds that most coaching research still adopts a “within subjects” design, where a population receives an intervention with no reference to a controlled group.

One key variable that seems to differentiate those who benefit from a coaching approach is change or developmental readiness – the person being coached must want it in the first

place. Developmental readiness is both the motivation and ability to grow and change as a leader and is a precursor of effective leadership development. One of the factors that underlies this is the mindset of the person being coached towards modifying their leadership ability. Those with a fixed mindset around leadership believe that leaders are born not made, and that it’s very difficult to modify your natural ability.

“Individuals with these mindsets can really struggle in a coaching process.

By contrast, coachees with a growth mindset take an incremental approach to their development, believing that leaders are made, not born, and that the acquisition of expertise is a function of application and effort. Individuals with this mindset really thrive in a coaching process,” adds MacKie. While opinion may still be divided over the true effectiveness of corporate coaching and who benefits from it the most, it is not a remedial intervention.

It’s an individualised form of leadership development that is particularly effective with more senior managers and leaders who are high performers and have specific rather than generic leadership development needs.

Understand that, say the experts, and you’ll be well on your way to making it work for you – and banishing forever the dread that too often comes with that knock on the door from the HR department. ✶ Find out how to make coaching come alive in your company with the CIPD Coaching Toolkit: bit.ly/coachingtoolkit

The simple guide to the world’s smartest business gurus Business gurus

“The paradox of change is that the only way to alter the way we think is by doing the very things our habitual thinking keeps us from doing”

“People don’t change that much. Don’t waste time trying to put in what was left out. Try to draw out what was left in”

“There’s no going back.

Pay your son to take out the trash and you’ve pretty much guaranteed the kid will never do it again for free”

“HR must give value or give notice”

“It is still money that dominates the negotiated relationship between an employee and employer. Let’s widen the conversation to include an equally important asset: good work” “Today’s executives must learn how to think explicitly about the management orthodoxies that bound their thinking – the habits, dogmas and conceits they’ve never challenged”

“Emotional aptitude is a ‘meta ability’, determining how well we can use whatever other skills we have, including raw intellect”

There’s no shortage of management thinkers around, but which ones should HR be listening to?

WORDS JANE SIMMS

People Management Asia

>

27

Business gurus

Ever since Frank Gilbreth, regarded as the first management consultant, began studying how to make work more efficient more than a century ago, businesspeople have been obsessed with learning from each other and understanding the trends that will challenge their companies in the years ahead. From Peter Drucker to Sheryl Sandberg, business authors have topped the bestseller lists and sold out conference halls for decades, but which gurus are most relevant for HR practitioners?

We raided the business bookshelf in earnest.

Who are Asia’s most important business thinkers?

Find out at www.cipd.asia/pm

Lynda Gratton

Daniel Pink

Gary Hamel

Who is she?

Professor of management practice at London Business School (LBS), where she specialises in HR strategy. She joined LBS in 1989, founded the ‘Hot Spots’ movement to bring academic research to managers’ attention, and leads the Future of Work Research Consortium.

Who is he?

A former chief speechwriter for ex-US vice president Al Gore, Pink used the experience of leaving his job in 1997 as the basis for his first book, Free Agent Nation: the future of working for yourself (2001). He has been described as a ‘capturer of the business zeitgeist’.

What does she say?

Gratton’s central premise is that, while companies have the power to simultaneously change the world for the better and make bigger profits, they can only do so by fully engaging their people. Her first book, Living Strategy: putting people at the heart of corporate purpose (2000), exemplified this theme, and Hot Spots (2007) developed it. Her 2011 title, The Shift: the future of work is already here, earned her 12th position in the Thinkers50 list of the world’s most influential living management thinkers.

Her most recent book, The Key: how corporations succeed by solving the world’s toughest problems (2014), looks at the impact of the changing world on corporate practices, processes and leadership.

What does he say?

In A Whole New Mind: why rightbrainers will rule the future (2005) Pink argued that we had already moved beyond the ‘knowledge age’ to the ‘conceptual age’, where emotion, intuition and creativity are what differentiate people and organisations. But it was Drive: the surprising truth about what motivates us (2009) that saw him explode into the global consciousness. He demonstrated that intrinsic, internal motivation (the desire to do a good job) is far more powerful than the traditional external motivators of fear, money and rewards. And in To Sell is Human: the surprising truth about moving others (2013), Pink examines the art and science of selling in a world where, he says, everyone is ‘in sales’.

Who is he?

One of the world’s most influential thinkers on strategy, leadership and innovation, Hamel has been on the faculty of London Business School for more than 30 years. His most recent initiative is The Management Innovation eXchange, which aims to reinvent management by using open innovation.

Why does it matter?

The best companies understand the link between engaged employees and business success, she says and, in an increasingly competitive, complex and challenging world, Gratton’s work is a constant reminder not to stretch employees to the limit.

28

People Management Asia

Why does it matter?

Most companies know there is no correlation between individual pay and company performance, yet continue to award performance-related pay. Those who embrace Pink’s message could improve individual and organisational performance – and save a lot of money in the process.

What does he say?

Companies need to innovate continually and harness the power of their people if they are to remain competitive in a world where adaptability and creativity drive business success. Competing for the Future (1994, with CK Prahalad) offered a blueprint for competing today while also preparing for tomorrow, and Leading the Revolution (2000) proposed a radical new innovation agenda and a strategy to harness the imagination of every employee. In his most recent bestseller, What Matters Now (2012), he urged readers to rethink the fundamental assumptions they have about management, arguing that values, innovation, adaptability, passion and ideology are the ‘make or break’ issues that will determine an organisation’s success.

Why does it matter?

The world has changed beyond recognition since management theory was first conceived, but too many companies still manage according to the same old rules.

Hamel wants to shake us out of our cosy way of thinking.

Marcus Buckingham

Daniel Goleman

Herminia Ibarra

Dave Ulrich

Who is he?

A British-American best-selling author, motivational speaker and consultant, best known for promoting what he calls ‘strengths’. His first job was at Gallup, where he worked on a survey that measured the factors contributing to employee engagement.

Who is he?

A psychologist and former science reporter who popularised the notion of ‘emotional intelligence’ (EQ). Until the publication of Emotional Intelligence: why it can matter more than IQ in 1996, IQ was seen as the pre-eminent standard of intelligence. The notion of EQ is now widely embraced.

Who is she?

Professor of leadership and learning, and organisational behaviour at INSEAD. She directs the Leadership Transition, an executive programme designed for managers moving into broader leadership roles, speaks internationally on leadership, talent management and women’s careers, and was ranked eighth in the 2015 Thinkers50 list.

Who is he?

Professor at the Ross School of Business, University of Michigan, Ulrich is arguably the world’s leading guru of HR management. He pioneered the acceptance of HR as a business function, rather than a support function, and made a lasting impact by bringing the idea of the HR business partner into workplaces.

What does he say?

People improve their productivity and personal satisfaction by focusing on their strengths rather than trying to reduce their weaknesses.

Rules stifle the originality and uniqueness – the ‘strengths’ – that enable all of us to exploit our full potential. His second book, Now, Discover Your Strengths: how to develop your talents and those of the people you manage (2001), co-authored with Donald O Clifton and tied to a Gallup personal assessment tool called StrengthsFinder, focused on how to find and cultivate your strengths. In The One Thing You Need to Know... about great managing, great leading, and sustained individual success (2005) he argued that managers should capitalise on what is unique about every member of their team, as this will have a positive effect on their performance.

Why does it matter?

Putting people in roles they enjoy and excel at is empowering, says Buckingham, and thinking about strengths changes the way we recruit, promote and develop talent.

What does he say?

Our emotions play a much greater role in thought, decision-making and individual success than was commonly acknowledged. Goleman defines EQ, a trait not measured by conventional intelligence tests, as a set of skills, such as control of impulses, self-motivation, empathy and social competence.

Working with Emotional Intelligence (1998) extends these concepts into the workplace, using research to demonstrate that EQ is a barometer of excellence in almost any job.

In Primal Leadership: learning to lead with emotional intelligence (2002), Goleman and his coauthors apply the principles of EQ to leadership.

Why does it matter?

Not only are people with high EQ (which can be taught) more successful than others at work, but, because EQ encompasses what are ‘essential skills for living’, they also lead happier and more fulfilled lives, says Goleman, whose ideas have inspired the mindfulness movement.

What does she say?

Ibarra advocates learning through action. People stay stuck in jobs they don’t like because they don’t know what they want to do instead, but reflection and self-assessment lead to “analysis paralysis”, she argues. Her views are encapsulated in her 2015 title Act Like a Leader, Think Like a Leader, which explains how to step into a bigger leadership role, including the idea that ‘acting up’ to expected behaviours can be more effective than the idea of being authentic. Ibarra believes people become stuck in unproductive habits (such as micro-managing) because they lack experiences that lead them to want to do new things.

Why does it matter?

The volatile business environment calls for people who are multi-skilled, innovative, curious and infinitely adaptable.

Meanwhile, too many leaders remain unprepared to step into senior roles and could benefit from a more honest framework for managing others.

What does he say?

In the mid-1990s, Ulrich said HR should reorganise itself around four key areas: shared service centres carrying out transactional HR activities; embedded HR (business partners) working directly with business leaders; centres of expertise providing specialist advice; and strategic corporate HR. In Why the Bottom Line Isn’t: how to build value through people and organisation (2003), Ulrich argued that shareholder value increasingly comes from people, reputation and other intangible assets. He has recently cocreated a Leadership Capital Index, which aims to measure the effectiveness of collective and dispersed leadership rather than the CEO alone.

Why does it matter?

Given the growing acknowledgement that well-led and managed people are the best source of competitive advantage, the people who can optimise others (whether HR professionals or business leaders) have never been more important.

People Management Asia

29

THE KNOWLEDGE

Your quarterly run-through of essential skills, with expert commentary

Employees moving on can be a costly business. There’s lost productivity before and after they go, the cost of hiring a replacement (and the possibility they won’t work out) and the impact on the morale of the remaining team members.

While some attrition is unavoidable, HR departments increasingly believe that drilling down into the detail of who’s leaving, and why, can help direct some simple interventions that might prevent the pain of unwanted departures.

Most organisations conduct exit interviews to try and understand attrition. The question is whether leavers will feel able to tell the truth, particularly if they are departing because of issues with their manager. “They might be reticent about sharing the real reason they are leaving,” says Michael Jenkins, chief executive at UK and Singapore-based leadership institute Roffey Park.

Darryl Parrant, group managing director for Align HR Consulting in Singapore, says it’s essential that exit interviews are conducted by someone other than the person’s line manager – either HR or an outside consultant. Some companies now also follow up with staff a few months after they have left, as this can improve the level of honesty.

“It is important to get constructive feedback that is honest and reflective of their experiences in the workplace,” he says. Parrant suggests allowing the departing employee to complete an exit 30

People Management Asia

questionnaire, which can be held for a specified period – perhaps a month or two – before being shared with key individuals, including managers.

A standardised questionnaire or exit interview questions can enable any data gathered to be easily compared. “The questions need to be carefully crafted and selected. For example, it might ask you to tick the main reason you are leaving.

Having a scale for scoring, as well as open-ended questions, is important to ensure the that data can be measured and quantified,” says Parrant.

What’s keeping you?

What staff in Singapore say about turnover

62% Proportion of employees in large Singapore organisations who are actively considering changing jobs

Key reasons for switching jobs Lack of career progression and development 52% Poor management 44% Insufficient financial rewards 42% Lack of appreciation 39%

63% Proportion of staff who see ‘meaningful and interesting work’ as a key motivation

Source: Singapore Management Agenda study by Roffey Park

WORDS VICKI ARNSTEIN

1

Understand why people leave your organisation

Jenkins adds: “Within the bounds of confidentiality, there could be scope for sharing it with the person’s line manager, particularly if negative things were said, so there is an opportunity to discuss them. Second, where necessary, share the findings with the top team and ask ‘is this a blip or a trend?’, ‘is this a sign that we haven’t been as good as we could have been?’ and ‘how can we do better?’”

Parrant agrees. He says exit data should be collated and, if a trend or theme emerges, HR should raise it with management and recommend a deeper investigation.

Some companies are investing in sentiment analysis tools that can forensically analyse key phrases from exit interviews to draw deeper conclusions across the organisation.

But beware assuming that all staff attrition Jenkins and Parrant is the same: it is worth say it is useful to share giving more weight exit data with managers to the feedback of those employees you particularly wanted to keep, or who are particularly difficult to replace, and potentially focusing your retention efforts on such precious cohorts.

Jenkins also suggests that businesses think carefully about succession planning so that managers are pressed to consider which employees might leave: “If you assess the people you have on your team, part of that is identifying those who might not stay. It encourages managers to be alive to how their people are feeling.”

The Knowledge

2

Conduct an interview via Skype

Whether you’re hiring from overseas or just the other end of the country, video interviewing offers a way to cut costs and find out more about a candidate you can’t see face to face. But although the technology has existed for years, there are still plenty of drawbacks, from the awkwardness of the process to the unfamiliarity of the technology. HR and recruitment professionals have a vital role to play in making things run smoothly and ensuring video interviews are just as useful as real meetings.

There are numerous options when it comes to video conferencing, also known as Voice over Internet Protocol (VoIP). The most widely recognised are probably Skype and Google Hangouts but others include Viber, Jitsi and ooVoo. Tiffany Wong, associate director of the human resources and transactional services divisions at Robert Walters in Hong Kong, says Skype and video conferencing are increasingly used by her clients. “Although they are not the same as face to face, video interviews can allow interviewers to see candidates and get a better feel of their personal presentation and non-verbal

communication Video interviews are skills compared being used to screen to telephone potential candidates interviews.”

Wong says a video interview should be treated the same as a face-to-face affair.

The candidate should be given the names and job titles of the people interviewing them in advance.

An interviewer should be dressed appropriately, and expect the same from a candidate, and both parties should attend on time and effort should be made to overcome technical problems.

A wired internet connection, rather than WiFi, can help connectivity, as can making a test call to confirm your connection.

Wong also has some technical tips that can help the interview run smoothly.

“Use headphones instead of speakers to avoid noise feedback,” she says.

“Interviewers should also have the camera as close to eye level as possible so they are looking into the camera – not at the monitor – to maintain eye contact with the candidate.”

Interviewers should also be aware of time delays, slowing down their

Why video interviewing fails Top reasons given by jobseekers who dislike video interviews

18% 21% 13% 27% 9% Poor audio/video quality

Uncomfortable on camera

Discrimination concerns

Connectivity issues

Visual distractions for interviewer

Source: Software Advice

SUPERSTOCK

“People may be more nervous on video – some allowances could be made”

delivery speed and leaving a pause after the interviewee speaks to avoid talking over each other. And while the technology could still let you down on the day, Wong says steps can be taken to minimise this risk: “It is important to ensure things work smoothly on the technical side to give a good impression, otherwise candidates might think the company is disorganised. Make sure all of the technical equipment is set up properly and tested before the call, and prepare a back-up plan if there is any technical problem on the day, such as switching it to a phone interview or rescheduling to another time.”

While both parties should treat a video interview as seriously as face to face, hiring managers should consider the context. “Some people could be camera shy and they might be more nervous being interviewed over video than they would in person. While it is still important to assess how much eye contact candidates are giving, or if they are smiling during the interview, some allowances could be made.”

The business should also realise that not all recruitment managers will be entirely comfortable with video interviewing. “It is always a good idea for interviewers to receive interview training to ensure a consistent experience for candidates in a manner that reflects the company’s values, whether it is a face-to-face, video or phone interview,” says Wong.

People Management Asia

31

No matter where they are, line managers and HR professionals find discussing poor performance a nerve-wracking affair. And according to Darryl Parrant, group managing director for Singapore-based Align HR Consulting, many Asian businesses fail to deal with the problem adequately. “It is vital that managers have more courageous conversations with employees who are not performing,” he says. “Building high-quality teams and organisational capability is a key priority for Asia, and it starts with performance improvement at individual and team levels.”

Zubin Zack, director and chief recognition strategist at O.C. Tanner India, recognises that giving negative feedback to employees can be difficult.

But he points out that managing performance continuously, not just addressing issues when they occur or once a year as part of a performance review, makes the process much easier.

“Performance should be an ongoing discussion, which starts as soon as a member of staff joins an organisation by outlining and agreeing goals and expectations between them and the line manager,” he says.

Both Parrant and Zack recommend the ‘sandwich approach’ to discussing poor performance. With this method,

José Mourinho felt his players let him down before his Chelsea exit

you give the employee some positive feedback, followed by what you would like to see improved and ending with something positive. “Always finish with a motivational comment to encourage them to want to improve, rather than a negative, which will demotivate them,” Parrant says.

“Try asking the person rather than telling them. For example, ‘do you know what I would like to talk to you about?’ or ‘can you help me understand how I can help you with this performance situation?’ It’s vital not to criticise the person directly.

Focus on the behaviour, so it’s easier for the listener to absorb.”

“Always finish on a positive to encourage them to want to improve”

Capco on performance Capco is a business and technology consultancy for the financial services industry with offices in Hong Kong, Kuala Lumpur and Singapore. Isabel Naidoo (left), human capital lead, explains how the firm manages performance: “We ensure our employees have very specific objectives that are clearly communicated and referred back to during the year. This helps them understand what great looks like. We use the EEC model to give feedback – first giving a concrete Example of what they have done; then talking about the Effect this had; and finally covering what we would like them to Change or Continue.

“We encourage managers to give as much feedback as possible so that staff don’t only get feedback when something is going awry. This builds trust, which is fundamental for all feedback to be well received. We also offer all our employees a coach alongside their project manager, who can bounce ideas around with them and help guide them in their development.”

32

People Management Asia

GETTY IMAGES

3

Manage a poor performer

He suggests employing phrases such as ‘we can work on the next report together so you better understand what I expect from you’ and recommends showing vulnerability (for example, ‘when I was in your position I also made mistakes’).

Zack highlights the need for managers to be confident in having tricky conversations, and says having clear performance objectives in place can assist this. “Talk through where they are now and where they need to get to. It’s important that it is a two-way conversation and not a ‘telling off’, so discuss why there are gaps and how you can resolve them together. Conclude the conversation by agreeing actions and a timescale to achieve them. If you keep the discussion professional and fact-based, there will be no reason for the employee to become argumentative or defensive.”

Offering training and mentoring can sometimes be appropriate, but, whatever action is taken, Parrant believes it is important to give the employee hope.

“Change will only come from inspiration, hope, aspirations and goals, delivered with passion and conviction. Anyone giving performance feedback or having a courageous conversation always needs to show a level of collaboration, so the employee feels they have support and purpose to want to improve.”

The Knowledge

The idea that HR professionals struggle with the numbers has been shown time and again to be an inaccurate stereotype. But it is true that the requirement for senior professionals outside the financial department to be able to understand profile and loss (P&L) accounts or read a balance sheet has never been greater.

According to Christine Wright, managing director of Hays in Asia, understanding financial business metrics gives HR executives greater ability to engage with and influence their peers at a senior level. “The more you can back up your opinions with solid financial data, the greater your credibility will be and the greater the likelihood that your recommendation will be followed,” she says.

“In most major organisations, the HR director and CFO are working closer together than ever before, and the more you can enhance your relationships between the teams the more effective you can be in your role.”

There are three main areas to consider. give a turnover figure, which is the value The balance sheet gives a snapshot of the of the business’s sales. When you take business’s total assets away the cost of the and liabilities at any sales, you get gross given time. It might profit, which can be include: cash available compared over time. in bank accounts, debts You should be able to correctly Meanwhile, the answer more than one of the not yet collected, stock cashflow statement questions below, according to or production costs is often the most Standard & Poor’s for unsold products, crucial information 1. You had $100 in a savings account and fixed assets (property, of all. It summarises the bank adds 10 per cent a year to the account. How much money would you plant and equipment), the business’s cash have in the account after five years if accrued liabilities inflows and outflows you did not remove any money from the (unpaid expenses) and over a given period, account? shareholder capital. certainly for the a. More than $150 The balance sheet also trading year but b. Exactly $150 c. Less than £150 shows the net asset also often monthly. value of the company – 2. You put money in the bank for two Reliable forecasting of the total assets less total years and the bank agrees to add 15 per cash movement and cent a year to your account. Will the bank liabilities. availability is essential add more money to your account in the The P&L statement to ensure suppliers, second year than it did in the first year, or is about performance employees and other will it add the same amount in both years?

– how much revenue creditors can be paid. a. More b. The same the business made “If you are looking over a period, the costs at stability, you will 3. Is it safer to put your money into: accrued and, ultimately, a. One business or investment go to the balance b. Multiple businesses or investments the profit. It lists sales sheet. If you want to revenue and expenses assess performance, that determine the then it’s the P&L,” profit (or loss) on a monthly, quarterly, says Wright. But if you haven’t got cash, bi-annual or annual basis. It will also very little else matters.

While no HR professional is likely to match the skills of an accountant, Narayanan Vaidyanathan, an Association of Chartered Certified Accountants senior manager, says it’s important for HR to broadly understand the bottom line. “Company Sales The total amount brought in by balance sheets and P&L statements, goods or services in the period used in conjunction with each other and Cost of sales The materials and labour interpreted correctly, will give a solid required to achieve those sales overview of the company’s financial performance. It’s important that HR Overheads These could include admin, professionals understand the link R&D, marketing and support functions between financial performance and Operating (pre-tax) profit business viability.”

The amount made from core activities – often reported in This can begin with your own area of the press simply as ‘profit’ the business, Wright adds. By applying the principles of P&L to HR’s own Profit after tax The most interesting figure for budgets, you can understand where you shareholders, as it gives the are deriving value, whether you are a fullest picture of profitability profitable department – and you might just turn up some unexpected outflows that need clamping down on…

Are you financially literate?

Answers 1 a, 2 a, 3 b

4

Read the company budget

Making sense of P&L accounts

People Management Asia

33

Comment

THE VIEW FROM HERE

Cultural intelligence can help businesses stand out in the global marketplace

cultural diversity at once. These Management scholars have differences present new challenges long accepted the importance for interpersonal effectiveness. of interpersonal effectiveness Cultural diversity enhances at work. Our ability to the potential for language and communicate with others is other communication barriers. central to business success, and Diversity also heightens the risk we are now developing ways of ambiguity, value conflicts, to quantify and improve it. and reasoning and decisionSocial intelligence describes the * Consultant and author with Culture making differences, while ability to understand emotions, Plus Consulting stereotypes and biases threaten motivations and behaviours * Former head of rapport and stifle the exchange of the self and others in social private bank at of information and ideas. settings. One key subset of Westpac in Singapore The workplace has changed this is emotional intelligence dramatically over the last two (EQ), and in 2011 a review of decades, and skillsets must align with this more than 1,100 studies confirmed the new environment. That is where cultural importance of EQ over cognitive ability intelligence (CQ) comes in to play. CQ (IQ) and personality traits in predicting is defined as an individual’s capability to work performance.

But one barrier to discussing and acting manage culturally diverse settings – the on social intelligence and EQ is that they knowledge, skills and abilities that enable are culture-bound. Behaviour considered us to detect, assimilate, reason and act on cultural cues appropriately. CQ is not the socially intelligent in one setting does capability for effectiveness in a particular not always translate to others, and there culture. It is instead a unifying approach are marked cross-cultural variations in to intercultural competency that helps emotional expression.

Businesses in Asia face unprecedented anyone adapt to and function in any novel cultural setting. diversity in their workforces. Workers Individuals with high CQ display interact every day with individuals four main competencies that transcend from different backgrounds, both particular cultural contexts: drive in home markets and across borders, (a willingness to work with others, often managing multiple sources of

Felicity Menzies

Individuals with high CQ cope well in culturally diverse settings

34 People Management Asia

overcoming unconscious bias); knowledge (an understanding of culture and cultural differences that takes in values and beliefs); strategy (an ability to flex mentally and move beyond our own world view); and action (altering verbal and non-verbal behaviour to reduce the risks of communication).

CQ can be reliably assessed at individual and group level, which is useful for setting development goals, selection and promotion decisions, performance appraisals and the management of multicultural teams. And because it is developed through education, training and experience, it offers businesses an opportunity to create an enviable competitive advantage. Culturally intelligent workforces have the skills required to detect cultural shifts, modify global business models for local markets, capture new markets, and establish relationships and negotiate successfully with diverse stakeholders.

CQ also supports innovation through the promotion of diverse networks, both inside and outside the organisation, and the exchange and integration of diverse perspectives, skills and experience. Not to mention the positive effects on retaining and engaging top global talent. I believe it is one of the most important ways for businesses to distinguish themselves in a rapidly converging global marketplace.

I hope HR leaders will be sufficiently open-minded to embrace this new mindset and begin to think about how CQ might affect their development and performance management programmes, as well as their own ways of working.

After all, we are all defined in some way by our culture. Shouldn’t we understand how that affects others too?

Develop your career in HR with an internationally-recognised qualification from the CIPD As employer demand for excellence in HR and people development grows, more individuals around the world are studying a CIPD qualification.

Achieving a CIPD qualification will help you: • • • •

improve and advance your knowledge in HR and people development get the skills sought by employers achieve CIPD professional membership – a badge of your professionalism help you to stand out from the crowd in a competitive job market.

Discover your study options cipd.co.uk/courses-asia

Register for the free exhibition at cipd.co.uk/IA1

A mark of your professionalism CIPD professional membership is an achievement to be proud of and sets you apart in the workplace.

Not only does it give you status and relevance with employers and an edge over your peers, it also entitles you to use designatory letters after your name (Assoc CIPD, Chartered MCIPD, Chartered FCIPD).

Become a CIPD professional member and: • • • • •

demonstrate your ability to make a difference to your organisation gain access to the latest HR, L&D and business resources expand your network by becoming part of 140,000 members around the world save money on CIPD products and services receive a copy of People Management Asia magazine.

For more information, get in touch at

cipd@cipd.asia or visit cipd.asia