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MAY 2011 $5.95

LEADING PEOPLE AND ORGANISATIONS

QUESTION FOR YOUR HR CHIEF: Are we using our A re w eu sing o ur data’ ‘‘people people d ata’ tto o ccreate reate vvalue? alue?

TOP CITIES HR leaders around the world discuss global HR matters

GLOBAL SKILLS SEARCH Australian employers look overseas to beat local labour shortages

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PAYING ITS DUES Why payroll is often overlooked

NOMINATIONS OPEN! SEE PAGE 28 FOR DETAILS


Value creation

sYdNeY CONVeNTION & exhIbITION CeNTre, 7 – 8 JUNe 2011

Value creation

Engagement

Demography

Talent

Demography Leadership Career planning

Engagement

Innovation

Performance

Gender equity Workplace investigations Technology

Workplace investigations

Strategic HR

Public sector

OH&S

Public sector

OH&S

Workplace relations Research

Human capital

Change management

Human capital

Change management

Strategic HR

Global business

THE WAY THE WAY FORWARD FORWARD

Workplace relations

Technology

Personal development Personal development

Diversity

Innovation

Performance

Risk management Gender equity

Talent

Leadership

Career planning

Risk management

Diversity

Research

Global business

The business landscape has changed forever. As an HR or people management professional, you are presented with fresh opportunities to move both your organisation and career forward. Commence an exciting journey with the new tools and knowledge you need at the AHRI 2011 National Convention. Hear cutting edge insights and fresh thinking from the best international and local thought leaders, including: Dr Kjell A. Nordström Associate Professor, Stockholm School of Economics Society 2.0: Midget multinationals, talent incorporated and the art of making money Vineet Nayer CEO, HCL Technologies Employees first, customers second: Turning conventional management upside down

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The why of work

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IN THIS ISSUE MAY 2011 FEATURES

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16

Question for your HR chief: Are we using our ‘people data’ to create value? By analysing the links between people practices and productivity, some companies are improving their bottom line.

THE GLOBAL SEARCH

HR ANALYTICS

COVER STORY

With the country at full employment, employers are often left with no choice but to recruit from overseas. HR Leader looks at some of the trends and challenges facing HR when recruiting from abroad.

THE GLOBAL SEARCH PAGE 16

20

24

Looking to broaden your horizons? Benjamin Nice speaks to four top HR leaders about the trends, opportunities and challenges they face in their adopted cities – both here and abroad – and what it’s like to work and live there.

The payroll profession is still viewed by many in HR as a back-office, low profile function – so it’s not hard to see why payroll people sometimes feel disheartened. Benjamin Nice looks at why payroll is often overlooked and what can be done about it.

HR AROUND THE WORLD

HR AROUND THE WORLD PAGE 20

PAYROLL: PAYING ITS DUES

INHUMAN RESOURCES PAGE 30

REGULARS 04 EDITORIAL NOTE 06 IN REVIEW 08 BOARD TALK 09 EMPLOYMENT LAW 10 MY BRILL CAREER 26 BOOK REVIEWS 28 HR AWARDS 30 INHUMAN RESOURCES

"These days it is critical for HR leaders to have managerial experience and a thorough understanding of their business. HR leaders also need to be comfortable with change and be able to build solutions in a rapidly evolving environment." Irene M. Tollner Head of HR Westpac Asia

May 2011 HR|LEADER 3


EDITORIAL NOTE Editor Sarah O’Carroll Journalist Ben Nice Designers Ken McLaren Anthony Vandenberg Senior production co-ordinator Mei Chew Production manager Kirsten Wissel Senior account manager Paul Desmond

Sarah O’Carroll Editor

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Gobal HR

Australian employers are once again bracing themselves for a massive skills shortage.

Advertising Paul Desmond: (02) 9422 2886 paul.desmond@lexisnexis.com.au

Factors such as the West Australian mining boom, rebuilding work in Queensland, and a handful of major IT projects throughout the

Editorial Sarah O’Carroll: (02) 9422 2207 sarah.o’carroll@lexisnexis.com.au

country are all expected to contribute to the growing need for workers in Australia. The resurgence of the skills shortage in Australia has sent HR departments scrambling to devise recruitment strategies to meet labour

HR Leader is published by LexisNexis, a division of Reed International Books Australia P/L, ABN 70 001 002 357 Level 1 Tower 2, 475 Victoria Ave, Chatswood NSW 2067 tel (02) 9422 2229 fax (02) 9422 2946 www.hrleader.net.au

demands. Although the squeeze will be felt mostly in the trades, technical and professional sectors, no industry is immune. Councils and businesses are calling for government funding to train and up-skill the workforce to meet local labour demands. But this is only a long-term solution. An immediate answer is needed, and while

Copyright is reserved throughout. No part of this publication may be reproduced without the express written permission of the publisher. Contributions are invited, but copies of all work should be kept as HR Leader can accept no responsibility for loss. HR Leader and LexisNexis are divisions of Reed International Books Australia Pty Limited, ACN 001 002 357 Level 1 Tower 2, 475 Victoria Ave, Chatswood, NSW 2067 tel (02) 9422 2203 fax (02) 9422 2946 ISSN 1833-5209 Important Privacy Notice You have both a right of access to the personal information we hold about you and to ask us to correct if it is inaccurate or out of date. Please direct any queries to: The Privacy Officer, LexisNexis Australia or email to privacy@lexisnexis.com. au. © 2010 Reed International Books Australia Pty Ltd (ABN 70 001 002 357) trading as LexisNexis. LexisNexis and the Knowledge Burst logo are registered trademarks of Reed Elsevier Properties Inc., and used under license.

casting the recruitment net overseas is one solution to the problem, it presents its own challenges. Our cover story looks at some of the difficulties facing HR departments recruiting overseas, the latest legislation impacting recruitment and some of the best strategies for a smooth overseas recruitment process. In the following feature, “Global HR“, we ask whether HR professionals in other countries are faced with similar challenges as their local peers. We speak to leading HR professionals in Singapore, Hong Kong, San Francisco and Melbourne – to compare the challenges, trends and opportunities they face in their day-to-day working world.

HR Leader 2010/2011 Editorial Board

Allen Wiseman

Roger Collins

Tracey McDonald

Joydeep Hor

Teresa Grove

Sally Kincaid

Josephine

Richard Atkinson

Former general

Professor Emeritus,

Director of

Managing principal,

Director of

Former executive

Simeone

Fomer human

manager of HR,

University of NSW

human resources,

People + Culture

workplace relations

director of people

Pacific HR director,

resources director,

Middletons

Strategies

and HR compliance,

and performance,

LexisNexis

eBay Australia and

GE Capital

ING

Kimberly-Clark, South Asia

4 www.hrleader.net.au

New Zealand


Let’s do the maths on WorkHealth checks.

Annual cost of sick leave.

Cost of WorkHealth checks.

WorkHealth checks can reduce your costs of absenteeism due to sickness. But it goes beyond the bottom line. The checks are free for small and medium businesses and are an excellent way to show that you care for your workers and are listening to what they want. Businesses with health and well-being programmes can reduce their employees’ health risks by up to 56%†. To show you care, sign your business up today at workhealth.vic.gov.au *Direct Health Solutions 2010 Absence Management Survey. †Wesley Corporate Health; the future@work health report: Employees and their Workplace (2006).

Because you care, sign up now. workhealth.vic.gov.au


in review For more information, go to www.hrleader.net.au

diversity

“All nighter” a barrier to women today

“We’re not getting the sustained improvement that we’re looking for so we need to do something else, something different.” Christine Covington, Partner & diversity Council Chair, Corrs

Most viewed on the web 1 Getting the top job 2 A management cheat sheet 3 Organisational change is top L&D priority 4 Employer references should stick to the facts 5 Gaming is future of talent management 6 Men want money, women want flexibility 7 HR must be part of strategic planning 8 Hot desking causing stress and annoyance 9 Law firm referrers take $20k finders fee 10 Offshore recruiting essential as job ads soar 6 www.hrleader.net.au

Terms such as “maternity leave”, and the badge of honour applied to those who “pull an all-nighter” to get a task done, may be symptoms of hidden gender biases preventing women from reaching law firm partnerships. That’s the opinion of Professor Bob Wood who, with the help of Corrs Chambers Westgarth, Westpac, ANZ, Santos and NSW Police, hopes to provide solutions to long-standing challenges preventing women from reaching leadership positions via The Gender Equality Project. Researching the issue with the Melbourne Business School’s Centre for Ethical leadership, Wood hopes his data will uncover subconscious “gender biases” associated with workplace language and behaviour. From there, participants will aim to explore “game changers” that may promote more long-lasting change. “People are saying there are some inherent mindsets that make it very difficult to make progress,” Wood told HR Leader. “While we believe you’ve

got to change individuals, unless we change the fundamental context - like the meaning of work and the meaning of success - we won’t get anywhere.” Participants on the project attended a two-day planning workshop earlier this month and heard from Sex Discrimination Commissioner Elizabeth Broderick on the extent of gender inequity in senior managerial positions. Participant Christine Covington, a partner at Corrs and chair of the firm’s Diversity Council, said she hopes the project can deliver some significant and sustainable workplace change. “Some leaders in the field [of diversity] are beginning to say ‘it’s been twenty years, we’ve been trying, we’ve been beating the drum, we’ve been developing programs but we’re just not getting there’,” she said. “We’re not getting the sustained improvement that we’re looking for so we need to do something else, something different. “ For full story see hrleader.net.au

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%

of office support staff and administrative workers in Australia feel forced to work outside of regular office hours.

strategy

Hr must be part of strategic planning With companies failing to effectively communicate strategy, nurture top performers and align performance related pay; HR professionals should “step up”, and aim to be at the heart of strategy execution. Research from Accenture and SuccessFactors revealed that 80 per cent of business leaders fail to communicate or execute strategy throughout their organisation. The survey also found that companies are struggling to monitor, motivate and retain employees, with only 17 per cent of employers recognising and developing top performers for future roles within the business. The whitepaper response to the research stated that HR now had a special opportunity to deliver a business critical role and become part of the planning and execution process to help businesses prosper.

“At this pivotal time, the data from our study shows that some get it and are rapidly becoming the business leaders in this next economy; others are stuck in the ‘personnel’ mindset and as a result will be further marginalised within the business if not outsourced,” said the whitepaper. The response, co-authored by Erik Berggren, vice president of customer results and global research and Vinzenz Kremer, managing director and executive partner at Accenture; focused on “The New Economy” and highlighted the importance that the HR function played within modern business practice. “The HR function should be at the heart of strategy execution and is often the owner of processes and systems which will determine the success of

strategy execution. Historically HR has rarely fulfilled its potential in this regard,” the paper stated. “The difference between winners and losers will be the recognition of the business critical role that HR plays. Those companies that relegate the role to paper pusher and administrative fulfilment should outsource the function and consider where they will fall as the Next Economy separates winners from losers.”


IN|REVIEW

AWARDS

LEARNING & DEVELOPMENT

I love beating Qantas: Virgin Blue HR chief

Organisational change is top L&D priority

Virgin Blue triumphed over rival Qantas after it was named as Australia’s most attractive employer at the Randstad awards month. With the ceremony marking its first ever appearance Down Under, senior executives and HR directors watched on as Virgin Blue were announced overall winners, ahead of Qantas and BHP Billiton, who came second and third respectively. Other winners on the night included BHP Billiton who beat Rio Tinto in the mining category of the best employer, and also Macquarie Bank who beat Commonwealth Bank and AMP in the finance sector. Virgin Blue HR Director, Richard Tanner accepted the award on behalf of the company and started by announcing that “he loved beating Qantas”. “We know from experience that we have retained a competitive edge as an employer of choice not because of the remuneration or senior packages that we offer, but fundamentally because we have a unique culture,” said Tanner. “We challenge the way things are normally done, and we encourage innovation whilst remaining relevant.” The award will come as a boost for Virgin Blue which had a tough 2011 so far, most notably plagued by controversy following discrimination claims from two former female employees earlier in the year. Working in the public relations department, both women were made redundant in June last year, after a company restructure failed to incorporate their current positions, allegedly because one was pregnant and the other was taking parental leave.

Organisational change and development has been cited as the number one issue on the learning and development agenda in the UK, according to a recent CIPD survey. The research, led by The Chartered Institute of Personnel and Development (CIPD), found that 47 per cent of respondents expected to see organisational change topping the agenda for learning and development (L&D) issues in the coming two years. Citing performance management, organisational development and increased coaching integration as the main factors predicted to drive the changes, the Learning and Talent Development Survey questioned 600 organisations throughout the UK. “Learning and development specialists across the country will be judged over the next two years on how well they support organisations as they aim to gain competitive advantage through their employees,” explained Dr John McGurk, learning and talent planning adviser, CIPD, who also said that organisations should welcome the findings. Among other anticipated changes in the L&D arena were a greater responsibility devolved to line managers, plus more emphasis on monitoring, measuring and evaluating training effectiveness. For full story see hrleader.net.au

Randstad CEO Fred Van Der Tang (right) presents Virgin Blue HR Director, Richard Tanner with the Randstad Most Attractive Employer Award

Hitting back at the critics and the media, Tanner said that Virgin Blue was a leader in issues surrounding diversity and equality, and noted that more than half of the workforce was female. “Notwithstanding the recent media, we are an industry leader of supporting women in the workplace,” he said. “In fact, half of our executive team is female, which is something unheard of within the aviation industry, and indeed, across most industries.” “We have a range of measures to ensure that women are able to take breaks from work and remain connected to the workplace and come back to the work environment successfully.” ASSESSMENT

Employer references should stick to the facts Employers should exercise caution when they provide references for ex-staff members, a senior workplace lawyer has warned. Although reference checks are generally seen to be a standard part of the recruitment process, Peter Ferraro, senior associate for Harmers Workplace Lawyers said that by disclosing such information, ex-employers risked being held responsible for claims of defamation or misrepresentation. “Reference checking provides a potential employer with valuable information when it comes to assessing whether or not a candidate is suitable for a role, yet there is a fine line between providing too much or not enough information about a candidate’s skills, previous experience and their ability to do

the job,” he said. Sticking to the facts, said Ferraro, is the shrewdest approach that employers could use, and would help to reduce the risk of being held accountable for an unsuccessful job application. “If you do want to provide a character reference for a former employee, do this cautiously as you don’t want to run the risk of being held liable for defamation because you provided an unfavourable reference for someone that didn’t get the job,” said Ferraro. The senior associate for Harmers also pointed out that employers were under no legal obligation to provide a reference, and that by just confirming the details of a person’s employment was perfectly acceptable.

With many organisations recently implementing a “no written reference” policy, Ferraro argued that there was now an even greater importance on the validity of verbal references, and gave tips to employers such as: provide factual and truthful information and avoid disclosing personal details about the candidate’s details that may hinder their chances of securing a role; don’t talk up a poor performer for the sake of placing them elsewhere; if you can’t answer the questions honestly, or you don’t want to be negative, don’t answer the questions; and instead of providing a character reference, this could be handled by saying “I know Sharon in a professional capacity and to my knowledge she did her job properly.” May 2011 HR|LEADER 7


in review For more information, go to www.hrleader.net.au

boarD talk

DiverSity

DaviD MortiMer

Men want money, women want flexibility

Ao chAIrmAn leIghton holdIngs

Mentoring certainly has a key role to play in identifying and developing tomorrow’s board leaders. It should be a part of every organisation’s leadership and development strategy. Not only does it assist with the retention and recruitment of talented employees, it exposes experienced directors to those who will eventually fill their shoes. Personally, I believe that mentoring has an important role to play in encouraging diversity on our boards by creating pathways for women to the top. Business leaders have to take an interest in emerging talent and understand potential barriers to their participation in more senior roles if we are to widen the pool of board candidates to more diverse perspectives, skills and experience. That is why I am pleased to support the Australian Institute of Company Directors’ Chairmen’s Mentoring Program as a mentor again this year, following my interaction with two mentees last year. We have seen a shift in boardroom attitudes regarding the appointment of female directors, and a high level of commitment shown to achieving greater gender diversity on Australian boards and within senior management. For example, Leighton Holdings has developed a Group Workforce Diversity Policy which aims to increase female and Indigenous participation in Australia and optimise the local workforce in established offshore markets. While a total of 79 boards in the ASX 200 – including Leighton – still do not have any women, significant ground is being gained and a continued effort is critical to maintain momentum. What is needed is sustained cultural change with respect to both board recruitment and selection practices and the promotion of women in senior management. This is the only way that we will be able to address the ‘pipeline problem’ in the longer-term and ensure that qualified women are represented in our senior executive ranks and available and ready for future board placements. David Mortimer’s top 3 mentoring tips: There is no one-size-fits-all approach to mentoring – tailor your mentoring relationship to the specific needs of the mentee. Goal setting is critical. Some mentees are interested in networking, some are drawn to the fact that they can have open conversations with a Chairman and for some it is about confidence building and improving their presentation and board skills. Don’t underestimate the barrier that logistics can provide. I have seen productive mentoring relationships fall apart because we can’t agree on the next time to meet. 8 www.hrleader.net.au

Ever thought of what you would look for in a potential employer? The chances are that if you are a woman, your priorities would be far different to that of a man, according to new research from Randstad. In a survey of more than 7,000 Australian job seekers, the research found that men are more likely to look for money and career progression; meanwhile women were found to be concerned with issues such as flexibility and a strong workplace culture. The research was part of the build-up for the Randstad Awards, which recognised Australia’s best employer last month.

“It is important for employers to recognise that men and women often have very different requirements”

process – from preparing the job description and writing the job ad, to conducting the final interview,” he said. The survey found that the top priorities for males and females included:

randstad ceo Fred van der tang

Men: Career progression opportunities Financial stability Strong management/leadership Strong image & reputation Long term job security

Randstad CEO Fred van der Tang said that the research demonstrated the need for a measured approach to talent attraction. “It is important for employers to recognise that men and women often have very different requirements and it is wise to focus on applying this knowledge through the entire hiring

Women: Flexible working environment Strong workplace culture Convenient location Good work/life balance Good learning & development

recruitMent

Supersized recruitment at McDonalds Fast food mega-chain McDonalds held its first US National Recruitment Day last week, in a bid to hire 50,000 new employees in just one day. With more than 13 million people currently looking for work in the US, thousands of hopeful applicants turned out at stores across the country hoping to land a job at one of 14,000 stores. In an attempt to hit back at critics and boost its ‘McJobs’ image, McDonalds said that its first National Hiring Day was a way to highlight the opportunities that existed within the company. In particular the fast-food chain said that its training and development programs were second-to-none, and offered opportunities to focus on leadership, team building and creative thinking, which would enable willing employees to develop a serious career at McDonalds. “We’re proud of our food, and we’re just as proud of the jobs we create,” the chain said about its recruitment plans, which would see its number of staff increase by seven per cent. While McDonald’s have painted the event as a boost for the American economy, the real purpose, industry experts told the Associated Press, is that McDonald’s needs to portray itself as a decent employer. For a company whose jobs often end up at the butt of a joke, the challenge is certainly a tough one, with “McJob” even finding a place in The Oxford English Dictionary; defined as “an unstimulating, low-paid job with few prospects.”


employment|law

‘Humiliated‘ aircraft engineer awarded $85K An Indonesian aircraft worker has received $85,000 in compensation after his employer was found guilty of breaching adverse action provisions in the Fair Work Act. In what is thought to be one of the first adverse action cases of its kind, Djoko Puspitono, who worked in Perth for the International Aviation Service Assistance, was awarded compensation for ‘‘distress and humiliation’’. In 2009, Puspitono was sacked after he made complaints about not receiving overtime, but was reinstated after lodging a successful unfair dismissal claim. However, just five months later, the engineer was sacked for a second time after being told that he had an “unsatisfactory personality”. The court awarded Puspitono $76,500 for loss of wages and remuneration, and $7500 for hurt and humiliation. In a subsequent judgment, a further $10,000 in pecuniary penalties was awarded against the employer, which the representing union, the Australian Licenced Aircraft Engineers Association, will receive.

Joe Murphy, director of Australian Business Lawyers & Advisors, said the ruling was a significant win for Puspitono and the union. “In this case what was significant was that the employee was awarded damages on the basis of hurt, humiliation and distress. Ordinarily, an employee would seek compensation for psychological injury by way of a workers’ compensation claim. In cases involving adverse action, damages or compensation for hurt, humiliation and distress has now been realised and is likely to feature in future claims.” Murphy said the decision sent a positive message to other employees in similar cases. “It certainly sets a precedent. I think it means you’re going to see claimants relying on this matter when making similar claims and they will undoubtedly be more hopeful of an award from a court in the nature of compensation and penalties,” he said. Giri Sivaraman, senior associate at Maurice Blackburn Lawyers, who acted for Puspitono, told The West Australian that the case was a significant win for his client who had been treated in a ‘‘disgraceful manner” by his employer.

“In cases involving adverse action, damages or compensation for hurt, humiliation and distress has now been realised and is likely to feature in future claims” Joe Murphy, director, Australian Business Lawyers & Advisors

“The decision confirms that action by an employer in response to a complaint by an employee made before 1 July 2009 is unlawful. It also highlights that making a negative assessment of an employee that adversely effects the continuation of his employment is ‘adverse action’,” said Sivaraman. “This case also shows that the court can order the employer to pay lost wages, compensation and, very importantly, damages for the hurt and humiliation suffered by the employee. In this case we can see the workers when they raise legitimate grievances and enquiries.”

May 2011 HR|leaDeR 9


my brilliant career Bruce Hodgins Head of human resources, Jones Lang LaSalle Australia. What is your current role and how did it come about? I am the head of human resources for Jones Lang LaSalle Australia. I had previously led the HR function for Hewlett-Packard and after 14 years in the IT industry sought a change to rejuvenate my career. Property and professional services have always been of great interest, so it was a nice fit.

How did you get into HR? Like so many, by accident. I was presented with an opportunity around the time of leaving school to take on a cadetship-type role in the public sector while studying part-time. I was privileged to have some talented HR leaders that sponsored some great opportunities for me.

What is your career ambition? To continually promote and develop employee capability, future leaders and HR talent. Leading the HR function provides never-ending opportunity to achieve that ambition.

What has been your biggest achievement to date? Sponsoring the development of HR talent. Winning the Australian Human Resources Institute NSW Best Employer Award while at HP was great recognition of the achievements of the team I led.

What do you think it takes to succeed in HR? Strong business relationships and knowing the “basics” of HR.

What advice would you give to graduates considering a career in HR? Seek broad experience across as many facets of HR as possible – L&D, recruitment, C&B, change management, acquisitions and HR service centres. Take in broad experience before you choose to specialise. Finding a mentor to help guide your career is usually very helpful.

Describe yourself in three words. A non-stop learner.

Do you have any role models, professionally or personally? A handful of HR leaders both in Australia and overseas that were prepared to help me learn. I also have enormous respect for the leadership capability of James Strong [chairman of the board of directors at Woolworths] and the talent and organisation development work of Ed Lawler [professor of business at the University of Southern California Marshall School of Business, and founder and director of the university’s Centre for Effective Organisations]. 10 www.hrleader.net.au

"Seek broad experience across as many facets of HR as possible ... before you choose to specialise"


hr AnAlytics

McKinsey Quarterly special report

Question for your Hr cHief: Are we using our ‘people dAtA’ to creAte vAlue? By analysing the links between people practices and productivity, some companies are improving their bottom line.

H

uman resources executives have aspired to be strategic advisers to business leaders for at least a generation. But it’s been a struggle for many because it’s so difficult to measure the business value of HR approaches. Questions such as “What is the ROI of training?” and “Which screening techniques yield the best performing recruits?” or “What target-setting approach will best motivate performance?” have been met with imprecise answers. Today, however, new tools and methods for analysing data enable HR to define the link between “people practices” and performance more effectively. This couldn’t have happened at a better time, since CEOs are hunting for value anywhere they can find it. The upshot: if you and your head of HR haven’t recently discussed ideas for using data to generate a talent strategy that’s more closely linked to business results, it’s time to start. Why now? For starters, the widespread adoption of enterprise resource planning and HR information systems has made data on business operations, performance, and personnel more accessible and standardised. Furthermore, the rise of HR information systems has generated a community of software and technology intermediaries that can help HR and business executives use data to find links between talent management and labour productivity. Finally, the consolidation and outsourcing of transactional HR work has compelled many leaders of the function to take a first step toward quantifying and reporting HR costs and performance. These trends, coupled with the universal imperative to get more for less, have led some

12 www.hrleader.net.au

companies to discover new ways of using HR analytics to create value. The Bon-Ton chain of more than 280 department stores in the United States, for example, leveraged its data to identify attributes that made cosmetics sales reps successful. Now it screens potential reps using a test of cognitive ability, situational judgement, initiative taking, and other relevant traits. Those who score in the top half tend to sell 10 per cent more product than the others and tend to like their work more. Since 2008, the chain has seen an increase of $1400 in sales per representative and 25 per cent lower turnover among them. Other pioneers are emerging, particularly in industries where people are central to value creation (notably banking, health care, and retailing) and where scarce technical expertise governs growth (such as technology and upstream oil exploration). While the specific people-related practices that add value will differ by company – industry dynamics, talent scarcity, growth rates, and corporate cultures all influence the answers – the organisations that we’ve seen get the most value from investing in HR analytics all use some variation of these four steps. 1. Focus HR on business priorities Most HR teams view, organize, and measure their activities through the traditional employee life cycle: starting with recruiting, hiring, and “on-boarding” and proceeding to evaluation, training, and development. For HR analytics efforts to work, however, the function’s leaders must view problems – and value creation opportunities – as business leaders do.


HR AnALytics

“Typically, a strong partnership is crucial for identifying and prioritising issues that intertwine people challenges and business result”

Executives at Pittsburgh-based PNC Financial Services, for example, suspected that their tendency to pick experienced outsiders over internal candidates in hiring decisions might be hurting the bank: once hired, the outsiders were too often viewed as lukewarm performers. So in 2009, PNC’s HR team partnered with colleagues from the company’s marketing-analytics group to analyse the sales performance, over several years, of external hires versus people promoted from inside. What the team found confirmed the suspicions: in a number of key job categories, internal candidates were significantly more productive in their first year than experienced external hires. In subsequent years, the outsiders narrowed – but never closed – the gap. Millions of dollars in value were at stake. It’s unusual for business or HR leaders to spot pain points such as these on their own. Typically, a strong partnership is crucial for identifying and prioritising issues that intertwine people challenges and business results. PNC’s team, for example, asked line executives what they saw as the highest-value opportunities for improving talent management. From these discussions, the analytics team distilled a top-20 list of business questions and hypotheses to test, such as “What is the business impact of training investment?” and “Is there an optimal distribution of performance ratings?” The PNC team then ranked the resulting list of issues by their expected business impact and the feasibility of conducting meaningful analysis. “This is where HR has the chance to prove itself,” says Jay Wilkinson, PNC’s new HR vice-president of analytics. “Better than coming to [business leaders] with tired best practices, we’re asking them how they define success specific to their business, and that provides the context for our analysis and recommendations.” Google is another company with an HR team that partners with business leaders seeking analytic insights. According to Prasad Setty, head of Google’s people analytics group, “We are looking to inform decision-makers with data so they can be as objective and bias free as possible.” Setty’s team has, for example, provided business executives with a systematic approach to reassessing provisionally rejected candidates. The team’s analysis of profiles that lead to success at Google helps it identify potential false negatives and to revisit these candidates. This technique has helped the company “save” many hires it would otherwise have missed. 2. Start with what you have Quantitative problem-solving skills may be hard to come by in the HR department. Therefore, senior executives who are eager to

May 2011 HR|LEADER 13


hr AnAlytics

McKinsey Quarterly special report

begin should push their HR leaders to draw in analytical resources wherever they exist. All that’s required is the ability to engage business leaders in efforts to identify issues and structure problems in a nuanced way and then to follow through with advanced data gathering and statistical analysis. Retailers, for example, typically entrust analytics to store operations analysts who understand the high priority the business places on containing labour costs. PNC’s capability emerged from its marketinganalytics group. Other companies lean on finance or strategic planning. Most pull the necessary people into the HR function over time, as PNC did in the course of a year when it decided to build a specialised HR analytics department. And remember: many analyses can be conducted using existing data and systems. Some work may be needed to match payroll data or training-attendance rosters with sales performance results, for example, but creative, persistent analysts can answer most business questions without new, sophisticated, or costly tools. 3. Go beyond traditional HR solutions New insights often require additional problem solving to go from theory to practical solutions. HR analytics succeeds when human resources and business leaders work together to address the root causes of problems and to pilot new ways of solving them. Google, for example, did a study to examine whether good managers matter – and, if so, how – within Google’s specific culture. Setty explains that “through various methods, we found positive relationships between good management and retention and the performance of teams. We then conducted double-blind interviews to identify the key behaviours exhibited by our best managers. We found eight behaviours that make a good manager and five pitfalls to avoid. These are

now incorporated into our manager-training programs and coaching sessions, and teams provide feedback to managers on these behaviours to help them understand where they’re doing well and where they can get better. The vast majority of our lower-rated managers have improved as a result.” 4. Make it stick Once a company has a few successes with HR analytics, it can build a lasting source of value creation by integrating analytics practitioners into its day-to-day business and HR rhythms. Several companies, for example, have established a routine of having HR or other “people strategy” staff join business reviews to identify priorities for analysis. This practice helps senior line executives conduct problemsolving discussions around HR-related issues and to plan for action as findings emerge. HR analytics practitioners must also commit themselves to the habit of measuring and

“Advances in technology are creating opportunities for senior business and HR leaders to start a new kind of dialogue about the link between people and performance” 14 www.hrleader.net.au

reporting on success. At financial-services giant ING, for example, business units and HR share a comprehensive dashboard, supplemented by regular reports, to show progress on key metrics. Similarly, a global oil giant’s people-strategy group reports progress at four stages of a project’s development: data gathering, analysis, developing solutions, and piloting. This approach helps HR and business leaders understand that progress is happening even when stages may take weeks or months to complete. It also provides a clearer understanding, in both directions, of changing priorities and emerging findings from the work. Advances in technology are creating opportunities for senior business and HR leaders to start a new kind of dialogue about the link between people and performance. That dialogue will help HR executives demonstrate the impact of their work and achieve their goal of strategic partnership with other members of the senior management team – and, of course, it will create value for the enterprise. This article was originally published in McKinsey Quarterly, www.mckinseyquarterly.com. Copyright © [2011] McKinsey & Company. All rights reserved. Reprinted by permission.


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Global skills search With a skills shortage crippling industry across Australia, employers are being left with little choice but to recruit overseas. However, as HR Leader discovers, it’s not always the best solution to the problem

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“If they can’t find them in Australia, and we can’t find them in Australia – nobody can find them in Australia. We then need to do an international campaign to try to find them” – Graeme Doyle, director, Hays

16 www.hrleader.net.au

he competition for employees is on again as the economy stabilises and employer confidence grows. More than 50 per cent of companies claim to be suffering a skills shortage, and it’s only set to get worse, with the Federal Government projecting a shortfall of 36,000 tradespeople in the resources sector by 2015. Responding to these labour market pressures is a huge challenge for HR departments, and when there are not enough people to meet the demand, employers are often left with no choice but to recruit overseas. It’s not an ideal situation – it is more expensive and carries more risks – but it’s often the last resort for employers looking to grow their business. “We’ve had clients come to us and say, ‘We need to hire these types of people and we’ve been trying to find them in Australia’,” says Graeme Doyle, director at Hays. “In some situations we search and we can’t find them. So if they can’t find them in Australia, and we can’t find them in Australia – nobody can find them in Australia. We then need to do an international campaign to try to find them.” The resurgence of the skills shortage in Australia has sent HR departments scrambling to devise recruitment strategies to meet labour demands. Although the squeeze is felt mostly in the trades, technical and professional sectors, no industry is immune. In an attempt to rectify the looming shortage, councils and businesses are calling for government funding to train and up-skill the Australian workforce to meet labour demands. But this is a long-term solution. An immediate measure is needed, and although casting the recruitment net overseas is one solution to the problem, it presents its own challenges.


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May 2011 Hr|LeADer 17


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Recruiting overseas According to Doyle, nearly two-thirds of large organisations are actively opening up to overseas recruitment, and while many companies look to familiar locations such as the UK and Ireland, there has been an increased interest in both mainland Europe and Canada recently. “The first step generally tends to be towards the UK and Ireland, and the benefits of that are similar banking and financial services systems, similar qualifications in terms of the engineering and technical markets, but also a very comfortable relationship between these countries,” says Doyle. “Out of Asia we tend to focus on trying to appeal to expats to make the move back.” Resources, mining and engineering is the sector experiencing the greatest lack of skilled people. But it’s not just the resources sector feeling the pain; the injured financial sector is on the mend and recruiting again. “Even the financial services area is starting to build up their numbers again and there’s an attractive quality pool of people sitting in the UK and Ireland, where, because of the economic climate, they are interested in making the move over here,” he says. Doyle says the most successful overseas recruitment campaign occurs when the employer is directly involved in the recruitment process overseas. As this can be an expensive and time-consuming process, long-term forward planning is vital to the success of overseas recruitment. Generally, the timeframe from the beginning of the recruitment process to the day the new recruits land in Australia is six months. This highlights the need for employers to prepare now for inevitable skills shortages in the coming two years. Employers can start by putting in place a workforce plan, analysing the employees they will need in six months time, and assessing whether that skills pool is available in Australia. “One of the biggest challenges for HR departments is to be able to predict what those needs are going to be,” says Doyle. “Having workforce planning in place is essential to allow the whole project to work well. Also having a commitment from the company to do that is vital.” Branding overseas Another factor employers must consider when recruiting overseas is how to build their brand in a foreign market. An unfamiliar company brand can make it more difficult to entice employees to relocate. This is another example of why it is beneficial for the employer to be actively involved in the process. Doyle says that some of the overseas 18 www.hrleader.net.au

“The issue around English language ability is one the Government takes very seriously and I doubt it is going to give any major concessions on that” – Robert Walsh, managing partner, Fragomen

recruitment success stories he has experienced have been when the employers partner with the recruiter and take the opportunity to sell their business overseas. This approach enables the employer to give a greater depth of information about their organisation. The key to successful recruitment overseas, says Doyle, is good preparation. “If a company is interviewing in the UK for 12 jobs in Sydney, they should be confirming offers before they leave the UK,” he says. “So while they will set aside a certain amount of time to do interviews, we recommend that they then set aside a number of days to produce offers, do the reference checking, and actually leave the UK with the number of people ideally that they’re looking for – offered, accepted and confirmed. Then their details can be handed straight over to a migration lawyer to do the visas.” Any delay in this process can lead to failure, says Doyle, because there can be implications with time differences – making the process more difficult. “The project is to go over and secure people rather than just go through the interviewing process,” he says. “As the timeframe starts to blow out, the chances of candidates who you have made an offer to ultimately making it to Australia begin to slim.” Some of the other factors that employers need to take into account, especially in skills-short areas, is that companies are competing with other Australian companies abroad, so making sure that there is a good relocation package available in terms of flights and accommodation is critical. “It’s important to make the move as simple as possible for those looking to relocate,” says Doyle. Immigration challenges According to Robert Walsh, managing partner of immigration law firm Fragomen, there has been a surge in immigration enquiries right across all industry sectors, with some of the biggest demands coming from resources, oil and gas, particularly in Western Australia and Queensland. IT and health, he says, are almost constantly searching for people. In the lead-up to the federal budget, the Government is looking at various strategies to try to assist companies to bring skilled workers into Australia, but immigration hurdles remain. “For professionally qualified people with the relevant experience, it really is a simple process to obtain a 457 visa,” says Walsh. “Where the real issues are going to come is in the trade occupations, because there have been changes to English language skills and skills


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assessment. We haven’t really seen those played out, because the demand for tradebased people has not really picked up since those rules were changed – which happened at the low point in the immediate aftermath of the GFC.” Walsh says that as new big projects in Western Australia and Queensland come on stream, there is going to be an increased demand for trade-based migration into Australia. He believes the issues around English language ability and skills assessment could become a real issue particularly when hiring from countries such as China, the Philippines, Vietnam and central Europe. “The issue around English language ability is one the Government takes very seriously and I doubt it is going to give any major concessions on that,” says Walsh. “Although it might get to a situation where it [the Government] needs to make changes, always in the background are the occupational health and safety issues about having people in a potentially dangerous work environment who don’t have the English language ability to

deal with OHS situations – that’s the real crunch point.” Walsh says that if a company is essentially a good employer with a good track record, then the rules are not that difficult for them to meet. “Most employers who are clearly operating within the Fair Work legislation are going to be able to sponsor workers for the 457 visas without a lot of hassle.” Another issue facing employers is around processing times, which can delay hiring from overseas. It’s one of the issues the Government is hoping to address in the upcoming budget, allowing 457 applicants in certain industries to be processed more quickly. The visa consideration needs to be upfront before embarking on an overseas recruitment strategy, says Walsh, and should not be thought about after the hiring is complete. However, companies are not limited by the number of 457 visas they can apply for. “The Government likes to say that the 457 visa process is demand driven, and if a company meets the criteria and they need people because they can’t find them

onshore, then they should be allowed access to these visas.” Last-minute tip There are a range of effective tactics human resources departments can employ when recruiting overseas. “You can do things such as social nights during recruitment, to get the buy-in from the candidates and encourage them to make the move,” says Doyle. Ultimately, though, Doyle says it is a different ball game when recruiting from overseas and it takes a lot more management than local recruitment – and therefore more preparation and attention. “If the entire process is not managed properly, you can will end up with a high drop-out rate,” he says. For case studies on this topic, see the upcoming Skills Shortage Series online at www.hrleader. net.au. In our first case study, we profile a start-up firm in Western Australia, and how it plans to overcome the skills shortage in order to generate growth.

May 2011 Hr|LeADer 19


GLOBAL HR

HR around the world Looking to broaden your horizons? Benjamin Nice speaks to four top HR leaders about the trends, opportunities and challenges they face in their adopted cities – both here and abroad – and what it’s like to work and live there. Singapore

W IRENE M. TOLLNER HEAD OF HR – WESTPAC, ASIA

ith its close historical ties to the UK, India, China and Japan, Singapore has always relied on large numbers of immigrants. Today, 36 per cent of the population is made up of foreign workers and students. With its proximity to Australia, high earning potential and comfortable blend of East and West, the country remains an attractive prospect to Australian workers. Irene M. Tollner is the head of HR at Westpac in Asia and, as an Aussie, enjoys the simple Singaporean attitude to business and the diverse mix of cultures. What is your role and how does this fit in with the organisational structure at Westpac? My role is head of HR for Asia. I’m based in Singapore and report directly to the general manager for Asia. What current HR trends are you and your peers experiencing in Singapore? In today’s frantic, multinational, multilayered business environment, HR leaders in the region need to take a more strategic role and handle a wide range of responsibilities, often across diverse jurisdictions. Talent attraction, retention and development is an area of focus and will continue to be a challenge in the region. Describe the job situation for HR professionals in Singapore. Very strong. Singapore is a hub location for many multinational businesses, and as companies expand across borders HR professionals who have regional experience, notably in terms of understanding cross-border issues, are sought after. Give an example of a specific challenge you have faced at Westpac, and how did you deal with it? At Westpac, we are organically growing our Asia footprint and it is important for us to clearly articulate the value proposition. We have a strong appetite for talent and once we engage new talent we need to ensure we manage them effectively. The key pillar of our business

20 www.hrleader.net.au

is our people, and our Asian leadership team regularly reviews our talent. We manage this valuable resource not as a separate workplace strategy but as a key part of the overall business agenda. What kind of qualifications or specialist HR skills are in demand at the moment? HR in Singapore has evolved significantly over the past 10 years. These days it is critical for HR leaders to have managerial experience and a thorough understanding of their business. They also need to be comfortable with change and be able to build solutions in a rapidly evolving environment. These skills are in high demand in Singapore. What is the most significant challenge facing HR practitioners in Singapore? The most significant challenge is meeting the complexity of doing business today. The emerging markets of African and South American countries accelerate the need for a more comprehensive understanding of cultures that were not even on the radar screen 10 years ago. For Singapore to survive and prosper in today’s business environment, it must continue to exercise the foresight that has been the critical springboard for its success in retaining and attracting companies to this island. This will benefit Singapore’s position in the region and ultimately its people. To meet this challenge, HR must design programs that prepare for this accelerated rate of change not only through innovation but also through measurable results. What do you love about your employees, and people from Singapore in general? We have such a diverse culture in Singapore, a pool of remarkable talent and a government that has taken a strong interest in HR as a business tool. The Singaporean government has put in motion plans to emphasise HR and leadership throughout the island, making the country a hub for HR expertise in Asia. Recently we saw the establishment of LINK – Leadership Initiative for building Networks and Knowledge – a single campus devoted to leadership and talent development. It is our government’s desire to make Singapore a “home for talent”. This emphasis has created a rich source of very talented people who are not only a pleasure to work with but also to have as friends. How do you think Singapore compares to other cities around the world as a place to live and do business? Singapore is a fun place to live and to do business. Every city can be manifestly different in many aspects of living and working. The major difference with Singapore is the lack of complexity in doing business. Singapore is very young in comparison to many other cities. There are fewer barriers and more encouragement for prospective entrepreneurs. It is also the home of many multinational companies, which makes the country a perfect destination to establish a head office. Singapore’s physical location, between China and India, provides a stable political and social springboard. In Singapore we have tourist attractions that are connected to both the oriental and occidental civilisations. It is also a place where you can have serious fun while doing business, with destinations like Resorts World Sentosa and Marina Bay Sands, where work and fun can integrate seamlessly.


GLOBAL HR

Silicon Valley, San Francisco

dynamic can tip the scale for a candidate in favour of a start-up. That’s an area where HR professionals add a ton of value, by targeting talent that gels with our organisation and work culture, effectively showing candidates the value of joining – and then by providing the appropriate incentives to motivate, grow and retain our key employees. The most successful companies in the talent war are those looking at how to better source, target, attract and retain top talent.

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rawing tech-heads, investors and IT gurus from around the globe, the San Francisco Bay area boasts the status of being the No. 1 place in the world for high-tech innovation and development. Playing host to the 1990s dot-com bubble, Silicon Valley continues to go from strength to strength, and with companies such as Google, Apple and eBay all laying down their HQ roots there, ‘‘the valley’’ is still proving to be one of the top places in the world to work and live in. Mark Alfaro, human resources and recruitment manager at RadioTime, certainly thinks so – saying that in terms of innovation, there is no place like it.

MARK ALFARO

What is your role and how does this fit in with the organisational structure at RadioTime? As manager of recruiting and human resources, I report to our director of business operations, who reports to the CEO. I have two to three people on my team.

Describe the job situation for HR professionals in Silicon Valley. Overall, I’d say the HR job market is fair. The job market for recruiters is good. It feels as though we’re leading the comeback for the rest of the United States’s economy woes at the moment here in the Silicon Valley. People with similar experience to mine are getting numerous solicitations each week for recruiting/HR jobs at some very interesting companies. There is a lot going on in technology right now. It’s fiercely competitive, but that’s good for business and that’s the Silicon Valley way. Competition fuels creativity, increases productivity and generates more innovation and excitement in what we do.

What current HR trends are you and your peers experiencing in Silicon Valley? Competition among companies here in Silicon Valley is getting fierce for technical talent, especially top software engineers and web developers. As a result, large companies – and even some well-funded start-ups – are throwing money at engineers to bring them into their organisation. Every good engineer we’ve hired recently has had multiple offers; usually very good options. Start-ups and small companies can’t afford to compete with the Googles, Facebooks or Apples on immediate cash compensation. However, we’re finding that impact, potential upside and the team

Give an example of a specific challenge you have faced at RadioTime, and how did you deal with it? Whole strategies on recruiting have had to shift with the changes in the marketplace. Referrals are harder to obtain because demand is high for good talent – everyone is asking everyone else for referrals. And with many interesting companies expanding, the competition gets even rougher. As a result, tech companies must get more creative, strategic and competitive with candidate sourcing and recruiting. We have formalised our sourcing strategy, and we’re documenting what works and what doesn’t. At the end of the day,

HR & RECRUITMENT – RADIOTIME

May 2011 HR|LEADER 21


Global HR

there’s no silver bullet, because the targets and the market are ever changing. We’re adapting and, as a result, we’re able to buck some of the trends by making key hires. What kind of qualifications or specialist HR skills are in demand at the moment? Great HR people that can actually land top talent and/or retain top talent will always be in demand.

“Hong Kong is a true melting pot of cultures. as a major international financial and commercial centre with relatively little bureaucracy, a fast-paced economy prospers’’ HR leadership team as the Asia representative of all our businesses in Asia, and in this regard have accountability for the strategies pertaining to compensation and benefits, organisational development, talent acquisition and development, employee engagement, employee relations and people-related policies.

What is the most significant challenge facing HR practitioners in Silicon Valley? The talent war and its obvious impact on recruiting and retention. It’s a good problem to have economically.

What current HR trends are you and your peers experiencing in Hong Kong? A major challenge for us and many corporations in Hong Kong is the high turnover of staff. Nowadays an employee’s average length of service with a company is about three to five years. A strong economy drives rapid job growth and development opportunities for people to move upward and horizontally.

What do you love about your employees, and people from Silicon Valley in general? The people we hire aren’t in it for the money. They want to work for a company that provides a product or service that they’re passionate about – something they share with their friends and family. I love helping people that want to build something great. That’s something I really enjoy about living and working here – the people. There are so many intelligent and passionate people with great ideas.

Describe the job situation for HR professionals in Hong Kong. Since the global financial crisis, Hong Kong has rebounded strongly. Last year we saw a boom in the finance sector, with many job openings. With this sector now stabilising, we see increasing demand for commercial jobs, and the next wave will be the industrial sector. This is the typical cycle after the kind of dip in the market that we experienced in 2008 to 2009.

How do you think Silicon Valley compares to other cities around the world as a place to live and do business? What I always tell people is that if you really want to make a difference, and you want to work on great products, come to Silicon Valley. To be perfectly frank, there’s no place like it for innovation in the world. With so many talented people living in a relatively small area, the population, geography and history of the region have fostered a breeding ground for intensely thoughtful people to do great work. Here in Silicon Valley we believe we can drive the greatest economic engine in the world, and accomplish that by bringing together people from diverse backgrounds all working on the next great technology that can change the world. And when we get to live in such a naturally beautiful place as the San Francisco Bay area, it makes all the difference as well.

Give an example of a specific challenge you have faced at Avery Dennison, and how did you deal with it? Avery Dennison is in its 75th year and as we transform for growth and meet new milestones, we must position ourselves accordingly to the talent we wish to attract. In Asia we don’t have a retail presence, so our brand isn’t well known even though we employ more than 18,000 people across the region. One of our key HR goals is to enhance employer brand and employee engagement, not only to attract but also to retain talent. Specifically in Hong Kong we are launching a flexible benefits program for our staff, giving them more flexibility and choice to manage their benefits. We see this as a key differentiator and an offering that is not provided by all of our competitors. On the employer brand side, we will roll out a new campaign targeted at the key attraction drivers of the talent we aim to attract. The key for us is to ensure we are clear and concise about our employee value proposition and are capable of delivering against it.

Hong Kong

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ften put in the same bracket as Singapore, Hong Kong is another Asian destination that maintains a strong appeal to foreign talent. With a recent survey finding that 94 per cent of Aussies believe their living conditions had improved since moving to Hong Kong or Singapore, it’s not hard to see why people continue to be attracted to the region. Ranked the sixth most-popular destination to work in the world, Hong Kong is home to many Australians – including John Holding, HR vice-president of Avery Dennison. While Holding says his heart will always be in Australia, he loves the scenic countryside and the cosmopolitan buzz of Hong Kong. What is your role and how does this fit in with the organisational structure at Avery Dennison? I am the HR vice-president of our Global Sourcing Regions and Supply Chain (GSRSC) in the Retail Branding and Information Solutions division. I am accountable for all people and organisational strategies and processes across this part of our business. I report to the divisional HR vice-president as well as the vice-president/general manager of GSRSC. I also sit on the global 22 www.hrleader.net.au

joHn HolDinG HR vice-pResident – aveRy dennison

What kind of qualifications or specialist HR skills are in demand at the moment? HR business partners with strong business and financial acumen are most critical and in highest demand. In Hong Kong these can be tough to find. Professionals who have good experience and a track record in managing shared HR services are also popular in the market. What is the most significant challenge facing HR practitioners in Hong Kong? Staying on top of the growth and keeping pace with change are the two biggest issues for us. Many companies have global or region head offices in Hong Kong and use it as a base to support other locations. Staying in tune with the other locations is also critical to ensure our programs are relevant and impactful.


GLobAL HR

What do you love about your employees, and people from Hong Kong in general? Our employees are very passionate and tenacious in meeting their goals. We have a great team with lots of great ideas, strong execution and industry insights. They love customers and enjoy serving them. I find Hong Kong people very efficient, hard-working and embracing. Hong Kong is a true melting pot of cultures. As a major international financial and commercial centre with relatively little bureaucracy, a fast-paced economy prospers. This leads to a spirit and vibrancy unlike anywhere else I have been in the world. How do you think Hong Kong compares to other cities around the world as a place to live and do business? I have lived in Korea, Singapore and obviously Australia. While my heart will always be in Australia, Hong Kong is a fun place to be as well. It is so convenient to move around in the city, thanks to a worldclass transport network. It is a very versatile place in which you can enjoy the countryside and mountains in the morning and then go shopping in the afternoon – much to the delight of my family! The country parks in Sai Kung, Lantau Island and the New Territories are fabulous. The natural scenery is quite diverse, too, from parks and forests to sandy beaches – many parts remind me pieces of Australia. The fact that we have four seasons is nice as well, after living in Singapore. Hong Kong is a versatile and cosmopolitan city with a buzz and zest for life that’s hard not to like.

“doing business in Melbourne, and australia generally, feels like we’re on a different plane from the rest of the world still dealing with the gFC’’

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What is your role and how does this fit in with the organisational structure at Ernst & Young? My current role is the Oceania People leader for Ernst & Young, and I've recently had my 16-year anniversary with the firm. I have responsibility for the People team in Australia, New Zealand and Fiji as well as the Partner Matters function. I sit on the executive and report to the Oceania CEO. What current HR trends are you and your peers experiencing in Melbourne? Transforming the HR function is a key priority for us. We are doing this by maintaining a strong connection and relationship with the business to deliver services and help them to grow in the market. We are also driving efficiency in our leverage model by moving process and transactional activities into shared services functions at the Oceania and global levels. As a professional services firm our people are our competitive advantage, so we need to pick the model that supports innovation and quality service delivery while balancing the need for process efficiency and consistency where possible. It’s an ongoing journey.

Give an example of a specific challenge you have faced at Ernst & Young, and how did you deal with it? E&Y has a flat management structure and local managing partners are very strong in managing their businesses. This means there are dozens of very smart leaders around the country who all know what’s best for their business. Influencing that group to do things in a consistent way can be tough. They all agree with the need for consistency on some issues, but that usually means that everyone should do things their way! Managing relationships, knowing where to prod/cajole/flatter and when to give a bit of tough love to drive change is a uniquely professional services skill. This has been my biggest challenge recently, from obscure issues like harmonising rank definitions to strategic issues such as our approach to talent management. I suspect it has something to do with advising people on how to manage their business who make a living advising other people on how to manage their businesses! What kind of qualifications or specialist HR skills are in demand at the moment? I’m happy to say we haven’t lost enough people to find out recently. We mostly ’’grow our own’’, so we have good opportunities for people to start in one area and either specialise or move into generalist roles. From experience I’d say that good ’rem and ben’ practitioners are the hardest to replace.

Melbourne oted No. 2 in The Economist’s World’s Most Liveable Cities 2011 survey, Melbourne proves that Aussies need not travel halfway around the world to find a great place to work. Sometimes overshadowed by Sydney, Melbourne offers a slightly different experience, with a cooler climate and seemingly more laid-back lifestyle than its northern rival. However, Melbourne is home to five of the 10 largest companies in Australia, and is also an important finance centre, with NAB and ANZ both based in the Victorian city. McGregor Dixon, people leader of Ernst & Young, says that it doesn’t get any better than working in Melbourne. He likes the way people just get on with the job, rather than just talking about it.

Describe the job situation for HR professionals in Melbourne. Terrible for HR directors like me. It’s so hard to find the right people. As always, quality skills are in strong demand. It’s a fairly buoyant market for candidates.

McGREGoR Dixon people leader – ernst & young

What is the most significant challenge facing HR practitioners in Melbourne? Being a true business partner to our internal clients. We need to really understand their business and offer solutions that are relevant to helping them grow their business. It’s critical for my team to be viewed as subject matter experts with a valued opinion, not just taking an order or managing a process. The business leaders must see us as an integral part of their team if we are to be able to effect any positive change. What do you love about your employees, and people from Melbourne in general? Everyone is so supportive of each other and acts as a team. We’re a fairly understated bunch and just get on with the job, instead of talking about getting on with the job. We also lack hierarchy. Graduates can walk up and have a conversation with the most senior partners in the firm. Working with such a high-powered team in HR and the broader Melbourne office is inspiring. One of the things that people often reflect on after they’ve left E&Y is how much they had underestimated the benefit of working with hundreds of colleagues operating at a consistently high level in various specialisations. How do you think Melbourne compares to other cities around the world as a place to live and do business? I might have a slight bias, but living in Melbourne is as good as it gets. Most other places are fantastic to visit, but the quality of life for a family in Melbourne is hard to beat. Doing business in Melbourne, and Australia generally, at the moment feels like we’re on a different plane from the rest of the world still dealing with the GFC. April 2011 HR|LEADER 23


payroll

Paying its dues Payroll still suffers the stigma of being a back-office, low-profile function of HR – leaving those in the profession disheartened. Benjamin Nice looks at how the industry can combat its negative perceptions.

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ust a few weeks ago, a glitch in the IT system at NAB caused widespread frustration and panic for employees around the country after wages were delayed and thousands, perhaps millions, of people were left without money for several days. While the blame undoubtedly lay with the bank and its system providers, payroll staff across the country also bore the brunt of the blunder, with many receiving a barrage of complaints from understandably angry and confused staff who were concerned about how they were going to meet direct debit payments or their rent. Rewind four months and the same thing happened. But in that case, a data processing error at NAB left millions of customers scrambling for information, unable to access their accounts or receive their wages for up to a week. The drama once again underpinned the absolute importance that the payroll function plays within businesses and the massive scale of responsibility for the individuals who are left to deal with such episodes.

Building a presence While technology can certainly go a long way in helping to maintain a flawless payroll system, Alexia Tzovlas, HR shared services operations manager of the Australian Red Cross Blood Service, believes the key to success is to acquire and retain good talent within the function – something that is not always easy in such a low-profile and often undervalued profession. 24 www.hrleader.net.au

“Payroll has traditionally been viewed as a back-office function rather than a profit centre,” says Tzovlas. “It’s hard for payroll professionals. There’s often confusion within organisations as to whether the department sits under the finance umbrella or within the HR team, which means that traditionally they don’t have a very strong profile within the organisation.” Echoing Tzovlas’s sentiments, Jason Low, general manager of The Association for Payroll Specialists (TAPS), says he is amazed that some organisations continue to overlook and undervalue the importance of payroll, pointing out that even a small error could cost a business hundreds of thousands of dollars. Low acknowledges that it is difficult for payroll staff and notes the irony of the situation – the better payroll the team performs, the lower the profession’s profile becomes. “Payroll professionals work hard to ensure that employees are paid correctly and on time. It’s not until something goes wrong that people even think about payroll,” says Low. Tzovlas, who has more than 25 years of industry-related experience and has chaired an Australian payroll standards committee, insists that in order to combat the negativity within the profession, payroll teams must be more proactive and be seen to be more valuable and visible to the business. “It is important that payroll be viewed as a knowledge base for the organisation. This can be achieved by going through different channels within the company to provide information and advice to the workforce.


payroll

“It is important that payroll be viewed as a knowledge base for the organisation ... by providing information and advice to the workforce” For example, the FAQ section or company intranet are good places to start,” explains Tzovlas. “Payroll needs to be involved when other parts of the business are making decisions about issues in terms of people management. To have a voice and be visible can be achieved by creating opportunities within the organisation.”

Ticking the boxes Payroll – which often accounts for as much as 60 per cent of a company’s outgoings – must be effectively managed. It also has to keep up with the constant changes in legislation and compliance. In the past 18 months alone, the payroll profession has had to deal with the introduction of the Fair Work Act, the National Employment Standards and the Modern Awards. According to Tzovlas, the issue of the day is the new Paid Parental Leave Scheme, which comes into force on 1 July 2011. “Legislation is constantly on the move in payroll. One of the biggest changes that we, as a broad community, would have experienced this year is paid parental leave. Organisations need to make decisions on how they manage that,” says Tzovlas. Despite recent promises by the government to simplify future changes, Low is sceptical of the pledges and expects to see an increasing number of adjustments to legislation in the future. “Despite claims by the government of simplification, I expect that the endless changes in legislation will continue to place enormous demands on payroll,” says Low. “With a constantly changing legislative environment, the most important investment an employer can make is to have qualified and experienced payroll staff and to ensure that their knowledge is kept up to date with regular training.”

assist managers in making more informed decisions regarding overtime and staffing/service levels. “Payroll technology will always focus on process,” he says. “With our workforces more mobile and high utilisation of contingent labour, it will be critical to capture information such as time and attendance and absence for our remote workforce. We will see more enhanced solutions managing benefit plans and reducing duplication of costs.” Despite the clear advantages that new technology can offer to the payroll industry – and indeed the broader business – Low warns that companies must be careful when considering new systems, and should refrain from relying on technology as the answer to everything. “The biggest story of the year has to be the Queensland Health payroll stuff-up … they implemented a new payroll system that resulted in more than 35,000 payroll errors,” says Low. “Having already spent $64.5 million to implement the system, the Queensland Government will now spend more than $200 million to fix the faulty payroll system in a project that may take up to three years to complete.” “All employers can learn a lesson from Queensland Health – payroll is not as simple as buying a system and pushing a button.”

Keeping ahead of the game In terms of compliance, one way that companies can make it easier on themselves is to keep up-to-date with the latest technology available on the market, says Shafiq Lokhandwala, chief executive officer of US payroll software provider NuView Inc. “Since some of the most significant and critical parts of a payroll professional’s job is compliance, new payroll products and services will be designed to effectively enable compliance as well as reduce the burden of payroll administration,” says Lokhandwala. “It will be critical for technology to be flexible and respond quickly to legislative compliance changes.” In terms of current technological trends within the payroll industry, Lokhandwala says that self-service or “kiosk“ systems are becoming an increasingly popular option among employers, with staff able to access information such as timesheets, leave balances and pay slips with the click of a button – or even using their mobile phone. Lokhandwala also highlights the importance of being able to link payroll to scheduling and budgeting aspects of the business, which he says will May 2011 Hr|lEaDEr 25


book reviews Power is an important tool, whether it’s leading people or connecting with the rest of the business. Benjamin Nice selects two books that will help inspire and energise HR professionals to take action.

recharge by Alan Hargreaves Wright Books Ever wondered how some of your colleagues effortlessly power through each day with a renewed sense of energy and inspiration, while you sit at your desk counting down the hours, feeling lazy and unmotivated? If the answer is yes, rather than slurping on your third energy drink of the day, instead try picking up a copy of Alan Hargreaves’ book, Recharge. With bold promises such as “Recharge will revitalise your entire approach to business” and “achieve many of the things you have been putting off for months, or even years”, Hargreaves keeps it simple by identifying the main causes of business failure and how to take action. Adopting a welcome jargon-free approach, Hargreaves identifies 52 separate performanceenhancing lessons, and bravely states that each one should be read, absorbed and acted on in 60 minutes or less.

The elemenTs of Power Terry R. Bacon Amacom Whether someone is flipping burgers at a fast food restaurant or occupies the CEO’s chair at an ASX 100 company, most people probably wouldn’t say no to a bit more power in their working lives. And, according to Professor Steven Reiss’s 16 basic human desires, you wouldn’t be wrong or alone in this craving – with power found to be one of the most satisfying elements of all. In his book, The Elements of Power: Lessons on Leadership and Influence, Terry R. Bacon sets out to understand and conquer the concept of power, focusing on what it means to be powerful and how this can be achieved. If used correctly, Bacon argues that power is the ultimate tool for achieving success – which, he says, can be measured by a combination of factors such as knowledge, expressiveness, history, character, attraction, resources, position, network and reputation. The content of the book can be crudely broken down into three sections of analysis: Personal 26 www.hrleader.net.au

Covering areas such as management style, financial decision-making and self-motivation, each lesson pinpoints a certain problem or issue, and then offers key points, advice or solutions to help reach a favourable conclusion. One chapter, for example, looks at “Addressing uncomfortable issues”. After describing a hypothetical situation in which a manager finds himself bogged down in a tricky spot, Hargreaves proceeds to take the reader through a series of logical steps in order to rectify the situation. The steps are: define your preferred outcome, introduce objectivity, take action, and review. Each point includes a summary of how best to tackle the issue. Formatted in a clear, user-friendly layout and written in an easily digestible style, Recharged successfully identifies almost any situation that could lead you to feel bogged down or uninspired. Highlighting that “the main cause of business failure is the failure to take action”, Hargreaves may well be on to something – a great read for all those looking for that extra boost at work.

Power Sources; Sources of Organisational Power; and The Will to Power. Featuring case studies on inspirational and powerful figures such as Mark Zuckerberg, Barack Obama, Aung San Suu Kyi and Maya Angelou, Bacon discusses issues such as what the critical sources of power are in various organisations, how to build power from within, and also how easy it is to diminish power once it is established. While The Elements of Power will appeal to all those looking to acquire more power within their lives, HR professionals in particular would do well to take note of some of the key messages Bacon establishes throughout the book. They are highly relevant, especially when you consider that in the years ahead, the HR profession looks set to become increasingly in-tune with the strategic alliances of business, and therefore command more power and respect than ever before. HR professionals striving for this goal will find it an informative, inspiring and useful read. In The Elements of Power, Bacon helps equip practitioners with the knowledge that will enable them to become both powerful and influential decision-makers within their organisations.


SPONSORS

Enter Now!

Welcome to the 2011 HR Leader Awards – Australia’s most prestigious event for the recognition of excellence in HR. Now in its eleventh year, HR Leader magazine has developed the most respected awards program for the HR profession in Australia. Held in Melbourne this year, the awards are ever evolving in the quest to recognise outstanding work in people management and leadership. The HR Leader Awards (formerly known as the HR Compass Awards) acknowledge excellence across the entire spectrum of HR, with 16 categories ranging from strategic planning and innovation in recruitment through to best HR team and the CEO award for best HR champion. The awards have grown to reflect the increasingly important and complex role that HR plays in many modern organisations. They also fi ll an important gap in providing an opportunity for individual HR leaders, professionals, teams and organisations to come together to pay tribute to and celebrate HR as a profession. Every year, we aim to raise the bar in terms of standards of entry. A rigorous selection and judging process, developed in conjunction with leading academics and professionals from the HR industry, underpins the awards. Organised by HR Leader magazine, the HR profession’s leading publication, the awards will culminate in a gala ceremony on Thursday 27 October 2011 at the Park Hyatt hotel in Melbourne.

CATEGORIES Accumulate Award for Employer of Choice (more than 1000 employees)

Award for Best Talent Management Strategy Award for Innovation in Recruitment and Retention

Key Dates Nominations open Tuesday 5 April 2011 Nominations close Friday 26 August 2011 Winners announced Thursday 27 October 2011

Frontier Software Award for Employer of Choice (less than 1000 employees)

Award for Best Change Management Strategy

Award for Employer of Choice (public sector)

Award for Best Workplace Diversity Strategy

Award for HR Champion (CEO)

EmployeeConnect Award for Best Overall Use of Technology

Award for Best HR Leader Award for Best Learning and Development Strategy Award for Best HR Team Award for Best Health and Wellbeing Strategy Award for the 2011 HR Rising Star Award for Best HR Strategic Plan

28 www.hrleader.net.au

Award for Best Corporate Social Responsibility Strategy


HR AWARDS 2011

2010 HEAD JUDGES' COMMENTS

"It was a pleasure to read through the Employer of Choice submissions for the HR Awards 2010. I can honestly say, the high calibre nominations made judging a challenge" "Rob has clearly built an operating rhythm that ensures the people agenda is embedded into the way leaders work at Pacific Hydro" 2010 HR Champion (CEO) Winner Rob Grant, CEO, Pacific Hydro

"Kate has taken a strong role model position as a HR Leader. A very worthy and clear winner for HR leader of the year" 2010 Best HR Leader Winner Kate McCormack, Director, People, Learning & Culture at Mercy Health

"Allens has a very clear HR strategy linked to the business priorities that aims to build a high performing and inclusive culture that fosters personal growth and professional development" 2010 Employer of the Decade Winner Allens Arthur Robinson

HOW TO ENTER 1. Complete a nomination registration form with contact details, nominee details and payment details. This form is available online at www.hrawards.com.au. 2. Specify your category on the front page of the nomination registration form. 3. Read through the specific criteria for the category you are entering and base your submission on this criteria. Criteria for each category can be found in this document. 4. Supply between 1,000 and 1,500 words per nomination in the space provided on the nomination registration form. Please ensure you adhere to the word limit, as marks will be deducted if submissions exceed the requested word length. 5. Supply up to two attachments with supporting information such as charts and statistics to elaborate upon submissions should they require it. Each attachment must be no more than 1MB. 6. Please supply a high-resolution JPEG image to publish along with your submission in HR Leader if your submission is successful and becomes a finalist. The image could be a headshot of the nominee, photo of a project worked on or a team shot. 7. Save this document and email your nomination to hrawards@lexisnexis.com.au before Friday 26 August 2011. Entry cost: $175 (including GST) per submission.

SPONSOR PROFILES

Frontier Software Award for Employer of Choice

(less than 1000 employees)

Founded in Melbourne, Australia in 1983, Frontier Software is a global leader in Human Resource, Talent Management and Payroll solutions. Their flagship solution, chris21 sets the benchmark functionality and useability. With support offices in Melbourne, Brisbane, Sydney, Canberra, Adelaide and Perth and key global locations, Frontier Software is well placed to service their 1600 clients. chris21 is flexible and scalable, supporting client workforce numbers ranging between 100 and 65,000 employees. As a total solution provider, Frontier Software has considerable experience and an excellent track record in implementing and supporting clients of all sizes across all industry sectors. Contact us on 03 9639 0777 or visit us at www.frontiersoftware.com

EmployeeConnect Award for Best Overall Use of Technology EmployeeConnect is a recognised leader in best of breed of Human Capital Management Solutions in the Asia Pacific Region. Built on a unique integrated workflow platform and using browser based access, our solutions connect your people with processes, policy, and systems, ensuring the HR processes revolve around the employees and managers. With core solutions that include selfservice, HRexpress, HRpro, HRenterprise, EmployeeConnect will transform your traditional, paper-based human resource function into an integrated, enterprise-wide, human capital program delivering strategic, fi nancial and competitive benefits. With over 13 years experience, we are known for flexible and scalable solutions that are easy to use and cost effective to implement. For further information please visit www.employeeconnect.com or call (02) 8288 8000

May 2011 HR|LEADER 29


INHUMAN RESOURCES The unusual suspects Last month we shared some of our favourite moments from Michael Stanford’s Inhuman Resources. Aside from the fact that the book shares our name, the realer-thanreal examples of office characters we love to hate still have us chuckling away. Here are a few more...

A cup of rice goes a long way With more people working abroad than ever before, there are enormous international opportunities for those willing to relocate. Well, in theory anyway... This wasn’t quite the case when UK mobile phone company Orange decided to outsource its customer service department and offered employees the chance to relocate. Unfortunately, the relocation package Orange had put together was probably not quite what the workers from Darlington in the north of England were expecting. As well as a proposed move to Manila in the Philippines – almost 10,000km from the UK – Orange then outlined details of a “rice and laundry allowance” as part of the transfer package. Forty employees were offered the opportunity to move after the mobile phone company confirmed it would be axing jobs and outsourcing some of its work to service partner IBM, which had an office in the Filipino capital. Despite a wage equivalent to $300 a month and the added bonus of plentiful rice supplies and clean laundry, workers were outraged. “It is a complete joke. No one in their right mind would want to move to Manila,” one unnamed employee told UK paper The Daily Mail. Meanwhile, local MP Jenny Chapman told the newspaper that she was lost for words and was finding it hard to take the Manila move seriously, or consider it as a credible proposition. “I really cannot imagine people working in the offices of Darlington Orange considering moving to the Philippines. I'd be fascinated to find out how many people take them up on this offer,” she said. Although a company spokesperson said that the offer was in fact an “HR error”, Inhuman Resources wonders what all the fuss is about. Clean clothes, rice, 300 bucks a month, plus the added bonus of not having to live in the dreary north of England – wins all round as far as we can see! 30 www.hrleader.net.au

The ‘Actually, I’m really nice’ person: “Although found in many roles, the best examples end up as office managers or the CEO’s personal assistant. They assert their authority by questioning sick leave, monitoring timesheets, and by liberal use of the all-staff email for reminders on bathroom hygiene. Caps and exclamation marks drive home their authoritarian emails; however there is a perverse need to be one of the gang, hence the use of smiley-face icons or copyright-free cartoons they have gleaned from the net.” The ‘I don’t want to be here’ person: “Most are young, living in or around the inner city – common in the public service and the hospitality sector. Masters of the ‘no smile’ greeting, the sulk break and the ‘I can’t hear you’ walk past; they show a perverse lack of interest in all around them. To show enjoyment in their work would betray their true dreams, which may involve acting, poetry, documentary film-making or pop singing.”

The ‘I don’t shower after a lunchtime jog’ person: “A sense of hygiene and communal responsibility is lost on these individuals. Around them, a work environment normally redolent of magic markers, overheated computer hardware and takeaway coffee can achieve the funk of a gaol weights room.”

A bit of hard graft won’t kill you, will it? Some of us may have heard the expression, “All work and no play makes Jack a dull boy”. While dullness is something that often goes hand-in-hand with being a workaholic, it turns out that being dull is probably the least of a work junkie’s worries, with new research revealing that 11-hour days can increase the chance of heart disease by 67 per cent. The heart-stopping statistics (excuse the pun) were put together by British scientists who followed more than 7000 workers over an 11-year period. The University College London survey found that heart disease – the world’s biggest killer – could be significantly increased by working 11-hour days instead of the standard seven or eight that most people stick to. While working too much can increase stress levels, the survey also found that it was a major contributor to health-related issues such as bad eating habits, lack of exercise, smoking and depression. So while your boss may be over the moon that you’re staying late again, your colleagues and friends probably think you’re dull and you’re increasing your chances of dying earlier, neither of which are ideal.

Here at Inhuman Resources, we are so concerned about this issue that we think all employers should take the following steps to stamp out work-related heart disease: ■ Impose a five-hour daily working limit ■ Increase weekends to three days ■ Provide free healthy meals ■ Increase annual leave to 40 days ■ Sack people who make others look bad by working too much


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HR Leader May 2011  

Australia's leading publication for HR and business professionals. This month, we look at the global skills search and how employers are loo...

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