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OUTPLACEMENT AND M&AS P.24 » ELEARNING FINALLY COMES OF AGE P.40 » INSIDE HR AT DELOITTE P.48 »

HUMAN CAPITAL MAGAZINE | www.hcamag.com

ISSUE 9.01

2011: Where to now? IN EVERY ISSUE:

Profile case studies

Best practice examples

The forum

Expert opinion columns

Topical news briefs


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EDITORIAL

X marks the spot

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nd X is shaping up to be a calendar year: 2011. Over the past month I’ve interviewed a number of people, from HR consultants to HR professionals, who have all essentially said the same thing: in 2011 HR needs to start delivering on business outcomes. In many ways the timing is perfect – lessons have been learnt from the economic downturn, core skills have been sharpened, and of course, talent is back on executive agendas. As Dan Hammond of leadership consultancy LIW says: “HR has a big opportunity to be as strategic as they want to be. It’s not that HR necessarily want to be transactional, but they can be boxed into that. It’s up to them to grab the opportunity, to help create what we’re seeing just the tip of at the moment – this fluid, collaborative and innovative organisation.” Likewise Alec Bashinsky, national partner, people & performance at Deloitte, said the time has come for HR to prove its worth. “HR needs to continue to rise and be an equal contributor at the executive table. Our CEOs have an onus to understand that talent is part of the organisation’s key strategies. This is apparent because many Board sub-committees – which used to be around audit and risk – are now being joined by sub-committees for remuneration and talent, to look at not only succession planning but also the broader concept of talent.” Bashinsky, himself a senior HR practitioner with many years of service under his belt, agreed that steering HR initiatives, building strategic relationships and being a successful change agent at that level is a challenge unto itself. Perhaps some of the features in this forecasting issue of Human Capital – from OHS to M&As – will provide some tips for budding HR professionals ready and waiting to step up to the next level.

EDITOR Iain Hopkins

SALES & MARKETING NATIONAL COMMERCIAL MANAGER Sophie Knight

COPY & FEATURES

SALES MANAGER Sarah Wiseman

EDITORIAL ASSISTANT Clare Costigan

MARKETING EXECUTIVE Kerry Corben

PRODUCTION EDITOR Carolin Wun

MARKETING COORDINATOR Anna Keane

PRODUCTION EDITOR Richard Garfield

TRAFFIC MANAGER Stacey Rudd

ART & PRODUCTION

CORPORATE

DESIGN MANAGER Jacqui Alexander

MANAGING DIRECTOR Mike Shipley

DESIGNER Paul Mansfield

CHIEF OPERATING OFFICER George Walmsley

CONTRIBUTORS

CHIEF INFORMATION OFFICER Colin Chan

Carroll & O’Dea Lawyers, The Next Step

HUMAN RESOURCES MANAGER Julia Bookallil

SALES DIRECTOR Justin Kennedy

Iain Hopkins, editor

Editorial enquiries Iain Hopkins tel: +61 2 8437 4703 iain.hopkins@keymedia.com.au Advertising enquiries National Commercial Manager, HR Products Sophie Knight tel: +61 2 8437 4733 sophie.knight@keymedia.com.au Sales Manager, HR Products Sarah Wiseman tel: +61 2 8437 4745 sarah.wiseman@keymedia.com.au Subscriptions tel: +61 2 8437 4731 • fax: +61 2 8437 4753 subscriptions@keymedia.com.au Key Media www.keymedia.com.au Key Media Pty Ltd, Regional head office, Level 10, 1 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 Offices in Singapore, Hong Kong, Toronto www.hcamag.com Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept as HC can accept no responsibility for loss.

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CONTENTS

Inside this issue

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12 Cover story: 2011: Where to now? 2011 will bring new challenges but also new opportunities for HR professionals. Human Capital looks at four critical issues to concentrate on

24 HR to the rescue Michael Hill believes 2011 will be the year for HR professionals to shine in the new M&A environment

32 The lying game No one would fall for the cheap qualifications churned out by online ‘Diploma Mills’... or would they? Iain Hopkins discovers that deception runs deep – and employers need to be wary

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44 Not quite there It’s estimated that for each employee at least 24 working days per year are lost through underperformance due to illness or depression. Human Capital investigates the growing scourge of workplace presenteeism

Regulars 4 In Step – HR career experts 6 Legal 10 The Forum Letters to the editor Do you have a burning HR or people management issue you would like to share with others? If so, Human Capital would like to hear from you. Send through your comments to editor@hcamag.com. Alternatively, express your thoughts on the readers’ forums at www.hcamag.com

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CONTENTS

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HR Career Experts

ATTRACTING HR TALENT IN 2011

T

his month’s In-Step examines how companies are, and should be, responding to the pick up in the employment market, and specifically asks what they should be doing to attract top HR talent to their organisations in 2011.

2010 – The Year That Was 2010 was a year of consolidation in the HR Recruitment Market, and in many respects, a return to ‘normality’. Although the trend varies depending on industry sector, the seniority of role and the specific HR discipline in question, 2010 was clearly a better year for HR professionals in search of a new opportunity. Employment growth has been strong, with job vacancies and advertisements rising steadily over the course of the year, and although a recent Reserve Bank report indicated some caution and a more modest rate of growth in 2011, the overall prognosis continues to be positive.

Employee value propositions In 2011 – Back to the future? Businesses in Australia have reacted in different ways and at differing speeds to the return of a candidate-driven market. Those that are getting it right, and are attracting and securing the best HR professionals in the market, are those that understand three crucial aspects of talent attraction and recruitment – a strong, well-defined employment brand; competitive and well-articulated benefits; and a professional and efficient recruitment process. Not all businesses are competing on a level playing field in this regard, but the winners at the moment are often those who make the best of what they have, rather than sitting back and relying on their reputation alone. A company doesn’t have to have the most prominent brand in the market place, or pay at the top of the market, as long as they are clear on their Value Proposition and can articulate it effectively and to the right market.

their perception of the organisation in the future once the recruitment process has come to an end. It is the companies that understand that to secure the candidates they are after, their recruitment process needs to be at least as slick as their employment branding. And trust us, HR professionals understand this and are more critical of recruitment processes than anyone! Turn off’s for candidates can include: »» An interview processes that is ill-defined from the outset and then meanders along and drags out unnecessarily. Most candidates don’t mind lengthy recruitment processes as long as they understand what it looks like upfront. »» Long time delays between interviews. Awareness needs to be developed that interviewing talent at the back end of a recruitment process is a priority, not something to be fitted into available blank spots in diaries. »» Meetings with HR and business leaders that don’t engage HR candidates with a ‘vision’ for what the organisation and HR are trying to achieve. »» A lack of appreciation that recruitment is a twoway street – a company has to sell itself to toptier HR candidates just as much as a candidate has to prove their worth to the employer. This is particularly true in an increasingly talent short market. All this will sound like Recruitment 101 to most of us, but as we emerge from an employer-driven market to one where candidates are increasingly calling the shots, it is a timely reminder that a recruitment exercise is a means of engaging people, not a ‘process.’ The businesses who respond to this most quickly will be the ones that secure the top HR talent in 2011, and who will have even the unsuccessful candidates singing their praises at backyard barbecues all over Australia!

Getting the basics right Key to success is getting the recruitment and engagement process right. Candidates will always be attracted to roles with ‘blue-chip’ companies, but in reality it is the experience they have once the selection process starts that will shape whether they choose to work for that company, as well as

Adam Wilson is a senior consultant in our permanent recruitment team in the Sydney Office For information call (02) 8256 2500 or email awilson@thenextstep.com.au or visit www.thenextstep.com.au


Recent HR Market Moves supplied by The Next Step

Joining United Group Limited in the global role as Regional General Manager Human Resources – Services is Caren Shadel Sevil. Caren was employed with Sun Microsystems for the last 14 years having held the role of Director HR APAC & LATAM for the last six years.

After four years with Telecom NZ, Alexandra Lawrie has accepted the role of HR Director, Commercial Finance & Insurance with GE Capital. Alex was most recently employed in the role of Head of HR, Gen-i Australia & Sales New Zealand.

Leisl Guest has been appointed the role of Executive Director

as Senior Manager HR Solutions and Delivery. Joanna most recently held the roles of Senior Manager, HR and then led Talent, Leadership and Recruitment at HSBC Bank Australia. Previously, Joanna worked in London and has over 10 years HR experience particularly with retail and investment banks.

Human Resources, Janssen Australia and New Zealand. Leisl has been employed in senior HR management roles with Johnson & Johnson Medical for the past seven years and was previously with Prudential, the Xerox Corporation, Colonial State Bank and NRMA. McDonald’s has promoted Joanne Taylor into the role of Vice President, Director People Resources & Corporate Communications. Prior to her successful eight years to date with McDonalds, she was previously the Human Resources Operations Manager with Star City.

Catherine Hueston has commenced as HR Manager – Tax (Melbourne) with Ernst & Young. Prior to this, Catherine was with Freehills in a People & Development Consultant role within their Business Service division.

Joanna Pannett joined Insurance Australia Group (IAG)

Jill Adams has joined Pacific Brands as the General Manager Human Resources. She has previously enjoyed senior HR management roles with Mercer, Telstra and Franklins.

Red Energy has appointed Melissa Hilderbrand as their Recruitment Manager. Prior to joining Red Energy, Melissa enjoyed a long career with RACV.

Michelle O’Neil has accepted the role of National HR Manager at Target. Prior to this, Michelle was employed with Bakers Delight as the General Manager People.

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


Legal Experts

“CASUAL” BY NAME – BUT NOT BY NATURE!

F

or some years Australia has had one of the highest rates of casual or insecure employment in the OECD. That state of affairs is a result of a number of factors, prominent among which is the changing nature of work in our age of exponential technological advances, increased employer interest in the perceived cheaper option of casuals and employee ‘lifestyle’ choices.

Williams’ case – a recent precedent to ponder A very recent decision of the Federal Court of Australia reminds us that parties to an employment contract cannot simply call their relationship ‘casual’ and expect their intention to prevail, if a court does not regard the relationship to be truly ‘casual’. In Williams v MacMahon Mining Services Pty Limited [2010] FCA 1321, Justice Barker of the Federal Court decided that Mr Williams, a miner engaged in the Western Australian mining industry on a contract that stated that he was a ‘casual’, was NOT a casual at all. Thus, on termination he was entitled to the monetary value of the annual leave that he had accumulated during the employment period from 9 November 2006 to 16 December 2007.

The critical facts Williams was employed to work as a miner at the Argyle Mining site, on a ‘fly in/fly out’ basis. ‘Fly in/ fly out’ means that the miner is flown into and out of the mine by the employer and works a set roster which in this case was ‘two weeks on/one week off’. The company’s offer of employment, accepted by Williams, said (most relevantly) that he was employed as a casual miner, he was to be paid a flat hourly rate which would include a loading in lieu of leave entitlements, and the employment could be terminated on one hour’s notice by either side.

facts as to what is the true nature of the relationship. Second, while the concept of ‘casual employment’ is still not crystal clear, its essential essence is ‘intermittency and irregularity’ – a state of affairs lacking in Williams’ arrangement, as he was engaged on a roster that gave him regular shifts and a degree of permanency in practice, even if the contract did not itself provide it. Third, the fact that the contract allowed either party to terminate on one hour’s notice to the other was not in accordance with the totality of the relationship. While the contract clearly included such a term, on the facts the expectation was that the supply of work would continue until the job was finished or the employer lost its head contract. The term is also inherently impractical in the context of a ‘fly in/fly out’ mining engagement at an isolated mine site.

Implications for employers What does this case mean for all the myriad of casual arrangements that exist in private sector employment throughout Australia? Might it mean, for example, that the established concept of ‘the regular casual’ (common in the hospitality and other industries) has to be reassessed? Perhaps – but the facts of this case were special – ie, a ‘fly in/fly out’ miner on a set roster will not, in reality, be considered a ‘casual’. The general lessons from this case are clear: just because you have a written agreement with an employee for ‘casual’ employment (and pay him or her a loading for the casual status) is not enough; if the relationship has regularity, certainty and is expected by both sides to be ongoing then it may not be truly casual. This means that regular employee benefits such as annual and personal leave and redundancy/notice entitlements will apply, even though a loading for lack of such entitlements has been paid by the employer. Carroll & O’Dea regularly receives questions from its clients about casual employment. If you have any such questions, please contact us.

Federal Court’s ruling and reasons Justice Barker upheld an earlier ruling by a federal magistrate that Williams was not a casual. Why, when the terms of the contract seemed so clear? First, it is a simple and longstanding principle in Australian employment law that calling a work relationship one thing – ie, ‘casual’ (even by agreement) – does not make it, legally, what you have called it: a court will make up its own mind on the www.hcamag.com

www.codea.com.au

Janine Smith, Senior Associate Carroll & O’Dea Lawyers Level 18 St James Centre 111 Elizabeth Street Sydney NSW 2000 Phone 02 9291 7100


DIVERSITYwork-life Indigenous recruitment OPINION balance

EXPOSING THE MYTHS ABOUT WORK-LIFE BALANCE

O

ne of the most popular goals in workplace coaching programs is to find ‘work-life balance’. Work-life balance is such an overused term as far as I am concerned because many people don’t do ‘balance’; they are involved in some elaborate juggling act. I think of a circus character walking across the tightrope, metres up in the air, with no safety net, just a big pole that creates balance. Left side goes down (work), right side goes up (home life), and up and down and backwards and forwards as you move across the wire. Add in a nice dose of peer pressure, guilt, stress about getting from home to school for an early meeting, drop-offs, pickups, arranging care and babysitting and it makes for one complicated work-life balancing act! I had the pleasure of talking to Sean Richardson, sports psychologist, to offer us a new paradigm for balance that explodes once and for all the work-life balance myth: There is so much that we can learn from competitive sport and its application to the corporate workplace. The culture of competitive sport is an oldschool culture that pits individuals against each other, assesses their capabilities, and ranks them accordingly into winners and losers. It’s aggressive, physical and high pressure, with high stakes. In contact sports the physical stakes are high with the risks of being hurt, as are the mental aspects. The high-pressure nature of the game helps our understanding of how people lead in tense environments, and how it’s difficult to change this style of leadership. The traditional leadership approach in high-pressure, high-stakes, high-physical environments is to drive the team to be as tough as possible, and to push them hard to peak performance. But the message from Richardson is about balance – the balance between stress and recovery.

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It’s okay to push your team to achieve deadlines, but leaders have to remember that, just like physical stress and recovery, employees need to have recovery time, or downtime, to recover from their mental and emotional exertion. There are many things about Richardson’s message that resonate with me. I remember the long corporate hours, pushing the envelope and then putting myself into bed for a week, laptop on my knee, tears every now and again because I was exhausted and couldn’t get the job done, and not recognising the very obvious signs of burnout. Recovery or taking a day off just wasn’t an option. I remember thinking, ‘I put in more hours than everyone else so that when I want a day off or some time in lieu to go home early, nobody will question me!’ And then a coach asked me, ‘How many days do you take off?’ The answer was ‘None!’ Ten years of working overtime so I could take a day off, and I didn’t ever do it! Richardson asks a great coaching question: ‘What am I doing to balance the stress I am putting on myself? What relief am I giving myself to recover from the stress going on in my head?’ And it doesn’t need to be stress in a negative sense. Stress is any way that you are stretching yourself, and this can be innovatively and creatively. When muscles are stretched and put under stress, they get stronger. Fatigue and soreness are not bad; they are a sign that the body has been stretched. The key is that you have recovery time. Leaders in the workplace need to understand that there is a time to push and drive, and a time to recover! They need to understand when you can push people and when you need to support them. In sport it is easy to focus on push, but if we don’t pull back and make athletes feel good as human beings, they won’t perform and over the long term they will break down.

About the author Natalie Ashdown is the CEO of the Open Door Coaching Group and author of the latest book on corporate coaching, Bring Out Their Best – Inspiring a Coaching Culture in Your Workplace. Contact Natalie at www. opendoorcoaching.com.au


DIVERSITY OPINION Indigenous recruitment remuneration

EFFECTIVE PAY STRUCTURES: WHY IT ‘PAYS’ TO GET IT RIGHT!

A

recent survey by the Australian Industries Group on skills shortages revealed that the majority of respondents expect their staff numbers to increase over the next 12 months. Of the vacancies created, 54% will support the expansion of operations whilst the remaining 46% will replace existing staff. Many of the respondents believe that skills shortages will severely impact on the effective operation of their businesses in 2011 and beyond.

the business’ remuneration policy. Each pay range would have a minimum, maximum and targeted pay point. Progression through the pay scales could be based on a number of factors which may include: »» Experience »» Expertise »» Performance »» Working conditions

Does this mean large, across-theboard increases?

Your pay structure will be unique as it will have to be in support of the organisation’s HR strategy. In order to ensure a ‘best fit’ pay structure , a number of issues need to be addressed: »» What is the purpose of having this structure? Is it only for managing pay or will it also be used to define career paths? »» Will the scales be structured purely on market rates, internal ‘market’ rates or a combination? »» How will the pay scales be structured? ie, what will the pay range, degree of pay overlap and range penetration be? »» What resources do we have to administer the system? »» What are our budgetary constraints? Like most reward practices the design needs to support your culture, values and business objectives.

No! This time round, boards will expect a more focused approach to remuneration. This will result in remunerating employees according to: »» Scarcity of skills »» Performance »» Market positioning – ie, external value of the role »» Internal value of the role »» Value of the individual to the business When using these factors as an integral part of the decision making process they need to be evaluated and targeted against specific company objectives and the conclusions must stand up to rigorous examination. For this to occur there is a need for robust salary survey information, an effective performance management system and a structure to administer levels of pay.

The purpose of a pay structure A well designed pay structure provides support to management for making informed pay decisions which are seen as fair and competitive and assist the organisation to attract, retain and motivate key staff. The following broad steps will be required in developing an effective pay framework: »» Step 1: Determine where jobs in the organisation are placed in relation to one another according to your organisation’s job evaluation or classification tool. »» Step 2: Determine the external market pay rates for your jobs. »» Step 3: Cluster jobs based on their job ‘value’ and market pay levels. The result is a series of pay scales that apply to each level of jobs in the organisation. Each pay scale has a pay range which reflects what the organisation will pay for a particular job or job grouping based on

Ensuring ‘best fit’

Concluding thoughts The importance of a well communicated and well designed pay structure should not be underestimated. It can serve as an effective instrument in communicating your organisation’s remuneration philosophy and policy to your targeted audience – current and prospective staff. A recent study by WorldatWork (www.worldatwork.org) shows that a well communicated, fair and clearly understood remuneration strategy influences employee satisfaction with regard to their pay. Another study showed that employees were more prone to leave their companies as a result of inequitable internal pay practices rather than external market pay rates. A well designed pay structure acts as a foundation for other HR applications such as succession and career path planning and explains and supports what the organisation considers important. It ‘pays’ to get your pay structure right!

About the author Allan Feinberg is the director of P-Cubed Reward. For further information visit www.pcubedreward.com.au www.hcamag.com

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THE FORUM l&d

What’s your number one tip for better performance management?

Let’s have a chat... 10

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Tip 1 Effective and timely followup with employees will catch early signs of poor performance By Brett Morris, chief executive, The Fortune Group

With performance management being so critical to a team’s success, it’s tempting to analyse it every which way and devise an holistic approach to perfecting it. While that may have merit, in our view there’s a powerful and simple underpinning to performance management: effective managers and leaders always inspect what they expect, because people respect what managers and leaders pay attention to and follow up on! Why do you take your car in for regular service checkups, usually when nothing’s wrong with it? Because you know that you can’t just expect it to perform well for years on end; you must inspect it to ensure it’s equipped to continue operating. Just as importantly, you inspect your car on a frequent basis to detect any signs of larger problems. The same goes for effective performance management, whether it’s a system or a leadership imperative. When delegating tasks or projects to employees, it’s common to agree what outcomes you expect and then leave them to get on with it. But it’s vital to follow up on their progress so you know if they’re on track to complete the tasks as expected. People don’t respect what you expect, they respect what you inspect. Just as you have your car inspected to catch any signs of larger problems, likewise effective and timely follow-up with your people allows you to catch early signs of poor performance. This is critical because if you don’t catch and confront poor performance early, employees instinctively take your lack of action as a signal that you condone whatever it is they are doing, in effect saying “it’s okay”. With so many obligations throughout the workday, how can you remain vigilant in ‘inspecting’ what you delegate and expect? The key is recognising that you also have a responsibility for ensuring successful completion of the task, because in the eyes of the organisation the buck stops with you. Managers who fail to accept this psychological ownership, of being accountable, neglect to follow up and inspect their people’s work. Using the car analogy again, if you don’t take it in for a checkup for 10 years, it’s not the car who’s responsible for breaking down – you are. So retain that ownership, and even with a heavy workload, you’ll find you instinctively inspect what you expect. Improved personal and team performance will follow.


THE FORUM l&d

Tip 2 Don’t be complacent; take the time to know your employees By Andrea Boyle, HR leader, GE Energy Australia & NZ

Get to know your employees – really know them. Understand what their real capability is. Understand what their passion is and use that information to engage them. Stay in touch, read the signs and act early. Don’t think that things will improve by themselves over time. You need to get involved and help employees work through the issues. It starts with the recruitment process. Selecting employees with the right cultural fit and behaviours is key. Understanding the dynamics of the existing team and how the new employee will fit with the rest of the team really helps. So, you really need to know your team well. We ensure that managers take ownership of the selection process to help drive this. Setting goals, expectations and providing ongoing feedback are also important in driving a culture of high performance. We have a formal process that supports this but it needs to happen every day. Employees need to know how they are contributing and that what they are doing is valued. When they are off-track or performing under par, they need help to understand why and how to improve. Tying it all together is GE’s process for aligning compensation with performance. GE has a rigorous assessment process that sends a message to its people telling them they will be rewarded for high performance. We really value leaders and senior team members with strong coaching skills and try to develop this skill in our organisation, as they should be the enablers of the above.

Tip 3 Create a well designed performance management system based on clarity, climate and competence (the 3Cs) By Pia Lee, CEO, LIW

Managers dread them and employees resent them, so why go through the pain of performance appraisals? Well-executed performance management can create all the conditions for both the individual’s success and the success of the organisation as a whole. Top performing organisations realise that employee engagement is central to driving results and, therefore, develop an aligned system which supports it. Organisations with optimal engagement have 2.6 times the earnings per share (EPS) growth rate compared with organisations with lower engagement in the same industry (Gallup 2010). A performance management system is the cornerstone of Organisational Leadership Architecture. Put simply, this is the process by which an organisation engages with its workforce to achieve its goals. A well-designed performance management system will provide a framework for regular discussions about three specific conditions: clarity, climate and competence (the 3Cs) which determine success. These are firstly the Clarity of key accountabilities, goals, objectives, standards and how they align to the strategic direction. Second, the Climate required to do the job which includes the environment, resources and culture. And finally, the Competence, including the behaviours, knowledge, skills and attitude required for the individual to fulfil their longer term potential. If a leader can project that their intent is positive, then a more genuine conversation where selfdisclosure, two-way feedback and problem solving are the norm will take place. The vital ingredient, therefore, lies in the leadership style that supports the performance management system: the leader should be positioned as a super coach rather than a micro manager so they can address difficult issues, build understanding and enable learning of the lessons of past performance. Asking three fundamental questions forms the basis of any coaching conversation: What are you trying to achieve and why? Where are you now? What do you need to do next? Most companies invest in the ‘systems and process’ side of performance management. While this is valuable, it’s only one piece of the puzzle. The key is to ensure that there is a quality conversation, which strives to create the conditions for future shared success.

“Get to know your employees – really know them. Understand what their real capability is. Understand what their passion is and use that information to engage them” – Andrea Boyle

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COVER STORY HR in 2011

2011 will bring new challenges but also new opportunities for HR professionals. Human Capital looks at four critical issues to concentrate on

2011: Where to

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COVER STORY HR in 2011

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anuary is the month for prioritising, taking stock and promising to stick to New Year’s resolutions. HR professionals are no different. If 2010 was about cautious rebuilding, 2011 may prove to be a year of re-assessing HR’s role at the executive level. Over the following pages Human Capital looks at where HR professionals should be focusing their attention (and budget).

Re-investment Joe Ungemah, director of professional services Australia and New Zealand at SHL, says a major 2011 trend will be “targeted re-investment” across all areas of the HR spectrum. Far from the ‘spray and pray’ broad brushstroke approach to spending in years past, Ungemah says an important lesson learnt in 2010 will dictate where investment occurs. “2010 forced business leaders to take a detailed inspection of what the core products and services in each company was, and I see that trend pulling into 2011,” he explains. “As people are setting their budgets they are more aware of what is core to their business and they know these are the areas that need investment.”’ In the HR space, Ungemah believes the two key areas of re-investment in 2011 will be retention and development initiatives. Along with the knowledge of what’s core to the business, he adds that there will be continued pressure to provide evidence of ROI for these initiatives. “Businesses are very astute now – they’re asking ‘if we invest this money, what are our expectations of a return?’ HR professionals must be ready to answer to those business needs and business leaders will be requesting that information.” The breadth of ROI variables will also expand. Where traditional ROI metrics in recruitment might include time to hire or cost per hire, Ungemah says this will expand to include qualitative metrics: how satisfied are managers in the business that they’re getting the right talent? Is the performance of new hires what’s expected in regards to peers in the same work group? Has this had any impact on broader business metrics such as customer satisfaction?

Skills shortages

now?

By now even the most casual observer would be aware that the GFC presented a mere blip on the radar for talent availability. For a few short months there were more candidates than jobs advertised. That’s no longer the case. Ungemah expects a more buoyant jobs market in 2011, but only for experienced job seekers – those with 10–15 years of work experience – and only in certain industry sectors. He believes this buoyancy will not translate into the graduate recruitment market due to ongoing uncertainty around the promises made to graduates. “In the past you may have been able to promise a three-year graduate program, and then offer a job at the end of it. Now companies are wary about making that type of commitment, and if they are able to make that commitment, it’s where they know there will be a skills shortage anyway. It goes back to that understanding of the DNA of the organisation. It filters through to grad programs and recruiting into those select streams only,” he says. Will employers be more willing to look overseas for talent in 2011? Ungemah believes in many cases they won’t have a choice. “We’re seeing our clients decide between hiring a junior with limited experience in the Australian market or placing their bets on someone with more experience from overseas,” he says. Statistics from the Department of Immigration and Citizenship (DIAC) support this. There is a close correlation between an increased use of temporary www.hcamag.com

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COVER STORY HR in 2011

“The biggest challenge for HR people in 2011 will be hiring top talent and retaining high performers… At Luxottica we’ve created a new concept store in Melbourne, OPSM Eyehub, which was created purely on feedback from our customers and our people. This will ultimately drive engagement and retention of our high performers within this store and within the broader Luxottica business” – Cassie Fleming, talent acquisition manager, Luxottica

visas and a decline in the rate of unemployment in Australia. For instance, from July 2009 to the end of January 2010, primary visa grants under the work visa (Subclass 457) program was 45% lower than for the same period to January 2009. However, more recent statistics flowing from improved business conditions and a fall in unemployment rates show the number of Subclass 457 primary visa applications lodged in May 2010 was 12% higher than April 2010 so the trend is upwards.

An age old issue Another interesting trend to note is that Treasury’s Intergenerational report 2010 states that approximately 89% of migrants are aged less than 40 years at time of migration to Australia whereas only 55% of the resident population are aged less than 40. The rate and age of the migrant population as compared to Australia’s resident population helps to curb the rate of population ageing. Kevin Dwyer, founder and CEO of Change Factory, says the ageing population is perhaps the biggest issue facing business in the next decade. With reports that some organisations will lose as much as 15–20% of their workforce due to Baby Boomer retirement between 2011 and 2014, Dwyer says it’s an issue that cannot be ignored. He warns there are serious repercussions for succession planning and knowledge management flowing from this exodus. “The HR fraternity in general haven’t been well prepared in terms of giving the Gen Ys and Gen Xs the sort of succession planning development that they need. You’d be surprised at how many organisations just play lip service to succession planning. It’s crucial to be having these discussions about positions that are important either in terms of leadership or in terms of operations,” he says. Dwyer adds that it’s a myth that preparing successors for a new role requires expensive

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training. Although he says training is part of it, overseas assignments, job rotations, mentoring and project work can work just as effectively. “SMEs are missing this because they perhaps don’t have the resources. The big players – BHP, Rio Tinto – have vast armies of HR professionals, but companies that are 200–300 people strong tend to miss it. Yet it can be done with minimal outlay.” Knowledge management is also critical. Dwyer notes that 20–30 years ago the average tenure of employees was around 15 years with the same employer; now it sits at around three years, which limits the amount of knowledge accumulated. “The Baby Boomers accumulated a wealth of knowledge. Records management, not in the compliance sense, but storing documents electronically where people can actually find it, has become so important,” he says. Keeping experienced workers on in consulting roles, similar to how those on parental leave are kept abreast of company issues and projects, may also help to keep knowledge within the organisation. “Provide easier options to keep in touch with the organisation if they [Baby Boomers] desire,” says Dwyer. Mentor programs can also be used to pass valuable knowledge to colleagues, but Dwyer warns that “just because someone is older doesn’t automatically make them a good mentor. The important thing is to get good mentors rather than just any mentor”.

Retention Following on from the theme of skills shortage, it stands to reason that employees will feel more confident in switching employer – this of course means it will be harder to retain staff in 2011. Ungemah says this dilemma has been brewing for some time. He notes that in 2010, the ‘psychological contracts’ employees held with employers were broken and many people have checked out already.


COVER STORY HR in 2011

“Employees are going through the motions. Now they see the market has started to pick up, the options are available, and they will check out physically,” he says. Although there is no ‘magic bullet’ for resolving staff turnover issues, Ungemah believes it’s crucial to go back to looking at what is crucial to the business in terms of the individuals doing the roles. “There may be a disproportionate amount of effort spent on those individuals who are core and who are also seen as a flight risk. My word of caution would be that simply throwing money or development programs at someone is not going to restore their psychological contract,” he says. For employers, there’s very little they can do to restore those psychological contracts of their staff, unless there is some kind of fundamental transformation they can undertake – either a completely new job role, or a step change in the level of responsibility. Ungemah adds that many organisations will make last ditch efforts to retain people through professional development programs or salary incentives – but these are short-term fixes. “The reality is most people have already disengaged from the business,” he says. Dwyer adds that another key consideration – for both attraction and retention – is how inclusive the culture is. “People want to know if the company they’re joining is one that they will participate in, or whether it will be one where they are told what to do. When it comes to retaining, it’s even stronger. If you want to blow out the three-year average tenure to seven or more years the best way to do that is through developing people and letting them feel included – an inclusive culture – rather than money.” In some cases, the damage has already been done. A topic of conversation has been, and will continue to be, how companies dealt with the GFC, says Ungemah. “As more people come onto the job market, they will look at the track record of that

The skills you need in 2011 As HR seeks more exposure and responsibility at the top end of business, it’s essential to have the skills to follow through. Can you: »»read and understand a balance sheet? »»calculate the ‘mathematics of profitability’? – that is, the simple addition, subtraction, multiplication and division of key figures to determine what makes money and what doesn’t. For example, would a 5% increase in prices translate into a 80, 90 or 100% increase in the bottom line? »»problem solve with limited resources or finance? »»present a position in a language your non-HR colleagues understand? »»foresee opportunities and obstacles?

company,” he says. “When things got tight how did that company react? Was that aligned to their value proposition or were their behaviours totally different?”

HR, take a look in the mirror A fourth area of concern in 2011 will be the HR function itself. Dwyer feels the HR function over the past 10 years has been in danger of “becoming a profession within itself without a clear role in driving a business outcome”. In short, it’s at risk of becoming a silo within the organisation. “The danger of that is it starts creating business for itself rather than creating business to get a business outcome. You end up with very slick recruitment models but do they deliver the people that are needed to reach the objectives of the business?” Dwyer urges business leaders to take a look at how smaller companies of 100 people or less operate. “There might be one person in HR – and they clearly have a role: hire the right people, get some policies in place so there’s a consistent approach to managing people, and then help managers become better leaders and to manage their staff better. As soon as you get 3,000 people or 30,000 people you then become a division in your own right and it’s

“A pressing focus area for us is gender diversity. As a firm we’re helping our female staff strive and grow their careers at PwC and to become part of the leadership mix in the firm. We’re really focusing on how we can continue to help build the confidence of our women, how we adapt ourselves from a flexibility point of view to accommodate different styles of working and different ways of making it through to partnership or executive director” – Sophie Crawford-Jones, human capital leader, PwC www.hcamag.com

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COVER STORY HR in 2011

It’s not just HR’s concern… Leadership consultancy LIW’s latest global Leadership Challenge Survey of CEOs and other business leaders shows a strong shift towards talent being a major challenge in the post-GFC world. While ‘systems and processes’ are steadfast as the number one challenge, ‘recruiting and retaining key talent’ has gone from afterthought to second in little over a year.  Dan Hammond, managing consultant at LIW, says leaders are clearly getting onto the front foot and, compared with sentiment during the GFC, are focusing on aligning resources in order to take on the challenges ahead. This aligns with the well known skills shortage which is clearly having an impact. “We’ve spoken to leaders in healthcare with vacancies open for months, and others in the IT sector who report that the options open to potential and current employees dramatically increased in recent months, challenging recruitment and retention,” says Hammond.  “One CEO in the IT industry summed this up: ‘The biggest challenge today is getting the right people and keeping them in a timely way. They are out there but the skills shortage means things are getting harder.’ Against this is the drop in ‘developing people’ from second place last year to today’s 10th place. This is an area for leaders to consider in their attempts to retain talent: ‘high potentials’ expect development and will deliver most as a result of it,” Hammond adds.

What is your current leadership challenge? Developing people Aug 10 (%) Nov 09 (%) April 09 (%)

Building execution capability Managing change Creating an adaptive and innovative culture Ensuring clear communication throughout organisation Building and maintaining a positive culture Defining organisational direction Ensuring crossfunctional collaboration Recruiting and retaining key talent Developing or improving systems and processes 0

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2

4

6

7

10

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COVER STORY HR in 2011

easy to lose track of your core purpose. As a CEO you need to have a vision of where you want to go, you must have goals, and you must know what each division’s role is in reaching those goals. As soon as you allow a division to create its own goals unrelated to the goals of the company, you will see performance levels suffer,” he says. Ungemah believes there will be a demand for more “professionalism” in the HR space, which he believes is a positive move. “One thing that came out of 2010 was looking at how the HR function operates and what kind of benefit it brings to the business. It’s more than just looking at ROI. It’s looking at how HR operates and how it can ramp back up to a more buoyant market. “Our client conversations over the last couple of months have been around how you divvy up roles and responsibilities in the HR function. Who’s going to do the analytics? How are we going to run massive recruiting campaigns? These types of issues are at the forefront of HR functions that probably don’t have the investment they used to have but also know they’re going to have an increased workload next year.”

Out with the old, in with the new With many HR functions still operating lean following cut backs, what does a professional HR function look like? Ungemah says an increase in staff numbers – an extra recruiter, an extra trainer ��� is not the answer; instead he says it’s crucial to look at the roles and responsibilities and skills of the people in these different areas. “What’s interesting is that there are more conversations about not just hiring for HR skills, but hiring for the business skills that someone could bring to that function – in terms of operational skills, project management and analytical skills. These skills would traditionally not fall in the HR remit but are being seen as increasingly important for

HR partnering with the business through change,” he says. This ‘new HR toolkit’ includes business acumen, consultative skills, and business analytics with a special focus on HR and regional or remote management. HR governance, risk and control, change management and strategic resourcing are more traditional but still essential skills for an HR generalist to have. In short, this falls in with the natural evolution of HR from ‘enablers’ of strategy into true business partners who drive the strategy (much like the other specialist players on the C-suite table). “HR now has the opportunity to sit alongside the business in terms of looking at strategy and change, and help them through both upswings and downswings. Businesses are savvier in understanding the relationships between their workers and the business objectives. HR is in a really good space to have those conversations now,” says Ungemah. With increased M&A activity on the horizon (see feature on p24) change is inevitable in any business. Ungemah urges employers not to lose sight of what was learnt during the GFC regarding structure, process and performance management. If there is no solid structure in place, or there is no performance management information, he says, it’s very difficult to change a business. “It’s amazing how many companies were left in the lurch when change was required by the market – when the GFC required it – and they didn’t have a fundamental structure in place about how job roles related to each other, or they didn’t have performance management information so they couldn’t make decisions about their personnel. The thinking was you only learn that when you have a downturn; you don’t need it when you’re in an upswing. So the lesson for 2011, as we see a buoyant market, is not to lose focus on structure and performance management. This is the core of having a sustainable business and HR function.” HC

“It’s about retaining the key talent in our business. We get talented people in our business who are strong commercially, have good leadership skills, but in places like WA a lot of our good people in specialist areas like HR get snapped up by mining companies. It’s challenging to compete at that level” – John McDonnell, general manager – human resources Australia, Accor

www.hcamag.com

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COVER STORY HR in 2011

Reinvention

Human Capital: What’s your view of leadership in Australia and why do you believe it needs to be reinvigorated? Tony Golsby-Smith: To put some context around it, around the world the traditional approach to business and the ideas behind it are running out of steam, particularly in a rapidly changing world. The thinking system that has fed business is an analytic system, based on rationality and scientific method. But the more forward-thinking management schools are saying we need organisations to be more innovative, creative, conceptual. People are starting to take note – particularly post-Apple. Steve Jobs once had an interview with the investment community. He said his strategy was simple: he would reinvent Apple by design. No one knew what he was talking about. They do now. It’s a creative, customer-based way of thinking, and it’s design that has created probably the biggest juggernaut of the 21st century. Basically, it was design thinking that

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did it. It’s now a much more conceptual, marketfocused player. HC: What do you mean by ‘design thinking’? TGS: People are bursting for a new way of thinking around leadership that is described in various ways but is essentially more humanistic and more creative. The nature of the organisation is changing globally. Our organisations are basically legacies of the industrial era and the predominant management model is control, certainty and the use of data. That model was born in the 19th century. The essential genius of that model is efficiency. Make everything efficient. It’s also built on a paradigm – that we can know stuff, we know the future, we can forecast it. So no one gets any brownie points for saying, ‘I don’t know what’s going on, I’m confused, I’ll explore the situation’. You don’t hear that at executive level meetings. The answer has to be right there. But ambiguity for designers is not just ok; they love it.


COVER STORY HR in 2011

by design Tony Golsby-Smith, CEO of leadership consultancy Second Road, chats to Human Capital about leadership in the corporate realm, and why it needs a shake up Design thinkers are saying ‘I’m going to make the future, not just predict it’. We need leaders who do that with organisations and markets, not just single products. HC: What does this new organisation look like? TBS: The modern organisation must look at itself like an eco system, not an organisation. You have ‘the unit’ plus its environment. It can no longer dominate the environment because the environment will kill you. In the environment there are four major stakeholders: owners, customers, employees and suppliers, and the community. Any of those stakeholders can now destroy you: take customers – they will walk. The modern customer is so ubiquitous, so well educated, and so internet savvy. They know more than you do. You can sit in your ivory tower and ignore them, or you can ask, ‘what are the great product developments of the first decade of the 2000s? What does Facebook do? It delivers all power to customers. What does our Iphone do? It makes you like an author – you have the world at your fingertips. Customers are powerful now. What I’m looking for is boards who are as sophisticated about customer behaviours, customer experiences, as they are about balance sheets. If we talk about the world of HR and look at the employees, the new economy has got a completely new class of employee. We’re now in a knowledge economy: they process information, they make decisions. If people are knowledge workers, you can’t boss them around because, amongst other things, they will walk. Engagement becomes a critical issue. HC: What does this mean for managers and leaders? TGS: In this eco system world you learn that the important stakeholders make the decisions – not you. You can’t control them. So the genius shifts from making decisions to influencing decisions.

HC: How do you do that? TGS: I’ve identified several levers to work within this framework; the first three levers are personal qualities that make a person influential. What are those three qualities? The answer, according to the Greeks, is ethos, logos and pathos. I translate this in modern language to being: ethos is authenticity or personal vision; logos is big picture thinking; and pathos is empathy. Leaders have got to be seen to be driven, on the ethos side, by passion and being expansive. For instance, many people have whispered conversations about senior leaders: ‘I don’t think X is a real leader’ – they have no idea what this person stands for. For logos, it’s the ability to see patterns. It’s the only quality that good leaders seem to have in common. Basically the world is complex, leaders need to see the wood for the trees – most people don’t; they are lost in the detail. Thirdly, empathy – pathos – is compassion. HC: We presented some of the communication tools you advocate to connect with employees in issue 8.06. These included storytelling and strategic conversations. How do these fit in? TGS: Rather than command and control, I engage you with dialogue and conversation. I create arguments that give you space to become an author. I authorise you, I treat you like a dignified human being, I give you space to make decisions, I empower you. The essence of innovation is discovery and not knowing. Innovation is like a seedling, it needs time to grow. Most organisations don’t have the patience to do that. They say, ‘we want to be like Apple’. But Apple was prepared to try things that failed, prepared to let things gestate for months and years; they invested heavily in development. But don’t throw away efficiency, rigour, or process engineering. You do need control; I still want monthly reports. But, it’s also about encouraging creativity. HC www.hcamag.com

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FEATURE leadership

“… spiritually the female will now have her turn to lead mankind into the New Light. And eventually, this female spiritual light will permeate the entire range of human experience from female leaders in business and religion to female leaders of state … this female light will become so strong as to become obvious to all who live on this dear planet and will continue to grow for thousands of years” – The Serpent of Light by Drunvalo Melchizedek

That feminine touch Traditional patriarchal models of leadership serve to reinforce the power base of the authority figures that created them. Does this approach work in the 21st century? Dennis Roberts outlines how business may benefit from a shift towards the feminine in leadership

I

About the author Dennis Roberts is a leading strategist, executive coach and business mentor. Visit www.DennisRoberts.com.au or call 0433 142 885

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s this uprising one of women as a gender, or femininity as energy? If the former, then those women who have won positions of power by amplifying their masculine side will continue the masculine archetypal game. If, on the other hand, the essence of this is the rise of the feminine energy then that has the potential to change how the game of business is played, and to change the very game itself. And that is what I am exploring. The ancient Chinese viewed things in relationship with nature and the environment; everything they studied formed part of a holistic perspective. No single element existed in isolation. There was perfect symmetry in the dualistic nature of night and day, water and fire, active and passive, masculine and feminine. Daoist theory of yin and yang helped explain all things and their inter-relationships. All things had yin and yang properties. Yang is associated with outward movement, activity, projection, brightness, excitement. Yin is associated with inward, rest, darkness, passive, nourishment.

How is business played out under the masculine archetype of leadership? Masculine (Yang) energy plays out in business as a bias for action: making things happen, setting goals, measuring results, hitting targets. Metaphors of war abound in both business and sport. Competition is fierce, targets are hit, takeovers are hostile, market share is won/lost, customers are targeted, plans are executed, patches are carved up, products are launched, staff are boned, people are fired. Sun Tzu’s classic text, The Art of War, widely linked competitive theory with ancient Chinese military strategy. Some suggest such military, authoritarian styles of leadership have a time and a place, especially during times of crisis and war. Perhaps so. The natural state of play is for masculine and feminine energies to co-exist in equilibrium. What Drunvalo was alluding to is the rising up of feminine energy to restore the equilibrium from hundreds of years of dominant masculine energy.


FEATURE leadership

Leading business mind Warren Bennis writes: “We are facing unprecedented times of growing complexity, globalisation and rapid change, the likes of which we have not seen before … what is needed is not a map, but a compass for this is unchartered territory.” Furthermore, Harvard University’s Ronald Heifetz suggests that amid such uncertainty one of the leadership qualities needed is an ability to “live in the disequilibrium”. If masculine (Yang) energy is about DOing then feminine (Yin) energy is about BEing. Our leaders need to embrace more of this Yin energy, remaining present in the disequilibrium and seeking out and listening to diverse opinions. The key is to resist trying to solve the problem and allow creative tension to bring resolution of its own accord. As Albert Einstein said: “You can’t solve a problem with the same level of thinking that created it”, and we most definitely need different ways of operating to deal with these new challenges.

The Rise of the Feminine – what it means for business and leadership

If The Art of War was the masculine, archetypal guide to strategy then ‘Blue Ocean Strategy’ now illustrates how The Rise of the Feminine has permeated business schools. Rather than using metaphors of war, the discussion centres on charting fresh territory, creating uncluttered niche markets, inventing and reinventing brands, strategies and ideas, collaborating rather than competing, seeking synergies, delivering superior customer value, and engaging and empowering employees in meaningful work in which their creative minds find stimulation. The liberation of creative right-brain thinking is much-needed, even in a legal and regulatory environment where compliance is the order of the day. Compliance activities are prime fodder for automation and/or outsourcing. The real value-add of a professional services firm is in creative thinking. Technological advances and the increased globalisation it facilitates mean that decisions have to be made in real time. Heifetz draws a distinction between authority and leadership by saying that leadership is an improvisational art. It is a verb, not a noun. Bennis chimes in to suggest “many CEOs are bosses, not leaders”. The act of leadership can and does occur at grass roots levels. A major challenge in the professional services environment is how effectively you encourage risktaking and mistake-making. Is it something you discourage, merely tolerate or actively encourage? Businesses are de-risked but employees must take

Yang

Yin

calculated risks and have supportive organisational frameworks that encourage them to do so. Traditional patriarchal models of leadership serve to reinforce the power base of the authority figures that created them. Leadership is not something that can be delegated. Authority is delegated but leadership is demonstrated by anyone with a heartfelt conviction in a cause. What the model needs is less authority and more people empowered to lead. It is not about delegation, it is about empowerment.

The game is changing, how to get with the program Here’s a quick snapshot of how you can change your organisation to embrace The Rise of the Feminine: What got you here, won’t get you there – leadership expert Marshall Goldsmith suggests that the higher up the corporate ladder you rise the more performance issues and developmental opportunities are behavioural. And for the ever-busy professional it’s not simply a question of choosing what to do but more a question of what to STOP doing. The Rise of the Feminine evokes a different, more expansive way of thinking creatively. It is less about efficiency and more about effectiveness. It requires a different level of thinking to flourish in the new game. Stop, pause and reflect about behaviours such as winning too much, replaying past victories (over and over), not listening, seeing the glass half empty, finding the objection first, withholding information or opinion. Permission to fail – in a professional services environment we are not used to failure, and certainly not used to it being encouraged, let alone condoned. Like them or not, issues around approval-seeking are common within professionals services. There is no stigma, we are all human and we all feel pain. It is just that our business and leaders seldom acknowledge our human-ness. Create little risktaking experiments where staff can take managed risks. This is common in the creative powerhouses of Apple and Google but rare in professional services. If you operate with a compliance mindset then technology and outsourcing will pass you by. Resistance to change – people don’t resist change per se, they resist loss. When change involves real or perceived loss, people will hold onto what they have. The key to leadership is to assess what kinds of loss are at stake, from life and loved ones to jobs, wealth, status, relevance, community, loyalty, identity and competence. Assess, manage and provide a context for any loss and help move your people through the losses to a new place. HC www.hcamag.com

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FEATURE OHS

TOP O H S FOR 2 TIPS 011

The GFC is over and business is getting back to normal. So what are the upcoming challenges that OHS professionals can expect to face? Moshe Woods lists his top issues for 2011

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1. Harmonisation of OHS laws

The harmonisation of OHS laws due to begin on 1 January 2012 will have a major impact on any company with operations spanning multiple states. The aim is to introduce a uniform set of laws and safety standards across all Australian jurisdictions. If it is achieved, harmonisation will reduce the number and complexity of OHS requirements and in the process, will remove many of the headaches currently plaguing OHS managers. At the time of writing, however, some provisions in the proposed laws are being challenged by New South Wales. How it will pan out is impossible to guess but managers will need to keep a close eye on this issue in 2011 to prepare for the changes that are now less than 12 months away.

2. Improving safety culture

In early 2010 the Safety Institute of Australia (SIA) and the Australian Institute of Management (AIM) conducted a survey which in part assessed senior

management and board level attitudes towards OHS. They discovered that 28% of CEOs and board directors don’t believe OHS should be an agenda item for board meetings, 5% can’t make up their mind, and approximately 18% don’t believe that OHS is an integral part of corporate governance within their organisations. If HR wants to inculcate a culture of safety it is going to have to start by convincing senior management that a solid safety culture goes hand-in-hand with operational and production efficiencies, reduced wastage, improved industrial relations and a more motivated workforce. Max Lloyd-Jones, managing director of LloydJones Meakin Group, a leader in business safety, agrees. “Safety integrated into business processes is a powerful way to ensure consistently high performance and business standards. The journey starts with the careful setting of standards and the creation of robust systems. At the same time safety needs to be integrated into all processes and the behavioural approach adopted to engage people.”


FEATURE OHS

3. Recognising and managing risk

In 2009 a new international risk management standard was released. AS/NZS ISO 31000:2009 Risk Management – Principles and Guidelines provides practical guidelines, including how to identify, treat and manage all types of risk – from operational and strategic to financial, environmental and even reputation risk. The standard also addresses how to improve an organisation’s performance through risk management. Although similar to the earlier, local Australian and New Zealand standard AS/NZS 4360, there are some important differences in the way risk is characterised, the principles for effective risk management and in its framework for continuous management of risk. These changes will need to be communicated to all managers so that the new standard becomes a part of every planning exercise.

4. Environmental considerations

There are a myriad of state and federal government laws, incentives and suggestions designed to minimise an organisation’s environmental impact. Monitoring and documenting environmental performance may be critical for regulatory reasons, it may be required by a customer or partner in the supply chain, or it might just be of benefit to the organisation’s public image. If and when Australia sets a price on carbon or introduces carbon credits, the situation is only going to become more complex. A first step towards understanding environmental performance is to conduct an audit. This will help the organisation to understand where it stands now, how it is performing compared with industry peers and whether it is meeting its legal obligations. It also lays the groundwork for the development of future targets and strategies.

5. Injury management

Injury management requires much more than safe work practices or a reduction in the incidence of injuries. It involves a commitment from the organisation to rehabilitation and the return of an employee to suitable work. As anyone involved in HR understands only too well, it also involves a great deal of paperwork. In the last three years for example, stress claims have emerged as a growing and sometimes controversial problem. Organisations have had to be careful to ensure that each claim is evaluated and managed in a consistent manner. A well-documented workplace injury management policy will help to formalise the response to claims, delivering consistency at the

same time as demonstrating a commitment to care for employees. If your organisation is in NSW, it may also be worthwhile reconsidering the kind of workers compensation premiums that you commit to. Recent changes introduced by WorkCover mean that some large employers are eligible for an alternative ‘burning cost’ method of self-insurance which may help to reduce costs.

6. Contractor management

28% of CEOs and board directors don’t believe OHS should be an agenda item for board meetings

Employing a contractor is full of risk. It requires due diligence in advance and exposes the organisation to liability in the case of accident or injury. Recording information about contractor licences, equipment certification, accreditation and insurance in multiple spreadsheets or PC-based databases is cumbersome and can make it difficult to find the information you need should an incident occur. A less risky and more efficient approach would be to introduce a contractor management system that stores and aggregates all essential contractor data, and automatically provides reminders when licence renewals or certification updates are required.

7. OHS inductions and training

This is an almost permanent fixture on the HR activity list. It’s the foundation for developing a safety culture and creating an informed workforce. And of course it’s essential for compliance. With so many changes in regard to OHS law, maintaining accuracy in OHS training has meant frequent updating of course materials – a factor that helped to convince a number of organisations to adopt elearning solutions in 2010. Given the current state of harmonisation laws, it’s also a factor that is unlikely to go away any time soon.

Wrapping it all together

In recent years many of the leading OHS concerns were to do with skills shortages or the need to do more with less. In contrast, 2011 is set to be a year dominated by change, risk, safety, compliance and management. Documentation and reporting demands have grown to a point where it’s almost impossible to manage OHS using bits of paper and spreadsheets. If this sounds familiar, perhaps there’s one last challenge that should be added to the 2011 list: find a totally integrated OHS, risk and claims software system that can capture essential data, support organisational workflow and facilitate the reporting essentials for compliance. It will save you time, money and risk in the long run. HC

About the author Moshe Woods is director of safety, risk & claims solutions at ComOps www.hcamag.com

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BUSINESS OUTLOOK HR and M&A activity

HR to the rescue Michael Hill believes 2011 will be the year for HR professionals to shine in the new M&A environment

About the author Michael Hill is the M&A business leader for Mercer Australia and New Zealand

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fter slowing down during the financial crisis, merger and acquisition (M&A) activity is back on the business agenda. Opportunities are arising as companies reassess their strategic options to either ensure their future survival or capitalise on new pathways for growth. But while deal activity might be on the increase, in the post-GFC environment the drivers and dynamics behind M&A have changed. In particular, difficulties in financing and the heightened degree of uncertainty have made the deal environment more challenging: potential buyers are harder to find and they’re proceeding more cautiously than ever before. In response, sellers are going the extra mile to prepare the businesses they want to sell to ensure they receive an optimum price, particularly those divesting healthy businesses in order to bring in additional cash and working capital to finance a new business direction and strategy. We are also seeing many corporate and private equity buyers considering acquisitions, increasingly outside of their home markets, as a path to growth. In particular, local companies are increasingly looking outside of Australia and into emerging markets, such as Asia, which highlights the need for emphasis on the internal and external cultural considerations. Whether you’re on the sell side or the buy side the critical success factors remain the same, and business leaders still regard people matters as one of the essential and challenging issues to be addressed if the deal is to realise its potential. In today’s environment it’s important to prepare early in order to extract the most value, or command the highest price. In this context, HR has a responsibility and indeed an opportunity to drive the people issues, both on the sell side and the buy side. In Mercer’s view, HR should lead the people strategy in a transaction and not be content to just fulfill its ‘day job’ of providing ongoing HR services, or wait for others in the company to assign it to tactical support for a transaction. If it has the

skills to do so, HR should drive the people issues throughout the transaction: during planning, due diligence, negotiation and integration. If HR does not have the skills to do so, now is the time to take a step back and invest in some focused preparation for this role.

M&A trends in today’s economy At Mercer we’re observing several trends that underline the need for HR to ensure it has the appropriate skills to drive the people strategies that will ensure a company is appropriately positioned to gain the most value in a deal situation. Preparing on the buy side for sale: Extensive due diligence has become customary practice over the last decade, but on the buy side we are now seeing more sellers going the extra mile to prepare the businesses they want to sell. In other words, they are going beyond preparing for and arranging transition services to complete the deal, instead going as far as to ensure the business becomes effectively standalone before close or even before signing. This helps to minimise efforts and risks for buyers and can lead to higher prices for sellers as a result. Organisational fit as a source of value: We are also seeing more preparation on the part of potential buyers and a greater focus on people issues on the part of corporate strategy and acquisitions. The main thrust of their discussions with us recently has been about ways to assess the degree of organisational fit, ie the working style, practices and behavior patterns that determine how work gets done. In short, this could be called organisational culture. Clients want to know about ways to assess degree of fit, sometimes as early as in the screening of potential targets before they are approached. Early identification of this can be used to guide negotiation, assess the potential difficulty of achieving synergies and identify any potential cultural ‘deal-breakers’, guide communication and assist in integration planning, including building an understanding of exactly where the ‘low hanging


BUSINESS OUTLOOK HR and M&A activity

fruit’ is, thus capturing early wins and building a successful record right from the start. HR readiness: While it is a commonly accepted truth that ‘you need to do many deals do to them well’, it helps to take a structural approach to improving HR’s readiness for transactions. A prepared HR organisation is in the best position to partner with management and the deal team to face the challenges of the new M&A environment. We are seeing more and more organisations do this – not just the serial acquirers.

Getting M&A ready For HR, getting ready starts with building understanding of the deal needs within the organisation: 1. Understanding the role of deals in the company’s strategy 2. Learning the company’s corporate development process and what the key players expect from HR on deals going forward 3. Assessing how HR performed on prior deals – addressing shortfalls and reinforcing strengths Once the context is confirmed HR can then build its state of readiness by activities such as: 1. Developing an HR acquisition strategy 2. Defining HR M&A roles and responsibilities 3. Defining HR team structure and providing M&A training for team members 4. Developing an M&A ‘playbook’ of proven methods, processes and tools An M&A situation provides the ideal context for HR to act as a true business partner, to lead the people issues and help the deal realise its full value potential. After all, business is a very human activity. No matter what other assets a business has – physical plants, intellectual capital, financial resources – none of them can be applied to create value without people. Past experiences have taught us that preparing well and focusing on integration strategy from the initial stages of a potential transaction is crucial to M&A success. HC www.hcamag.com

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M&A outplacement

While it is usually the acquirer who engages an outplacement provider after the acquisition has taken place, HunterBligh’s Nigel Leadbitter provides one example where it was the acquired company who did the engaging – and reaped the benefits

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utplacement professionals play a great number of roles, depending on the requirements of client organisations, individual participants on programs, and more often than not, based on how early or late in the separation process they become involved. Early intervention often shortens the time it takes an individual to recover from the emotional impact of job separation. Even now we still see the best and worst of separation practices. At the positive end, early involvement starts with working alongside the client in coaching line managers on how to handle the separation discussion, through to being onsite at the time of the separation meeting in order to start working immediately with the displaced staff member on their career transition journey. During 2009, HunterBligh was engaged by the Australian arm of the global pharmaceutical business, Wyeth, to assist in the preparation for their acquisition by Pfizer. This in itself was unusual. In our experience, it is usually the acquirer who engages an outplacement provider after the acquisition has taken place. So why did the executive team at Wyeth take this unusual step? Gayle Philpotts, who at the time was human resources director for Wyeth Australia, felt that Pfizer’s “polite” use of the term merger rather than acquisition actually created some false expectations. While often used interchangeably, there is a distinction between the two. In a merger the power is more evenly shared between the two companies coming together to form a new, combined company. In an acquisition, the buyer has significantly more power and the acquired company is incorporated into the existing organisation – retaining the buyer’s name, systems, processes and often location. Fortunately, Philpotts had experienced mergers and acquisitions from both sides of the equation, and was able to work effectively with Erica Mann, MD for Wyeth Australia, to build an extensive framework to support staff through the acquisition process. This included constant, consistent and clear communication (avoiding the term ‘business as usual’ – as life at Wyeth was far from usual following


M&A outplacement

the January 2009 announcement), resilience training, and support for the executive team in the preparation of profiles and résumés for review by the US acquisition team of Pfizer. This is where HunterBligh became involved. Initially, HunterBligh worked with Mann on writing her personal profile and extended executive résumé following a request from Pfizer head office. This quickly extended to the entire executive team, with a workshop on résumé and profile writing, and individual guidance and support. Philpotts can still remember the resistance from the executive team when she outlined her plan, in conjunction with HunterBligh, to conduct résumé writing and interview skills training for all employees. But thanks to Mann, who was supportive from the start, Philpotts was able to convince the team of the direct benefits. As Philpotts explains: “We were not in control of the details of the acquisition, timing or process. Yet our employees were looking to us for guidance and reassurance.” The premise of the training was not to encourage people to leave – rather it was to prepare them to stay. Wyeth were very clear that the primary goal was to ensure all staff were ready in case Pfizer, at short notice, requested detailed résumés, scheduling of interviews or outlined the selection process. They wanted their staff to have the best opportunity to demonstrate the high quality of talent at Wyeth, and that as many employees as possible would secure appropriate roles at Pfizer. Importantly, Wyeth gave its staff permission to openly discuss their strengths and achievements. In doing so, people were talking in a positive way – rather than focusing on the negative circumstance of the acquisition. Wyeth was also upfront about the fact that some staff would potentially use these skills to secure alternative employment. Philpotts says: “If people were going to leave then they would do this whether we ran the training or not. It was actually interesting to note that turnover dropped to a record low in 2009 – partly due to the GFC but also partly because staff told us they felt comfortable enough to see things through to a close.”

HunterBligh designed two programs, ‘Presenting Your Career’ and ‘Interviewing Skills’. After a number of successful pilot programs, the interactive workshops were rolled out using a combination of HunterBligh and Wyeth HR team facilitators. The statistics on the training speak for themselves – 28 sessions with 640 attendees – the highest attendance for an HR program in Australia in the past five years. “The benefit of working with HunterBligh was that they had both credibility and a neutral perspective. The program was not ‘the Wyeth way’ but rather an independent perspective,” says Philpotts. The purpose of this training was not to replace outplacement – rather it was a prologue to any outplacement that would follow. The training supported people going into the integration process, whereas outplacement supports people once they are actively transitioning from one organisation into another career path. In any number of measures the integration has been a success. In the first 30 days post formal acquisition Wyeth made a commitment to speak to every employee. By Christmas, 85% of people knew their fate – and in total over 70% of employees got their first preference (of role, or to leave). Australia was the first country globally to have Wyeth employees transfer to the Pfizer payroll, and completed the integration process before some countries had even started. As outplacement professionals, this project was one of only a few where there has been such early intervention, most notably on behalf of the business being acquired. It reinforced everybody’s view that the involvement of outplacement support as early in the process as possible is crucial for all stakeholders. These final thoughts from Philpotts say it all: “I think predicting and planning rather than waiting and reacting were the keys to our success. Mostly, I believe the culture we created pre-merger announcement meant we continued to treat our employees with respect and dignity and that kept their trust and confidence in us. If last impressions are lasting – then I think we can hold our heads high as to how we led Wyeth until the end.” HC

About the author Nigel Leadbitter is a director at executive career transition firm HunterBligh. He has worked as an HR director for companies undertaking factory closures and organisational restructuring and downsizing, and has consulted extensively in the field of career transition. For more information on HunterBligh visit www.hunterbligh.com

Exiting gracefully www.hcamag.com

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TEAMBUILDER sophia zembis

With trades consistently topping the list of skills-short industries, Fisher & Paykel has decided to take matters into its own hands

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truggling with the skills shortage? Take a walk in the shoes of an employer with tradies (plumbers, electricians, etc) on their books. There is a reason why the call-out rate for the average plumber or electrician has blown out in recent years – there simply aren’t enough of them. Chris Peters from the ACT Chamber of Commerce reported to ABC News in October that refrigerator mechanics, who require a trade qualification and at least a couple of years of workplace experience, have a starting salary in the order of $160,000. It’s a problem that household appliance manufacturer Fisher & Paykel Australia has tackled head on. Not only has their electrical service technician’s apprenticeship program been effective in combating the skills shortage in trade roles, it’s also allowed the company to ‘grow their own’ talent, as many of the qualified technicians who come up through the program move on to owning a Fisher & Paykel franchise themselves, or move to different roles within the organisation. In conjunction with more stringent licensing requirements, it’s hoped that training programs such as this will also eliminate ‘dodgy tradies’ and increase the standard of Australian appliance technicians. The pilot program, which is unlike any other apprenticeship program currently offered in

Australia, aims to train students specifically for appliance servicing, therefore better equipping graduates to repair household electrical items. Fisher & Paykel national technical manager, Grant Pearson, says students must currently study a four-year electrical or commercial refrigeration apprenticeship at TAFE. However, only a fraction of the course covers household appliance repairs. “Our apprenticeship program solely focuses on appliance servicing and repairs, which is excellent news for students interested in an appliance servicing career,” Pearson says. “Unlike traditional courses, this training is competency based, meaning less time will be spent in class rooms, and more spent on practical training. “Although time frames will vary due to competency and the amount of time invested, an apprentice can potentially complete the course in three years and gain a Certificate III in Appliance Servicing,” Pearson adds. Sophia Zembis, HR manager at Fisher & Paykel, says Fisher & Paykel’s program has been well received from participants and employer alike. “The RTO involved – SkillsTech Australia – is also really supportive of the program,” she adds. “We’d like to see more apprentices enrol in the program and through exposure to the wider industry we would

Thilo Pulch, www.pulchphotography.com

your own


STATS & FACTS n 45% of employers in Australia are struggling to source qualified job candidates n This is not unique to Australia; globally the situation is similar. In New Zealand 30% of employers experience the same challenges in finding suitably qualified workers; in Brazil it’s 64% and in Japan 76% n Jobs on ‘most wanted’ lists vary from country to country but sales representatives, financial staff, skilled tradespeople, drivers, health professionals, technicians and machine operators top lists globally n Skilled trades shortages tops the list in Australia Source: Manpower’s 2010 Talent Shortage Survey


TEAMBUILDER sophia zembis

hope the profile of the course is lifted.” Zembis also appreciates the team morale that is developed between participants, which she notes is particularly evident during study or assessment periods. “Knowledge and experiences are shared through networking with apprentices from other service companies and our own interstate apprentices,” she says. “This helps build camaraderie within the industry. Apprentices are encouraged to plan study time together.” Currently there are 32 apprentices moving through the program. It’s one less thing to worry about for Zembis, who has her hands full with skills shortages in non-trade roles such as IT, accounting and logistics – although she says internal development and succession planning is helping. “Generally, our recruitment process begins with internal advertising and we tend to fill a large portion of our roles this way,” says Zembis. “Employees are also given opportunities to complete certain courses and this goes a long way in shortening the gap. By advertising internally we’re also capturing a large network of employees who keep in touch with people who left due to redundancy, who are always looking for an opportunity to return to us.”

HR at Fisher & Paykel Fisher & Paykel’s global HR team is located in Auckland, New Zealand – home of the head office – while each major region (Australia, US, Thailand and Mexico) has their own HR team that runs the day-today HR operations. In Australia, the team is just two – a Brisbane-based payroll officer and Sydney-based Zembis. “A small but effective team – for now. I don’t think we could have it any other way!” says Zembis. The company employs approximately 250 people throughout Australia within service, sales, marketing and distribution – but following a major change to the company’s global manufacturing strategy in 2009 there is no longer a manufacturing plant in Australia. Following the offshoring of this operation to Thailand, Zembis says there has inevitably been a shift in HR focus from industrial, union-based issues towards talent management, retention, employee engagement, and the like. “Coming out of the recent financial crisis topics such as talent management and succession planning are hot on everyone’s agenda. Fisher & Paykel is no different. We operate a flat structure and our teams are fairly lean in most departments – it’s extremely important that knowledge is shared and captured. We have employees who have been with us for over

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25 years in various different roles – their knowledge is priceless and vital to the continued success of our organisation,” Zembis explains. To this end, Fisher & Paykel have several initiatives in place to develop employees. A recently launched Business Excellence program is run in conjunction with the New Zealand Business Excellence Foundation. This program focuses on continuous improvement and benchmarking against top ranking organisations; the programs being run range from Leadership to Workforce Planning. They also run a Leadership Development Program facilitated by an external provider, and a Talent Management Program, which “should ensure that capable employees are ready to fill key and critical roles now and in the future,” Zembis says. Beyond professional development, Zembis is hoping the Fisher & Paykel corporate values provide a solid foundation for HR to draw upon. “We have a very unique culture backed up by our longstanding values – or DNA as we like to refer to it – of Style, Care, Integrity and Innovation,” she says. The key to HR success? Zembis believes it comes down to building meaningful relationships with colleagues and stakeholders. “In Australia, I believe that HR operates with a business partnership model – I love working alongside managers and employees to come up with solutions to problems, proactively helping their departments, or trying to make their lives easier by giving them the necessary tools and advice to succeed,” she says. HC

“I love working alongside managers and employees to come up with solutions to problems, proactively helping their departments, or trying to make their lives easier by giving them the necessary tools and advice to succeed” – Sophia Zembis

Extra incentives for apprenticeships in skills shortage The National Skills Needs List identifies trade occupations in national skill shortage that may attract extra financial incentives for trade apprentices and their employers. Trades are deemed to be in national skill shortage based on research conducted by the Department of Education, Employment and Workplace Relations (DEEWR). The National Skills Needs List has been developed to take into consideration cyclical fluctuations and long-term needs of the Australian labour market, and may contain additional trades not included in the Skilled Occupations List (SOL). This list is used to determine eligibility for the following Australian government financial incentives for employers and apprentices: »»Commonwealth Trade Learning Scholarship »»Support for Adult Apprentices »»Tools For Your Trade payments »»Rural and Regional Skills Shortage incentive »»Securing Australian Apprenticeships initiative For the most up-to-date list, go to www.australianapprenticeships.gov.au/ whatsnew/NSNL_announced.asp


TEAMBUILDER sophia zembis

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PRE-EMPLOYMENT SCREENING qualification checks

The lying game No one would fall for the cheap qualifications churned out by online ‘Diploma Mills’… or would they? Iain Hopkins discovers that deception runs deep – and employers need to be wary

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len Oakley was moving up the corporate ladder, but as he was about to step on the highest rung of his career, the truth came out and his world fell apart. Sharing similarities with the film Catch Me If You Can (a real-life story in which Frank Abagnale Jnr successfully impersonated an airline pilot, doctor, assistant attorney-general and history professor, while cashing more than US$2.5m in fraudulent cheques in 26 countries), Oakley’s story is almost as compelling: a man with no qualifications who lied his way into any job he wanted. It serves as a stark warning to employers

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considering waiving pre-employment checks in the rush to fill positions. Oakley’s deception began in the 1980s. The fake qualifications included a bachelor of science (hons), a graduate diploma in education, a master of business administration and a doctor of philosophy. These got him his first job and led to others – predominantly six-figure executive roles. The first time he used the qualifications was in 1987, when Oakley jumped from being a mortuary assistant to a regional manager of the Maritime Services Board. An impressive run of job titles continued until 2001, when his lies started to catch


PRE-EMPLOYMENT SCREENING qualification checks

up with him. Oakley became the front-runner for an executive position with toll road developer Transurban; all was well until a board member – who happened to be a University of NSW academic during the time that Oakley claimed to have completed his masters – had no recollection of him. The recruitment agency assigned to the Transurban position confronted Oakley with doubts that his photocopied qualifications were genuine. Unable to provide original copies, Oakley responded with the far-fetched story that he had been given an identity, including academic qualifications, by the Australian Security Intelligence Organisation while working as an undercover agent in the 1980s. He added it was a military secret that could not be disclosed, before withdrawing his application. Meanwhile, another job application, to NIB Health, was sprung by their recruitment agency Korn/Ferry who – thankfully – carried out their due diligence. History abounds with potentially devastating hiring errors. Geoff Stockton is a CV fraud detective and director of employment screening company The Personnel Risk Management Group. He says that adding the odd qualification to a CV is more common than one might think. “All it takes is a good imagination and a computer. You can write anything

you like in a CV and chances are it won’t be checked, and if nobody does any checking, you can get away with whatever you dare to write,” he says. As screening becomes more accepted and advanced so does forgery. Internet growth, laser printers and other accessible technology have caused an explosion of fraud. Taking it a step further, ‘Diploma Mills’ are companies set up as fake schools selling Bachelor of Arts, Masters degrees and Doctorates for a relatively small fee. There are an estimated 500 Diploma or Degree Mills operating around the world with an annual turnover of hundreds of millions of dollars. Richard Bensberg, managing director of Red Flag Screening, says qualifications checks are becoming harder to carry out, but there are three variations commonly seen on suspect qualifications: »» ‘Original’ forgery »» Real certificate with details changed »» Diploma Mill-provided certificate “Generally, academic certificates are not difficult to forge, and therefore forgeries are hard to spot – there are some exceptions however, with forgeries containing obvious misspellings, for example. As such, the most effective method of verifying a qualification is to do it through the institution

“All it takes is a good imagination and a computer. You can write anything you like in a CV and chances are it won’t be checked” – Geoff Stockton

www.hcamag.com

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TOP TIPS

“Always remember that while most candidates are honest, some open and probing questions about the course usually uncovers any anomalies that you may perceive,” says Greg Newton, managing director of Verify. Verify recommends the following: »»Always ask for the original qualification certificate, never a copy, but retain a copy on file for future reference »»Wherever possible, compare the qualification with others that you hold on file for staff from the same institution »»If in any doubt as to the authenticity of the institution just do a quick internet search »»Ask probing questions of the candidate as to why they chose that organisation and even get some ‘contacts’ to follow through »»Cross-check the dates on the certificate to ensure that they align with the candidates’ résumé and work history »»Use an experienced Verifier to contact the issuing institution to confirm the qualification

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directly. This is where the issue of Diploma Mills is important to understand. In such cases, the awarding institute will often still exist and even be able to verify the qualification attained. In such cases it’s important to have a clear policy on the educational requirements for the position, and having a screening provider who can alert you to instances where the ‘qualification’ does not meet your company’s standards,” says Bensberg. As proof that these bogus qualifications are difficult to spot, last year an NBC reporter in the US led an investigation into Diploma Mills and 10 days later, after paying US$180 to a company called instant.degrees.com, was awarded a PhD with honours, no questions asked, from a ‘Buxton University’ in the UK. The package arrived, stamped from Portugal. The Buxton degree comes with an accreditation certificate that states in very small print that they are having trouble with their phone lines, making overseas verification difficult. Stockton says little irregularities such as this should ring alarm bells for astute employers. He also cautions that many genuine-looking university diplomas are really from places that sell degrees for ‘life experience’. Reading a book on a relevant subject is often criteria enough. Greg Newton, managing director of Verify, says that where the qualification appears to be issued by an Australian institution there are some easy steps to take (see box). He adds that working with a pre-employment screening partner that has relationships with hundreds of institutions around the world is more effective than trying to use a supposed qualification broker which may just be ‘warehousing’ information. “While they can be a useful source we’ve always found the issuing institution to be the most reliable and valid,” he says. “The absolute simplest and best way to confirm the qualification is to have an experienced background verification company undertake the process for you. It’s not expensive and in most cases costs less than $50 to give you total peace of mind.” In addition to Diploma Mills, organisations are urged to be wary of a similar trend in the

employment reference market, with companies providing fake payroll info and references. “It costs about $1,000 to set up a company. We encountered a case where a candidate had his spouse on the other end of the telephone ready to provide a reference for him. It was a legitimate company but it was totally fake,” says Stockton. The globalisation of the workforce is adding another layer of complexity to an already challenging problem, as greater numbers of students are returning from abroad with a wider range of qualifications from different institutions. “This can prove to be an overwhelming job for HR professionals tasked with verifying such information, experience and qualifications from all around the world,” says Bensberg. “It’s becoming much harder for all employers, from large MNCs to small local businesses, to be sure whether the qualifications and experience a candidate presents in their applications are genuine.” However, it must be remembered that qualification checks, like most background verification services, can usually be delivered within the same time frame it takes for a potential employer to undertake the full recruitment process. Solid partnerships with third party information providers and high speed online communication technology means that most checks – such as identity, criminal record, credit history, and bankruptcy – can be completed in less than 24 hours. “We try to get them back as soon as possible but there are always going to be roadblocks – referees who are overseas, schools that are closed over a period during the year – but no one else can get it done any faster,” Stockton says. In Australia, at least, it appears candidates can also ill afford to dupe employers. Stockton warns that if a worker commits fraud by providing false qualifications in order to be employed, they may be subject to criminal charges. “There is certain to be a flood of lawsuits in the future and insurance companies are not going to pay out for theft or litigation if an employer has not conducted proper pre-employment screening,” he says. HC


DIVERSITY Indigenous recruitment EXPERT INSIGHT Psychometric assessment

BEYOND THE INTERVIEW: PSYCHOMETRIC ASSESSMENT

Human Capital talks to Cherie Curtis from Onetest about the importance of psychometric assessment in any pre-employment screening process HC: Like other pre-employment screening techniques, are we essentially trying to predict someone’s behaviour through psychometric assessment? Cherie Curtis: Pre-employment tests measure traits of an individual that are otherwise difficult to assess prior to hiring. They provide greater insight into the characteristics of a candidate to help the recruiter more accurately assess their potential suitability for the role. It also ensures a standardised, objective means of evaluating candidates. Although other steps in the recruitment process, such as an interview, also provide the opportunity to evaluate the candidate’s behaviour, it is very difficult for the recruiter to remove their own subjective bias from these appraisals to consider the candidate in relation to the role. That is, we all have a tendency to be naturally more attracted to people with similar behaviour and personality to our own. Furthermore, certain personality types (extroverts) are more comfortable than others in these types of forums and therefore may present more favourably in terms of communication skills, but this may not necessarily be what is best for the job. Online psychometric assessments are immune to such subjectivity and therefore provide the fairest opportunity for the candidates to be evaluated against the job selection criteria. HC: The perception is that psychometric assessment can be used across three areas: personality or behaviour, ability, and motivation. Is this correct? CC: Psychometric assessments have been developed to measure a wide range of human behaviours and attributes of which personality, behaviour, ability and motivation are some. There are assessments for almost every element of human behaviour, personality and ability from a generic level to very specific attributes. Regardless of position type, company or industry, the same fundamental characteristics are desirable in candidates. Namely, that they will: »» have the ability to do the job »» be committed to the organisation »» be satisfied with the daily task requirements »» integrate well with the existing team

Although these general characteristics are consistent across roles, the specific elements of each are unique to every position. This is where ‘job fit’ is relevant, which is, fundamentally, what recruitment is all about. In order to determine ‘job fit’, position profiles should be created that define the specific requirements of each role. Psychometric assessments can then be used to compare the unique attributes of the roles and applicants in order to generate ‘suitability’ scores. Applicants with high ‘suitability’ scores can be expected to perform well, be more productive, stay longer, be more engaged with the organisation, and make a meaningful contribution to the team. In addition to these fundamental attributes, other specialised assessments can be used to assist in the selection process where relevant, such as measures of workplace safety behaviour, emotional intelligence and integrity. Psychometric assessments are one of the most valid, cost-effective and efficient means of predicting work performance, commitment, and job satisfaction. HC: As an HR manager who requires candidates to undertake these assessments, what are some key tips for using psychometric testing in recruitment? CC: Pre-employment assessments need to be considered as one element in a full recruitment process and there are a few key points to be considered when using them: »» Choose assessments that measure attributes directly relevant to the role (ideally, assessments with a ‘built in’ job profiling capability) »» Consider the candidate experience. Do not over test! Assessments should be brief and when using a combination of assessments, really an hour of the candidate’s time at any one time is about the limit. »» Candidate care is critical. Giving support throughout the testing process and ensuring prompt feedback reports are provided shows candidates that the time they have invested in the recruitment process was both worthwhile and appreciated. It also presents a favourable image for the recruiting company.

Cherie Curtis is Head of Psychology at Onetest www.hcamag.com

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FEATURE exit interviews

Just 16% of organisations that conduct exit interviews believe they get good value from them. Is it time to rethink exit, onboarding and stay interviews?

They love me; they love me not A

comprehensive report released in late 2010 by The Interview Group shone a light on how employers are using exit interviews, stay interviews and onboarding interviews, providing insights into employee mindsets throughout their tenure with their organisation. According to Lenore Lambert, director of The Interview Group, the results for each area held surprises. New entry on the block, onboarding interviews, has had a surprisingly swift uptake. Results indicate these were already half as commonly used as exit interviews. For stay interviews there was the other extreme: they are rarely conducted, a surprise given the importance of employee retention in today’s market. Lambert believes this is possibly because many organisations are doing engagement surveys quite regularly, which some view – incorrectly – as a substitute. Results for exit interviews were mixed. Lambert says she expected the magnitude but didn’t expect to see how rare best practice was in this space. “Exit interviews have been around for a long time, so we were a bit surprised about how little attention is being placed on them. Only 16% of respondents believe they get good value from them. When you take a look at how some organisations are actually conducting them, they might as well not bother,” she says.

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Stay interviews Whether they are handled in-house or outsourced, the core issue for stay interviews is the cost of doing them. When done at all, The Interview Group’s research showed they’re primarily done internally. Lambert suspects the reason for the low response rate is that HR staff usually have so much going on that the idea of making the time to sit down and thoroughly explore their employee’s experience at that moment in time doesn’t get the time of day. Lambert suggests that, given the time and cost pressures, stay interviews should be conducted only on high-potential, high-performing employees, or anyone operating in a ‘hot spot’. Organisations tracking turnover data should be aware of where their hot spots are – often certain role types at certain tenure points. For example, it might be professional staff at 18 months of tenure at risk; it may be particular roles that are difficult to fill in the market; or perhaps it’s a part of the business where staff are being poached by a competitor. Successful stay interviews will gather satisfaction ratings on a variety of elements the organisation knows are potential turnover-drivers. If there is any dissatisfaction, a similar process to exit interviews is run through (see the five tips on p 38): in short, if this issue is not addressed,


FEATURE exit interviews

Lessons from benchmark results

Insync Surveys benchmarks exit survey data. Use the table below to identify with other organisations in the marketplace. Check if your organisation is experiencing these reasons for leaving

Typical results in other organisations

Benchmark tip

»»Professional development opportunities »»Career & advancement opportunities »»More challenging work »»Dissatisfaction with the job

Benchmarked over time, Insync Surveys has found these factors are very likely to impact an employee’s decision to leave

If these reasons rate highly with your organisation, you are similar to others

»»Remuneration & incentives »»Work-life balance »»Work stress »»Personal reasons (including retirement, health, travel, study, etc)

These factors are likely to influence an employee’s decision to leave, though may be more important based on the demographics of the employee

If any of these reasons rank as top issues you may have a unique problem to tackle

»»Corporate culture & the work environment »»Equipment & resources »»Relationships with direct managers »»Relationships with colleagues

These factors are relatively less likely to impact on an employee’s decision to leave

Warning bells should be ringing if any of these reasons rank as top issues – you may have a major problem with your culture, resourcing, leadership or even bullying

is it serious enough to cause the employee to leave? This immediacy is another key difference from engagement data obtained through surveys: engagement data can identify which issues are making staff unhappy, but it may not reveal which of those issues is likely to drive turnover. James Garriock, CEO of Insync Surveys, is not a fan of stay (or tipping point) interviews. He maintains that these often fail to get to the root cause of unrest. “Often people are leaving because of something that happened or didn’t happen a long time beforehand. Maybe they were made promises when they came on. It takes the average person two years before they realise those promises aren’t going to be honoured, and then they look for another job to find it. So interviewing them at two years isn’t going to help you out,” he says. “They need to not only stay but also know what they’re meant to be doing and working hard. It’s alignment and engagement. I think a good staff survey is going to do most of what that tipping point research is going to do for you,” he adds.

Onboarding interviews Although commonly thought of as a means to collect information on the recruitment and induction process, the primary reason to conduct onboarding

interviews should be to identify flight risks. Losing an employee in the first six months of employment means thousands of dollars down the drain. “This was another surprise,” Lambert says. “A huge portion of organisations doing the interviewing aren’t addressing the issue of flight risks.” However, onboarding interviews are a direct and fresh gauge on the employer brand. Lambert says it’s useful to assess what people thought of the company before they applied to work there, but also what impact the whole recruitment and selection process had on their enthusiasm to work there. An onboarding interview can also be used to assess speed to productivity – are new employees well inducted informally as well as formally?

“It’s good to have the data, but it’s better to change it” – James Garriock

Exit interviews The poor showing for employers getting value from exit interviews is perhaps the most disturbing result of the research. Exit interviews and exit data are still king in terms of identifying the core drivers of staff turnover – but it must be collected rigorously. Garriock believes the use of exit data is dependent on the type of organisation conducting interviews. Garriock says organisations can be broadly split into two groups: those where HR is strategic, in which case they want to use the data to

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FEATURE exit interviews

EXIT INTERVIEWS n Almost all organisations (97%) that use exit interviews do them for voluntary exits, whereas far fewer (28%) interview employerinitiated exits and redundancies n Face-toface interviews are still the most common method for exit interviews (79%) n 84% of organisations do not differentiate between causal reasons for leaving and dissatisfiers (issues that caused dissatisfaction but not resignation)

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make change; and those organisations where HR is operational, in which case they’re looking for a number. Secondly, Garriock suggests that many organisations are not collecting quantitative data alongside the qualitative data. “Again, there are two types of organisation,” he suggests. “There are those just acting on a one-to-one basis. They’re saying, ‘ok we want to see why Chris left’. So they do an interview and find out why Chris left. That’s helping to prevent Chris from leaving next time – sadly Chris has already gone. Others are collecting quantitative and qualitative data and that’s what empowers them to do something on a divisional or organisational basis, to do something strategic.” Finally, Garriock suggests that organisations baseline and benchmark their data. Baselining is an organisation’s performance in year two compared with performance in year one, tracking progress or decline. Benchmarking is performance benchmarked against that of other organisations.

1. Real turnover drivers must be separated from ‘dissatisfiers’. Lambert explains: “When you first ask someone to list off the reasons why they are leaving, they will usually give you between three and six reasons. A rigorous process must be used to find out which of those six reasons actually caused them to resign. Some will be things that irritated them, but were not enough to make them resign. Most organisations also only report on frequency of citations. Pay is a classic one; it often gets mentioned but when we test it out through structured questioning it’s not a reason for leaving. Organisations that aren’t doing this separation process will find that pay looks like it’s one of the top turnover drivers so they spend hundreds of thousands of dollars on rem & ben consulting and change their payscales, only to find that turnover is exactly where it was before.” 2. Focus on turnover drivers and weigh their relative importance. “It’s not uncommon to find one of the four reasons given for leaving accounts for 70% of

“When you take a look at how some organisations are actually conducting exit interviews, they might as well not bother” – Lenore Lambert

Some employees will always leave for more pay; some will leave for career development; others will leave for personal reasons. If an organisation only sees its own results it may focus on professional development, thinking it was a big issue, when in fact the organisation was pretty good at that. In fact, fewer people might be leaving for that reason than for the same reason elsewhere. “We benchmark organisations against other organisations, so they can see, for example, that elsewhere 10% of people leave for pay reasons, whereas in their organisation it’s only 5%. You can then prioritise that once you know what the issues are,” says Garriock. Lambert believes there are five key areas where HR is missing the target with all three interviews, in particular exit interviews. Four of the five relate to getting honest, accurate and quality data about why people leave organisations.

the decision to leave. The others may only be 10% or less. Some employers get departing employees to rank their reasons and that doesn’t do it either. If you’ve got one reason accounting for 60% of the decision, two reasons for 15% each, and one for 10%, they would be ranked 1–4 and you would have no way of knowing that the first reason was six times as important as the last one. HR can end up chasing the wrong rainbow in terms of bringing down staff turnover.” 3. Implement a disclosure control process. “This needs to be appropriate for the type of interview. Employers or external providers should use a permission-based disclosure control policy. With exit interviews, the departing employee should have complete control. So if they say, ‘if you want me to be honest, no one is allowed to see my individual report’, then you respect that and don’t


FEATURE exit interviews

Why people leave their employer

2009 (%)

Personal reasons

13

Little opportunity for career development

12

Lack of job satisfaction

2006/07 (%) 11

n The majority (78%) of those conducting onboarding interviews do so for all new staff

13

10

14

No development opportunities

9

8

Work-life balance

8

10

Work stress

8

4

Job (in)security

7

3

Direct manager

7

5

Location

7

5

Inadequate pay and conditions

6

11

Lack of challenge in role

6

8

Equipment, resources & infrastructure

4

3

Relationships with work team

3

3

Misfit with the company culture

0

2

Source: Insync Surveys Retention Review 2010. Insync Surveys examined the exit survey responses of 1,548 employees from 25 Australian-based organisations who departed in the 2009 calendar year. Departing employees completed an online survey that tapped into both their reasons for leaving and their general attitudes about their work environment

send that on. For onboarding and stay interviews, you still want to let the individual control who gets and sees the report but we do recommend to clients that we insist on some disclosure.” 4. Select and train the interviewer with care. “Interviewers must be highly skilled in verbal reasoning and be able to check that the story is consistent. We’ve found that in one in six cases the initial reason given for leaving is not the real reason. For example, fuzzy terms like ‘organisational culture’ can be the culprit – ‘I didn’t like the culture of the organisation’. But when you listen to the comments you realise what they’re thinking of as culture is not culture at all; the root cause is actually poor management or lack of resources, or bullying and harassment. It’s important that the interviewer can hold the story in their head while hearing each new piece of the story and to be able to check back.” 5. Collate and report back on findings. “Over half the organisations surveyed did not have methods that lead to easy analysis and reporting. Why do it then? Value is being missed if you can’t

ONBOARDING AND STAY INTERVIEWS

quickly and easily access trend data because there can be systemic issues at play. Results between departments and groups can be quite different in the same organisation. For example, in one area it might be a manager that is the problem. Elsewhere it might be under-resourcing, so it will cost the organisation money to get other resources for this team. However, it’s extremely valuable to be able to pull out data that shows the flight risk issue for this team and showing that it is due to overwork, and knowing the cost of losing these people, versus the cost of employing one more person.”

Final tip Garriock offers one final word of advice for practitioners of not only exit, onboarding and stay interviews, but also employee surveys: Don’t measure anything you are not prepared to put the effort into changing. “It’s good to have the data, but it’s better to change it,” he says. “It’s not hard to calculate the numbers. What is tough is asking the hard questions to put yourself in a position to then change the numbers.” HC

n Most organisations (61%) do not share onboarding feedback widely with data being collected confidentially (40%) and anonymously (21%) n Only 29% of organisations conduct stay interviews n 43% of organisations doing stay interviews do them with all staff, 28% conduct them with all high potential staff Source: The Interview Group. Exit, Stay and On-boarding Interviews in Australia and New Zealand Report, 2010

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LEARNING & DEVELOPMENT elearning

E K A W ! P U


E

LEARNING & DEVELOPMENT elearning

Re-energising jaded learners “I’m the guy who stands up at induction and does the PowerPoint presentation. Everyone falls asleep. All your elearning has to be better than that” – so went one briefing between a client and an elearning vendor. Times have changed. Human Capital tracks the latest developments in elearning and ‘social learning’

B

y 2015 the global elearning market will be worth US$107.3bn, with the US and Europe accounting for almost 70% of that spend*. It is among the most rapidly growing sectors in the worldwide education and training industry. Driven by its benefits in the form of reduction in operational costs, flexibility in learning activities, simplified training programs, and the need to address the training and learning requirements of a globally dispersed workforce, the corporate world has long recognised elearning as a viable professional development avenue. Yet closer to home the story is less impressive. Australia and Asia-Pacific account for just 20% of that forecasted expenditure. However, on a positive note, anecdotal evidence suggests that Australian companies are increasingly willing to take chances on elearning that is more innovative and compelling than what’s on offer overseas. Duy Huynh, executive producer at Beyondedge, confirms that some organisations in the Australian market are using virtual learning strategies like Second Life and course management systems with social functionality (like Moodle) to undertake learning initiatives. Many are now demanding the development of iPad apps to enhance their offerings to employees. “What we’re finding is organisations have stopped producing mass amounts of elearning in the text-based fashion, and have reduced their projects down to smaller numbers but conversely are willing to spend more money on those projects. They’ve found they get a better ROI when learners are actually engaged with the program because they’re getting people to actually use it,” Huynh says. There is also the practical element to consider. As organisations grow and issues like compliance become increasingly complex, Huynh says it can be almost impossible to undertake learning in a traditional way. “One client of ours undertook a study that found it would take 14 years to deliver a very basic 101 Induction Process to their 40,000

people. It was not possible for them to maintain a face-to-face approach to learning. In general, organisations are aware that they need to invest in elearning over the next few years.”

Making it work The key to successful engagement is that it must be planted early in the strategy. Huynh says it’s important, firstly, to dispel one significant myth: that the introduction of elearning into a workplace heralds the end of face-to-face learning. “There will always be a role for face-to-face,” he says. “The most successful implementation of elearning occurs when different learning approaches are brought together in a blended approach. The idea is to look at the overall L&D strategy and then mark in areas where you think elearning can be used. Don’t slash away any face-to-face options to reduce costs and replace it with elearning before you’ve fully tested your new product, and before you’ve had an engagement process with staff on this new elearning process.” The best elearning examples, Huynh says, occur when management teams have kept all their options open and spent time marketing the new programs to their staff. “Alongside your elearning budget, it’s critical to assign some budget to engage staff to teach them about why you’re doing it. Many have fallen victim to that early adopter syndrome where they’ve seen the bad examples of elearning and that’s what they believe elearning to be.” (See box on p 30 for engagement tips.)

elearning comes of age… at last If page-turning, text-heavy online reading brings limited results, what is the best approach? “We see elearning as an interactive experience where the learner is taken on a journey that involves them being actively engaged,” says Huynh. “It should combine the creative design of instructional learning with video, interactive games, activities, interesting statistics, simulations, automated assessment: and in some instances it can trigger off www.hcamag.com

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LEARNING & DEVELOPMENT elearning

workplace activities and social learning. We’d say elearning is best used in many circumstances.” David Hegarty, managing director of CADRE design, confirms that technology improvements mean that one major criticism of elearning – that it can not deliver or invoke emotion in learners – has been removed. “How many people are laughing or crying over a YouTube video? The ability to use audio and especially video means that suddenly the whole emotional side of learning opens up,” he says. Another debate – whether elearning can possibly match traditional learning for sparking discussion and personal engagement between learners – is also dismissed by Huynh. “We should not underestimate the social aspects of learning,” he says. “There has been a lot of research done on social engagement as part of the learning experience, and new technology such as social media will play a big part in this as we move into the next phase of elearning.” elearning has also traditionally been viewed as ineffective at teaching ‘soft skills’, but with the aid of video and interactivity Huynh says it can be a good tool for demonstrating sales, negotiation, communication and leadership skills. Interestingly, certain aspects of learning – eg, concepts that are difficult to convey in a classroom because they may be hazardous or visually difficult to explain – can actually be enhanced by elearning. Huynh cites a recent example done by Beyondedge: an elearning module to teach CPR. “It shows the skin colour response and the blood circulating around the body through the online mannequin. It provides instant physiological feedback so the learner can see what’s going on,” he explains.

Learner fatigue?

Try these approaches...

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The future? At the Gartner Symposium/ITxpo held in Sydney in November, Stephen Prentice, Gartner vice president, recommended that all CEOs invest in iPads for use by employees across divisions in organisations. Huynh agrees, and says there is strong demand for portable devices in the learning space, not least of which for organisations with staff not bound to a desktop environment, such as retail and logistics. Is this the death of the LMS? Perhaps. There are countless reasons for the decreasing use of enterprise systems: they often do not have the functionality that is required by users and are often seen as not very user-friendly. In addition, it is now easy for individuals to set up accounts with online tools (the vast majority of which are free, such as GoogleDocs, Twitter, Delicious and Slideshare) and then combine them, so a lot of learning activity is now taking place outside the organisational firewall. The rise of personal devices like iPods, iPhones and iPads as ‘learning devices’ is also on the increase, as it is also easier to access the online tools on these devices because they bypass the firewall. “iPads also offer unparalleled user interface options with the large touchscreen, microphone and speakers. Our iPad CPR simulation uses the touchsensitive screen to simulate chest compression strength, the microphone to recognise breath velocity, and the speakers to show ideal heart beat and casualty response,” Huynh says. Hegarty refers to this as just-in-time learning. “What I love about the use of iPads as learning devices is the just-in-time nature of it. Using the CPR example, I’ve done countless courses on how to give

»»Concentrate on the elements that create emotional engagement. Create online or interactive experiences rather than a dump of data. “People don’t receive information unless it’s contextualised and has been framed in such a way that they can receive it. We’re seeing more active engagement where learners are required to interact with the program at regular intervals, so they’re not just passively watching the screen,” says Huynh.

»»Have clear business objectives for the elearning program, so that each lesson is about one particular business objective. In other words, make sure learners know what they need to do as a result of that learning piece. “We’re teaching people to look back on what the organisation needs to achieve with each of these lessons. Be clear on the ‘doing’ part of that lesson, almost working backwards from the end result,” says Huynh.

“We see elearning as an interactive experience where the learner is taken on a journey that involves them being actively engaged” – Duy Huynh

»»Pay attention to the information architecture – making menus and titles really clear and giving people what they expect when they come back to the program. “elearning is something people repeat or go back to when they’re unclear on a particular subject matter,” says Huynh. “So make it easy for them to return to where they left off.”


LEARNING & DEVELOPMENT elearning

someone CPR. I still get confused – is it more chest hits, or more breaths? It doesn’t stick because you don’t utilise it in real time. What you need is training with immediate, demonstrable results,” he says. With the operating system (iOS) and hardware standardised, the rise of mobile devices is a dream situation for developers such as Beyondedge who have traditionally had to navigate a minefield of different hardware platforms, and a host of operating systems from Windows and Mac. Assisted by the increasing use of personal learning devices is the phenomenon of ‘informal’ learning. That is, instead of going to the LMS to find answers to their questions or solve problems, learners are using tools like Google, Wikipedia or YouTube, or simply posting questions to their networks on Twitter, Facebook or corporate equivalents to get immediate, up-to-date answers. “We’re seeing a big movement in that direction,” says Huynh. “Many organisations have an attitude that there can’t possibly be value in YouTube, Twitter, Facebook and other social media tools – so they lock these sites out. We believe the opposite. Staff needing to quickly get up to speed with a skillset or piece of knowledge will tend to post a status, ask a question or search out a forum or discussion feed. Their peers’ responses put them on the right track and they are immediately productive to the benefit of the organisation. Yes, there may be those who abuse that privilege, but that can equally be said about making personal calls at work, and we’re not about to ban phones.” Hegarty agrees that one notion his industry has supported poorly is the fact that if anyone is

»»Self-paced learning is crucial. “Give the power back to learners to access learning when they need instruction. When you give them that power it actually improves the business outcomes,” Huynh says.

asked which is the main tool they use for learning, the answer is invariably ‘Google’. “We’re trained now to type something into Google and searching for the answer. However, if I’ve got a problem with interpersonal staff issues in the office, I don’t want a two-hour human development module. What I want is something specific,” he says. Hegarty believes the future will see a convergence of just-in-time learning – small, well tagged, well structured, highly effective short pieces – with more search-friendly capabilities that are deliverable on any platform. “The technology for the delivery of the media is fine,” he says. “The structural problems remain, however. How does the learner get the information? With most organisations still blocking YouTube and Facebook there are real challenges around getting it out there, but there’s an inevitability about it. If someone wants to seek it they will be able to find it.” Huynh adds that it’s crucial “to teach staff critical thinking skills so they can discern the good from the bad”. As a final tip, Hegarty says it’s critical to be reasonable about expected outcomes from any learning strategy. After all, he says, no one will remember all the material from an induction program delivered face-to-face, just as they won’t when it’s delivered through elearning. “elearning should be giving people a sense of confidence that the tools they need to help them do their job are on the intranet, not testing people on ‘what are the 14 OHS policies in our company?’ – because no one will get that.” HC * Research conducted by market research firm Global Industry Analysts http://www.strategyr.com/eLEARNING_Market_Report.asp

»»Create learning that has a persuasive logic. “We’ve all seen presentations that have been a dump of data. If you look at elearning as being a mini presentation, as such it’s still got to have a beginning, middle and end. The beginning sets up or poses the question, the middle discusses some of the options available, and the end delivers a conclusion, or what we want others to believe as a result of that learning,” Huynh says.

»»Ensure you use a range of different media: as much as permissible according to the budget allocation. “The core of it is spending time on the instructional design – the way that information is presented has been considered and is not just straight out of a text book or manual into an online reading environment. Ultimately, clients may need to spend a little more money but they’ll get a better return because of that,” says Huynh.

»»Consider a hybrid approach combining the best of web technology with the best of film and TV production. “We’re blending elements that TV has brought into the education market with everything we know of the web. We must look at developing elearning platforms as a totally different skillset to [designing and creating] just another website,” says Huynh.

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CORPORATE HEALTH presenteeism

Not quite there

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CORPORATE HEALTH presenteeism

It’s estimated that for each employee at least 24 working days per year are lost through underperformance due to illness or depression. Human Capital investigates the growing scourge of workplace presenteeism

I

n the rush to condemn the level of absenteeism in the workforce, researchers have overlooked one vital fact: presenteeism – not absenteeism – is having the most devastating impact on workplace productivity. Presenteeism is the loss of productivity that occurs when employees attend work but aren’t fully functioning due to illness or injury. New analysis from corporate wellbeing expert Dr Paul Lanthois suggests that presenteeism is costing Australian business tens of billions of dollars in lost productivity every year. Lanthois says that even though many employees are turning up to work each day, they may be underperforming to the point where at least 24 working days are lost every year through poor productivity. Although contemporary studies are thin on the ground, a 2005/06 report commissioned by Medibank Private revealed that presenteeism cost the Australian economy $25.7bn in 2005/06, the equivalent of six working days per employee per year. “This is only the tip of the iceberg,” says Lanthois. “The study only measured the productivity impact of 12 particular medical conditions and didn’t include obesity or arthritis, both of which were found in an American study to be among the top six most costly medical conditions in terms of absenteeism and presenteeism.” Lanthois adds that when the cost of colds and flu, substance abuse, smoking, alcohol, fatigue, sleep deprivation and other undiagnosed medical conditions are factored in, the numbers start to become worrying. “Add the $14.8bn burden that workplace stress places on Australian business each year and the cost becomes too great to ignore,” he says.

One myth busted What gets measured gets managed; part of the confusion with presenteeism has always been its perceived immunity to assessment. Dr Mary Casey, founder and CEO of the Casey Centre, an integrated health and education service, says this is a myth. She

says presenteeism is measureable, but organisations need to have good, provable systems in place to do it. That is, specific KPIs, a solid line of command, and an HR manager with people management skills. “You can measure presenteeism by giving employees KPIs to meet from the start – and we make it clear to them before they start that if they don’t meet their KPIs they are out of a job,” she says. Casey notes that presenteeism has occurred in her business, primarily where an employee has suffered depression or a problem with alcohol. “We’ve dealt with it by bringing them in and letting them know they are not meeting their KPIs, then sending them to our HR manager to discuss their problems. Ten out 10 times they will admit they have problems at home. Our HR manager discusses the problem with them, gets to the bottom of why their personal life is impacting on work, and develops strategies with them to get around it. The feedback goes back to the employee’s manager. If they continue to fall below their KPIs, they are sent back to HR.” She believes the onus is on the employer – specifically the direct manager – to monitor employee behaviour and to be aware of possible symptoms of the root causes of presenteeism.

A key to engagement and productivity?

In 2010 Right Management surveyed 30,000 representative employees across 10 sectors in 15 countries worldwide to indicate the extent of their agreement or disagreement with 100 different statements. Employees who responded favourably to the proposition that their organisation actively promotes health and wellbeing were: »» 8 times more likely to indicate that they were engaged than employees who responded unfavourably »» 4 times less likely to indicate that they planned to leave within the next year than those who responded unfavourably »» 3.5 times more likely to identify their organisation as encouraging innovation and creativity than those who responded unfavourably »» 3 times more likely to assess their organisations as being productive than those who responded unfavourably Source: Right Management white paper, ‘Working Well – A Priority for Engaging Employees and Driving Productivity’

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CORPORATE HEALTH presenteeism

Human resources manager Ross Acutt leads Queenslanders Credit Union staff in the lunchtime yoga class

Case study: Bending over backwards for staff health Queenslanders Credit Union has taken steps to enhance its staff’s health and wellbeing with the recent introduction of lunch time yoga classes. Held in a ‘quiet space’ at Queenslanders’ Brisbane headquarters, the classes are part of a corporate health and wellbeing initiative designed to help employees strike a positive work-life balance. Human Capital talks to Queenslanders Credit Union HR manager, Ross Acutt, about the program. HC: Do you see an employee’s wellbeing as being a joint responsibility between employer and employee? RA: Definitely. It’s a win/win situation as happy staff get more job satisfaction and this translates to happy customers and a healthy bottom line. Depression and stress can be infectious, and we have a duty of care to all staff to provide an environment where they can be happy. If we show we care it gives staff the initiative to take action, a little bit like exercising with a friend… you get involved to motivate them – but in the long run you both benefit. HC: Your yoga offering sounds like a good balance between mental and physical wellbeing. What benefits have you noticed since implementing the program? RA: Staff appear to return from the lunch time sessions invigorated and say their afternoons are more productive. The yoga requirement to ‘empty the mind’ has also assisted some staff to stay focused on their job by helping them to cope better with non work-related issues. It opens people’s minds to new things – for example, one of our staff members who had never done yoga liked it so much she has joined a yoga group outside work. HC: Do you see your corporate health initiatives as a way of re-engaging employees? Did you consult with employees when planning this program? RA: We felt that if our overall health and wellbeing strategy had something for the mind, body and the soul it would be a keystone for engagement. With this in mind we offer an Employee Assistance Program (free counselling service) for the mind, fruit delivered to the workplace weekly for the body, and yoga for the soul. Our Employee Engagement Survey, planned for early next year, will hopefully verify the anecdotal evidence which supports the continuance of our lunchtime yoga program. Discussions were held with key stakeholders prior to implementation and staff were surveyed about who would attend.

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“If someone is disengaged, that can be a very normal thing. If it happens for a week, that’s fine. If it continues for two, three or four weeks, that’s how HR would keep on top of it. I recommend having a good line of command – a coordinator, then manager, then HR for instance – so employees know who they are answerable to,” she says. However, Casey believes employers cannot be held responsible for the wellbeing of employees, especially if the underlying cause lies outside of the employer’s control. “If someone is depressed because of personal issues it can’t be the fault of the employer. But identifying it and dealing with it straightaway needs to fall with the employer. The employee needs to be accountable for the outcome, for overcoming it,” she says. Lanthois agrees, and refuses to paint employers as the sole ‘bad guys’ in this dilemma. Instead, he maintains that employees must take the first step to at least acknowledge that something is wrong. “A Right Management study in 2009 found that if an organisation ignores health and wellness the number of disengaged workers doubles. However, I believe employers cop an awful lot. We’re placing the emotional responsibility on other people – ‘if they did this then I’d be happy’. Sure, there are some behaviours that are just not on – I’m not saying employers are the saints in all of this – but at the same time it’s a two-way street. Start looking at the ‘man in the mirror’ first – that’s the thing you can control,” he says. While recent initiatives such as RU OK at Work Day and the longer established ‘Movember’ aim to raise awareness of depression in the workforce by giving people the skills to ask friends and colleagues ‘are you ok?’, Casey does not believe it should be up to employers to formally raise these sorts of issues. “I don’t agree with asking employees at work if they are OK, as it means you think they’re not, and it can open up a whole lot of rubbish. It’s best that employers focus more on getting their teams together for lunch, breakfast or drinks. In my own workplace, we have quick chats and expressions of opinions about things over breakfast in the office. Those occasions give people a chance to talk about anything, and it’s easy for managers to pick up if someone’s not on top of everything in those meetings.” However, there is conflict between those who believe employers should step out of the equation, and those who think employers should be more


CORPORATE HEALTH presenteeism

making money easy...

involved in the health of their employees. For example, a November survey of 300 male and female senior executives and business leaders by The Executive Connection (TEC) asked its members about the barriers men experienced in seeking help for depression. Of the executives surveyed, 64% said being unable to recognise the symptoms of depression and other mental illnesses was one of the biggest barriers men faced. Nearly a quarter of respondents noted that pride also played a role in preventing men from diagnosing and treating their depression. Nearly half of respondents (46%) said support for mental health should come from peer support networks established within the workplace, with 30% agreeing that independent organisations could do more to address the issue.

What can employers do? Destroying another myth, Lanthois believes the narrow-minded view of absenteeism and presenteeism being a debate between those who stay at home when sick or come to work when sick misses the point. “For me that’s not the issue. The issue is finding out what causes absenteeism and presenteeism and addressing that. More often than not it comes down to unsustainable lifestyles. Businesses are big on talking about sustainability, and it’s great that they want to use their resources more effectively, but it seems we’ve forgotten to apply the same principles to ourselves,” he says. Lanthois adds that those companies providing healthy lifestyle training and education to their employees are rewarded with productivity benefits and real competitive advantages. He also urges employers to ask their employees what works for them. “Don’t just throw them a gym membership. Ask them: ‘What are your health goals? How can we, as your employer, help you reach that?’ ” he says. While the symptoms of presenteeism are many and varied, the condition is often misunderstood as feeling a ‘bit blue’, slightly depressed or even disengaged from work. How should business leaders keep on top of how it is manifesting itself? “Let’s provide some tools and strategies so people can actually learn how to re-engage. Train people on how to take responsibility for their own health and wellness, particularly when it comes to issues like stress or depression,” Lanthois suggests. “Being stressed, depressed or disengaged is not something that passively happens to you. You need a recipe to make stress.” HC

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PROFILE alec bashinsky

In Australia, Deloitte emerged post-GFC with the strongest performance of the Big 4 professional services firms. Iain Hopkins talks to Alec Bashinsky – the firm’s HR guiding light

Strategist & steward F

or someone who arrived “by default” into HR, Alec Bashinsky, national partner, people & performance at Deloitte Touche Tohmatsu, has made a lasting impression on his profession. Not only was he the sole returning HR professional to Human Capital’s November ‘Who’s Who’ list, five years after the first list, but he is continuing the drive towards HR as business partner. He holds strong views on HR operating as business strategists and nurturing young, upcoming HR talent. As Bashinsky talks enthusiastically about where HR could head to in the future, the more viable and seemingly ‘do-able’ his vision becomes. “I’m passionate about this, can you tell?” he informs Human Capital.

Road to HR Although Bashinsky studied a Bachelor of Business (Accounting) at university, it was while working as a manager at a hotel during his uni days that set him upon the career path towards HR. As hotel manager, he held accountability for 350 employees working in a large bistro, a bar, and a nightclub. “It was all about people-rostering, IR, training, the whole thing. I fell into it almost by default,” he says. From there he moved to retail, working as HR officer at Venture stores, and setting up the Australian

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operations of Toys R Us, both of which widened his experience of HR and operational issues. Bashinsky feels there is “no question” that his business understanding from these early days has held him in good stead in his HR career. “Having the business understanding – whether it’s micro-task level or the operational level – has been critical. In retail, it’s everything, from knowing what the bestselling product lines are, what the stock turn is, what works regionally, let alone what the business and people issues are, and having insights into how we grow the business. You must understand the business element in order to bring value as a people-strategist.” The most valuable skill he picked up was negotiating on industrial relations. In retail he dealt with “everything from IR cases, to appearing before the IR commission, to negotiating EBAs and EFAs with the unions”. Indeed, Bashinsky believes this skill base is now largely absent from the skills armoury of many HR professionals. “A lot of our younger HR grads and young upcoming managers in the last 10 years have not done any IR because of our climate. In the new government set-up, they’re going to be forced to deal with unions, yet many of them – by virtue of not having to do that for so long – do not have the skillset.


Thilo Pulch, www.pulchphotography.com

PROFILE alec bashinsky

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PROFILE alec bashinsky

“All of a sudden you’ll have a union official bouncing you on a claim, and you’ll be required to handle negotiations. If you can negotiate, you can influence business leaders and other people you deal with – it’s a really good, foundational skillset.” For Bashinsky the question runs deeper: can upcoming HR professionals even handle what he describes as the “confronting experience” these situations represent? “I’m not sure some of the upcoming HR managers are actually tough enough to handle those skillsets,” he says. “Knowing how not to get flustered in a union conversation, knowing how not to get flustered in a grievance process, knowing how to deal with conflict. I think a lot of people still view HR as the, ‘I like dealing with people’ type field. The presumption of HR just dealing with people is not the case. They need to be business savvy, they need to be results-oriented, to drive performance, focus on the business issues, and they also need to understand talent and leadership capability.” Anecdotal evidence, alongside the hard reality of increasing skills shortages, suggests that there will be renewed focus on HR in 2011 to prove why they should remain at the top level of business. Bashinsky suggests the debate should really be around whether the right people are sitting at the executive table in the first place. It all depends on the attitude of the CEO, he suggests. “Unless you get a CEO who understands the value of people as an asset to his/her business, then they’re going to hire HR practitioners who in many cases are great organisers and administrators, but not great strategists. What I’m suggesting is smart CEOs ask the right questions of their HR directors before they sit at the table so they know they’re coming with their own people scorecard,

In his own words… What are your thoughts on the future of HR as a profession? I’m seeing two challenges as we head into the next five years. Firstly, CEOs who don’t get the importance of people to their business and hence hire HRDs as administrators. Secondly, in today’s environment many of the up and coming HR leaders just don’t have the ‘tools in their toolkit’ to provide people leadership strategies to their CEOs. HR leaders need to take a greater ownership of developing HR leaders of the future. I hire around five HR grads a year, and we put them through rotations so they see different elements of HR. I think the profession owes it to itself to develop young talent coming through, otherwise we risk producing peopleadministrators which bring HR down at a time when HR needs to continue to rise and be an equal contributor at the executive table.

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they know they’ll measure the right outcomes, that they have the capability to drive change. In other words, you are hiring a strategic HR director.”

HR at Deloitte Bashinsky walks the talk. He notes that a continuing challenge is reminding the leaders in his team of over 100 HR professionals that “they’re not here to deal with the employees”. Although this is sometimes met with quizzical looks, Bashinsky says it’s not HR’s mandate to deal with the day-to-day problems faced by employees. “We provide direction, leadership, support, advice, and training. I’m looking for HR leaders to interact with the executive leaders of their function, of their business unit, not become a ‘I can’t find my laptop’, ‘where are the toilets?’ type of resource. Organisations need to have a strong HR services function where the employee can get that information, but HR shouldn’t get caught up in it,” he says. Bashinsky’s team is split across functions such as Capability Development, Talent Sourcing, and People Services, and the remainder are Business Unit HR leaders across Australia. His mandate is to drive a performance culture, build leadership capability by establishing leadership development, talent assessment, performance measurement and employee engagement. These are big issues with – potentially – big responses. One of Bashinsky’s strategic pushes for 2015 is how to shape the workforce of the future. With 70–75% of Deloitte’s workforce under 35 years of age, the old rules of engagement no longer cut it. Hence the Deloitte team is developing a strategy called the Career Lattice. Instead of people moving

What has been your greatest career challenge and how did you overcome that? Undoubtedly the start up of Toys R Us in Australia. We had an executive team of four and built the business from scratch to 24 stores within two years, employing over 3,000 people. I had to develop both an HR strategy and build a team in the process… a Greenfields opportunity. My second challenge would be at Deloitte, working with the CEO and exec team to take an organisation that, five or six years ago, was a basket case with high staff turnover, low employee engagement and poor revenue growth, to our position now where we work with many clients in the ASX200. We’ve got strong client relationships, our revenue and performance is strong, and our employee engagement is up around 63% for a firm of 5,000 employees. All the metrics and strategies are really starting to see the results come through, but it’s an ongoing process.


PROFILE alec bashinsky

up a chain of job levels, it’s about providing different opportunities – it could be across service lines or across business units – and then picking up levels of competence along the way. “In our organisation you could go from Analyst 1 to Senior Analyst, but let’s dispense with the titles. Let’s say at the old Analyst 1 level there were five key achievements or competencies to reach, so let’s make sure the individual has got those. Then they move across and do another five or six competencies. It’s a different approach to the traditional ‘you must do X, Y or Z to get to the next level’ way of developing people. It’s about how we change movement in those roles, and create flexibility, so it keeps people with us.” Perhaps even more crucially, Bashinsky says there’s no reason why such an approach could not be expanded to alliance companies, including clients and the like. “If we know someone is going to leave the firm and they want to get more risk exposure in a bank or they want to get broader consulting exposure in another company, then if we have a relationship with that company they can spend time with them. “At the same time that client organisation may have someone who wants to leave but wants to develop their career further in corporate finance – so they might ring us. I’m not suggesting a one-on-one exchange but it’s potentially a way to facilitate the rotation of talent within organisations rather than losing it out of our broader alumni totally.” Although the plan is still in the development phase, Bashinsky has had positive feedback from his business network. “We’re working towards having an employee for life. That doesn’t mean we want to keep them in Deloitte for life but in the rotational process they may actually come back to us,” he says.

Driving diversity By Bashinsky’s own admission, legal and professional services firms have traditionally been dominated by white Anglo males. He’s keen to shift this perception, and is working on a number of diversity initiatives. In terms of gender diversity, Deloitte has set itself the goal of becoming the professional services firm of choice for women. Part of this strategy is ensuring the firm’s metrics reveal where talent gaps exist. The firm monitors male/female turnover rates down to business unit in each region, and also monitors promotions at all job levels, from analyst up to partner. Specific programs target the development of women in the firm. For example, Deloitte Business Woman of the Year award is aimed at identifying talent at all levels. The winners are announced at the firm’s annual partner meeting and are given the

PERSONAL FILE

Alec Bashinsky Age: 55 Family: Wife (just celebrated 30 years of marriage); daughter, 26, who is a primary school teacher; son, 24, who is now a qualified chef at Aria in Sydney and assisted Matt Moran open Aria in Brisbane Favourite sports: Wave skiing, basketball (including coaching), golf, self-development Favourite movie or TV: Don’t watch TV; Movie – Love Actually Best advice ever received: Never respond with anger and emotion in an email. Park it and go talk to the person (I’m getting better at this) Self-described: Energy plus, passionate and have a drive for achievement, integrity and teamwork Hobbies: Reading, wine collecting, travel, enjoying my family First job/worst job: Started as a casual employee at Coles when I was 15. No such thing as a worst job… it’s what you choose to make of each role If not in HR: Running my own winery/ restaurant close to the sea

opportunity to attend elite business schools such as INSEAD or Harvard for professional development, as well as having the opportunity to shape corporate policies. Further diversity initiatives – for Indigenous Australians, and those with a disability – are also being rolled out. “Talent exists in all shapes and forms and a one-size-fits-all approach to talent doesn’t work,” says Bashinsky. At Deloitte knowledge is power, and this extends to HR metrics. Bashinsky can easily put his hand to metrics around all aspects of talent – including diversity – gleaned from satisfaction surveys, engagement surveys, and exit interview data. He believes that if an HR leader cannot sit at the executive table and produce their contribution to the measurement of the business – ie, people – they have no right to be there. “Quantitative gets the attention; qualitative creates the debate,” he says. “At the end of the day what I’m trying to do is get the business leaders around the table having the discussion to drive towards an outcome. “My role is to steer them with the right input towards the desired outcome. In some cases we’ll put a solution down but sometimes it’s actually better to allow leaders to get to that solution themselves.”

2011 and beyond Looking ahead to 2011, Bashinsky says that “without doubt” the attraction and retention of top talent is the biggest HR issue. “For the first time in Australia’s workforce history the workforce demand will exceed our supply by 2013. CEOs and boards need to be asking their leaders what they are doing about attracting talent into the business,” he says. Deloitte’s ‘innovation approach’ to business – for example, 30% of its revenue in 2009 came from products and services the firm did not have two years prior to that – saw the firm maintain a slow growth pattern during the GFC. The firm will further develop ‘outside the box’ thinking and will look to hire 6,000 new employees by 2015. Bashinsky says that crucial skills for HR professionals to develop will include managing mergers and acquisitions, and also project management. “The biggest bugbear for me is HR strategies. HR is great at building the concept, great at communicating the strategy around people, but they fall down miserably in the execution,” he says. “I would rather do fewer strategies but execute to 100%. There are lots of great thinkers in HR but it’s about the ability to understand the business, build the strategy and execute around it.” HC www.hcamag.com

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IN BRIEF australian news

Salaries set to soar in 2011 Organisations are digging deep to attract and retain top talent. Findings from Aon Hewitt’s 2010/2011 Salary Increase Report identify an overall increase in salary budgeting that reflects the stronger than expected recovery of the Australian economy. The study, which surveyed 210 organisations across Australia, found an average salary budget increase of 3.8% in 2010, higher than the 2009 prediction of 3.4%. The report predicts the average increase will continue – reaching 4.2% in 2011, surpassing the long-term average of 4.0%. “The driving force behind this growth is the desire to attract and retain talented employees in an increasingly tight job market,” said Tim Powell, CEO human capital – South East Asia and the Pacific at Aon Hewitt. The report suggests that the diminishing need to control compensation costs is another factor influencing salary increases. As the economy recovers, measures such as variable bonus reductions and salary freezes are becoming less relevant.

EO awards set benchmarks

A Brisbane law firm that set a new benchmark for paid parental leave in Australia, a CEO that boosted the number of women in leadership positions, and an organisation that tackled pay equity head-on by redesigning jobs, were among the winners of the 2010 EOWA Business Achievement Awards. These awards showcase individuals and organisations that are supporting and advancing women in business. In her address, EOWA acting director, Mairi Steele, said: “The organisations profiled today at the 10th EOWA Business Achievement Awards represent the way forward for EO in Australian businesses… They will secure the best and brightest staff.” Among the winners were: Paul Hitchcock of Corporate Express Australia (Leading CEO for the Advancement of Women); Kate McCormack of Mercy Health (Diversity Leader for the Advancement of Women); and Griffith University (Leading Organisation for the Advancement of Women >800 staff).

Learning opportunities below employee expectations One in two Australians are likely to either change their career or look to professional training in 2011 according to a new study released by Upskilled.  More than 14% want a complete change of career and despite 29% seeing professional training as the solution to improving their career progression, one in four Australians have never been offered the chance to undertake training by their workplace. The gender divide is still showing no signs of improvement with males making up a majority of those who have participated in paid training.  For many, training is seen as unaffordable with 46% citing this as the main barrier, in addition to longer working hours (21%) and course locations being too inaccessible (15%). Other findings include: almost 1 in 5 women (17%) are looking for a career change in 2011 compared to only 10% of men; 14% would never consider training to further their career; and only one in four Australians said their work organises training for them internally.

Social media changing the game for employers

Employers that take disciplinary action against an employee for posting damaging or inappropriate comments on social media sites such as Facebook can face legal – and potentially costly – ramifications if they do so without following basic workplace laws and procedures. According to Jenny Inness, senior associate at Harmers Workplace Lawyers, employers should first consider whether the employee’s conduct is sufficiently connected to the employment relationship before taking action in response to erring employees in the digital sphere. She added that an employer is permitted to take action against an employee (including dismissal) because of their ‘after hours’ (or ‘private’) activities if the conduct is connected with the relationship of employment and has serious enough implications for the employer. “It’s becoming increasingly common for employees to use social media sites to criticise their place of work, or a colleague, or boast about things like going to the beach on a day when they have called in sick,” Inness said. “While an employee’s actions may be inappropriate, and potentially damaging to a company’s reputation, employers must still follow basic workplace rules before taking disciplinary action,” she said. Inness suggested that all employers should have a social media policy that clearly articulates what is acceptable behaviour in relation to employees’ social media engagement and clearly explain the impact this behaviour might have on their organisations.

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Fast fact: In the

Australian Financial Review’s 12th annual survey of executive salaries in 2010, just five of the top 250 of Australia’s highest paid CEOs and executive chairmen are women.


IN BRIEF australian news

Fast fact: Research

conducted for Go Home On Time Day (24 Nov) revealed that each year, Australians work more than two billion hours of unpaid overtime. Among full-time workers, the amount of overtime is 6.6 hours per week on average. Over the course of a year this is equivalent to 319 hours, or more than double the typical annual leave requirement (150 hours).

Talent war heats up for foreign companies in China

Companies with operations in China need to step up their efforts to attract and retain local workers, or face losing out to Chinese private-owned companies in the battle for talent, according to a new Manpower white paper. Lincoln Crawley, managing director of Manpower Australia & New Zealand, said that foreign companies in China are facing increased competition for talent as worker preference leans towards Chinese private-owned businesses, with the number of job seekers considering a foreign company as their first choice of employer down 10% since 2006. “Thirteen of the ASX Top 20 companies have offices or major holdings in China, and it’s vital that these companies realise the importance of developing HR strategies that will drive their business forward in that region,” said Crawley. “China is Australia’s largest trading partner, so it’s likely we’ll see more and more companies looking to establish a presence in there. But, just as we advise local employers in Australia to develop a robust hiring strategy aligned with their business needs, it’s even more important for companies entering the Chinese market to ensure they have the talent pipeline in place to win in an increasingly competitive market. “China is only the ‘land of opportunity’ if businesses can find the right people to make use of that opportunity,” he said.

Know and reward your audience for online business success

Social networking can be a boon to business but knowing, engaging and rewarding users of online communities are the keys to success, according to a social media expert from the Australian Psychological Society’s College of Organisational Psychologists (COP). Organisational psychologist Craig Errey said many organisations recognised the potential business benefits of social media, particularly online communities, but failed to grasp how to really make them work. “Although many organisations have set up the technical platforms to facilitate online communities, they haven’t recognised that people are the key ingredient for success,” Errey said. “Too often they don’t provide the psychological incentives and rewards that encourage users to revisit and contribute knowledge.” To assist organisations to maximise their online capacity, the college has produced a tip sheet, titled ‘How to create active online communities’. According to Errey, psychology is a key to understanding what attracts people to social networking. “People need to connect to other like-minded individuals whom they can learn from and, in turn, share information with,” he said. “They also want to be valued, recognised and rewarded for their contributions.” Seven steps to building an online community: »» Ensure people are able to find your community online using key words and phrases that are optimised through the major search engines. »» Ensure people are able to search your website easily, identifying key topics of interest to them. »» Promote hot/popular posts and most active threads on your homepage. »» Ensure people are able to review member profiles to ascertain if this site is of interest to them, if this is a community with values they share and would like to join. »» Provide opportunities for people to contribute their expertise by highlighting threads or topics where questions have not been answered or answered well. »» Have a facility to acknowledge and reward members such as ‘member of the week’, ‘most useful comment’ or by nominating ‘Guru’ members to be responsible for answering questions about a particular topic. »» Create member levels and rewards based on rate and quality of participation. www.hcamag.com

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IN BRIEF international news

Global: Hiring in the West

Firms in the emerging markets – particularly those in China and India – are building up their workforces in North America and Europe. The 2010 IBM Global Chief HR Officer (CHRO) Study, Working Beyond Borders, shows 45% of Indian companies (with global operations) plan to increase their North American headcounts over the next year, while 44% would expand in Europe. Meanwhile, one-third of Chinese companies are planning expansions in North America, and 14% of them are looking to grow in Western Europe. Unlike the traditional pattern of movement – in which companies in mature markets seek operational efficiency through headcount growth in emerging economies – the study shows workforce investment is also moving in the opposite direction. IBM suggested that as companies expand globally, the need to identify workforces with the creativity, flexibility and speed to capitalise on growth opportunities is becoming a priority. “More than ever before, competitive success will depend on the leadership talent to assimilate information and share insights among a diverse group of employees around the globe,” said Denis Brousseau, vice president, organisation and people, IBM Global Business Services.

UK: School leavers want career advice British youth are looking for more contact with potential employers during their last years of schooling. A study by Deloitte, commissioned by the non-profit Education and Employers Taskforce, has found that 95% of young people want employers to be directly involved in school career advice and guidance. Of the 500 students surveyed, 42% said they had no contact with prospective employers in the last two years at school. Such contact improves the confidence of school leavers, with those that had met with (four or more) employers being nearly twice as likely to believe they had the knowledge and skills required for their chosen career path. The report encouraged organisations to send staff to schools and talk about their work. It also suggested that organisations post career guidance information online for easy access to both students and teachers.

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US: A weighty issue Obese workers are costing US companies some US$73bn a year, a new study has confirmed. The costs arise from both absenteeism and ‘presenteeism’, where sick workers remain at the office with drastic impacts on productivity. The research, conducted by Duke University and the National University of Singapore, found the overall losses were equivalent to hiring 1.8 million workers at the national average wage of US$42,000 per year. The researchers put a dollar figure on the per capita cost of obesity among workers by analysing three factors: presenteeism, absence from work and medical expenditures. The per capita cost for obesity was US$16,900 a year for women with a body mass index of over 40. The cost for men in this category is approximately US$15,500. In comparison, the cost incurred by a worker of normal weight was about US$10,000.

If business leaders think they can keep the use of smartphones and tablet devices at bay, they should reconsider. In a survey of 6,000 such users, 81% used their devices to access their employer’s network without their knowledge or permission – and 58% do so every day Source: Juniper Networks

THAILAND: South East Asia vs China for cheap wages Monthly wages for manufacturing workers in Thailand are now lower than that in China. A Wall Street Journal report noted that while China may still have some infrastructural advantages, rising wages across the country have forced companies to look for labour elsewhere in the AsiaPacific region, with Thailand topping the priority list. For instance, Ford Motor Company said it will build a US$450m car factory in Thailand, its first whollyowned plant in the country, despite fatal anti-government protests in Bangkok earlier this year. Manufacturing workers in Singapore are the highest earners at US$2,832 per month, with Malaysia coming in a far second at a much lower US$666 per month.

NEW ZEALAND: Discrimination costs The manager of a New Zealand car dealership is in hot water, after explaining an employment decision to an unsuccessful candidate. Monte Wells, of the 4Guys Autobarn in Hamilton, says he stands by the decision, despite Tesa Te Whareturoroa making a complaint to the Human Rights Commission. Te Whareturoroa was appalled to read the rejection email, which said the job required a male to have a “balance” in the team. Her complaint earned her a NZ$6,500 settlement from Wells – but he said he’s been hard done by.“Employers make a decision based on a certain profile when they’re screening applicants. They have a right to do that – it’s called choice.” he said, noting that he employed nine women in a staff of 30. Te Whareturoroa maintained that was outdated thinking. “I don’t think that [gender] should have been an issue at all.”


THE LAST WORD compiled by James Adonis

5 minutes with... Michelle Cooper – Peoplebank Australia National manager – people & performance

What’s the greatest HR lesson you’ve learned so far? It is not possible to please everyone. Just listen and action what the majority of your audience/ stakeholders need, and you will have achieved the best that you can. What’s your favourite people-management tip? Recognise employees instantly. What gets recognised in a timely manner gets repeated. My other tip is to make time to do the basics right. We need to listen to what our team members have to say, respond accordingly and communicate as much as possible, because better informed employees lead to a more successful organisation. What career advice do you have for ambitious HR professionals? Always communicate your achievements in

business terms and show how they link back to the company’s strategies. For example, instead of just saying that employee engagement has increased, add how it’s contributed to the company’s performance, customer satisfaction, reduction in staff turnover, and reduction in unplanned absenteeism, etc. What’s the main challenge facing the HR industry right now? One of the major challenges of HR is the need to adapt quickly and remain parallel to the changing needs of the organisation. Successful organisations are becoming more resilient and adaptable to customer needs and market trends. How should HR professionals overcome that challenge? As HR professionals we need to manage effectively through planning, organising, leading and controlling HR outcomes. We need to ensure we have a seat at the table to influence change, but we also need to be aware of the chosen path ahead and adjust the HR strategies, planning and execution accordingly.

Quote of the month “He has a right to criticise, who has a heart to help” – Abraham Lincoln Can you believe it? An Irish employee has taken his employer to court and has been awarded A$13.5m in a record-breaking libel case. Three years ago, his employer had issued a press release that suggested he’d made inappropriate advances to a female colleague during a business trip. In reality, however, the father of six was a regular somnambulist who happened to sleepwalk naked into his colleague’s bedroom while she was asleep.

n Almost half of Australian workers say employers are responsible for ensuring their employees have a work-life balance Source: Hays

n Only 4% of candidates believe employers should conduct checks using Google or Facebook Source: WorkPro

n 51% of organisations say they’ve had problems with unethical conduct in the workplace over the past two years. This is an increase from 37% in 2008 Source: KPMG

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