Human Resources Director 12.00

SPECIAL REPORT

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HUMAN RESOURCES DIRECTOR HCAMAG.COM ISSUE 12.00

2014 FORECASTING YOUR ULTIMATE GUIDE EXECUTIVE RELATIONS HR COLLABORATION & INFLUENCE

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EDITOR’S LETTER / HUMAN RESOURCES DIRECTOR

NEW YEAR RESOLUTIONS:

PRODUCTIVITY & PERFORMANCE

SPECIAL REPORT

WORKPLACE LAW

HUMAN RESOURCES DIRECTOR HCAMAG.COM ISSUE 12.00

IKEA’S WORLD-BEATING HR PHILOSOPHY HUMAN RESOURCES DIRECTOR: THE NEW NAME FOR HC MAGAZINE

COPY & FEATURES EDITOR Iain Hopkins JOURNALIST Cameron Edmond PRODUCTION EDITORS Roslyn Meredith, Danielle Chenery

ART & PRODUCTION DESIGN MANAGER Daniel Williams DESIGNER Marla Morelos, Loiza Caguiat TRAFFIC MANAGER Abby Cayanan

CONTRIBUTORS The Next Step

SALES & MARKETING MARKETING EXECUTIVE Anna Farah COMMUNICATIONS EXECUTIVE Lisa Narroway NATIONAL COMMERCIAL MANAGER Sophie Knight ONLINE COMMERCIAL MANAGER Sarah Wiseman

CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR – BUSINESS MEDIA Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HUMAN RESOURCES MANAGER Julia Bookallil Editorial enquiries Iain Hopkins tel: +61 2 8437 4703 iain.hopkins@keymedia.com.au

“Those who cannot remember the past are condemned to repeat it”

Iain Hopkins, editor, HRD

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EXECUTIVE RELATIONS HR COLLABORATION & INFLUENCE

PERFECT PARTNERSHIP

Amidst the flurry of end-of-year summations and forecasts for 2014, there were two separate reports that set alarm bells ringing in my head. The first, from HR consultancy Randstad, suggested that, in 2014, falling productivity and workplace performance is the number one issue keeping Australian business leaders up at night. One quarter of those surveyed noted this as their major concern and over half rated their ability to face the challenge as either average or poor.

In fact, local business leaders are more concerned about workplace productivity than any other country in the region, with only 17% of businesses in Malaysia, Hong Kong and Singapore noting productivity as a major concern, and 19% of Indian leaders listing it as a primary challenge.

Worryingly, Australians are also the least confident in their ability to overcome productivity challenges in the coming year, with only 5% saying they are in an excellent position to improve workplace performance.

The second report, Right Management’s Manpower Employment Outlook Survey for Q4 2013, suggested, globally, more than three in four employers (76%) anticipate no layoffs at all during the six month period (October 2013 – March 2014) and 13% forecast a normal level of layoffs.

However, Australia rated among the countries most likely to have above average layoffs leading into Q1 2014 (13%), significantly higher than the global average at 5% and the APAC average at 6%.

This issue of HR Director offers some potential solutions to these highlighted problems, ranging from greater insights gleaned from big data or offering broader employee value propositions. Perhaps of most interest as the new year comes into view is the ‘2013 leadership mistakes’ feature on page 26. After all, as the saying goes, those who cannot remember the past are condemned to repeat it.

2014 FORECASTING YOUR ULTIMATE GUIDE

Advertising enquiries National commercial manager, HR products Sophie Knight tel: +61 2 8437 4733 sophie.knight@keymedia.com.au Subscriptions tel: +61 2 8005 6674 • fax: +61 2 8437 4753 subscriptions@keymedia.com.au

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CONTENTS / HUMAN RESOURCES DIRECTOR

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COVER STORY

A perfect partnership What’s the secret to IKEA’s global dominance of the furniture retail market? Iain Hopkins talks to CEO David Hood and national HR manager Jessica Murphy about the company

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FORECASTING

2014 forecasting What’s in store for HR professionals in 2014?

HR Director takes a look at several key trends impacting talent management, retention and HR effectiveness

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2014

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Leading on thin ice Think you operate in a tough corporate culture? Try leading a team of 18 strangers into the wilderness of Antarctica for an entire year. That’s just what Rachael Robertson did. She shares some of the most powerful leadership insights from the most extreme workplace in the world

Special report: Workplace law From upcoming changes to bullying legislation to managing chronic sick leave, HR Director provides a holistic report outlining key facets of workplace law in 2014

REGULARS 04 | Insight: HR collaboration and influence 52 | In person: Vijay Kashyap, Campari Australia

FRONTLINE INTELLIGENCE 10 | In Step — HR career experts

CHECK OUT THE HRD ARCHIVES ONLINE:

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CEO, Beyond Blue

General Manager HR, REA Australia

PROUDLY SUPPORTED BY

• Better interaction – Less death by PowerPoint, more discussions. You’ll have greater access to speakers for all your questions, and facilitated networking with HR professionals working within your industry • More Australian HR Award winners - Hear from the individuals and organisations that are recognised as being at the forefront of HR best practice • New perspectives – Hear from a wider range of speakers in 2014 with insightful case studies from leaders in the public and not-for-profit sectors as well as top corporate brands • More employment law – You told us you want to hear more on employment law changes and recent cases so we’ve included important topics like workplace bullying, managing terminations and mental health

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Joydeep Hor

Head of People and Culture, Starlight Foundation

Leadership and Talent Manager, IKEA

What to expect at The National HR Summit in 2014:

Natalie James Fair Work Ombudsman

www.hrsummit.com.au

Managing Principal, People+Culture Strategies

‘Award-winning speakers…

That’s the National HR Summit difference’ Sarah Robb

Head of G&A HR, APAC, Google

Melinda Tunbridge

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HR Director, SBS

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HR Director Australia, PepsiCo

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INSIGHT / HR INFLUENCE & COLLABORATION

HYBRID HR? As a new year dawns, it’s timely to look at how HR is positioning itself to remain a viable contributor to business success Enterprise performance expert Bernard Marr set online comment boards alight recently with a proclamation that the HR profession is dead, calling it an out-dated shell that should be externally sourced.

Marr’s argument orbited around the idea of HR being too heavily rooted in viewing employees as a ‘resource’, and that such a view doesn’t reflect the intricacies of the modern workplace. In addition to suggesting the function should be outsourced, Marr also raised the idea of splitting HR into separate departments: one for analytics, one for employee support. The former would adopt the increasing ‘hard’ skills of HR, while the latter would take on the ‘soft’ skills that have traditionally defined the industry.

While Marr’s comments have not been well received by the majority of the HR community, they have raised interesting questions about where the HR function should evolve to next. How can HR learn to integrate itself further into an organisation? What sectors must it partner with, and should it be looking to collaborate or merge? It all begins with influence.

THE FOUNDATION: LEARN HOW TO INFLUENCE Discarded as either a cost centre or simply an

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administrative function, the majority of organisations still view HR as best suited for managing policies and cultural initiatives, without much scope outside of that. KPMG’s report, Rethinking Human Resources in a Changing World, which surveyed 418 executives from around the world, found only 15% viewed HR as excelling in providing insightful workforce analytics that provide an understanding of the business’ people agenda. In addition, only 17% felt HR measuredly proves the value of itself to the organisation.

How can this perception be shifted? HR professionals should focus on influencing others in the workplace to communicate not only their ideas and solutions, but also demonstrate their worth. Mel Tunbridge, director of HR at SBS says without the ability to influence others, HR will simply be ineffective.

“Perhaps we’ve become a victim of our transactional pasts, where some managers have failed to see our move into strategic roles or, even worse, missed our transformation to executives who just specialise in the people space. To take the influential high ground we need to consistently become capable of providing solutions to broad business needs and issues,” Tunbridge says.

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HUMAN RESOURCES DIRECTOR

THE ART OF INFLUENCE To influence effectively, any executive, whether CFO, COO or HRD, must become a fullvalue provider. Mel Tunbridge, director of HR at SBS, outlines four ways to make that happen: 1. COMMUNICATE NARROW AND THINK WIDE Learn to influence by using a value proposition that can be communicated succinctly. The first part should be analytical and logical. Follow that up with the creative and emotional messages.

2. BECOME FLUENT IN THE LANGUAGE Many HR professionals come from backgrounds in psychology or management that don’t require quantitative analysis. That means you need to understand factors such as value creation, ROI, KPIs, capital investment and cash flow.

3. SHOW UP WITH CONCRETE ANALYSIS Those HR leaders who can master numbercrunching, who not only explain the reasoning for something, but show it via empirical research and analytical evidence, will have a valued place in the room.

4. BECOME KNOWN AS A COLLABORATOR AND PROBLEM SOLVER There’s no one more popular at the table than the person who steps up to solve a problem.

Here’s where HR directors can really shine, because you’re already seasoned at solving problems behind the scenes, right?

Ultimately this is about relationships, and effective relationships require trust and trust is gained through credibility. “Just because you can influence by solving the problem with your ‘what’ doesn’t matter if you don’t have a compelling ‘why’ or ‘if’,” says Tunbridge.

To further examine the issue, it’s worth considering HR’s relationship with three pillars of the business world – finance, marketing, and IT – and how HR can collaborate more effectively with each.

REPORTING LINES The percentage of HR professionals in Australia/New Zealand who... yy consider reporting line of HR when making a career move – 80.6% yy have their HR leader reporting to the CEO – 83.6% yy are okay for HR to report to the COO/CFO – 3.2% HR Viewpoint 2012 by The Next Step

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“To take the influential high ground we need to consistently become capable of providing solutions to broad business needs and issues” Mel Tunbridge FINANCE Of all internal relationships, the one between HR and finance is perhaps the most fractious.

“The worst situation you can have between HR and finance is where the accountant views HR as the chief culprits who waste resources, and where the CEO relies on the CFO to put the brakes on a naïve HR at budget time,” says Gary Taylor, HR practitioner with the South African Board of People Practice. “This is not how partners operate. How the CFO views you will determine significantly how the CEO views you.”

To turn the relationship around, Taylor recommends HR adopt the following: yy include economics or business subjects into your own study plans, so you can speak the language of finance yy sit down with finance through the annual budget process. This will give you an appreciation for their challenges, and you can see how HR can help yy on the flipside, bring a senior finance professional into the wage bargaining process.

This will allow them to see what HR is faced with yy insert HR into the organisation’s risk committee, so your department can gain a greater understanding of the business risks facing the company “Once a track record of collaboration and trust has been established, HR will be in a better position to propose some of those more innovative and exciting programs with the support of our finance colleagues,” Taylor adds.

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INSIGHT / HR INFLUENCE & COLLABORATION

DIFFERENT PERSPECTIVES, SAME GOAL? Taylor outlines key areas to discuss with finance: HEADCOUNT More workers means a bigger pay roll, but it also means greater productivity. Finance might not always see the latter, and instead just look at bodies = costs, and start humouring the idea of doing more with less.

AUTOMATION Finance doesn’t view operating and capital costs the same.

OUTSOURCING Internal collective bargaining makes accountants uneasy. Fixed contracts with service providers? Happy days!

BENEFITS Finance will often be looking to cut down on benefits in ways HR cannot necessarily predict. Moreover, they are most likely to go to the CEO with controversial ideas, not HR. If you are considering alternate benefit programs, work actively with finance right from the start. Both hard and soft variables should be on the table. Tangible ROI thinking is essential.

MARKETING Simone Carroll, general manager of people & brand at REA, explains the need for HR to align itself with marketing in order to survive what she refers to as the “relationship era”.

“It’s a societal shift that is happening … with the rise of social continuity and increased transparency there has now been a collapse of mass marketing and this has collapsed the campaign era,” she says.

The ‘campaign era’ refers to the marketing approach that existed prominently before social media – through marketing campaigns on television, radio, print, etc. organisations were able to control their brand and people’s perception of it, while only having to combat professional media outlets. With social media effectively giving voices to all, this strategy has crumbled.

“We used to tell people how they should think about your business – you can’t get away with that now. People are watching what you do and employees are talking about what you do from the inside,” Carroll adds.

People & brand is an entirely new business function at REA, generated by Carroll to blend the HR function with necessary elements of marketing.

“It has to do with employer branding but it is really more than that,” Carroll tells HRD. Organisations now must have a consistency both inside and outside of the workplace to influence consumer opinion. In this way, the strength of the employees and their passion for the organisation

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becomes a marketing tool in itself, transforming every employee into a brand ambassador of sorts.

The power balance has shifted: Relationships with consumers are no longer marketing led, they must be consumer led. The same has happened with the employer/employee relationship. “Relationships with employees can no longer be employer-led, they must be employee-led,” Carroll adds.

The modern consumer is filtering out irrelevancy while gravitating towards what resonates with them, and the same applies for employees. “Human beings are working for companies that are right for them and they tend to be companies that know why they are there and what they stand for and are trying to do good in the world. Employees are also engaged in that.”

This reflects not only a shift in HR thinking, but also in marketing philosophy. With marketing having to reinvent itself for the relationship era, the function must take cues from the socially-centric HR function.

“Consumer or colleague, it doesn’t matter. We are all human beings and we all want to know more about each other and why we should work with each other,” Carroll explains, adding that a search for purpose drives the marketing and employer branding of the relationship era.

Through collaboration, marketing and HR can uncover and promote this purpose that sits in line with company culture, business objectives, and brand strategy.

Carroll explains that REA puts a strong emphasis on living the organisation’s purpose, so it becomes important for that to come across in the company’s brand strategy. This covers everything from recruitment, reward and recognition, managing careers, right through to when someone leaves and enters into the alumni network. “We’re looking for not simply advocates for the brand but people who believe in our purpose,” she says.

WHO’S DRIVING HR TECHNOLOGY? Position

Leadership driver

1st

HR (50.7%)

2nd

Combination of representatives (27.2%)

3rd

IT (5.5%)

4th

Other (5%)

5th

Not sure (4.6%)

6th

No one (4.6%)

7th

Finance (2.4%) Navigo Research 3rd Australian HR Technology Report

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HUMAN RESOURCES DIRECTOR

IT DEPARTMENTS HR and IT interactions can be ripe for misunderstandings at best and a recipe for costly project failures at worst, but their proximity is increasing.

Indeed, massive advancements in technology have meant IT departments across the world have grown in importance, and evolved their skill set.

This evolution includes a much greater emphasis on employees: security, internal communication platforms, entire HR technology suites, working arrangements, devices and analytics are all heavily geared around the 21st century worker, and largely driven by technology.

The reality of business today means a key issue is how well HR and IT can cross-pollinate and share their knowledge. For example, this could mean HR looking to leverage big data insights to help improve productivity; or it could mean IT looking to implement new systems staff will be actively engaged with.

How can HR ensure IT-related decisions that are right for staff? It all comes down to a number of key steps HR and IT need to undertake – together:

COMMUNICATION: HRDs should take at least their broad system requirements to IT directors much earlier than in the past. If internal advice from the IT department is not sought at an early stage, the strategy could prove ineffective from implementation stage. If HR is to commence roll-outs or purchases themselves, they must understand IT’s standing on the various options, and be comfortable enough to discuss it with them.

HR must also ensure IT’s understanding of the overall company culture before any major changes to ensure they do not alienate the majority of staff, or cause other disruptions. In turn, IT must trust HR’s attunement with the broader company culture.

NEGOTIATION & BUY-IN: If HR wishes to act with any autonomy on IT matters, they must first understand not only the IT policies in the organisation, but the culture surrounding them.

Overlooking legal compliance, data correlation and other factors can result in unforeseen consequences.

“This is where HR really needs to say to IT ‘look, I want a best in class application, but please give me a sanity check on this and make sure this fits into our strategy and infrastructure’,” John Hansen, vice president HCM management at Oracle, tells HRD.

TESTING: By this point, HR and IT should both be well versed in each other’s policies. Roll-out of the new systems,

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initiatives or policies has commenced, but there is still one final phase HR knows all too well: gauging how employees are reacting to it all.

This phase is a significant turning point, and IT must trust HR’s ability to report back on what employees are happy with and what must change.

Through appropriate, hands-on training between IT and HR, productivity and engagement can be not only kept consistent during the change over, but perhaps even bolstered.

HYBRID OR STANDALONE? Is HR destined to become a ‘hybrid’ function? This is debated among professionals. The people & brand unit at REA certainly indicates a possible hint of future ‘hybrid’ HR functions, but Peter Linas, international managing director at Bullhorn, suggests it won’t always be the case.

He tells HRD that if HR is represented on the board, as in enlightened organisations, the probability of creating a hybrid HR practitioner – such as an IT/HR super professional – is low.

Instead, it’s likely HR will remain a standalone function and will move towards practitioners expanding their knowledge base and borrowing from other business functions to allow for greater collaboration and understanding.

The 2012 Human Resource Competency Study, compiled by ‘HR guru’ Dave Ulrich using data from more than 20,000 respondents around the world, identified six areas HR professionals must demonstrate proficiency in. To be successful, they must be: y strategic positioners who understand evolving business contexts, stakeholder expectations and business requirements, and be able to translate them into talent, culture and leadership actions y credible activists who build relationships of trust and have a clear point of view about how to build business performance y capability builders who define, audit and create organisation capabilities required for sustainable organisational success y change champions who initiate and sustain change at the individual, initiative and institutional levels y HR innovators and integrators who look for new ways to do HR practices and integrate those separate practices to deliver business solutions y technology proponents who use technology for efficiency to connect employees and to leverage new communication channels, such as social media.

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INSIGHT / PRODUCTIVITY

BARRIERS TO PRODUCTIVITY

A recent study found only 7.5% of workers reported they were productive all of the working day, with the majority feeling they were productive around 25% of time. Australia has lagged behind other countries in terms of productivity. What is hampering workers?

The Clarius Group polled 1,000 white collar professionals to find out what they think would improve their productivity on the job

65% Could you be more productive during working hours?

65% - yes 35% - no

1 in 5 people say they are productive for only half a day or less

Employers are missing out on an average of three months of productivity per year from their staff

WORKPLACE BULLYING – A BIGGER PROBLEM THAN WE THINK? One in 10 professional cite bullying from other colleagues or their manager as a productivity barrier

THE TWO MOST COMMON TYPES OF BULLYING* ARE: 1. VERBAL Using putdowns, insults or sarcasm to regularly

humiliate

2. PSYCHOLOGICAL MANIPULATION Being deliberately left out of workplace activities or requests for help or advice being ignored

Gen Y’s are the most effected

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WHAT IS CAUSING LOW PRODUCTIVITY? 1

Unsure how to use the technology

2

Bullying

3

Organising social calendar

4

Social media

5

Don’t like the job

DID YOU KNOW? In 2004, the South Korean government moved to lower working hours by introducing a mandatory 44-hour, five-day working week. In Australia, the Fair Work Act 2009 stipulates that, unless additional hours are ‘reasonable’, the maximum weekly hours for a full-time employee is 38 hours.

FOUR KEY AREAS TO BOOST PRODUCTIVITY^ ;; Organisational structure, design and operating

model – removing all wasteful, bureaucratic, and non-value work and outputs. 23% of leaders believe org structure, design and operating model have the biggest impact on productivity ;; Technology – being more ambitious and effective in process automation and technological change. 8% believe additional, new or improved technology would improve performance ;; People management issues – developing and utilising the full talents and capabilities of human capital. 54% believe people management issues have the biggest impact on productivity ;; Innovation – being deliberate and audacious with an innovation agenda. 15% believe further innovation would increase productivity Sources: Clarius Group except for: *Australian Psychological Society ^Wastage adds up despite motivated workers The Ernst & Young Australian Productivity Pulse

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HUMAN RESOURCES DIRECTOR

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FRONTLINE INTELLIGENCE / HR CAREER MANAGEMENT Craig Mason is Managing Director of The Next Step, a specialist consulting practice in the human resources market. For more information call (02) 8256 2500 or email cmason@thenextstep.com.au. Website: www.thenextstep.com.au

Making the right moves in 2014 There are some key trends in store for the HR profession in 2014. These trends of course mirror exactly what is happening in the business world as well as in the broader economy.

THE TREND OF NOT KNOWING WHAT THE TREND IS ...

The first trend is that there is no trend.

There is a significant level of uncertainty in the business environment. This is playing out in patchy performances across the board.

There is a much-used quote that could describe this environment, by former US Secretary of Defense Donald Rumsfeld, who said, “There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.”

Now that quote was related to the wars in Afghanistan but it aptly describes the current business market.

This is a great opportunity for HR professionals who revel in environments that require agility and adaptability but can challenge those that require high levels of stability and certainty.

HR professionals in 2014 are going to be operating in a heightened level of ambiguity, requiring even faster levels of change response time than in the past. Fast twitch execution and driving outcomes are going to be the order of the day.

THE TREND TO IMPROVE PRODUCTIVITY There is broad consensus that improvements need to be made in relation to Australia’s productivity. On a company-bycompany basis, this will translate to improving productivity being a key trend that will carry over from 2013.

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This is a trend that will play out within the HR function as well as HR practitioners playing a key role in the business.

Many improvements have been achieved in the overall productivity of HR functions through better process management, but this trend will continue as companies strive for shorter response times combined with consistent service delivery.

In the business, HR will be asked to continue to manage the process of delivering workforce business productivity programs. Synergies created through system integrations as well as other initiatives such as offshoring will continue to be rolled out and managed by HR. Therefore, in 2014, the main HR capability to deliver improvements in productivity will continue to be change management. HR will be working with business leaders, driving and managing change. This was the domain of the management consultancies five years ago but it is rapidly becoming the most sought after HR capability in Australia (five years after the same trend was experienced in the UK).

THE TREND TO DELIVER PERFORMANCE Through knowing the numbers and metrics, HR is being asked to deliver a clear picture on the performance of the business and its people with a higher level of transparency.

Using fact-based logic, HR professionals will be expected to assist business leaders to drive improvements, see linkages and foresee unintended consequences in the business landscape.

For the HR function itself, there will be a continued pressure on head count, but with increased levels of responsibility and autonomy in roles, with HR leaders needing to have the right people in the right roles.

THE TREND TO DRIVE INNOVATION In identifying the seven key business issues of 2014 for boards, the Australian Institute of Company Directors in their December 2013 edition quoted at number two, Organisational Culture.

It quoted the CEO of Insync, Nicholas Barnett, as saying, “They, (Boards) need to ask questions like; Have we got a culture of innovation embedded in the DNA of our company? Is our organisation’s culture sufficiently robust and change-capable to enable it to quickly adapt to significant industry change or disruption?”

In the November edition of this column, we quoted a report from KPMG’s head of Transformational Change, clearly stating the case that driving a culture of innovation is HR’s BIG OPPORTUNITY. As the report indicated, innovation is all about culture rather than R&D spend and therefore is clearly within HR’s mandate. This is an exciting prospect and an incredibly positive contribution that the HR community can deliver on in 2014.

THE FINAL WORD It’s fairly clear that 2014 is going to be a low-growth environment and that this is the new operating norm. As Barnett said, “Companies continually have to do more with less as current business models are challenged. … Companies will feel the strain unless they have a deliberate strategy to drive productivity and innovation through more engaged employees … ” HR communities that can help build a culture that drives productivity and performance improvements and builds innovation will be seen as key enablers by the business community in 2014. What a great opportunity!

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12/12/2013 8:11:14 AM

MARKET MOVES / RADAR

Recent HR Market Moves Sharyn Schultz has recently been appointed as Executive General Manager, HR, for AsiaPac at RP Data, the leading provider of property information, analytics and risk management services. Sharyn has an extensive career across diverse industries, including financial services, construction and, more recently, retail at Luxottica. She has a considerable background in HR management and, in particular, organisational, cultural development and transformational change management.

Toll Holdings Ltd has appointed Alex Lombardi as their National Head of HR for Toll Fast and Toll People. Alex has an impressive background in senior HR leadership positions and has driven commercial and transformational change within highly competitive industries such as IT, airlines, engineering, finance and professional services. He has worked nationally and internationally and was most recently Regional Director, Human Resources, Australasia, at International SOS. Bernadette Obeid will join St Vincent’s Private Hospitals as their new HR Manager. She has extensive experience in HR management with a strong background in industrial and employee relations across various industries, including manufacturing. Most recently she worked for Asciano, Australia’s largest national rail freight and ports operator, as National HR Manager.

The introduction of the National Disability Insurance Scheme (NDIS) is the catalyst for major HR changes in the NFP disability sector. In response, Tony Scrivens has been appointed as Executive Leader – Human Resources at Ability Options, one of the largest disability service providers in NSW. Previously, Tony has held senior HR leadership positions across a broad range of industry sectors, including automotive, IT, manufacturing and banking and finance.

The ASX200 company Challenger Group, a leading investment management firm, has appointed Kynan Newswan as their new Head of Reward. Kynan started his career with EY and has a depth of reward experience, combining strategic thinking with operational excellence. In the last eight years he has progressed through a series of roles at

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Macquarie Group and was, most recently, Associate Director, Global Rewards.

Hesta Superannuation has successfully secured Sophie Sigalas to join them as Executive Manager People and Facilities. Sophie’s deep human resources and organisational development expertise assisted City West Water, her previous employer, to become an HR best practice leader within the water industry.

ANZ Bank has appointed Rachael Perry to the position of Human Resources Business Partner — Retail Banking Australia. Rachael has returned to Melbourne with a wealth of global experience, having worked at Accenture in Europe and, most recently, Deutsche Bank in London and New York. Her last position was Senior Vice President, Global HR Business Partner and Americas HR Regional Lead, Group Technology, where she delivered a number of business-aligned change projects.

Having worked there on a contract, John Curran has recently gone permanent as Manager, Safety and Environmental Services, at Endeavour Energy. John has extensive senior leadership roles within large multinational, matrix businesses in a wide range of industrial sectors. He is highly adept at driving structural and cultural change, particularly through the development, implementation and measurement of safety management systems.

Eftpos has recently appointed Marie Maky as senior HR Manager. She brings a wealth of experience to the role from her HR management career with businesses such as Alcatel, Cochlear and Kelly Services. Marie was most recently the GM, HR, at the Institute of Chartered Accountants.

Dr Richard Laidlaw has recently joined Woolworths to manage Talent and Succession. Richard joins Woolworths following eight years at Stockland, most recently as GM HR for the Retail, Office and Industrial businesses. His early career was spent in education and training, including L&D roles with Ernst & Young in Australia and Europe.

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

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COVER STORY / IKEA

A PERFECT PARTNERSHIP What’s the secret to IKEA’s global dominance of the furniture retail market? Iain Hopkins talks to CEO David Hood and national HR manager Jessica Murphy about the company’s unique approach to people management, and its impact on business success

Pulch Photography pulchphotography.com

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12/12/2013 5:22:05 PM

HUMAN RESOURCES DIRECTOR

As a child, a trip to IKEA was a revelation. Unlike other furniture stores where everything was oh-soserious and kids were frowned upon, IKEA not only encouraged interactivity with the goods for sale but kept bored kids occupied with ‘the ball room’ – a glass-walled room filled with small plastic balls. Then there was the cafe with its ginger-snap biscuits…

Fast-forward 30-odd years later and while the appeal of IKEA to former kids like myself has changed, few would argue it isn’t still something of an adventure visiting an IKEA store.

WORLD BEATER A Swedish company established in 1943 by 17-yearold Ingvar Kamprad, IKEA has always presented stylish, budget-friendly design. The popularity of its ready-to-assemble furniture (such as beds, chairs and desks), appliances and home accessories has seen the company grow to become the world’s largest furniture retailer, with over 300 stores in 38 countries.

Not surprisingly, IKEA has also taken an innovative approach to people management. In the eastern Australian states (Perth and Adelaide are franchised stores) the company employs around 1,800 people. The HR team, headed by national HR manager Jessica Murphy, consists of six people, in addition to a further three staff in each store.

Although Murphy is the first to admit that the people agenda is not owned by HR – instead the company takes an organisation-wide, top-down approach – she says that this is not a new concept.

Indeed, it’s been part of the culture since conception in 1943. However, it wasn’t until the late 1970s that IKEA founder Kamprad wrote the company’s ‘HR Idea’ and ‘Business Idea’.

“Thirty years ago, he never imagined or constructed an organisation of ‘HR’ people, but rather outlined a philosophy that put the growth of people and the growth of business on equal footing,” says Murphy. “Because of this, the core of our success is a belief that all leaders are responsible for both the business and people agenda.”

Murphy is quick to clarify one point: IKEA does not have a ‘people-first’ culture. This lofty goal often ends up being nothing more than an empty sentiment. Instead, IKEA has a culture that recognises there is a symbiotic relationship between people and business. Murphy notes that there is evidence of this in countless ways: making sure all co-workers profit from the success of business

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“Shared values make most conversations easy.

I also think we challenge each other. I’m not afraid to tell him when I don’t agree with him and he definitely feels the same” Jessica Murphy results; ensuring that high-potential programs are focused on business outcome; making large investments in leadership development and selfawareness; six months’ paid parental leave; global and local KPIs around talent, mobility and succession; and “the list goes on”, she says.

CEO/HR RELATIONS Not surprisingly, the interweaving of HR issues into the core fabric of the business involves all stakeholders, but especially CEO David Hood. For any HR professional looking to forge a productive and meaningful relationship with their CEO, it’s insightful to see what makes this relationship tick.

The two communicate daily, if not face-to-face then via email or phone, to bounce ideas off each other or keep up to date with what is happening. Mutual respect, honesty and trust reinforce and perhaps underpin the relationship.

“I’m incredibly lucky to be working with someone who genuinely believes that 50% of every decision is about people,” Murphy says. “More often than not, he comes to me with new ideas around talent development or reward schemes.”

She believes that her CEO has three main expectations of her as head of HR: 1. To create an environment in which co-workers can be the best version of themselves and get the support they need to grow as people 2. To challenge him and the leadership team to ensure that everyone is always living up to values and has the co-worker in mind when making decisions 3. To provide input to and help deliver a business strategy that secures IKEA’s future on the Australian market

IN HER OWN WORDS...

What’s your biggest people-related issue heading into 2014 and how will you overcome this?

“We have huge expansion plans in Australia but also in the Asia-Pacific region. At the moment our biggest challenge is spotting and developing enough talent to fill the need for our country and to support globally.

I would also say that within Australia there are still too many people who don’t see the breadth of careers that are possible in a large retail organisation like ours” – Jessica Murphy

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COVER STORY / IKEA

IN HIS OWN WORDS...

What’s the biggest business challenge IKEA is facing in 2014 and how do you plan to overcome that?

“We are expanding rapidly in the AsiaPacific region. At the moment we have a 78% internal promotion rate in Australia for all leadership roles. To keep up this kind of succession with so many stores opening here and in our region will take a concerted effort from everyone, not just the HR team” – David Hood

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Hood himself expects Murphy to have total engagement in IKEA’s business agenda, bringing business and people together in all areas through the company’s ‘total plan’. It’s also important, he adds, that she is an advocate for people issues out in the frontline of the business.

“I expect that of all managers: get into the frontline. Of course, there is an expectation that she secures the technical stuff, but it’s only the base – I want my HR manager spending and committing time to the people development, talent and succession agendas,” Hood says.

And the key to CEO/HR success? It’s quite simple, Murphy laughs: “A mutual love of good wine!”

Beyond the love of a fine drop, Hood says it’s about constant contact and discussion. “We meet every week and chat every day. Sit close to each other. Be accessible to each other. And of course, have a common view about the direction and the importance of people in your business.”

Overriding all of this, Murphy adds, is a genuine love for and pride in the company. “We want to ensure its success. Shared values make most conversations easy. I also think we challenge each other. I’m not afraid to tell him when I don’t agree with him, and he definitely feels the same.”

HR’S IMPACT ON BUSINESS SUCCESS These close ties are beneficial when aligning the people strategy to the business strategy – but again

there is a twist in how this is done at IKEA. Murphy explains: “We have a way of working with business planning that integrates all of the elements of our business. As an example, we’ve just finished the draft of our FY15–17 Business Plan. There is not a ‘People’ section, nor is there a ‘Sales’ section.

Through a wide consultation process, we’ve decided what our priorities are for this period.

Integrated within this are many ways that our people will help make this come to life.”

Both Murphy and Hood see the direct financial impact of HR’s initiatives on business success. Like most organisations, IKEA has several key people measures that are used to guide the business.

Alongside the usual key indicators – turnover, diversity, 360s, exit data, etc – Hood suggests the most useful of all the people measures is the annual engagement survey.

“This year in particular we’re paying close attention to how involved and empowered our co-workers feel in the decision-making processes in the business. So much of our culture is built on entrepreneurship – this is crucial for our ongoing success,” he says.

Murphy adds that two further essential measures are internal succession/promotion and co-worker engagement.

“Through our experience here and globally, we can see the correlation between these two things and business success – this is especially the case when we open new stores,” she says. “It’s the difference between a store hitting its targets or not. There is a wide acknowledgement within the business of this correlation, and both of these measures are in goal letters signed by the leadership teams in the stores.”

THE FUTURE With ambitious plans to grow (see boxouts), it seems IKEA will once again buck trends and challenge the sluggish retail landscape.

And at what point should HR be involved in critical business decisions and future planning strategies? Hood doesn’t hesitate: “At the very beginning – I can’t imagine not having people represented at every stage.”

See David Hood and Jessica Murphy talk about integrating the growth of people and business together the IKEA way at the HR Summit, Sydney, 1-2 April 2014. hrsummit.com.au

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HUMAN RESOURCES DIRECTOR

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2014 FORECASTING / SUPERANNUATION

2014

A SUPER YEAR? 2013 was a year of significant change for superannuation.

Is 2014 shaping up to be just as busy?

Business leaders and HR professionals can breathe a sigh of relief. Given the raft of super changes rolled out in 2013, the forecast for 2014 is less turbulent. In fact, at this stage there are unlikely to be any significant changes to superannuation in 2014. The new government has announced that the superannuation guarantee (SG) rate will be frozen at 9.25% for a further two years. As such, the proposed increase to 9.5% will be deferred until 1 July 2016. The only other commitment from the new government is that it will make no unexpected changes to superannuation in its first term.

That’s not to say employers should take their eye off the ball. A survey conducted by Aon Hewitt prior to the July 2013 reforms revealed that many employers were struggling to stay compliant with those changes, let alone further changes in 2014.

Among the survey’s findings: y 29% of organisations are paying more than the SG, but only 11% intend to stay ahead

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of the minimum by the same amount when it increases y 58% of organisations say they have not yet determined their response to the SG increases beyond 2013 y Only 12% of companies intend to commence a review to determine which MySuper fund to use as their default fund, while 52% are still deciding what to do

MYSUPER The introduction of MySuper has been brewing for some time. This raft of changes falls under the government’s Stronger Super reforms and will require employers to make critical changes to their businesses which they must comply with by law.

MySuper is a new, simple and cost-effective superannuation product that will replace existing default super fund products. By 1 January 2014, employers must make SG payments for employees

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HUMAN RESOURCES DIRECTOR

who have not selected a preferred fund, to a fund that offers a MySuper product. The MySuper changes will deliver benefits to both employers and their staff. MySuper products will have a simple set of product features, regardless of who provides them, and will ensure members do not pay for any unnecessary features that they do not need or use.

Many superannuation funds have already launched MySuper products, and ATO authorisations of new MySuper products will continue through to the end of 2013. Super funds have been contacting employers and advising of the new arrangements.

It is important that employers should check that the default fund they are currently using provides a MySuper product, or plans to do so by the new-year deadline.

If the existing default fund does not offer a MySuper product by 1 January 2014, employers will need to switch to a fund that is authorised.

“Like many changes there are employers ready for the new changes and others that need to update their systems and procedures to ensure employees are offered a MySuper product by default,” says Brad Eppingstall, principal, RSM Bird Cameron.

THE DATA AND E-COMMERCE STANDARD Another key date to consider for employers with 20 or more employees is 1 July 2014 (1 July 2015 for employers with 19 or fewer employees). By these dates, employers must use the Data and E-commerce Standard (the Standard) as part of the government’s SuperStream measures to ensure all data and money are transferred electronically.

Currently, contributions from employers may be sent to different superannuation funds using different methods and formats. This process can be costly and inefficient for both employers and funds.

For employers, the Standard provides a simpler, more consistent method of making superannuation contributions.

A common standard will also ensure that employer contributions can be streamlined and monies paid in a consistent, timely and efficient manner to a member’s account. Many of the complexities employers currently face will be removed.

For the majority of employers the Standard will also enable information about all employee contributions (that is, both default and choice contributions) to be sent to multiple funds through a single electronic channel.

“This is a large-scale change affecting many

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thousands of businesses and relationships. A change this large is an ongoing process, not a single event, and needs to be carefully managed,” says Alison Lendon, ATO deputy commissioner, superannuation.

“There’s no ‘one size fits all’ approach to adopting the Standard. Employers can choose the solution that best fits their business arrangements,” Lendon adds.

Multiple solutions will enable employers to comply with the Standard, including: yy upgrading payroll software yy engaging a service provider, such as a payroll bureau, tax agent or bookkeeper yy using a clearing house yy working with their super fund, which may have an online solution Employers should speak to their default funds or service providers to help them find the right solution for their businesses.

The ATO’s focus in 2014 will be on making sure that employers are aware of their obligations, understand the options available to them and have plans and arrangements in place for when and how they will meet the new requirement.

For example, the ATO will expect that by 1 July 2014 employers with 20 or more employees will have a plan as to how they will implement the Standard and a target date for when the first contributions will be made under the Standard.

“Depending on the option they choose, an employer’s actual start date may be later than 1 July 2014,” says Lendon. “The ATO will support employers through help and education activities to get ready to make contributions using the data standard.”

3 MYSUPER STEPS FOR EMPLOYERS Employers can be ready for MySuper by taking the following simple steps: 1. CHECK: Check your existing default fund arrangements. Has your default fund advised you about MySuper changes?

2. CONTACT: If you have not heard from your default super fund, contact them now.

3. CONTRIBUTE: After 1 January 2014, make SG contributions with your MySuper arrangements in place.

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2014 FORECASTING / BIG DATA

DATA OR DIE

Research suggests the talent acquisition function has the highest business impact of any of the HR functions. David Bernstein outlines how Big Data can assist and why HR can’t be strategic without it

END GOAL IN SIGHT A strategy is a carefully designed plan with a specific end in mind. With a clear understanding of overall company goals, HR gathers the various types of internal and external data needed to detect patterns and predict future outcomes. HR can then create people strategies based on that analysis, with the specific end of meeting business goals as they pertain to talent.

If HR is unable or unwilling to incorporate

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VALUE & NEED ASSESSMENT

Optional

Must Have

Nice to Have

Optional

VALUE

A recent report by ManpowerGroup and Right Management states: “In the Human Age, the shift in strategic focus from capital to talent is putting business performance results at the door of HR leaders. Success will be measured by their ability to work with the business leadership to… leverage talent as a competitive advantage.”

Sound advice, to be sure, but the perception of HR’s strategic prowess leaves much to be desired.

HR is accused of not being strategic, and that accusation is all too often based on reality.

PricewaterhouseCoopers’ 2012 CEO Study stated 79% of HR leaders report to the CEO; however, the Economist Intelligence Unit’s 2012 CEO Perspectives Study stated only 38% of CEOs view HR leaders as key in the company’s strategic planning.

In order to offer strategic insights to their organisations, HR leaders must bring what every other business function brings: recommendations and consultation based on solid data. The advent of Big Data offers HR unprecedented opportunities to demonstrate their value to the bottom line.

NEED evidence-based forecasting into its processes, it will become even less relevant to its company’s goals. A decision point has arrived for HR leaders, wherein they need to assess the value and need of data in their organisation (see graphic) and decide whether or not data matters. No one, if given the opportunity to increase their likelihood of making accurate decisions, would say, ‘No thanks’. But that’s exactly what HR professionals are doing if they reject the ‘must-have’ nature of data. If Big Data-generated insights aren’t important, valuable or needed, then this article is a waste of time and there’s no point in reading any further.

If, however, such insights are valuable and needed, consider this. The Boston Consulting

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HUMAN RESOURCES DIRECTOR

Group recently concluded the talent acquisition function has the highest business impact of any of the HR functions on the success of running a business. If HR hopes to retain this vital function, it needs to acquire the Big Data-derived predictive analytics necessary to become more strategic.

BIG DATA IN PRACTICE Here’s an example of how Big Data can inform one aspect of talent strategy. After my firm reviewed the talent acquisition objectives of a large financial institution, it became clear they did not understand how their recruitment marketing spend was performing. Over the years, the number of job boards they were using had ballooned to 48, costing them roughly $175,000 per year – all in an effort to hire an average of 350 people per year in just that one segment of their business.

The first objective was to analyse their candidate activity across those 48 boards. We found, to everyone’s surprise, 45 of their sites showed no response within a reasonable time frame. The analysis revealed only three of their current boards were producing any reasonable candidate response rates. With our Big Data analysis capability, we were then able to identify four other boards they should use and recommended they drop the 45 that were

“Big Data enables you to see into your company’s future, as well as that of the broader market, and be strategic in your talent acquisition efforts” not performing. Finally, based on our analysis of the words and phrases candidates were searching on, we provided guidance on how to improve their job posting titles and descriptions.

Ultimately, we helped our customer boost their candidate traffic by 175%. Our customer also reported an increase in the quality of candidates, as evidenced by an increase in the number of candidates brought in for interviews. The data analysis from this example was both descriptive and predictive: here’s what is going on now, and here are ways to likely improve what’s going on. Big Data analysis can help to bridge the gap between ‘I think’ and ‘I know’, between ‘This is how we’ve always done it’ and ‘This is how we should be doing it’ – by enabling accurate forecasting and real-time analysis and adjustments

THE ‘DIGITAL GENOTYPE’: IT’S CLOSER THAN YOU THINK Ari Kopoulos, director of sales - HR technology/payroll at EI Group, looks towards the not-too-distant future at a trend that will transform how employers source, hire and retain employees There are algorithms that fly planes; algorithms that trigger buying selling of stocks; and there are even algorithms that predict online purchase patterns that have redefined the marketing department. So why not harness the range and depth of information we generate as a data signature to assist, or even predict, a successful hire, as well as their performance and likelihood of staying with the company?

In many ways, Big Data and HR are a natural fit. Big Data offers HR the opportunity to take data-driven decision making to an entirely new level by interpreting an unprecedented volume of information from a variety of sources, some even quite unconventional.

This Moneyball approach* can appear to be heartless, counter intuitive, and defy explanation, but it will augment HR’s ability to execute complex sourcing, hiring and retention strategies.

To complete their journey towards a strategic partner, HR professionals will need to embrace the Big Data movement.

I’m suspecting HR will become more like the marketing department, using the real-time tactics and analysis that Big

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Data offers to identify, acquire and develop their ‘customers’ while building and promoting the brand experience.

Although early days, there are quite a few start-ups analysing and translating online behaviours, social profiles and activity patterns into intelligence, productivity and emotional IQ. Knack.it, Gild, and Evolve are just a few.

I have no doubt Big Data can identify the ‘Digital Genotype’ of a successful candidate, but that in itself does not guarantee these qualities will be expressed in any environment, for we all know correlation is not causation.

Qualities and competencies can be switched off, suppressed or even enhanced into a negative state by external forces, such a culture. This is why Big Data needs to be embraced as a holistic process for the specific environment. Until the ‘algorithm’ can predict success in a given environment, there will still be a place for human decision making. *a film in which a baseball coach creates a ‘data model’ to evaluate players and identify the key characteristics to mathematically give the team the best chance to win at the lowest cost

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2014 FORECASTING / BIG DATA

METRICS AND BENCHMARKS The following metrics, taken from clients of consultancy SuccessFactors, cover several recruiting areas and have been shown to drive better recruiting results. Here are the top metric categories your organisation should be thinking about: CAREER SITE PERFORMANCE: MONITOR AND MEASURE CANDIDATES’ FIRST IMPRESSIONS Key metrics y Number of candidate career site visits per completed application Benchmark: 92% of candidates who visit a career site do not apply on their first visit. y Percentage of candidates who start the application process, but do not finish it Benchmark: 50% of candidates who start the application process do not finish it. y Ratio of content that’s about your company versus about available jobs Benchmark: 80% of your career site should be about helping candidates look for jobs; 20% should be about your company (culture, benefits, etc).

Own your source: create and cultivate a talent community Key metrics y Percentage of hires from existing sources Benchmark: Companies with their own talent communities typically see an increase of 25-40% in hires from existing sources. y Percentage of completed applications from external sources versus the talent community Benchmark: Companies that encourage candidates to join a talent community before applying, typically see an increase of 30-40% in completed applications. y Percentage of ‘true’ passive candidates captured (as measured by candidates who join the community but

don’t apply for a job for more than 30 days) Benchmark: 25-30% of candidates will join a talent community and wait more than 30 days before applying.

Use of free sources: Search Engine Optimization (SEO) Key metrics y Number of applications-per-hire by source Benchmark: SEO takes, on average, 32 applications to get to a hire, versus 219 for job boards. Fewer applications per hire generally means the source is generating higher quality applicants – saving the recruiters time screening. y Percentage of candidate traffic from each search engine (e.g. Google, Bing and Yahoo!)

Benchmark: 80% of job board traffic comes from Google, Bing and Yahoo!, with Google accounting for 85% of SEO traffic. y Growth in candidate traffic from search engine sources over time Benchmark: In January 2011, SEO generated 697,000 candidate careers site visits; in January 2012, SEO generated 1,993,000 candidate visits.

Know your social media performance: embrace the power of social media effectively Key metric y Applications-per-hire by social network source Benchmark: Facebook takes, on average, 31 applications to get to a hire, versus LinkedIn, which takes, on average 268.

Be mobile friendly. Get moving on mobile Key metric y Percentage of career site traffic from mobile devices yearover-year Benchmark: The graphic below shows the staggering growth of visitors from mobile devices for companies with mobile-friendly career sites.

VISITOR GROWTH TO MOBILE-FRIENDLY CAREER SITES PHARMA/ BIOTECH

181%

FINANCIAL SERVICES/ INSURANCE

148% 167%

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121% RETAIL

HEALTHCARE

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MANUFACTURING

192%

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HUMAN RESOURCES DIRECTOR

within the talent acquisition process.

KEY STEPS HR leaders can follow these practical action steps for building a foresighted, Big Data-informed talent acquisition strategy that aligns with business objectives: yy start with your internal data in your core ATS and HR systems to determine turnover rates, cost per hire and other key metrics yy look at the data from the job boards you use to determine which ones are producing the candidates you need – and how long it’s historically taken to get them yy subscribe to data services – ie web traffic data, Google AdWords, vendor and government labour data, etc – to increase your ability to forecast talent needs yy measure your Facebook, Twitter, and LinkedIn traffic – ie number of Likes, Follows, ReTweets, etc – and determine if there is a correlation with your employer brand and recruitment marketing efforts. yy work with vendors or in-house IT and data

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specialists to analyse the data to detect patterns of behavior that will inform the how, why, when and where of your talent acquisition strategy Consider how these insights can enable you to be proactive. Big Data enables you to see into your company’s future, as well as that of the broader market, and be strategic in your talent acquisition efforts. It also enables you to measure whether you are getting the expected and desired results from those efforts.

Bringing to your executives data that reveals how long it will take to fill certain positions and the budgets needed to build the right sources, for instance, makes your strategic value obvious. Faster time-to-insight means faster time-to-hire, which means your organisation has the competitive advantage of having the talent it needs in place at the right time.

Being able to fulfill business goals and take advantage of market opportunities has a long-term effect on any organisation’s bottom line. That’s the kind of strategic partnership that can boost the C-suite’s confidence in HR.

About the author David Bernstein is VP of Big Data for HR at eQuest. For further information visit equest.com

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2014 FORECASTING / TALENT MANAGEMENT

BUILDING A BETTER MACHINE: TOMORROW’S WORKFORCE TODAY Holly Benson presents a ‘cheat sheet’ to prepare for tomorrow’s workforce, which will be faster, smarter and bigger than ever before

Wearable technology. Co-creation spaces. Cultural dexterity. Virtual offices. We hear a lot about what the future of work will look like, but where is the cheat sheet for how we prepare?

Consider these four major shifts in the modern workplace:

BIGGER Do you have the agility to navigate an increasingly globalised and diverse workforce?

SMARTER Can you unlock innovation by removing organisational barriers?

FARTHER How do you ensure clarity as relationships become virtualised, networked and transient?

FASTER How do you nurture resilience in coping with accelerated velocity and change?

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The good news? Whether these changes create a defining weakness or a competitive advantage for your business is up to you. Far from being random or unpredictable, you can actually engineer the outcome.

BIGGER If your workforce isn’t yet globalised, your customer base may well be; if your customer base still isn’t, your supplier base likely is. There is a growing certainty that your managers will need to manage across geographic, linguistic and cultural boundaries; your employees will need to collaborate with people who developed in a very different cultural Petri dish. How do you prepare?

The first response is tactical: Design and implement HR processes and systems that allow you to manage human capital on a global scale.

Leverage technology to ensure that leaders have control not just of a global operation but also of a global talent pool.

Second, consider your strategy. Are you an Australian company that operates internationally, or a global company? If the latter, you need to be driving global diversity through your staffing and succession planning, your leadership should reflect the demographics of the markets in which you operate, and your decision-making should be more decentralised.

You must also foster cultural agility: the human ability to operate seamlessly across borders. I’m not talking about cultural immersion courses but the awareness that others are truly different.

International business partners may have different definitions of success: you might be focused on operational efficiency while your partner is

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HUMAN RESOURCES DIRECTOR

focused on expanding the local payroll. Or you may use language differently.

FARTHER Increasingly, employees need to work effectively with people they cannot see, and may never meet.

As one project finishes, they must quickly be able to establish new relationships with different team members – across the hall or across the globe, from home and remote sites, with short-term contractors and long-term partner organisations.

The key to navigating these relationships is clarity.

Once upon a time, proximity could compensate for lack of clarity; if someone didn’t understand, or didn’t deliver what you wanted on the first attempt, you simply walked down the hall and tried again. That’s not possible in a virtualised workplace.

To bridge the virtual gap, it’s important to start new individual or organisational relationships with explicitly defined goals, expectations, metrics and rewards. You also need the right performance management systems, governance – and yes, oldfashioned listening – to reinforce them.

FASTER The pace of business and of change itself has never been quicker for organisations, or for individuals.

I worry when I hear change-weary employees lamenting, “When will this be over?” Leaders need to be honest with them: it won’t be “over”.

HR must help set these expectations and prepare staff to cope with them. Both recruitment and succession planning should be assessing candidates’ agility and resiliency. They should look for evidence of rapid learning, curiosity, and openness. From onboarding through ongoing communication and development programs, the organisation should set the expectation of change and pace, and effective strategies for coping with them. OE/OD leaders should also make the case for investing in meaningful organisational change support for major initiatives.

SMARTER In addition to the technical aspects of business information sharing – business intelligence,

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analytics, big data and the like – we must consider the human factors.

The organisation that waits for all information to pass through a central decision-making authority has already lost the race. Winning enterprises not only invest in systems that enable real-time data synthesis and availability but they also invest in creating the organisation capable of leveraging it.

In these winning organisations, decisionmaking becomes decentralised and democratised.

Senior executives are open to the possibility that a front-line employee halfway across the world might possess a more important insight than peers in the C-suite. Front-line employees have the tools and organisational support that empower them to act on information locally, or rapidly get it to someone who can.

Innovation – or lack thereof – is at heart a cultural issue. Organisations must remove the barriers by rewarding collaboration and prudent risk-taking. Encourage people to fail fast, often and cheaply by budgeting for multiple smart attempts. Only then will you grow the team you need to succeed in a bigger, farther, faster, smarter world.

Holly Benson heads the organisational transformation practice at Infosys, a global business consulting and technology services company. Contact her at holly–benson@ infosys.com.

BUILDING A CULTURE OF INNOVATION IN YOUR BUSINESS FREE THEIR MINDS

• Encourage sabbaticals • Take work off the plate • Set aside a day/month for learning and exploration • Install break rooms and game rooms that allow people to play CREATE A SPACE FOR SHARING

• In person, virtual, at any scale • Everyone works harder • Ensure leaders are visible and engaged when they own a piece of the outcome • Reward collaboration and prudent risk-taking GIVE THEM A PIECE OF THE ACTION

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2014 FORECASTING / REMUNERATION

BONUSES: IN THE CROSSHAIRS? In 2014, Australian companies will be watching new European caps on bonus payments in the financial sector with interest, Stephen Burke reports

What led us to the GFC? Was it executives engaging in unsustainable, unreasonable risk-taking in exchange for super-sized bonuses? While the good times rolled, they were coming out way on top, but other times they were losing money hand over fist.

Australia acted to curb this reckless behaviour in 2009, but Europe’s financial sector is about to take things a step further.

New standards on bank capital came into force in the European Union as of 1 January 2014. Capital Requirements Directive IV (CRD IV) has been designed to strengthen the capacity of EU banks to more effectively manage the risks linked to their activities and absorb any losses they may incur in doing business. Australian companies with EU ‘parents’ are likely to feel these changes most acutely but there are likely to be flow-on effects for the broader Australian finance sector.

MATERIAL RISK-TAKERS Essentially, CRD IV caps bonuses of senior staff in the finance industry considered “material risktakers”, particularly in asset management and investment banking, at 100% of fixed pay (or up to 200% of fixed pay if approved by shareholders). It applies to any staff deemed to have a role that takes on material risk of: • EU-headquartered firms, for example large banks, and will include those in senior roles in markets outside the EU, including Australia • firms located in the EU, including subsidiaries of non-EU organisations, so material risktakers of foreign-parented firms located in the EU will also be caught So, what constitutes a ‘material risk-taker’? Any person in the above two types of organisations with

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total remuneration greater than ¤500,000, or whose pay otherwise places them among the highest paid 0.3% of staff or at the same level as the lowest paid senior management of the firm.

While the Australian Prudential Regulatory Authority (APRA) has given no sign that it is looking at similar regulation, the response of EUparented (and other affected) organisations located in Australia is likely to impact the market here. APRA instituted a number of changes to regulation of pay-related risk through prudential standards issued in 2009.

REVISED PAY MODELS EU-parented companies are considering alternative pay models for affected staff to comply with CRD IV. The primary change contemplated is to increase fixed pay to broadly maintain current levels. This would be introduced as a ‘role allowance’ and, as a result, would not be pensionable or flow through to other benefits.

Organisations are also talking about extending their long-term incentive vesting to take advantage of a ‘discount’ available for vesting periods equal to or greater than five years. This could be achieved by attaching an additional deferral period to the end of market-practice three-year vesting/ performance periods.

CURRENT FINANCE SECTOR PAY MODELS Bonus payments as a percentage of fixed pay have trended downwards in recent years, driven by changes in the underlying economics of financial services (namely, a fall in profits) rather than modifications to pay models. However, variable pay in financial services (outside retail banking) and

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HUMAN RESOURCES DIRECTOR

particularly in investment banking and investment management is, typically, several times fixed pay in years of good performance. Before the GFC, there were examples of senior executives receiving 30 to 40 times fixed pay in bonuses. In financial year 2013, there were still examples of senior executives receiving variable pay of up to 10 times fixed pay as some organisations began to feel profit recoveries.

The charts below illustrate that among selected ASX-listed companies in the financial services sector, which tend to have more conservative practices than foreign-parented and privately owned competitors, variable pay at median routinely exceeds the 100% cap imposed by CRD IV and, at the upper quartile, frequently exceeds the 200% cap available with shareholder approval.

The investment pay model led to a very healthy bonus structure during strong performance periods but it also has drawbacks for participants.

Weak profit performance means a decline in total pay as bonuses are cut, and the industry is often quick to reduce headcount in the face of

FINANCIAL SERVICE CEO BONUSES AS A % OF TOTAL PAY OVER THE LAST FIVE YEARS Median to 75th 25th to median

% of total fixed pay

250% 200% 150% 100% 50% 0%

2009

2010

2011

2012

2013

Financial years

BUSINESS UNIT HEAD BONUSES AS A % OF TOTAL PAY OVER THE LAST FIVE YEARS % of total fixed renumeration

Median to 75th 25th to median 300% 250% 200% 150% 100% 50% 0%

2009

2010

2011

2012

Financial years

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2013

downturns. At the end of the day, this is a high opportunity/high risk model.

CRD IV AND AUSTRALIAN COMPANIES The extent to which Australian companies (with EU parents) are affected will depend on how far down the organisation the CRD IV rules are deemed to apply. In general, we expect fixed costs will increase, there will be a lower correlation between overall remuneration spend and performance, and the ability to reap large cost savings from bonus reductions will be significantly reduced; that is, the business will lose flexibility.

If this proves to be accurate, in good times total pay will remain broadly competitive with the market (and we can be sure organisations will undertake a great deal of work to remain competitive) but in the face of a business downturn EU-parented firms may be forced to cut jobs faster than they have in the past to maintain profitability.

More broadly in Australia, the effects of these changes are likely to be influenced by an executive’s unique risk appetite and view of the economy.

Executives with a high risk appetite and/or a positive view of the economy, financial services industry and their ability to earn high profits may be more inclined to remain with organisations offering the current pay model. Risk-averse executives, on the other hand, might be drawn to EU-parented firms for their offer of higher fixed pay in uncertain times. The quandary for this latter group, however, is the possibility of a lower level of job security.

Findings from Towers Watson’s 2012 Global Workforce Study show that job security is the number one concern among Australians seeking a new job, and base pay is the key retention driver.

While a higher level of risk tolerance is likely in the finance sector, we would still expect a movement towards the same priorities as the wider workforce.

This means attracting and retaining talent could be a real balancing act for EU-parented firms.

Stephen Burke is director, executive compensation, Towers Watson

Driver

Attraction

Retention

1

Job security

Base pay

2

Base pay

Career advancement

3

Career development

Trust in leadership

4

Work location convenience

Job security

5

Career advancement

Manager relationship

Source: Towers Watson 2012 Global Workforce Study

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TURN BACK THE CLOCK

What can we learn from 2013? Iain Hopkins revisits some of the poor decisions and corporate misjudgments of the past 12 months and outlines different approaches that could have been taken 26 |

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HUMAN RESOURCES DIRECTOR

Let’s face it, everyone loves a scandal. People relish the thought someone else has done something wrong, only to have the misfortune of getting caught out.

The old adage ‘to err is human’ is worth keeping in mind in any analysis of corporate missteps. It would be a rare case indeed for someone to intentionally set out to do the wrong thing. Yet, despite the myriad consultants, expert advisors and ‘been there, done that’ colleagues, it happens with alarming frequency.

HR Director’s focus is not so much to dwell on what went wrong in the specific cases cited, but rather to outline how alternate paths could have been taken to achieve different outcomes.

LEADER INDISCRETIONS AND TOXIC CULTURES Recent history is rife with examples of inappropriate leadership behaviour. The sexual harassment claims made against former David Jones CEO Mark McInnes in 2010 is perhaps the most infamous – not simply due to the serious nature of the claims but also due to accusations the leadership team was aware of and tolerated ongoing sexual misconduct by McInnes.

More recently, in 2013, two CSIRO employees blew the whistle on alleged mismanagement and made claims about a bullying culture at the government agency. This case also threw the spotlight on toxic workplace cultures.

While it is tempting to say glibly that senior executives must be honest and fall on their swords, in reality this does not occur: corporate lawyers urge vagueness in order to avoid liability claims, and PR advisors by nature attempt to minimise the negatives and deflect attention. Therefore, urging executives to fire a sacrificial lamb just to appease the mob might be too simplistic, suggests Gary Taylor, experienced global HR practitioner, currently with the South

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African Board of People Practice. He does add, however, that both internal and external stakeholders are generally more forgiving of an honest apology than of a cover-up. “Interestingly, different cultures respond differently to behavioural scandals – in France, for instance, a scandal in one’s personal life is entirely forgivable, but not so in other cultures,” Taylor adds.

Usually these types of indiscretions are indicative of a wider moral failure across the system. For instance, a CEO may be brilliant, but is not morally or ethically very developed. Nor are they developed in terms of emotional or ego maturity.

“When they are functioning at this early stage or level of development, they can get themselves in trouble, such as in these cases,” says Bob Anderson, CEO of The Leadership Circle.

Moral development follows the same developmental sequence as the stages of leadership development.

What needs to be addressed in this instance is how to develop the leaders of an organisation, not only from the perspective of capability, but also by evolving their ability to deal with higher levels of complexity.

“As this happens, they become more mature,” Anderson adds.

Can faith in leadership be restored following such a scandal? Reputation can be rebuilt, but it must be rebuilt on the very same principles that built trust.

Leaders should: yy act in accordance with their own statements – act as they expect their employees to act yy listen to employees and understand their concerns yy follow through on commitments yy encourage employees to offer ideas and suggestions “Spinning the issue will not work; in fact it will further erode the situation,” says Anderson.

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A FAILURE TO COMMUNICATE? “The standard you walk past is the standard you accept; that goes for all of us, but especially those who have a leadership rank.” So said Lieutenant General Morrison in response to the sexual harassment claims that riddled the Australian Defence Force in 2013.

What some managers are unaware of is the standard you walk past is also the standard you are personally liable for. Under a number of Australian anti-discrimination laws – the federal Sex Discrimination Act and the Victorian Equal Opportunity Act to name two – accessory liability is imposed on those who request, instruct, induce, encourage, authorise or assist the unlawful behaviour of others. Managers can be found personally liable and a damages award made.

Lieutenant General Morrison’s speech was applauded as an example of outstanding leadership that turned an overwhelmingly bad news story into a public relations success. It demonstrates a zero tolerance policy to unacceptable behaviour in the workplace and encourages everyone in the ADF to stand up and call bad behaviour.

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TOYOTA FEELS THE HEAT AFTER STAFF LAY-OFFS When Toyota made 350 plant workers redundant in April 2012, few could have foreseen the PR furore the action provoked. The media, the public and the workers themselves claimed the method of the process was needlessly cruel and humiliating, with claims of overbearing security presence and workers enduring months in limbo.

Then-Workplace Relations Minister, Bill Shorten, stated he had concerns over the way the workers were sacked. “You can do these things in a dignified fashion,” he commented.

Yet, by all accounts, Toyota followed the letter of the law.

Workers who were made redundant received four weeks’ redundancy pay for every year of service, and the cap was increased from 75 to 90 weeks – an offering far in excess of legal requirements.

A Toyota spokeswoman said the offers made to redundant workers had been agreed with the union, and the entire workforce was assessed – those with the lowest scores in behaviour, skills and knowledge, including their adherence to the company’s values, were let go. Workers were also assessed on whether they attended work on time, their standard of uniform, their communication skills and their adherence to safety protocols.

Toyota said it was “a very difficult day” for the company and it wanted to make sure its employees were treated with respect by providing one-on-one meetings. Services, including counselling and a free

HCAMAG.COM

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HUMAN RESOURCES DIRECTOR

COMPLIANT DOWNSIZING Here’s a six-stage strategy employers should adopt to ensure they downsize legally and for redundancies to be considered genuine 1. PLANNING In the planning stage, employers need to be aware of employee entitlements such as notice and severance pay rates, annual and long service leave, bonuses and other incentive arrangements, which are derived from the National Employment Standards, relevant awards, enterprise agreements, contracts and policies.

Important obligations for an employer in the initial planning phase also includes consultation and redeployment. “If you don’t at least exhaust your redeployment obligations, then an employee may have jurisdiction to bring an unfair dismissal claim against you,” says Minter Ellison senior associate Sheridan Jones.

Employers also need to plan for contingencies in redundancy programs, from media relations and potential delays through to industrial action and other proceedings.

4. REDEPLOYMENT AND UNFAIR DISMISSAL Employers are protected by an unfair dismissal ‘shield’ if they are able to satisfy three criteria. A redundancy is genuine when: a job is no longer required to be performed; if an employer has complied with award/EBA consultation provisions; and if reasonable attempts to redeploy have been made.

“A lot of employers fall down when it comes to their redeployment obligations,” says Kristy Edser, a partner in Minter Ellison’s employment law practise. She adds employers need to consider retraining, relocation, lower positions or other suitable positions (within the employee’s skill and competence), within the employer’s enterprise and any other associated entity.

“We take the view this may not necessarily encompass companies overseas if you’re a multi-national organisation.

It won’t stop people asking though, but if you’ve got 2. ANNOUNCEMENTS AND NOTIFICATIONS Employers interstate operations I’d be assuming you should be looking will need to notify affected employees and unions for vacancies there,” she says. concurrently if they have members or more than 15 employees. They will also need to notify Centrelink if 15 or 5. SEVERANCE PAY There are some exemptions from more employees are being retrenched. severance pay under the National Employment Standards.

Employers should also consider whether to make a Severance pay does not apply to casuals or businesses general announcement to the business; this may or may with less than 15 employees, while the Fair Work Commission not be appropriate depending on the size of the restructure. (FWC) may reduce or eliminate the need for severance pay “If you’re making an announcement though, remember where acceptable alternative employment is obtained for people who are on leave – particularly those on parental an employee whose role is slated for redundancy. leave – because there is a specific obligation to notify these “Let’s just say we find a comparable role and the employees,” Jones says. employee unreasonably refuses it, you may not have to pay severance,” Edser says. “This is not automatic; you can’t just 3. OBLIGATION TO CONSULT CPSU v Vodafone Network say ‘I offered you a good role and you’ve refused’ – you have Pty Ltd is a case that accurately sums up the critical to make an application to the FWC for this exemption, which employer obligation to consult. may or may not be granted.”

In this case, the Commissioner said consultation is not perfunctory advice on what is about to happen, which is a 6. MANAGING CLAIMS AND RISKS With any redundancy common misconception. Rather, consultation is provided to program, employers need to manage risks and prepare individuals to give them a bona fide opportunity to influence themselves for the possibility of unfair dismissal claims. A the “decision maker”. number of cases have demonstrated that failure to prove This process of consultation is not about facilitating a compliance with the unfair dismissal ‘shield’ have resulted joint-decision making process or impeding management’s in successful action against employers. prerogative to make decisions, but is meant to inform the Employers also need to be wary of adverse action or decision-making process as it may affect individuals’ discrimination claims, and employees cannot be dismissed employment prospects. or prejudiced against because of workplace rights under Another important consideration in this process is the awards or EBAs, union membership (or non-membership) extent of consultation. “One question we’re often asked is or other discriminatory reasons such as gender, race, age, ‘do we consult over the decision itself, or do we consult over and physical or mental disability. implementing the decision?’ You need to consult over the “Breach of policy could also lead to a claim,” says Edser. decision itself before it is actually implemented,” says “This includes breach of express terms or, if it’s a serious Jones, who adds unions could otherwise seek orders to breach, an argument could be made that you’ve breached enforce consultation or contest whether the redundancies implied terms of mutual trust and confidence, so it pays to are in fact genuine and seek an injunction to stop be careful and to comply with relevant policies, such as redundancies from being implemented. those regarding redeployment.” .

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2014 FORECASTING / LEADERSHIP MISTAKES

“Spinning the issue will not work; in fact it will further erode the situation” Bob Anderson, The Leadership Circle

job centre, were also organised.

Managing redundancies and downsizing legally has been a hot legal issue for employers across the board since the 2008 GFC, and there are many pitfalls for organisations in planning and managing redundancies.

“Many employers think the process of redundancies is easier than it actually is,” says Kristy Edser, a partner in Minter Ellison’s employment law practice. “There are a number of tests organisations have to satisfy in order for a redundancy to be considered genuine, otherwise employers can leave themselves open to unfair dismissal claims – and that is something we see a lot of.”

RETAILERS COME UNDER FIRE FOR POOR CSR June 2013 saw consumer outrage erupt regarding poor working conditions for outsourced employees of clothing manufacturers.

The controversy sparked due to the collapse of an illegally built factory in Bangladesh, which claimed the lives of more than 1,000 workers.

Coles, Target, Cotton On and Forever New were all named as companies that have outsourced to illegal and dangerous factories in Bangladesh.

The disastrous working conditions brought to light the necessity for organisations to have a deep understanding of their supply chain and the moral decisions of suppliers, clients and customers.

A contemporaneous survey by Oxfam found 83% of consumers wanted clothing retailers to be more transparent about the locations of their supplier’s factories; almost 70% said they would gladly pay more for goods if it meant better conditions for the workers involved.

“Corporations have to take responsibility for the supply chain, and that comes out in lots of different ways,” Katherine Teh-White, managing director at FutureEye, told HR Director.

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The development of CSR as a core part of an organisation’s culture is crucial, as it is too late once lives have already been lost.

“It shouldn’t take a really significant crisis to realise ‘oh I see, we’re really out of line with society’s expectations’,” Teh-White says. “The lower cost way is looking at lead indicators of what are the social norms of society, and doing a gap analysis of the way you think as an organisation, the way your leaders think, and the way society thinks, and how that impacts on the behaviours and sorts of issues you may confront – and plan those out earlier.”

Some tangible action was immediately taken.

Cotton On, Target and Forever New signed on to The Bangladesh Accord on Fire and Building Safety, along with Kmart. This aim of this accord (outlined in HRD11.12) allows employees to refuse dangerous work. It will also create publically available, independent reports on working conditions.

Yet indicators of poor working conditions are evident to organisations long before the consequences are seen. “I think the modern-day expectation is that if you don’t take in the spirit of responsibility of the

FIRED VIA EMAIL One of Britain’s largest insurance companies accidently sent an email sacking all of its employees. The HR department at insurance firm Aviva was responsible for sending the email, which informed recipients to turn in all company property before leaving their premises, and reminded them of their obligation to guard the firm’s confidential information. “It was intended this email should have gone to one single person,” Paul Lockstone from the London-based insurer said. “Unfortunately, as a result of a clerical error, it was sent to all of the investor’s staff worldwide,” he added.

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12/12/2013 5:28:32 PM

HUMAN RESOURCES DIRECTOR

THE TABOO QUESTION YOU SHOULD BE ASKING… It’s assumed if a company asks about a woman’s intention to start a family, the managers are looking for ways to discriminate. But what if asking that question would help your employees’ long term career plans? That’s the suggestion from Facebook COO Sheryl Sandberg, who claimed employers are doing young women a disservice by not helping them plan for career breaks. She suggested rather than seeing maternity leave as an unavoidable inconvenience, a more open communication could help both company and employee through better planning and preparation. Sandberg said women make decisions early in their careers based on the stereotypes and low expectations placed on them by society.

supply chain, and that includes all of the people that are being employed by you, either directly or via your contractors, then you haven’t understood the social responsibility dynamic that has been emerging over the past 15 years,” Teh-White adds.

Despite this recent outrage, the damage to corporate reputations seems to be relatively shortlived. Taylor notes the most telling example is the “global amnesia” regarding those who contributed so meaningfully to the GFC. “It is remarkable how even a simple corporate name change or leadership transition allows people and institutions to reinvent themselves. Of course, the truth often comes back to bite, but our memories are collectively getting shorter.”

“To become the absolute best place to work, communication and collaboration will be important, so we need to be working side-by-side. That is why it is critical that we are all present in our offices. Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings. Speed and quality are often sacrificed when we work from home. We need to be one Yahoo!, and that starts with physically being together.”

Other business leaders soon chimed in: Virgin founder Richard Branson, for example, said he disagreed completely with Mayer. “Many employees who work from home are extremely diligent, get their job done, and get to spend more time with their families,” Branson wrote. “They waste less time commuting and get a better work-life balance. To force everybody to work in offices is old school thinking.”

Branson added that 30 years from now he expected offices to be a thing of the past, and said future workers will wonder why they ever existed.

The Australian federal government evidently agrees: former Prime Minister Gillard announced a commitment to have 12% of the public service regularly teleworking by 2020.

“There has been some very interesting discussion on this topic since Marisa Meyer dropped her bombshell

SOCIAL MEDIA MELTDOWN Here’s a helpful hint from the HR team at HMV: shut down the company’s Twitter account before you start terminations. HMV learned the hard way after members of its marketing team live-tweeted their firing under the hashtag ‘hmvXFactorFiring’.

Starting with “We’re tweeting live from HR where we’re all being fired! Exciting!!” the unknown staff then reached out to thousands of followers with messages such as: “There are over 60 of us being fired at once! Mass execution, of loyal employees who love the brand”, and “Sorry we’ve been quiet for so long. Under contract we’ve been unable to say a word, or – more importantly – tell the truth.”

YAHOO BANS FLEXIBLE WORK In March 2013, Yahoo CEO Marissa Mayer created a storm of controversy by announcing the end of workfrom-home policies for the company’s 27,000 employees.

A leaked memo outlined the reasons:

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2014 FORECASTING / LEADERSHIP MISTAKES

earlier in the year but most seem to miss a crucial point,” says Pia Lee, CEO at leadership consultancy LIW3.

“Most discussion has been about productivity – at home or at work – but the question is, whose productivity are we talking about?”

In today’s economy, talent is more important than ever so you need the best people, wherever they are, Lee says. Saying all staff must commute to Sunnyvale, CA – for example – limits your talent pool to those within commuting distance. Even taking into account the smart folks of the Bay Area, that is still limiting your talent pool considerably.

“Put it this way: your talent pool needs to be broader than your car pool,” Lee says.

SHORT-TERMISM In her defence, Mayer faces a tough task: to transform an ailing company. She is making some headway too – Yahoo is taking a more active role in social media (such as acquiring Tumblr) and the brand’s image is being reimagined as a modern tech company. Sadly, other companies have not had such leadership. Kodak, Borders and HMV are just three of countless entities that failed to move with the times.

Leadership enhances the collective capacity of the organisation to create its future. In determining the innovative capacity of an organisation it’s necessary to ask questions such as: How authentic is the conversation? Is there a clear purpose and vision? Is there a visionary, innovative culture? Are leaders focused on, and encouraged to develop, their visionary and creative capacity? Are they mentoring and developing the creative capacity of the organisation?

How well does the organisation build teams and collaborate across departments? Do leaders think systemically and design the organisation so they are more innovative, agile, and flexible?

“Organisations are perfectly designed for the results they are getting,” says Anderson. “If you want to radically improve innovation, for example, the entire architecture of the organisation needs to be considered.”

The primary impediments to innovation are people holding back in caution, complying, playing it safe, going along to get along and not wanting to rock the boat. This is, more often than not, caused by leaders who are overly aggressive, arrogant, and controlling. All these leadership behaviors stifle innovation.

“An innovative culture is one where the senior leaders can consistently have an open, authentic

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conversation with each other. This allows them to cut through difficult, complex, conflicted issues and make innovative, strategic breakthroughs,” Anderson concludes.

Over the following pages, learn how you can bounce back from poor decisions, career setbacks and more

REMAINING RELEVANT In his book, Winning the Battle for Relevance, Michael McQueen outlines key ways to save a struggling business: 1. CHANGE BEFORE YOU ARE FORCED TO – Most businesses wait to innovate until their hand is forced. As Steve Jobs once observed, if you’re not willing to cannibalise your own business, someone will do it for you. Consider Blackberry and Nokia.

Rather than recognising the seismic shifts afoot in their industries, both these tech giants essentially relied on this historical size and market positioning until the writing on the wall was too dire to ignore.

2. BECOME CLEAR ON THE BUSINESS YOU ARE ACTUALLY IN – Many businesses fall into the trap of defining themselves by the products they sell or the markets they are operating in – all the while losing sight of who they are and why they exist.

Consider how Kodak did this and veered off track in the 1970s and ‘80s. Rather than remaining focussed on their core DNA as a memory preservation company, Kodak started to see themselves as a film company – a paradigm that left them unwilling and unable to embrace the post-film world.

3. PRUNE DEAD WOOD – Any gardener knows restoring vitality to a garden requires pruning away the old in order to make way for the new. It is the same in business. Sony has also recognised the importance of this in turning around its flagging fortunes. The end of its decade-long marriage with Ericsson and the spinning off of entire business units is an attempt to restore the tech giant’s agility and innovative flair.

4. SEEK A POINT OF DIFFERENCE – The old marketing adage is true... it is better to be different than better. Rather than trying to outdo the competition in your market, how can you pursue a new market in a new way? Consider how Cirque du Soleil did just this and managed to build a flourishing business in a dying industry (circuses).

HCAMAG.COM

12/12/2013 5:28:35 PM

HUMAN RESOURCES DIRECTOR

HUMAN RESOURCES DIRECTOR HUMAN RESOURCES DIRECTOR MAGAZINE (HRD) IS AUSTRALIA’S ONLY MAGAZINE WRITTEN FOR AND TARGETED PURELY AT THE MOST SENIOR HR PROFESSIONALS (CHRO’S & HR DIRECTORS) AND TOP CORPORATE DECISION MAKERS. With seats secured at the executive table, HR Directors are now looking to retain their positions and justify why they need to be there. To do so, they are required to have a comprehensive understanding of business and business strategy, while also carrying out their more traditional HR requirements.

Human Resources Director Magazine concentrates on the real issues and challenges facing the HR professional and the Industry, with in-depth features and analysis of what really matters.

HRD also features high level case studies, international and local profiles, interviews with HRDs and industry leaders from around the globe as-well-as leading news makers in the field.

VISIT WWW.HCAMAG.COM TO SUBSCRIBE TODAY HUMAN RESOUR

HR STRATE GY

HUMAN RESOUR CES DIR HCAMAG.COM ECTOR ISSUE 11.12

ONE-ON-ON MASTERCAR E MIKE McCARTD’S HY THINK LOCAL, ACT GLO GLOCALISATBAL ION CRISIS CON TRO IR DISPUTESL

/ GLOBAL IR

eight-storey Rana Plaza, an On 24 April 2013, in Savar, a g, collapsed of commercial buildin Dhaka Area the Greater people and subdistrict of that killed 1,129 Bangladesh. A tragedy the event represented the 3,000, as the injured nearly t in history, as well acciden in factory worst tal structural failure deadliest acciden modern times. shoots of However, green from since sprouted optimism have Plaza Rana The this dreadful event. n international attentio incident focused ace ons and workpl on working conditi and the developing world, safety in the significant contribute to te disaster may of both corpora in the spheres s. relation ial developments and global industr social responsibility

GREEN SHOOMTS IS F OPTIM O rd on The Global Acco

HUM AN RES OUR CES e.indd 1

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of of the magnitude It’s taken a disaster pse for the push for the Rana Plaza colla ions to negotiate orat corp s multinational workplace standard and apply ‘global’ chains to gain ly across their supp does the t momentum. Wha mean rd Bangladesh Acco for global business operations?

THE NEW NAM E FOR HC MA GAZ INE

48 | DECEMBER

KEY FEATURES

DECEMBER 2013

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14/11/2013

incident The Rana Plaza tional attention focused interna ditions and on working con ty in the workplace safe ld wor ing develop

signatories to take Accord obliges The Bangladesh n and ensure to implement, maintai significant steps s workplaces to within oversea acceptable safety standards ce to internationally to achieve ensure adheren In order ds. standar of workplace safety a keen regimen Accord sets out the goals, these remediation and SAFETY ions, reporting, AND BUILDING workplace inspect tional ACCORD ON FIRE interna more than 80 has several training. tive, the Accord Since April 2013, ts in Bangladesh From an IR perspec ies with interes : fashion compan and Building particularly notable ent Accord on Fire features that are agreem the red able signed structu enforce have tional agreement union z It is a legally ds in ies and global Safety, an interna ace ace safety standar between compan in respect of workpl to address workpl industry. federations (GUFs) Made’ garment ies’ global Bangladesh’s ‘Ready desh Accord those compan standards in behind the Bangla Prime movers iALL, two supply chains.

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HRD_Cover+spin

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HRD MAGAZINE WINS GOLD MEDAL Judges’ comments: “Extremely well-executed magazine – Sharp, smart, thorough and engaging.

Writing is focused throughout. The Special Reports contain to-do lists and sidebars add relevant and actionable detail” HCAMAG.COM

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REGROUPING

AFTER CRISIS Over the previous pages we’ve heard all about corporate scandals, poor decisions and lack of vision – but what can be done about it?

Sam Cawthorn knows a thing or two about bouncing back from a crisis. At just 26, Sam’s life changed forever when he was involved in a car accident and pronounced dead on the scene for over three minutes by paramedics.

Following his resuscitation, Sam was faced with the amputation of his right arm and severe damage to his right leg, and the prospect of never being able to walk again. Rather than dwell on his misfortune, Sam realised he had the unique opportunity to embrace this crisis and use it to transform his life.

Today, Sam is a thought leader and expert in resilience and corporate turnarounds, working with big brands such as Google, Exxon Mobil and Toyota to transform impossibilities into possible realities. He talks to HR Director about moving beyond a crisis or setback.

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HRD: What’s a better way to position things that don’t work out as planned?

Sam Cawthorn: A lot of the time we shy away from vulnerability and I think that’s a negative approach.

Often it’s easier to not only play the blame game but also to not admit our faults or admit to the things we’ve done wrong. That’s the starting point to a turnaround. The only way we can turn things around is by fronting up, admitting it, and showing some vulnerability. Vulnerability does lead to growth.

HRD: But it’s possibly something many executives struggle to show, especially when they are positioned almost like rock stars or superheroes in some companies...

SC: In a way it’s the people – the staff at every level, HCAMAG.COM

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HUMAN RESOURCES DIRECTOR

the board, even stakeholders – who look at them as superheroes. They all think their leaders are rock stars who have it together. Often that’s not the case.

Yet there’s a power in vulnerability – that’s how people can find you more relatable, more approachable, easier to communicate with and connect to. In today’s world we’re not looking for the hero boss.

HRD: What’s perhaps the most pivotal thing you’ve learnt since your accident?

SC: I have something called phantom pains. After my accident I lost my right arm. I get this phantom pain and sometimes it will wake me up in the middle of the night because it’s so painful. It’s like the worst pins and needles you’ve ever had. There’s something called cognitive dissociation, which means that what we focus on is what we get. So if we focus on everything that’s going wrong, whether that be a downsize crisis, a natural disaster, a downturn in sales or budgets, problems in the office, staff engagement, whatever it might be – if that’s all we focus on, that’s how we’ll not only feel but that’s how everyone else will feel.

HRD: Can you outline cognitive dissociation?

SC: Cognitive dissociation is like neurological conditioning – I’ve conditioned myself to no longer focus on that pain. Instead I focus on the good things in life: a wife who supports me, kids who love me, this amazing job where I fly all over the world. So I’ve now focused on the things I can do, not the things I can’t do.

Crisis creates opportunity, which means some of the toughest times in our lives can ignite some of the greatest growth periods in our lives. But we have to choose to direct our focus in the right areas.

Admit you’re wrong, show some vulnerability, and then focus on what is working well, on strengths, not weaknesses, on where you can move and not where you can’t move. Focus on opportunities, not the crisis.

HRD: How else can we reposition our thinking when times are tough?

SC: Everyone goes through crises – whether they are financial, plummeting staff engagement, loss of a deal, a downturn. It could be personal as well. A lot of the tools we use in our personal resilience can be transferable in business and vice versa. In saying that, it’s our decision, not our condition, that determines who we are. Everyone has conditions in

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their lives, and some of those conditions can be tough: layoffs, relationship problems, conflict. But no matter what that condition is, it’s all about our mental attributes and being proactive about our own decisions instead of being reactive to our own conditions.

HRD: How does this tie in with the theme of your book: bouncing forward?

SC: I talk about reactive innovation and proactive innovation. Too often we look at the good old days, at bouncing back to where we were before the crisis hit. But all the latest research shows that through a crisis we can ignite the greatest growth periods in our life. Adversarial growth is not about bouncing back, going back to where we were, but bouncing forward to what we can become. It implies we are bouncing forward so we must start thinking creatively because we’ve never been there before.

HRD: It could be a good opportunity to rethink how things are done?

SC: When people have a frustration, a problem, I tell them to turn it into a crisis. It sounds counterintuitive, but when we’re in a crisis there is something in our biology that says we must get ourselves out of it. So we think differently; we think more creatively. When it’s a frustration or problem we tend to procrastinate dealing with it: I know it’s a frustration, I know it’s annoying, but I can’t focus on it right now because I’ve got all this other stuff to do. That’s the key difference in bouncing back versus bouncing forward. When we’re bouncing back it’s all about going back to how we used to be.

HRD: Can challenges and setbacks actually build resilience?

SC: There is something called adversarial growth.

Hypothetically, as an organisation, you may have had a really tough time financially, scraping the bottom of the barrel, looking at layoffs. But then we have this turnaround because we think differently and we get through it.

When something like that happens again, we know how to handle it. We’ve been there, we’ve done it, we’ve come out wiser. That is how adversity and crises are good: they teach us the core fundamentals and strategies we need in order to move through that – and the key word is ‘through’ – so we can then help people and other teams to navigate through their crisis.

Bounce Forward is published

by Wiley and available in bookstores nationwide or from samcawthorn.com/ bounceforwardbook.

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SPECIAL REPORT / L&D INSIGHTS

SOLD OUT IN SYDNEY, MELBOURNE & BRISBANE

Employment Law for HR Managers 2014 Featured Speakers Graham Harbord,

Joydeep Hor,

Margaret Kaukas,

John MacPhail,

partner,

managing principal,

senior associate

partner,

Matoula Makris,

Lincoln Smith, partner, Norman Waterhouse Lawyers

Rohan Doyle,

Johnston Withers

associate,

Wallmans Lawyers

People+Culture Strategies

Why attend Employment Law in 2014?

What you can expect to gain from Employment Law 2014: • Protect yourself and your organisation against adverse action claims • Minimise your exposure under the new anti-bullying laws in 2014 • Manage key legal aspects of workplace change and the impact of recent Court decisions • Understand best practice in the social media age: Censorship, discipline and ownership • Strengthen your employment contracts and avoid liability for sham contracting • Navigate areas of uncertainty around terminations and redundancies • Manage employee mental health risks to minimise loss of productivity

Event details Date 19 February 2014 Location Rydges South Park Hotel 1 South Terrace, Adelaide

EmpLaw14-ADEL_FP_HRD1200.indd 1 36-37_SpecialReport-Intro.indd 36

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For more information and to register visit http://www.hcamag.com/hr-top-talent/

36 | OCTOBER 2013

Donaldson Walsh

HCAMAG.COM

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HUMAN RESOURCES DIRECTOR

C IAL E P S

,

WORKPLACE

LAW RE T POR With Australian employment laws changing constantly, HR professionals must ensure their organisation remains compliant. HR Director presents a guide to ďŹ ve key areas

t

17:53 PM

Bullying p.38 | Mediation p.41 | Managing ill and injured workers p.42 Restraints of trade p.45 | Unfair dismissal p.46

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SPECIAL REPORT / WORKPLACE BULLYING

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STOP THE COMPLAINTS TO

‘STOP THE BULLYING’

presented by

Employee education and leadership training is the key, writes Fay Calderone There is no doubt bullying negatively impacts on workplace morale, productivity and the welfare of workers, but for ‘persons conducting a business or undertaking’ (PCBUs), the legal consequences of bullying are significant. While the case law and exposures in relation to workplace bullying have been evolving for many years – indeed some may say snowballing – the introduction of new workplace bullying laws under the Fair Work Act from 1 January 2014 has created a more structured, cost-effective and accessible regime for workers to swiftly make claims to the Fair Work Commission (FWC).

OUTLINE OF THE NEW LAWS The new provisions allow workers, who reasonably believe they are being bullied at work by an individual or group, to make an application to the FWC for orders to “stop the bullying” where: yy bullying is defined as repeated, unreasonable behaviour directed at a worker or group of workers that creates a risk to health and safety; and yy worker, as defined in the Work Health and

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Safety Act 2011 (Cth) (WHSA), is casting the net wide to include employees, contractors, subcontractors, apprentices, outworkers, trainees, volunteers and work experience students of corporations and other “constitutionally covered” businesses.

It is significant to note that the FWC is not able to deal with matters where the bullying is no longer occurring (eg where the alleged perpretrator has resigned) as the emphasis is to “stop future bullying” and not to compensate employees for past behaviour.

Once an application is made, the FWC: yy will be required to “start to deal with” the application within 14 days yy has the power to: 1. refer the matter to the relevant state work health and safety authorities for further investigation 2. make any order it considers appropriate to remedy and prevent the bullying 3. impose civil penalties for contravention of orders In making such orders, the FWC must, however, take

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into account any matters it considers relevant, in addition to: yy the outcomes of any investigation into the matter yy the grievance/dispute resolution procedure available to the worker and any outcomes from those, making it more important for PCBUs to have appropriate policies and procedures in place for all workers (as defined), to demonstrate to the FWC that intervention is not required and/or escalation of the complaint is premature

THE EXCEPTION: REASONABLE MANAGEMENT ACTION A worker is not considered to have been bullied if the conduct was reasonable management action carried out in a reasonable manner. In essence, this means a worker cannot make complaints against PCBUs, for example, for reasonable performance management, counselling, investigation of misconduct, or disciplinary action. These provisions are expected to operate in a similar way to the defence to stress claims in various state jurisdictions related to “reasonable management action” (eg section 11A of the Workers Compensation Act 1987 (NSW)).

The unfair dismissal cases also provide some guidance on this, such as in the recent case of Choi v Country Fire Authority [2013] where an employee was terminated for unsatisfactory performance and refusing to participate in performance management processes. The managers had consulted the employee on several occasions about their concerns but the employee was unwilling to change her behaviour. The employee lodged an unfair dismissal claim alleging she had been subjected to bullying by her managers. The Commission held that the termination was not harsh, unjust or unreasonable as the behaviour of the managers could not be characterised as bullying, but rather was reasonable management action.

Conversely, in Harris v WorkPac Pty Ltd [2013], the manager’s employment was terminated after an employee made allegations of bullying that were not investigated until 17 months after the events.

The manager was interviewed and provided a written response denying the allegations but was terminated the next day. The FWC found that the dismissal was unfair as the allegations were unsupported, and that it was really just a strained working relationship. It noted that the manager had merely been performing her duties, and that at times

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A worker is not considered to have been bullied if the conduct was reasonable management action carried out in a reasonable manner dealing with performance issues can be quite stressful, such that employees may perceive reasonable performance management as bullying.

CONCERNS FOR BUSINESSES Some understandable concerns: 1. Workers can only bring a complaint against the PCBU rather than the individual perpetrator, although the draft Case Management Model released by the FWC on 20 November 2013 suggests that the FWC will be corresponding directly with “individuals whose conduct prompted the application”, who will be advised that their employer/principal has also been provided with a copy (in most cases 24 hours before the individual is served). This in and of itself will create a challenge for leaders, as well as significant workplace disruption if not tactfully managed.

2. There is no obligation to approach the PCBU to provide an opportunity to remedy the situation at the workplace level before making an application to the FWC (although the Coalition government has proposed a filtering process requiring that this should occur).

3. PCBUs may be required to appear unrepresented unless leave has been provided by the FWC for legal representatives to appear. This is particularly troubling for offices of PCBUs (indeed small businesses often lacking time, resources and legal sophistication), given the broad power of the FWC to make orders and refer matters to the relevant state work health and safety authorities, which have the power to prosecute under the WHSA.

HOW TO PREPARE In light of the heightened risks and exposures, it is now more important than ever to: ➔➔ update anti-bullying policies and grievance procedures

Did you know?

Statistics show that bullying claims are rising steadily. In NSW alone, workers’ compensation claims associated with bullying have increased by 10% since 2011

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CONFLICT RESOLUTION

Fay Calderone is director, MatthewsFolbigg. For further information, contact T: +61 2 9806 7412 or visit matthewsfolbigg.com.au.

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➔➔ educate all workers (as broadly defined) on unacceptable behaviour, including training on not only what is but also what isn’t bullying (but rather reasonable management action) ➔➔ clearly communicate to all workers the process for making and managing complaints of workplace bullying ➔➔ develop effective leaders so as to minimise the incidence of bullying in the workplace and increase the likelihood the business can rely on the “reasonable management action” exemption ➔➔ train leaders to expeditiously and transparently manage, escalate, investigate and resolve bullying complaints in an effort to avoid matters being referred to the FWC ➔➔ regularly review complaints statistics to proactively identify training or other matters requiring early intervention ➔➔ update workplace policies to ensure compliance with changing laws and Safe Work Australia Guidelines when released ➔➔ monitor the effectiveness of workplace processes and procedures and promptly remedy any deficiencies identified

While everyone agrees that bullying is never acceptable, using ‘bullying’ as a generic term for interpersonal disputes is unhelpful and distressing for all parties. Helping employees find more accurate terms for conflict situations can alleviate the epidemic faced by HR. What else can HR do? workflow has friction points. Identify 4 Every where there are predictable points for potential

4 4 4

workplace conflict in the operation cycle, such as performance management, promotions and team restructures.

Create protocols and pathways for employees to handle conflict. Not all matters require formal investigation. Mediation may be best for interpersonal conflict resolution.

Improve communication skills for difficult conversations. When issues are not discussed from the outset, they often escalate in the minds of the aggrieved parties. Clear and mature channels of communication can de-escalate a delicate situation.

Enhance leadership capabilities. With increasing devolvement of HR functions, there are excellent opportunities to train line managers, supervisors and employees on how to manage potential conflict through early identification and intervention.

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SPECIAL REPORT / MEDIATION

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LESSONS OF A MEDIATOR Mediation will, in most cases, be a more desirable path to take with employee grievances than legal proceedings. Danielle Carney provides eight tips for successfully navigating the art of mediation

1

Ensure your mediation outcomes are clear, measurable and achievable. Agreements between the parties should be concrete and pinned down with detail so there is a clear understanding about what changes are necessary to restore a productive working relationship. Don’t allow the ‘I’m going to be nicer’ commitment to wash – it is not a real and sustainable mediation outcome. Your Mediation Action Plan might look similar to a performance plan: what is the action, who else needs to know about it, how do we measure it, what could impact it and when do we know we have succeeded.

2

In a mediation, identify any environmental or systemic change required to readjust the workplace in order to prevent the conflict from reoccurring. Take the opportunity to go beyond the human cause and consider process, system or organisational factors. Actions to eliminate them will most likely belong to someone outside the immediate mediation, so refer them on.

3

Harness the frontline leader in the mediation process. Gaining an understanding of the conflict or relationship from the frontline leader allows the mediator to have a fuller picture of the conflict prior to commencing the mediation. With permission from both parties, providing the leader with greater detail about the agreements made in the Mediation Action Plan will assist the leader to support the parties in implementing their agreements and taking ongoing responsibility in managing the relationship.

4

Don’t initiate mediation if a party is not ready. For a meaningful discussion to occur and a change to take effect, the parties need to be open to seeing the conflict through another’s eyes and engaging with the other person in a constructive way. A situation like this might require you to encourage the party to utilise the EAP first, or you may commence with a shuttle mediation until the parties have clearly identified

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their interests and needs and have moved to be forward focused.

5

Similarly, don’t commence mediation if a party is too focused on wanting to know they are right; that is, wanting vindication. Mediation does not involve confirming that someone has done the right or wrong thing in a conflict. It requires an open mind to appreciate or respect, not necessarily agree with, each other’s perceptions and move forward together with concessions.

6

Don’t embark on the mediation if a party does not have the nous to have an open and confronting discussion. It sounds harsh but it takes a degree of communication skill to participate in mediation.

To sit in front of someone who you feel less than comfortable with and talk about how you perceive their interactions and what you intended with yours is difficult and confronting. You have a role in developing their communication skills to allow them to participate in the mediation.

7

Support your frontline leaders in identifying and managing conflict. They are in the best spot to act early. They can recognise when a conflict sparks; they know the people involved and will have the best feel for the next step. Train your frontline leaders in managing down conflict early and responding to grievances, by providing grievance handling training.

8

Don’t allow your bullying policy to be a ‘how to’ guide for bullying. Ensure it emphasises desired conduct and outcomes, is underpinned by your organisational values, and establishes a framework that allows you some involvement in influencing the path for resolution of a conflict (eg an initial triage step). Also, ensure that mediation is an early step in the process, not one that is postcomplaint or just before an external avenue such as Fair Work Commission is taken.

Danielle Carney is director of Peel HR Consulting and Mediation.

For further information, phone 02 4963 7373 or email dcarney@peelhr.com.au.

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SPECIAL REPORT / MANAGING ILL & INJURED WORKERS

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UNTIL DEATH DO US PART? Charles Cameron and Emma Reilly outline the legal intricacies of managing illness and injury in the age of compassion Every sick day costs Australian employers an average of $385, and employees take, on average, 8.9 days’ sick leave per year.1 For a company with 500 employees on an average salary of $50,000 and with an absence rate of 6%, the total cost could be as high as $2.9m.

Despite the obvious and crippling expense to business, managing ill or injured workers is one of the most difficult issues encountered by employers, but an employer can take control with a good dose of respect and good conscience.

WHAT ARE THE RISKS? There are a number of competing legal considerations when managing ill and injured workers, including the requirement to balance: a) statutory work health and safety obligations to ensure the health and safety of workers at work (which can increase the risk of allowing ill and injured workers to return to work) b) rehabilitation and return-to-work obligations under the workers’ compensation legal framework. For example, in Victoria, the workers’ compensation legislation requires an employer to provide injured workers with a job that is the same as or equivalent to the one the injured worker was doing before the injury or illness for 12 months c) general protections, unfair dismissal and discrimination protections (which increase

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presented by

the risks associated with actually terminating the employment of ill and injured workers, including the processes leading up to termination and the manner in which a termination is conducted) In Australia, the primary exposures associated with managing and/or terminating ill or injured workers are the risks that arise under federal and state anti-discrimination laws.

In summary, the anti-discrimination legislation protects employees and independent contractors who suffer from a disability or illness from having their employment or work contracts terminated because of that disability or illness. The statutory obligation of employers is to accommodate such employees unless it would cause a business “unjustifiable hardship” to do so. If an employee were to bring a claim under either federal or state laws, there is a risk that a business could be ordered to pay damages (to compensate for loss/damage).

The other main risk is that an ill or injured employee may claim unfair dismissal or bring a general protections claim under the Fair Work Act 2009 (Cth). With respect to the general protections regime, it is unlawful for an employer to discriminate against a person or otherwise injure a person in their employment because of any illness or injury, or otherwise dismiss an employee who is temporarily absent from work due to illness or injury.

If successful in such claims, an employee could

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claim compensation and reinstatement, and the business could be exposed to civil penalties.

Despite these clear risks, proper management of ill or injured workers is crucial to every business.

In this context, one practical reality for many businesses is that the cost of a discrimination, general protections or unfair dismissal claim is likely to be only a fraction of the cost of an increase in premiums following a workers’ compensation claim.

DIRECTING EMPLOYEES TO ATTEND MEDICAL ASSESSMENTS The first step in managing any ill or injured employee should be to obtain information about the employee’s injury or medical condition. In our experience it is very important to utilise suitably qualified medical practitioners to assess and advise on the nature of an ongoing illness or injury, given that you may need to rely upon this evidence to issue warnings or terminate employment, and a reliance upon unsubstantiated or incorrect medical information is a recipe for problems.

Before directing an employee to undergo an independent medical assessment, employers should first consider obtaining consent from the employee to speak to the doctor who is treating them. Alternatively, you may choose to offer to cover the cost associated with sending the employee to a medical practitioner or specialist engaged by the employer. In most circumstances you will need first to provide the employee with the opportunity to attend their own practitioner.

If consent is refused this can be used to your advantage and, in the majority of cases, it will be reasonable and lawful for an employer to direct an employee to have a medical examination to determine their fitness to perform their duties.

Certainly, such a direction is necessary in cases where an employer is considering termination of an employee’s employment because of illness or injury. An ongoing refusal by an employee to attend medical examinations, or provide medical information from their practitioner, is evidence of non-cooperation and will often be frowned upon by a judge or tribunal member if the matter results in legal proceedings.

Circumstances in which a direction to attend a medical assessment is common include: yy where there are frequent, lengthy or unexplained absences from the workplace due to illness or injury

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Courts and tribunals have higher expectations of employers to accommodate illness and injury than they did 20 years ago, so it is important to understand relevant precedents by considering recent case law yy where concerns have been raised regarding an employee’s capacity to perform the role or inherent characteristics of their role yy where an employer is required to determine any reasonable adjustments to facilitate an employee’s return to work As mentioned, if an employee has refused a reasonable and lawful direction, an employer may be entitled to dismiss the employee (or at least take disciplinary action) for failure to follow that reasonable and lawful direction.

REASONABLE ADJUSTMENTS In all cases, employers have a positive duty to make reasonable adjustments to the terms, circumstances or arrangements of the employment of persons with an illness or injury to assist them in performing the requirements of their role. This might mean physical changes to the work environment or changes to work conditions, such as hours of work, or offering flexible work arrangements, including working from home.

Courts and tribunals have higher expectations of employers to accommodate illness and injury than they did 20 years ago, so it is important to understand relevant precedents by considering recent case law.

TERMINATION OF EMPLOYEES ON LONG-TERM SICK LEAVE Termination of employment is generally the final and most difficult step in any circumstance in which an employee has been absent from the workplace due to illness or injury for long periods, or there is otherwise doubt about their ability to perform the inherent requirements of their role.

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Charles Cameron is a partner and Emma Reilly is a senior associate at FCB. For further information, visit fcbgroup.com.au.

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In every case, an employer may only consider termination of employment in circumstances where any protected period of absence (such as under workers’ compensation legislation or the Fair Work Act 2009 (Cth)) has elapsed.

In these circumstances, before making any decision to terminate employment, the following considerations should apply: a) has the business assessed what the employee needs to do to carry out their current role (eg lifting up to 20kg)? b) has the business arranged for a medical assessment of the employee to see whether they can undertake the identified inherent requirements of their job (or obtained the employee’s own doctor’s confirmation that they cannot perform those requirements)? c) has the business considered whether any reasonable adjustments could be made to the way in which the employee performs the inherent requirements of their position that would not impose unjustifiable hardship on the business?

IN SUMMARY While there is no one-size-fits-all approach to managing ill and injured employees, proactive management should not be ignored. The most common mistake made by employers is to not be proactive. In our experience the absence of accountability leads to situations in which employers react because of frustration, yet they have not managed the employee’s expectations and made the business’s expectations clear. This is how things end badly for many employers.

Remember that, like all workforce management, it is critical to be consistent in your dealings with all employees, clear about your expectations, and to ensure ongoing accountability via a suitably qualified medical practitioner. Managing ill and injured workers is difficult; however, with respect for the vulnerability of the individual and a consistent approach, it is surprising how different the management experience can be.

See Direct Health Solutions 2013 Absence Management & Wellbeing Report Review by AFR (http://www.dhs.net.au/NewsDetail.aspx?pid=266)

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SPECIAL REPORT / RESTRAINTS OF TRADE

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RESTRAINTS OF TRADE Nichola Constant and Erin Lynch outline the role of restraints of trade in protecting business interests

‘Restraint of Trade’ provisions seek to prevent employees or partners from taking clients or competing with the business for a period of time after they leave.

DRAFTING AN EFFECTIVE CLAUSE A court will only enforce restraint clauses if it considers the restraint ‘reasonable to protect the legitimate business interests’ of the party seeking to enforce the restraint (the ‘restrainer’). If the restraint clause is not ‘reasonable’, a court is likely to find the whole clause void and unenforceable and it may be struck out of the contract. Normally, courts do not have the discretion to rewrite clauses.

However, in New South Wales, the Restraints of Trade Act 1974, does allow a court to ‘read down’ the terms of a restraint clause to modify it (as to the time period or geographic area, etc) until it is reasonable.

‘Cascading’ clauses offer a number of alternative covenants, detailing the time and geographical limits of restraint. The advantage to these is each one is severable by a court without affecting the validity and enforceability of the restraint.

WHAT IS REASONABLE? It is reasonable to protect a business’ goodwill for a period of time by placing restrictions on a former employee’s business activity.

Many factors are considered when concluding whether a restraint is reasonable. Factors include, but are not limited to, the influence of the person being restrained and how integral they are, or were, to the business. The type of information requiring protection may include trade secrets, customer lists, access to clients and/or prospects and the relationships established through the business.

In principle, courts will look at whether the restraint protects a genuine interest of the restrainer and whether the time period and geographical area are no greater than required to protect that interest.

CASE HEARING In late 2012, the full court of the Federal Court of Australia revisited restraint of trade clauses in employment contracts and upheld a two-year

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restraint period against a former director.

Brent Pearson was a director of HRX Holdings Pty Ltd. Mr Pearson agreed to a restraint that prevented him from accepting employment with a business ‘similar to or competitive with’ HRX for two years after termination of his employment. The restraint was designed to stop him disclosing confidential information and soliciting customers or employees away from HRX. Mr Pearson subsequently resigned from HRX. A week earlier he had accepted a senior position with a competitor.

The Court held that: “Where a contractual restraint protects a legitimate interest of the covenantee, the restraint must afford no more than reasonable protection as between the parties and in terms of the public interest. In terms of HRX’s interests, the restraint in protecting customer connections and ensuring the diligent and faithful pursuit of business opportunities by Mr Pearson for HRX, was reasonably necessary to protect those interests.”

HOW CAN A RESTRAINT CLAUSE BE RELIED UPON? It is becoming clear the requirements for a restraint to be held reasonable are: yy genuine interest – you must have a genuine and legitimate interest that needs protecting and the restraint should be limited to protecting that interest yy time period – the restraint should last no longer than necessary to protect that interest yy geographic area – the restraint should not cover a geographical area larger than necessary to protect that interest yy for employees – ensure the restraint is not so broad as to prevent the employee from working at all; and yy cascading clauses – with alternative time periods and geographic areas, which may help to ‘hedge your bets’.

Be wary of any ‘standard’ clauses. If they do not suit the specific circumstances, they may be unable to be enforced.

Nichola Constant is a director of People + Culture Strategies.

She can be contacted on 02 8094 3102 or nichola.constant@ peopleculture.com.au Erin Lynch is a senior associate at People + Culture Strategies and can be contact on 02 8094 3115 or erin.lynch@peopleculture.com.au

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SPECIAL REPORT / UNFAIR DISMISSAL

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DISMISSING EXECUTIVES: It ain’t easy to ever say goodbye Dismissing any employee is a challenge, but dismissing an executive brings its own legal minefield, as George Spiliotis and Aneeka Munshey explain Dismissing an executive employee is an uncomfortable thing to face. No matter the circumstances, nobody in a hiring-and-firing position likes having to say, “You’re fired”, particularly to someone who holds a senior position in the organisation. Before you say those words, however, are you certain of where your organisation stands under the law?

Employers who labour under misconceptions about the scope of executive protections under the Fair Work Act (FWA) 2009 and the common law may find themselves failing to adequately minimise the risks associated with executive terminations.

Unfair dismissal concerns dismissals that are, in all circumstances, “harsh, unjust or unreasonable”.

If an executive has completed the minimum employment period (12 months for small businesses and six months for businesses with more than 15 employees), the following requirements apply for the executive to be eligible for an unfair dismissal claim: yy The executive is covered by a modern award (or pre-modern award) yy The executive is covered by an enterprise agreement yy The executive earns less than $129,300 p.a. (income threshold) Eligible executives are able to seek remedies of reinstatement or compensation in lieu of reinstatement (up to 26 weeks’ remuneration). For executives who don’t meet the three eligibility requirements, an unfair dismissal claim under the FWA is not an option.

Recently, a series of high-profile executive terminations have resulted in executives pursuing

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general protection claims for redress from employers.

In July 2013, after being sacked as head coach of the Australian cricket team, Mickey Arthur sued Cricket Australia for $4m on various grounds, including discrimination because he is South African.

General protection applications under the FWA surged 30% in the first quarter of 2013 and have continued to grow rapidly since their introduction in 2010. The general protection provisions provide alternative statutory protections to executives, especially those who are ineligible to pursue unfair dismissal claims. Among other things, the protections provide recourse for executives who have not been dismissed but wish to enforce an entitlement or protect an attribute.

The central objective of a general protections claim is to prevent employers from taking adverse action against an employee for exercising a workplace right as defined under the FWA, or for engaging in industrial activity, and to protect the employee from discrimination.

A “workplace right” comprises entitlements, roles and responsibilities, an ability to initiate processes and proceedings, and the ability to make complaints or enquiries. Ultimately, the courts assess the nexus between the decision to terminate and the employee’s protected entitlement, activity or attribute.

If an executive succeeds in making a general protections claim, under the FWA they may claim reinstatement and compensation for breaches, or an injunction to prevent the employer from dismissing them unlawfully. It’s important to note that the compensation is uncapped and may include compensation for hurt and humiliation suffered as a result of the dismissal. Because these are civil remedy provisions, breaches may result in financial penalties for both individual directors and the corporate employer.

An often overlooked protection afforded to executives is a common law claim on the basis that the employer has breached an implied contractual term. In the landmark decision of Commonwealth Bank of Australia v Barker, the full Federal Court of Australia held that the doctrine of mutual trust and confidence forms part of contemporary Australian employment contract law.

Justices Jacobson and Landers reflected upon UK and Australian authorities in describing the implied term: “The employer will not, without reasonable cause, conduct itself in a manner likely to destroy or seriously

HCAMAG.COM

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Unfair dismissal concerns dismissals that are, in all circumstances, “harsh, unjust or unreasonable” damage the relationship of confidence and trust between the employer and employee.”

Notwithstanding the dissenting judgment of Justice Jessup, it appears that the protection of an implied term of trust and confidence has landed on our shores.

Depending on the nature of the breach, employers may be exposed to significant damages claims for contravention of implied terms.

Most executive employment agreements contain provisions that set out notice requirements for the termination of employment. Ordinarily, such a notice provision would be the end of the matter with respect to the notice to be given to the departing executive. Unfortunately for employers, and fortunately for executives, there have been numerous instances in which the courts have disregarded the notice provisions contained in the executive employment agreement. This is especially so in circumstances where the nature of the executive’s role, position and duties has significantly altered since the initial date of the agreement.

In those circumstances, the courts will look at determining what they consider to be reasonable notice of termination, taking into account a range of factors including the seniority of the position, length of service, age, and circumstances of the executive, to name but a few.

Executives have access to a number of avenues in pursuing their employer, either by utilising the unfair dismissal and general protection provisions of the FWA, or where a statutory claim may be simultaneous to a common law claim. Employers should look to the substance of their executive employment agreement terms to minimise the risk of exposure to substantial damages claims.

More importantly, employers and executive employees should consider meeting to candidly discuss terms, whether express or implied, and prevent the need for a claim to arise in the first place.

For more on unfair dismissal, including redundancies, turn to p.28

George Spiliotis is a principal, and Aneeka Munshey is a lawyer at Rockwell Olivier’s workplace relations team in Melbourne

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12/12/2013 5:37:07 PM

LEADERSHIP / EXPERIENTIAL LEARNING

LEADING

on thin ice

Think you operate in a tough corporate culture? Try leading a team of 18 strangers into the wilderness of Antarctica for an entire year. That’s just what Rachael Robertson did. She shares some of the most powerful leadership insights from the most extreme workplace in the world HRD: It’s a jump to think your experience in Antarctica might have relevance to the workplace, but obviously there are some correlations. Can you briefly outline what those correlations might be?

Rachael Robertson: Antarctica is just like any other workplace in the world – except we lived together around the clock for a year. So the interpersonal pressure was intense.

We had a very diverse team from various backgrounds – engineers, scientists, IT, trades – and my job was to shape these individuals into a high-performing team because our lives depended on our teamwork. I didn’t recruit the team; in fact I first met them in pre-departure training.

Because of the incredible diversity of this expedition and the enormous pressure of living together for so long in such extreme conditions, it was unrealistic to think we’d live in perfect harmony. I didn’t expect everyone to love each other, or for that matter to even necessarily like all 17 other people, but I did expect they’d show respect towards each other. Respect trumps harmony. We treated each other with the utmost

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professionalism, acknowledged very honestly and publicly that we were all different, and showed respect – for professional ability, personal space, individual opinions and idiosyncrasies. In highpressure environments that rely on collaboration, you need a strong foundation of mutual respect.

Harmony will follow.

Like most workplaces we also had business cycles. Summer [November to February] was a time of extraordinary activity, with 120 people living on station delivering 22 science projects and a comprehensive construction and maintenance program. Project reporting, risk management and compliance were front of mind. When things are frenetic and major goals are achieved it usually means working long hours, but it’s easier for people to stay energised and motivated. When things quieten down it’s a lot more challenging for leaders to inspire. From February to November the 18 of us were on our own, with no sense of urgency or burning platform, but we still had work to do.

Every workplace has small, seemingly irrelevant issues that impact morale and productivity. In HCAMAG.COM

11/12/2013 2:30:07 PM

HUMAN RESOURCES DIRECTOR

Antarctica it was a ‘Bacon War’ – should it be cooked soft or crispy?

In some offices it’s dirty tea rooms, or people arriving late for meetings, or texting while someone is presenting. They appear to be small things but they are nearly always a sign of a deeper issue around respect. Managers need to deal with these behaviours expediently. Our bacon war turned out to be a dispute between two teams whose relationship had broken down due to a lack of respect being shown; it manifested itself in the bacon war. Take care of the little things.

HRD: How do you achieve true leadership?

Can you provide examples of individuals who have inspired you with their leadership vision and why they inspired you?

RR: True leadership is about creating more leaders, not more followers. It’s about inspiring people to take up a challenge, to keep going when things are tough and to know exactly how they contribute to business outcomes.

I’ve worked with many incredible leaders, but most recently one person who really inspired me is Guy Russo, CEO at Kmart. Guy has a great strategic mind but importantly he can articulate and communicate the steps needed to implement the strategy. It’s no good coming up with the best action plan in the world if you can’t engender support for it and your people don’t understand it.

At the start of the Kmart turnaround I watched Guy address 400 store managers and tell them ‘this is who we are; this is who we are not’. His clarity around the brand was very strong, and it showed courage to address these key staff, in person, and tell them, very clearly with no ambiguity, ‘this is the future of Kmart’. Tough decisions were made to delete certain product lines, but Guy stood front and centre and explained the rationale very simply and professionally.

HRD: They say a fish rots from the head. Does the same hold true in organisations? Do people look to the business leader to demonstrate appropriate behaviour?

RR: Leading in Antarctica was a stark reminder of the scrutiny of leadership. We are being watched the whole time and everything a leader says carries extra volume and gravitas by virtue of their authority.

For an entire year I was under intense scrutiny – where I sat for meals, who I greeted in the HCAMAG.COM

48-51_Leadership.indd 49

Photo by: Peter Nink

morning, what time I left the party, even when I chose to wear a hairclip because my hair was hanging in my eyes – no hairdressers for a year!

It was all noticed. It came home to me that as leaders our behaviour is often interpreted in ways we cannot imagine.

I was very conscious of this and relied on my self-awareness to monitor and manage my own behaviour at all times. I also made sure my decision-making was consistent and transparent.

I would also never deride or ridicule the staff at head office, my peers at the other stations or other members of our expedition team as this type of contempt is unprofessional and breeds dysfunction. Any organisation that has silos needs to take a long hard look at the behaviour of their senior management.

Keeping with the fish analogy I’d also point out that fish live in schools and improve their own chance of survival by sheer numbers. That’s a good thing, but the downside is if a virus hits one fish it can soon spread through the entire school.

I’ve seen this contagion in teams where one person spreads their negativity and dysfunction

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11/12/2013 2:30:09 PM

LEADERSHIP / EXPERIENTIAL LEARNING

to the rest of the team. These people can be demoralising and exhausting. But the most important thing a leader can do is manage this behaviour before it spreads. Like fish, these people try to gather numbers, and you ignore this behaviour at your peril.

HRD: Business today is about agility and moving swiftly to both take advantage of opportunities and adapt to the times. What did your experience teach you around that context?

RR: In early December we had a plane crash. The landing gear failed and it stranded four of my people 500km away, with no way to fly the plane home. I had 116 people back on station watching me, worrying about the safety of their colleagues and picking up cues about the issue from my reaction and my behaviour.

I knew my immediate priority was to ‘manage’ the search and rescue for these four people.

But I also needed to ‘lead’. I had to ensure the other 116 people were informed, confident and optimistic and that we continued to deliver our works program.

There were four important rules I followed to effectively lead through this crisis: 1. VISIBILITY – I had to be seen about the place so people could ask me questions and be confident with our emergency response. My initial reaction was to hole up in my office and manage the search and rescue, but I realised it wasn’t enough to be leading; I needed to be seen to be leading.

2. COMPOSURE – My body language needed to build confidence and optimism. I had to be calm and poised.

3. CHOOSE YOUR WORDS – I spoke about a retrieval not a rescue; an incident not an accident. I had concerns but I wasn’t worried. Concern and worry are different words and they create a very different response.

4. COMMUNICATE – I sent out regular updates, every few hours, to inform people about the situation. If you don’t provide regular information during a crisis or a change, then people fill in the gaps themselves. Often these gap fillers are worse than the reality.

HRD: Experiential learning has made a comeback in corporate L&D. Your experience is perhaps the ultimate in experiential learning. Would business leaders benefit from something similar (perhaps not as extreme) by getting out and trying something totally unrelated to what they do day-to-day?

RR: People have told me this expedition was like

Photo by: Peter Nink

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20 years of CEO experience truncated into 12 months. I dealt with every issue you could imagine, and some you can’t, but the difference was I had no choice. I simply couldn’t ignore emerging issues, or delegate to someone else, or even take the weekend to consider my options. The buck stopped with me and I had to find ways to deal with things. Sometimes I got it right; other times I got it wrong.

The value of experiential learning comes in the reflection; that is, what did I learn there? What worked? What didn’t?

Because I had no one to talk to or discuss options with, I decided to keep a journal. The journal became the best leadership development I’ve ever had. As each new challenge presented itself I’d capture my thoughts and ideas and decide what to do. Afterwards, I’d go back to the journal and reflect on how things panned out.

The discipline of reflecting on your performance HCAMAG.COM

11/12/2013 2:30:10 PM

HUMAN RESOURCES DIRECTOR

and behaviour as the leader builds self-awareness.

It’s like standing on a balcony looking down and watching yourself. The best way leaders can develop their ability is to honestly and critically evaluate themselves and their performance, every single day.

We learn by doing new things. New experiences – secondments, higher duties, relocations – are opportunities to learn and add new skills to your leadership toolbox. I’d take on almost any opportunity to develop my leadership, even if it didn’t turn out, because I would rather regret what I did do than regret what I didn’t.

“During long projects, or even times when it’s business as usual, an inspiring leader will find a reason to stop and salute even small accomplishments”

HRD: You’ve said that all businesses encounter their own Antarctic winters at some point. What do you mean by that? What are your tips for coming through tough times in one piece?

RR: Every business has periods of time where

annoying behaviour. During these times open and direct conversations are even more critical. Go direct to the source.

2. FIND A REASON TO CELEBRATE – Recognise milestones and important moments. If you don’t have one readily apparent then create one. Find a reason. In Antarctica we celebrated big events but also the smaller successes such as a month without a power blackout, significant scientific data collection or uninterrupted internet access with a fully functioning server.

Usually it was just a notice on the whiteboard in the dining hall, but it was important to find the time to stop and celebrate, because these moments create momentum. They give a sense of progress, moving forward and getting closer to our outcomes.

During long projects, or even times when it’s business as usual, an inspiring leader will find a reason to stop and salute even small accomplishments. Whether it’s with an event, a reward or a simple thank you, the acknowledgement and recognition will reaffirm their purpose and demonstrate progress, two of the most important motivational domains.

3. CHECK IN ON PEOPLE – As you receive reports and updates on projects, take a moment to check in on people and ask, “Are you OK?” Not the project, not the tasks, but you – the person.

People respond with commitment and loyalty when they know both they and their contribution are valued. To show people they are valued, check how they are travelling. Make it spontaneous and often. These moments will create momentum.

As Maya Angelou put it so succinctly, “I’ve learned that people will forget what you said, people will forget what you did, but people will never forget how you made them feel”.

work is just work. Capital expenditure is curtailed; there are no big exciting projects on the horizon – it’s all just business as usual. This is the Antarctic winter.

Similarly, many projects, especially in pharmaceutical, construction and IT, have long lead times, years and years. The launch is exciting, the project completion or product launch is fantastic, but often the time in between is plain hard work with incremental progress. Just like Antarctica, the leaders need to keep people inspired through this period.

I used three simple tools to keep us motivated, connected and effective: 1. THE RULE OF NO TRIANGLES – The practice of only having direct conversations built respect within my team and resulted in very high performance. We had a simple rule that went: ‘I don’t speak to you about him, or you don’t speak to me about her’. No triangles: go direct to the source.

It’s a powerful tool that reduces conflict and clarifies accountability. It also shuts down ‘answer shopping’; that is, people who keep asking the same question and go over people’s heads, or around people, until they get the answer they want.

During the Antarctic winter, when interpersonal pressure increases and the focus turns from the work to the people, it’s even more crucial to have no triangles. Personal conflicts are magnified in quieter periods, unlike the heady times where we often overlook or put aside another person’s HCAMAG.COM

48-51_Leadership.indd 51

Rachael Robertson is the author of Leading on the Edge, published by Wiley and available in bookstores across the country and through Rachael’s website at rachaelrobertson.com.au.

RRP $29.95

| 51

11/12/2013 2:30:10 PM

IN PERSON / VIJAY KASHYAP

“‘Do a job that you love and you will never have to work a single day’. By this definition, I have been without a job for the better part of 20 years!”

IN PERSON:

VIJAY KASHYAP, CAMPARI AUSTRALIA With a deep understanding of people, Vijay Kashyap, HR director Asia Pacific at Campari Australia, knew from a young age that the HR industry was his calling. He chats with Cameron Edmond Pulch Photography pulchphotography.com

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HCAMAG.COM

12/12/2013 5:23:11 PM

HUMAN RESOURCES DIRECTOR

HRD: How did you first get into HR and what attracted you to it?

Vijay Kashyap: I played team sports from school right up to my Masters and found that I naturally gravitated towards being the HR manager for the team – the vice-captain. I was the guy who got individual players to see the big picture, provided solutions when there was conflict and helped the captain rally the team towards winning the tournament.

I also found that doing this kept me at the top of my game as a person, so over time I looked for opportunities that would help me convert this into a profession. So when I enrolled for business school, specialising in HR was a no-brainer.

HRD: Your work at Shoppers Stop involved HR operations across different companies [see timeline, right]. Did each company have a different culture?

VK: Shoppers Stop was the first department store chain in India that expanded into hypermarkets and bookstores. My mission was to make this conglomerate a Hewitt Employer of Choice, but each of these segments had a different culture, and so I realised a big HR lesson: cultures can be different, but if the glue that binds them is a common value system, you can build a highly engaged workplace.

We were ranked 46th overall in the Hewitt Best Employers list and fourth in retail while I was there, so the lesson did have its benefits.

HRD: Campari prides itself on transparency – for example, the company publishes financial results on its website. Is this transparency carried into the HR function?

VK: At Campari we believe that transparency is the bedrock of engagement and that every employee has the right to all information that impacts him or her. The HR response has been to make all information available on the intranet and to institutionalise different communication forums as part of our DNA.

HRD: What HR initiative are you most proud of in your career and why?

VK: I think the set-up of Campari Australia in 2009 would be right at the top. The business was set up in the middle of the GFC when good people with jobs were just holding on. We were a challenger company and were greeted with cynicism and HCAMAG.COM

52-53_InPerson.indd 53

disbelief. The leadership team assembled was unanimous in their vision of “Building lifestyle brands and people with passion”. This meant the people piece became central to the business strategy.

At the end of the day, Campari Australia pays salaries that are at market median, and is 20% the size of the biggest player in our industry. But we have low attrition levels and very high employee engagement scores. Besides that, we run a profitable business and enjoy great equity with our trade partners. Need I say more?

HRD: What is your number one HR challenge at Campari at the moment? How are you overcoming it?

VK: Succession planning. Seventy per cent of our key management have been in their roles since the company started four years ago. We address this issue of growth and enrichment through overseas projects and opportunities, job rotation and job enrichment. We also ensure that any exit is used as an opportunity to grow talent from within. As a result, by the start of 2014, 40% of our key managers would have received some variety through one of the mentioned initiatives.

HRD: Finish this sentence: The thing I love most about HR is...

VK: It is the only business function where you cannot be successful if you are not a good role model for the organisation’s values and ways of working. I love it because it spurs me on to be that – a poster boy for the Campari values of passion, integrity, pragmatism and performance orientation.

HRD: The thing I dislike the most about HR is...

VK: What I like least in HR is the employee relations aspect of the job, such as EBAs and disciplinary issues. Luckily, in a highly engaged culture like the one at Campari, this isn’t a significant part of the job.

HRD: What has been your favourite job?

VK: Hard to pick a favourite but Campari and Unilever would both be at the top. Cin-Cin!

HRD: What is the best piece of advice you have received?

VK: “Do a job that you love and you will never have to work a single day”. By this definition, I have been without a job for the better part of 20 years!

VIJAY KASHYAP CAREER TIMELINE Qualifications ● International Baccalaureate Diploma United World College of the Adriatic, Italy ● BA Economics with Honours Delhi University ● MBA XLRI India

1992–1998

● Unilever Personnel manager Responsible for HR incubation for newly acquired businesses in Asia, including five acquisitions in six years

1998–2001

● Taj Group of Hotels Area HR manager Responsible for HR and change management for a 1000+ workforce

2001–2005

● Shoppers Stop Vice-president of HR Responsible for HR solutions across the three group companies of Shoppers Stop (department stores), Crossword (bookstores) and Hypercity (hypermarkets)

2005–2006

● Aditya Birla Retail

Vice-president of HR Responsible for launching a start-up business from scratch through a combination of organic growth as well as acquisitions

2006–2009

● Star Track Express Corporate HR manager Setting up HR systems and practices in a 3,000+ predominantly blue-collar workforce

| 53

12/12/2013 5:23:11 PM

SALARY WATCH

Office support/admin salary and job trends Role

Page Personnel

Hays

Robert Walters

HRD median

Data entry officer

$52,500

$38,000

$40,000

$43,500

Receptionist

$57,500

$45,000

$52,500

$51,500

Office manager

$77,500

$70,000

$77,500

$75,500

Project administrator

$65,000

$65,000

$67,500

$65,500

Records officer

$60,000

$45,000

-

$52,500

Document controller

$75,000

$65,000

-

$70,500

Executive assistant (GM/director level)

$92,500

$70,000

$85,000

$82,500

Personal assistant

$77,500

$65,000

$70,000

$71,000

Legal secretary

$72,500

$65,000

$70,000

$69,000

Administration assistant

-

$42,000

$52,500

$47,000

Team assistant/administrator

-

$55,000

$60,000

$57,500

Specialist support/admin positions Role

Michael Page

Hays

Robert Walters

HRD median

Accountant assistant

$60,000

$55,000

$58,000

$64,000

Marketing assistant

$60,000

$60,000

-

$60,000

-

$65,000

$62,500

$63,500

Recruitment officer

Marketing coordinator

$90,000

$85,000

$85,000

$86,500

HR coordinator/administrator

$65,000

$55,000

$60,000

$60,000

L&D coordinator

$65,000

$65,000

-

$65,000

WHS/OHS coordinator

-

$60,000

$90,000

$75,000

Desktop support

-

$55,000

$60,000

$57,000

Database admin

$102,000

$100,000

-

$101,000

System admin

$91,000

$85,000

$75,000

$83,000

Event coordinator

$72,500

$65,000

-

$68,500

Marketing coordinator

$62,500

$65,000

-

$63,500

Customer service officer

-

$45,000

$60,000

$52,500

Account manager (contact centre & finance)

-

$45,000

$75,000

$60,000

Accounts payable officer

$55,000

$60,000

-

$57,000

Payroll officer

$68,000

$70,000

$68,000

$69,000

Hays: Salaries are based on Sydney roles, exclude superannuation and are based on a median of a lower and upper range.

Robert Walters: Figures are a median of an upper and lower range and based on Sydney roles, inclusive of superannuation but exclusive of benefits/bonuses.

Michael Page/Page Personnel: Figures refer to the median of an upper and lower range, based on employees of large organisations or with 5-7 years’ total experience in the stated role. Figures are for NSW and are inclusive of superannuation but exclusive of bonus/incentive schemes.

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HCAMAG.COM

12/12/2013 8:29:36 AM

HUMAN RESOURCES DIRECTOR

KEY TRENDS

SUPPORT/ADMIN SALARY INCREASES OVER THE NEXT 12 MONTHS All my employees will receive the same percentage increase

13% The most job opportunities for office support roles were in the property, infrastructure and pharmaceutical/medical sectors. Temporary government staff hires were also high.

Demand for technical administration and customer service officers has grown over the last three years and will most likely continue to grow.

Executive-level office support staff has remained in steady demand.

All my employees will receive an increase, but it will vary according to performance

50% Only my best-performing employees will receive an increase

25% No one in my team will receive an increase

12%

AVERAGE SUPPORT/ADMIN SALARY INCREASES

Demand is stabilising in WA after a year-on-year increase for the last four years.

NSW and Victoria may experience a slight increase in demand over the coming year.

0-2%

21%

3-5%

65%

Organisations are focusing on new methods for retaining office support staff, such as flexible hours and job-sharing opportunities.

6-8%

7%

9-11%

7%

MOST POPULAR BENEFITS OFFERED TO SUPPORT/ADMIN EMPLOYEES

OUT

13%

Sabbaticals

19%

Increased maternity/ paternity leave

AVERAGE SUPPORT/ADMIN BONUS AS % OF GROSS SALARY

1-5%

72%

6-10%

21%

11-15%

7%

WHAT’S LIKELY TO IMPACT SUPPORT/ADMIN SALARY LEVELS IN THE NEXT 12 MONTHS? Domestic economic conditions

81%

Flexible working arrangements

19%

Alternative leave options

63% Competition with other companies

31% Global economic conditions

26% Not sure

24%

31%

Team building/ offsite activities

HCAMAG.COM

54-55_SalaryWatch.indd 55

13%

Other

13%

Other

Source: Page Personnel Salary & Employment Forecast, Australia 13/14

| 55

12/12/2013 8:29:36 AM

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TECHN OLOGY

HCAMAG.COM ISSUE 11.12

CRISIS CONTROL IR DISPUTES

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56+IBC.indd 57

12/12/2013 8:34:19 AM

OBC.indd 1

12/12/2013 8:35:23 AM