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

www.cipd.asia/pm ISSUE FIVE

The future Six business trends you need to understand (before your strategy is out of date) PLUS

Relative values HR professionals lift the lid on family businesses

ASEAN calling Is free movement of labour on the cards for southeast Asia?


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Welcome

What’s next for HR?

Laura Harrison People and strategy director, CIPD

Abraham Lincoln, the 16th president of the US, said “the best way to predict your future is to create it.” It’s a fantastic quote and, if anything, is more relevant now than it was in the 19th century. It reminds us all of our power to affect change, and the responsibility we have towards our own future and the futures of those who come along after us. So you won’t be surprised to hear that at the CIPD, we’ve been engaging with members, businesses and other experts to understand what sort of future we should be championing for HR. We’ve moved away from thinking about how HR is organised – the relationship between administrative and strategic functions, or the angst of “needing to get a seat at the table.” Whatever view of the future you subscribe to, we think there will be similar requirements of HR: that it is a trusted voice in the organisation, one that understands the business but also provides expert advice on the people that make the business. That means how they interact with each other and respond to change, how they learn and are motivated; what they’re capable of now and what their potential could be if harnessed and developed in the right way. This unique

expertise will support the adaptiveness all organisations require. It will ensure the wellbeing of the workforce, long term-ism and inclusive working practices are balanced with short-term needs of taxpayers, shareholders, customers and other stakeholders. Our view of HR is that it’s a profession, not a functional or technical discipline. It must be practised with a strong ethical focus, a shared body of knowledge based on a deep understanding of humans and organisations, and with a collective identity that stands for public good over self-interest. As the CIPD, we will continue to build a profession for the future by being a source of strength behind our members throughout their careers; promoting HR’s credibility and distinctive voice; and supporting members to develop the core competencies that make them experts in people. To read more about the CIPD’s work on Profession for the Future, visit cipd.asia and read the research report From best to good practice HR: Developing principles for the profession. Read more about Profession for the Future bit.ly/ProfFuture Visit the website and sign up for the newsletter www.cipd.asia/pm Tweet us @peoplemgt_asia and @cipdasia #changing HR Join our LinkedIn groups Search ‘People Management Asia’ and ‘CIPD Asia’

Contents About the CIPD p5 News and analysis p6 Singapore prepares to ride out turbulence Case studies p10 Focus on Acleda Bank and iTalent Debate: distractions at work p14 Is it time to switch off our devices? The future of work p17 The trends every business needs to understand

Family businesses p24 The unique HR challenges of the family-owned firm Inside ASEAN p28 What Asia’s trade partnership means for employers The Knowledge p30 Key workplace skills, with expert commentary The View From Here: Cheryl Liew-Chng p34

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Marmalade Fish is a management and learning consultancy with a presence in the Middle East, North Africa and Asia Pacific. We partner with leading businesses to deliver on their organisational ambition. Our vision is to make work better by creating high performance cultures underpinned by values, enabling employees to be at their best, more of the time. How can we help you? PEOPLE CONSULTANT Experts in Learning, Talent, Resourcing, Nationalisation and Organisational Development

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

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EXECUTIVE COACHING Facilitating personal and professional development to achieve your potential

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

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

CONTACT THE CIPD 43 Niven Road, Singapore 228390 (65) 6338 4528 cipd@cipd.asia

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

Be part of a global community When you’re a member of the CIPD, you’re part of an international community of 140,000 members working in HR, learning and development, people management and consulting. The CIPD is the only professional body for HR and L&D in the world that awards Chartered status. It contributes to the development of HR internationally, sets and maintains HR standards, and works with governments, organisations and partners to help fulfil its broader mission of championing better work and working lives. CIPD professional membership is an achievement you can be proud of and will ensure you stand out in the workplace. It will give you status and relevance with employers and an edge over your peers. It’s a badge of your credibility: • It shows that you meet the CIPD’s rigorous standards for good practice and adhere to its Code of Professional Conduct. • It demonstrates your ability to make a difference to your organisation. • It inspires confidence in employers, clients and peers. • It proves a commitment to your continuing professional development. CIPD professional membership is respected by employers and industry, and can help improve career prospects and earning potential. It is available at three levels: Associate Member, Chartered Member and Chartered Fellow. When you gain professional membership, you can use designatory letters after your name to highlight your professional standing within the HR and L&D community.

Associate Member (Assoc CIPD) For professionals providing advice to managers across the business, and supporting the HR or L&D function. Associate membership is the CIPD’s first level of professional membership. It demonstrates that an individual has attained a recognised level of competence as an HR or L&D professional. Chartered Member (Chartered MCIPD) For experienced professionals managing, developing and implementing HR policies that support organisational objectives. Chartered Member is the CIPD’s second level of professional membership. Achieving Chartered Member status demonstrates that the individual has the knowledge and experience to create a real impact in the workplace and make a difference to an organisation’s strategy and people. Chartered Fellow (Chartered FCIPD) Chartered Fellow is the highest level of professional membership and is aimed at experts who are leading the development of strategic HR and L&D plans that drive business performance. A Chartered Fellow is a role model for the profession and part of a select group of senior HR and L&D professionals and business leaders who drive innovative people practices to help deliver strategy. Wherever you are in your career, the CIPD and its members will support and inspire you to achieve your full potential. For more information about professional membership and how to join the CIPD, please visit: www.cipd.asia/membership People Management Asia

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The real estate sector is optim ist about hiring in ic Q4

Labour market

Singapore steels itself for economic downturn

WORDS GEORGI GYTON

Unemployment on the up, but real estate, finance and services sectors provide grounds for optimism The Singaporean economy has undeniably been hit by faltering global markets, leaving employers struggling to grow their businesses, and unemployment rates reaching new highs. The latest statistics from the Ministry of Manpower (MOM) suggest the number of people without work in the second quarter of 2016 reached a seven-year high, with preliminary estimates of just over 68,000. But despite the subdued economic conditions, certain sectors are more optimistic about growth, while the government is working to try to futureproof Singaporean careers by focusing on workers’ skill development. The latest Manpower Employment Outlook Survey reported that hiring intentions in Singapore’s finance, insurance and real estate sector were up 19 per cent 6

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for the fourth quarter of the year, signalling continued growth, while the outlook for recruitment in the services sector stood at +15 per cent for the same period. Mining and construction reported a negative outlook, however, at -2 per cent. Overall estimates were modest, with 13 per cent of employers expecting staffing levels to increase, 5 per cent to decrease and 73 per cent predicting no change. Linda Teo, country manager for ManpowerGroup Singapore, says hiring sentiment is reflective of the current state of the broader economy. “Singapore, being export-driven, has clearly been affected by China’s slumping growth, the downturn in commodities and the uncertainty due to Britain’s vote to withdraw from the EU,” she says.

Associate professor Toh Mun Heng, from the Department of Strategy and Policy at NUS Business School, says that “rising retrenchment of PMETs [members of the professional class] and, more recently, the number of graduates seeking jobs which are exceeding the number of vacancies, has put many Singaporeans in a more sombre mood.” One silver lining, however, is that companies are now more motivated to seriously consider productivity and innovation. “And the enlightened ones are willing to send their employees for training and skill upgrading,” says Dr Toh. Meanwhile, the government’s Workforce Development Agency (WDA) has been working on a number of initiatives to try and boost employment figures, and has helped around 10,000 unemployed Singaporeans into work since the start of this year. It has also recently announced plans to restructure and expand its remit. Speaking at a parliamentary session, minister for manpower Lim Swee Say said the


News and analysis agency’s Adapt and Grow initiative had “enhanced and expanded the package of employment assistance,” as well as “ramped up the number of job fairs and other career support events, such as career workshops.” In September, for example, the WDA piloted a virtual careers fair through the scheme, with around 50 employers offering 500 vacancies at an online event. The planned reorganisation of the agency will see it evolve into Workforce Singapore (WSG), which will “go beyond helping the unemployed find jobs” and will help Singaporeans manage career transitions throughout life, he says. “This is to maximise matching between the aspiration of workers and the manpower needs of businesses,” says Lim. “In addition, it will work with businesses to redesign jobs and improve HR practices so that they can turn their human resources into their human capital.” Dr Toh says that while there are a plethora of schemes and programmes available to help those who are unemployed or retrenched, “two hands are needed to clap… Workers have to play their part, be actively involved and willing to pick up a new skill wanted by industries,” he says. Dr Toh believes that the restructuring of the WDA into a statutory board, “focusing on the development of skillsets that are extendable and have a long shelf life”, will help. Future skills initiatives are a step in the right direction, but there needs to be a nationwide culture that embraces learning new skills throughout a career lifetime, he says. Senior lecturer Chee Mew Leng, from the Department of Management & Organisation at NUS Business Workforce Singapore will go beyond helping School, says there are measures people find jobs, says Lim Swee Say employers can take to keep staff motivated in a downturn, including communication and recognition. She says: “Investing in the development of human capital sends a message to the employees that the organisation is committed to their long term growth and development.”

GETTY IMAGES

“Workers haveto playtheir partandbe actively involved”

News in numbers

7.3% Increase in Vietnam’s minimum wage – the lowest annual increase for a decade

6.25

Score given to the Philippines, out of 10, making employees in the country the happiest in south east Asia

S$72,000 Fine issued to the director of a Singaporean fashion house for making false salary declarations on ‘S pass’ applications

19% Increase in job adverts for HR professionals in Asia, Q2 2016 SOURCES: MERCER, JOBSTREET, MINISTRY OF MANPOWER, ROBERT WALTERS

LEGAL UPDATE

Fiona Loughrey, head of the Asia employment practice at Simmons & Simmons, and Mohammed Reza, director of JWS Asia Law Corporation, give an overview of legislative changes that HR professionals need to know about

A new law passed in Singapore in August 2016 provides for the creation of an Employment Claims Tribunal (ECT), which is expected to begin hearing disputes in April 2017. This can be seen as a positive development, as it will provide all Singapore-based employees with a relatively speedy and low cost dispute resolution alternative to court proceedings (for claims up to the prescribed limits). In particular, it expands the avenues for dispute resolution to professionals, managers and executives (PMEs). Roughly 30 per cent of Singapore’s resident workforce are PMEs, who until the ECT begins to operate, are obliged to pursue proceedings in the Singapore courts; they fall outside the Ministry of Manpower’s jurisdiction over salary-related disputes. Employers with operations in Singapore will want to note the following specifics:

• It appears that disputes which will fall within the ECT’s jurisdiction are those which cover salary and salary-related issues. Other matters, including where a sum claimed exceeds the limit, or where the remedy sought is non-monetary in nature, must still be brought in the appropriate court or tribunal. • There will be a limit of S$20,000 (around US$14,700, using current rates), or S$30,000 (around US$22,000) if the parties undergo mediation at a new local centre being established. • Claims must be filed within one year from the date on which the claim arises (or six months from the time the employment relationship has ended). • No legal representation will be permitted, either at the mediation stage or in front of the ECT. There does not appear continued overleaf People Management Asia

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News and analysis

LEGAL UPDATE continued

to be any provision which will preclude in-house counsel from representing the employer (or, more probably, ex-employer). Until detailed rules are introduced, it is not clear whether costs of in-house counsel will be claimable. • As in Hong Kong, hearings before the ECT are to be informal, and will adopt a “judge-led” approach. • Appeals from the ECT to the Singapore High Court will be permitted only with leave of the District Court, and only in relation to questions of law or pertaining to the jurisdiction of the ECT. It may be informative to contrast this system with Hong Kong, where a long-established labour tribunal system has both similarities and differences. The tribunal in Hong Kong has jurisdiction over many types of claims. These include disputes over money, such as outstanding pay, payments in lieu of notice or unlawful deductions, rights to statutory payments and claims for certain breaches of terms. Actions to enforce restrictive covenants must be brought in court, while discrimination claims must be heard by the District Court. In Hong Kong, there is no limit on the monetary amounts of claims, but more complex claims – or those involving larger amounts – tend to be transferred to the court, which requires leave. The limitation period is (now) six years. External counsel representation is not permitted, and no orders for legal costs will be made. Until the 1990s, lawyers were in fact usually discouraged or barred from attending: this was effectively up to the discretion of the presiding officer. Nowadays, external counsel are in practice often allowed to sit in, listen and observe, which can be to the benefit of parties who need relatively informal assistance. As in Singapore, parties dissatisfied with a tribunal determination have the right to appeal, but only on points of law. 8

People Management Asia

Maternity leave ‘still lagging’ Hong Kong rated highly in global report, but businesses unlikely to offer maternity benefits Hong Kong offers the most generous leave to new mothers in the region, according to Mercer’s 2016 Global Parental Leave report. Published in September, the findings put Hong Kong fifth in the overall global league table, with 56 per cent of companies there exceeding the local statutory minimum requirements for maternity leave. As a whole, APAC countries were less likely to offer maternity leave benefits above the statutory minimum requirement – 38 per cent of companies did so, compared with 44 per cent globally.

In Vietnam, 36 per cent of organisations beat the requirement, compared with 25 per cent in Thailand and Malaysia, 21 per cent in Singapore and 18 per cent in the Philippines. Indonesia was the least like to offer excess benefits (13 per cent). However, the same countries scored well when it came to paternity benefits, with 41 per cent of APAC businesses providing more than the required amount, compared to the global average of 38 per cent. Many countries do not have any requirements for paternity leave, so any benefit would be considered a bonus.

Organisations are becoming more flexible with parental leave to cater for the needs of staff

A large percentage of businesses also stated they were looking to increase the number of paternity days they provide. According to Mercer, more and more organisations are expanding their parental leave policies to accommodate the needs of their workforce, including non-traditional types of leave. “They understand that giving

Facts at your fingertips The latest CIPD research findings

Development opportunities should be open to all Almost nine out of 10 HR practitioners believe that everyone within an organisation should be considered a ‘talent’, and supported to reach their potential, according to the Attitudes to employability and talent report. However, when reporting on actual practices supporting employee development, opportunities to enhance careers were only

available to some workers based on the value they could offer the employer in three out of 10 organisations surveyed. ✶ bit.ly/HRattitudes

Culture begins at the top

culture of engagement and voice, aligning core values at the top of the organisation, and building leadership capability in line with an organisation’s cultural and behavioural values, are all key recommendations to business leaders who want to understand, measure and develop corporate culture.

Business leaders need to champion organisational ✶ bit.ly/Dutytocare change from the top, said the CIPD in its recent report A Lack of support duty to care? Evidence of the for mental health importance of organisational culture to effective governance The importance of addressing mental health is highlighted and leadership. Building a


Big thinkers

GETTY IMAGES

The latest round-up of inspiring ideas for HR professionals

women more responsibilities in the workplace is only part of the resolve to bring about gender equality,” said Ilya Bonic, senior partner and president of Mercer’s talent business. “Initiatives like paternity and family care leave not only give both genders the ability to care for children and parents, but are also valuable tools for attracting and retaining talent.”

in the latest CIPD Employee Outlook. Three in 10 respondents acknowledged that they had experienced poor mental health at some stage in their life. However, only half of those who described their mental health as poor (5 per cent) had ever taken time off work for that reason. The research also found that, overall, 20 per cent of those surveyed felt their employers either did not support employees with mental health problems well, or did not do so at all. ✶ bit.ly/Mentalhealthoutlook

The pressure on businesses to ‘do the right thing’ could lead to the rise of more ‘employee-centric’ relationships, suggests Dr Linda Holbeche. In her new book Influencing Organizational Effectiveness, she says this idea could translate to employers being more up front with new recruits and employing everyone on reasonable terms, rather than giving financial rewards to the top talent while putting others on casual contracts. So many initiatives around diversity still ignore bias, rendering most of them ineffective and possibly even counterproductive, according to Stephen Frost, former head of diversity at the 2012 Olympics, and talent expert Danny Kalman. In their new book, Inclusive Talent Management, they argue that organisations don’t need to sugarcoat policies or programmes to achieve change: “It’s as much about the barriers you remove, as about the decorations you add.” While many people expect learning to be as simple as watching YouTube, corporate learning management systems remain slow, hard to use and difficult difficult to maintain, says Josh Bersin, Bersin, founder of Bersin & Associates (now Bersin by Deloitte) in a blog. However, the problem can’t just be solved by designing better programmes or upgrading learning platforms: there is “a need to totally rethink corporate L&D, to shift the focus to design

thinking and the employee experience,” he says. “In today’s always-on, distracting work environment, people simply don’t take the time to learn unless it feels relevant and it’s embedded in the work.” A recent global study by Oxford Economics found that companies that get digital leadership right perform better in the marketplace and have happier and more engaged employees. Commenting on its Leaders 2020 report, Edward Cone, deputy director of Thought Leadership at Oxford Economics, says the findings should serve as a wake-up call: “Your employees, your younger executives and your financial results are all sending you a clear message about the importance of updating and upgrading leadership skills for the digital age. It’s time to listen and lead – or get out of the way.” Most of us consider play at work a distraction – think bowling, volleyball and meditation in Google’s offices, for example – but what if the opposite of play isn’t work, but boredom, asks communication and workplace strategist Michelle Burke. “We have made assumptions over the years that play doesn’t belong during work hours,” she writes in a recent blog. But for organisations looking to boost employee engagement and create a more positive and energised workforce, “I believe play is the vital missing solution.”

Linda Holbeche says it’s time for businesses to stop treating ‘top talent’ differently from the rest of the employee base


“We ask the village chief what he thinks of our new hires” Acleda Bank, Cambodia

The remarkable story of a Cambodian bank that rose from the ashes of war to compete with the best in the world

I

WORDS & PHOTOGRAPHY PHILIP HEIJMANS

n 1993, Cambodia was emerging from a period of terrible human atrocity in which at least 1.7 million people lost their lives – about a fifth of the population. After the country had been torn apart by the Khmer Rouge regime, Cambodia had gradually moved towards democratic elections overseen by a United Nations peacekeeping force. From the ashes of a society decimated by decades of fighting came the first wave of new businesses – among them a small, homegrown non-governmental microfinance organisation called Acleda. When Acleda was established in 1993, it had just 28 staffers, many of whom were inexperienced. But the group also included a tenacious 30-year-old university graduate named So Phonnary, who led the hiring and training of the business. In the years to come, the Cambodian economy picked up steadily. By 2010, it was

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one of the fastest-growing in southeast Asia. And fast forward to 2016 and Acleda is now a fully fledged bank – with the largest loan portfolio and highest deposit ratio of any of the dozens of financial institutions, including heavy-hitting international players. It is also the country’s largest single employer of local people. At the top of this mammoth staff of more than 12,000 now sits one Dr So Phonnary (above) as executive vice president and group chief operations officer. The rags-to-riches story of how a small NGO turned into the largest financial institution and most important employer in the Cambodian economy is a remarkable journey. Phonnary credits Acleda’s success to a unique people-driven philosophy and a notable ability to retain staff in a competitive and often divisive industry. Acleda was awarded a specialised banking licence in 2000, which heralded a rapid expansion and recruitment drive.

But the change – essentially moving from the ethos of local NGO to high-end financial institution with a large and skilled workforce – required diligent and careful planning of the right corporate culture, Phonnary says. “The original employees were more NGO staff, trainers and so on,” Phonnary says. “During the period of becoming a bank, we had to transition the staff,” she adds, noting that retention of the right personalities was more important than replacing them with arguably more skilled external candidates. To manage this process, the bank launched an intensive and extensive capacity building programme for existing staff to obtain tertiary education in Cambodia. Phonnary’s team also developed policies and support mechanisms to enable staff to partake in short overseas courses. “This [education] was our first priority mechanism,” she says. In 2011, the bank formalised its immensely successful internal training


Case studies

“Wedon’tappoint people outside the organisation tohigh positions. We onlypromote fromwithin”

of the applicant. Phonnary’s team applies this same diligence to employment applicants. “We ask neighbours and the village chief about the applicant as well,” she explains, adding that the bank asks questions such as: ‘Is the family a good family? Have they been here for a long time? What is the village like?’ Successful candidates are then placed in a three-week, classroom-style induction course, followed by on-the-job training. “This training is very important for Acleda, and can take up to three months,” says Phonnary. This detailed education and recruitment programme means the bank almost always hires fresh graduates for professional positions, which in turn unfolds another unique HR policy. “We don’t appoint people outside the organisation to high positions. We only promote from within,” Phonnary says, explaining that the strong recruitment focus is on graduates – or even students – to grow and stay within

Acleda Bank Mekong R

PhnomPenh

AcledaBank Acleda Bank

iver

programmes and created the international standard Acleda Institute of Business (AIB) – a tertiary institution offering associate and bachelor degrees in a range of fields specific to the finance and banking industry. “[The] AIB receives many microfinance and government VIPs every year to observe and learn from us, including from Myanmar, Laos and Malaysia,” says Phonnary. The Acleda academy is open not only to the bank’s staff, but also external Cambodian candidates. All courses are taught in English as the language of international commerce, she says, and programmes are bolstered by international guest lecturers. “We want our graduates to be able to accept work at any [international bank],” she says. “We have to have a proper plan to provide training to our staff,” Phonnary says, adding that the AIB initiative is also now an integral part of Acleda’s recruitment efforts. “We identify students who are at the top of their class [for recruitment].” Creating an entire tertiary institution to assist with recruitment may seem like an extreme HR initiative, but for Acleda Bank, which has an attrition rate below 1.5 per cent most years – largely down to the forced retirement of those over 60 – securing the right people is everything. And the screening and selection of new staff is critical. For Phonnary, the solution is to treat prospective employees with the same rigour the bank would apply to potential customers. “We arrange field visits to the families of applicants who are from the countryside,” she says. “The process is similar to that of the procedure for the loan customers.” In Cambodia, a country with poor infrastructure, connectivity and credit records, banks and microfinance institutions will often physically visit their loan applicants to verify the facts of a loan application and the financial health

the business. “This also means we don’t have a problem finding people to fill senior, technical positions. And these people will have integrity and commitment.” One member of staff who rose through the ranks started as a lowly custodian before becoming an AIB graduate and eventually a high-ranking divisional leader. Commitment and loyalty to the organisation are key factors in the company’s hiring, Phonnary says. “Acleda never takes employees from other banks. We only promote from within or from graduate programmes, though we see that other banks take employees from us. But this is not an issue because our philosophy for the new generation is for them to have freedom,” she says. “All our employees are very loyal and we see that when they move to other institutions, it is always for senior positions with triple or double money. We are happy for employees who do this. We keep good relations and they stay in touch with us,” Phonnary says, adding that the bank encourages staff to accept high-ranking positions with international organisations, ultimately expanding Acleda’s alumni network and reputation. “We are very proud when employees leave to take on good positions. Sometimes, we see people being recruited for roles that are three levels higher than their position at Acleda,”she says. The loyalty of employees is bred by a teamwork ethos, she adds: “We tell all the division leaders to create a team, not just one person who can do the job.” For Phonnary, Acleda’s junior employees are its foundation and their growth and retention will, ultimately, make or break the bank. Its willingness to commit the resources to recruit and train them is essential, not stiffer regional least as it faces stiffer and international competition. “We have had a strong corporate culture from the beginning, and build the organisation on Acleda transformed from a small NGO into a strong foundation,” she says. Cambodia’s largest

financial institution

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“I’m amazed we moved so fast” iTalent, Malaysia

How a successful tech entrepreneur went from sceptic to coaching evangelist after an immersive experience

B

WORDS CAROLYN HONG PHOTOGRAPHY RAHMAN ROSLAN

y their nature, entrepreneurs are self-motivated and self-reliant. They like to do things themselves, and do them their own way. The idea of taking on a coach or mentor – although those are services they could see themselves offering once they’ve made it – often runs counter to their very reason for being. Victor Phang, CEO of Malaysian digital HR services provider iTalent, is one such entrepreneur. His business philosophy was simple: to grow slowly and steadily. At least that is how he used to be. But since working with boutique Malaysian coaching company Proficeo, Phang has become a convert. “The coach questioned us a lot and challenged our plans,” he says, describing a journey that has seen iTalent move from a domestic player to regional markets via tieups with partners in Singapore and Thailand and talks with partners in Indonesia and Japan. “I’m surprised that we could move so far in just a year,” Phang says. Coaching can be particularly helpful for newer entrepreneurs who typically do not have a senior management team to act as a strategic thinking partner, says Renuka Sena, CEO of Proficeo. Proficeo has been offering coaching services since 2008, and also runs a coaching programme for SMEs, with a grant from state-funded investor Cradle Fund. 12

People Management Asia

Coaching and mentoring, however, are often confused, notes Sena. A mentor is usually a respected leader who advises the entrepreneur, and may also introduce new contacts. A coach, on the other hand, focuses on the how-to. Coaching is intensive and focused, with coaches assisting the entrepreneur in strategic planning and setting clear goals, measurable outcomes and implementation strategies. Many small Malaysian companies, Sena says, tend to stumble because the founders

iTalent KualaLumpur

iTalent

have no strategic thinking partners, and are often too preoccupied with day-to-day worries. This was something Proficeo’s partners discovered while in their previous careers as intellectual property consultants and management consultants. They sought to fill this gap, and in 2012 Proficeo was appointed by Cradle Fund to run the ‘Coach and Grow’ programme. Phang’s story began in 2009 when he launched iTalent as a traditional payroll outsourcing provider. In 2012, forced by increasing competition, the company took the leap into technology by creating proprietary software to cover the full gamut of HR management. The software went to market at the end of 2014, targeted at businesses with up to 10,000 employees. It was still a fledgling product when Phang came across the ‘Coach and Grow’ programme. “Having been an entrepreneur for many years, I find it important to have someone to talk to about the business, to be sure that the decisions are in line with market requirements,” he says. But it turned out to be a lot more than talking. He found it to be one of the most transformational experiences in his career. His ideas were challenged by the coach, forcing him to think through every step of the process. The issue confronting Phang, as with all entrepreneurs, was growth. Working with Proficeo’s coaching programme, he explored


Case studies Renuka Sena worked with Victor Phang to help him develop a growth strategy

the options, before considering going regional – something he had dismissed as too risky. For Phang, the key was tapping into the year-long programme for home-grown technology firms, designed to boost their growth and expansion. Since 2012, iTalent has worked with more than 300 companies that won a slot in the programme. Each selected business is assigned two coaches, who are typically senior managers or seasoned entrepreneurs themselves. During the monthly coaching sessions, the entrepreneur comes up with strategies for expansion, to be implemented within 12 months. There must be measurable outcomes such as a doubling of revenue or expansion to at least one new country. As a great deal of the challenge lies in changing the mindsets and working culture of companies, there are techniques adopted by the coaches to get past these hurdles. “For many entrepreneurs, the idea of expansion is a large concept with no shape or size. Coaching helps break this down into doable steps,” Sena says. “In that way, they can also see the risk factor reducing.” One effective method is simply to talk the entrepreneur through breaking down the big goal into small, actionable steps. An aim of doubling revenue may begin with creating

a customer database, so the entrepreneur actually knows who is buying from them. Sena says entrepreneurs are also encouraged to involve their teams in the year-long coaching, which helps create a willingness to adapt to new strategies. When people have a role in making the plans, they are more likely to implement them. Having found that diligent entrepreneurs benefited the most, Proficeo is now planning to instill mental discipline in a more systematic way. It is looking to set up a computerised system where entrepreneurs will provide updates in bite-sized nuggets more frequently, instead of just monthly reports. Ultimately, says Sena, business coaching is not about deciding what’s right

“Theidea of expansion can be alarge concept withnoshapeor size.Coaching breaks this down”

or wrong for the entrepreneur, but about ensuring the process has been thought through, and different options explored. For Phang, that meant using his coaches as sounding boards during the implementation process. He recalls struggling with a particular issue with a senior staff member who he had hoped would step up for a bigger leadership role, but who resisted taking on greater responsibilities. It was during a coaching session that he realised it was the wrong approach. He reorganised the company structure to bring in another senior staffer, and progress has been smoother since then. Phang’s progress may be a little faster than many organisations achieve but, Sena says, the majority of the entrepreneurs in the programme succeed. About two-thirds surpass the target of a 20 per cent revenue increase, and fewer than 5 per cent fail to meet targets. She attributes this to the time taken in that year to focus on strategic planning, something entrepreneurs, who are often too focused on running the business, cannot find time to do. “They need to work on their businesses as well as work in their businesses,” Sena says. Phang is evidence that the principle can bear fruit spectacularly. People Management Asia

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The debate

Is social media a distraction from work? When staff are playing Pokemon Go or spending work time on Twitter, is it best to ban, tolerate or manage their behaviour? INTERVIEWS LIANA CAFOLLA

Greg Tadman Regional human resources director, Asia Pacific, PageGroup

We have to set boundaries on social media Companies need to provide a clear stance to employees on the use of social media platforms at work. The key is to ensure people are fully focused and productive and that external apps do not unnecessarily distract. We would advise that policies remain broad – the Pokemon Go of today will be replaced by something else tomorrow.

We should not treat social media as the devil of the workplace. When email was first developed, people voiced the same concerns that they do today about social media. In many ways, social media is the new email. It will become more and more prevalent in our day-to-day life, and whether it is for professional or personal purposes, it requires governing. As a society, we are drifting towards a lack of human interaction and people playing out their lives through instant messaging or Facebook. Unless a variety of communication mechanisms are provided and encouraged, that can make its way into the

workplace. I would encourage the continued use of email, Skype, social media, face-to-face meetings and conference calls to ensure the full breadth of human interactions have been tapped. Some social media apps can add value. For example, we use Yammer, which is a way of cascading company news internally and fostering a sense of community within the office and between our international offices. Corporate wellbeing apps such as Fitbit can engage people and promote work-life balance. These can be used to support businesses and produce advantageous results.

Susie Quirk Partner at KPMG China and head of people and change advisory

Collaboration is a vital tool for business Social media actually enables productivity. The most important skill we are seeing enhanced by social media is collaboration, and this is making a huge difference to business outcomes. Our lives are so intertwined with the digital world that instructing someone to behave in a way that is not in line with societal norms is conflicted and often will not support the strategy of the organisation. For example, in the banking and 14

People Management Asia

insurance industries, organisations are looking to see how to use social media and apps to enhance the customer experience. If those companies then banned social media and apps in the workplace, it would be in complete contradiction to their strategy. Most organisations are not trying to fight the digital world, but are embracing it as a way to engage and communicate with employees. We recently launched a collaboration platform in an international bank where

employees worked together to come up with ideas to improve processes and operations across their business and across different geographical locations. People can comment and add to ideas, as well as “like” the idea. It has been very successful, with employees feeling they are contributing to the success of their division in the bank. We believe in the “leveraged professional” where the digital world is here to help us, not to replace us. For example, Amazon Echo is a voice service that can translate. In the future, it may help call centre staff to speak to anyone around the world by translating in real time.


Prof Ma Xiaojuan Assistant professor, computer science & engineering, Hong Kong University of Science and Technology

We need a way to express our emotions in the workplace In general, it might not be necessary to ban the use of apps and social media in the workplace. Instead, guiding people to use them wisely may be a better approach. Social media and apps give people a break from the task at hand, and interesting photos and fun chats with friends can provide temporary stress relief. Social media can also serve as an emotional

relief in cultures where people are traditionally taught to suppress their emotions. People are often more expressive of feelings, both positive and negative, on social media. If used properly, social media can act as a support group or as a persuasive tool via, for example, gamification, or to build a collective mindset through Q&A sites or crowdsourcing that can enhance productivity at work. Many workplaces reply on existing social messaging or media platforms for online communication and remote collaboration. In businesses such as media, IT, trading, advertising and public relations, it is important to

keep up to date with information and public opinion in order to respond quickly. Social media is a good channel for that. Work-oriented social networks can also improve people’s sense of belonging, especially for geographically remote teams. Online and offline communication are complementary, rather than one replacing the other. Face-to-face interaction can build higher communication efficacy and strengthen trust, while social media and apps can help to maintain connections among weak ties.

Sarah Dunleavy Research adviser, CIPD Asia

HR must use its judgment Many routine parts of our working day can be distracting, whether it’s emails that arrive while trying to complete a project or colleagues in an open plan office. Often, a colleague wearing headphones is the unwritten signal that they are concentrating. Although we need to be cognisant of becoming distracted during working hours by either the workrelated or the personal, sometimes

a distraction can be good for us – it allows us to rest our minds or interact with peers. Employers need to trust employees not to spend work hours on personal devices playing games, chatting with friends, or completing personal projects. Employees in turn need to show a mature approach to managing their workload and delivering value to the organisation. While we all need to take a break during our working day to ensure our continued wellbeing, the trick is to not become distracted and to return to the task at hand. There is an element of ‘give and take’ in the employee-employer relationship, and discretionary effort

could be eroded by over-policing employee behaviour. The HR professional’s role is not to act as the organisation’s police, but to create a culture of trust and transparency that ensures work creates value for all stakeholders – in essence, honouring the psychological contract. As technology develops, HR will need to use good judgement to manage the impact of technology on the organisation. The use of personal devices during the work day is a growing challenge. They’re difficult to manage and can create risks to productivity and security. The question of trust and meeting mutual obligations in the employee-employer relationship is paramount. People Management Asia

15


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Cover story

“ONLYTHE LUCKYFEW WILLDOMORE THANSERVE A MACHINE” Isaac Asimov, 1964

Fortunately, the fabled sci-fi writer was wrong and the robots aren’t in control. But what are the major challenges shaping the workplace of tomorrow? And how can HR professionals be part of the solution? WORDS LEE ADENDORFF, PAUL COCHRANE, WANG FANGQING, ROBERT JEFFERY, JENS KASTNER, TOM MARESCA

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If you want to understand why a keen eye on the future direction of work – encompassing economic shifts, the development of tomorrow’s skills and technological advances – is so crucial to being part of an organisation today, you could do worse than take a trip to your local branch of KPS Video Express… Except you can’t. Once Hong Kong’s best-known video and DVD rental chain, with close to 100 stores and 1,000 employees, in 1997 the business announced plans to expand across Asia, with a particular focus on Singapore and Taiwan. But it had reckoned without disruptive technology that made copying of CDs and DVDs possible on a widespread scale, facilitating piracy that

In 1960, the average company in the S&P 500 – the benchmark of multinational fiscal health – stayed in the index for 55 years. Today, it is around 18 years. Only 12 per cent of Fortune 500 firms in 1955 were still listed 60 years later. This is partly due to technology making business models old before their time (a trend accelerated by the rise of Silicon Valley) and partly down

think about the skills they need, and the investments they need to make. But the danger is the discussion takes place purely at a political level, with no profession responding to it.” Making work better – for individuals, organisations and society – is only possible if work itself becomes more human, and more attuned to human needs. That means jobs, and companies,

fatally undermined its business plan. Within a year, it was effectively bankrupt and its remaining assets were sold to global leader Blockbuster. Even Blockbuster, however, couldn’t stay in the game. By 2005, Netflix – a business which had only launched eight years earlier – was renting so many DVDs by mail that its rival’s bricks and mortar offering was itself rendered obsolete. In 2013, Blockbuster went out of business, with Netflix having pioneered streaming technology that had rendered even the concept of owning a DVD pointless in many parts of the world. History is littered with similar examples of businesses who didn’t (or couldn’t) react to change quickly enough. And their number only keeps growing as the wider business environment becomes more volatile.

to financial engineering. But it’s also true that many businesses have sat back and watched as global demographics have completely shifted, and have failed to understand how the rise of a global middle class, or the availability of a mobile labour market, would turn how they operated upside down. Across the world, businesses haven’t examined the future from a broad enough perspective, preferring to interrogate only their own sector or specialism, argues Laura Harrison, people and strategy director at the CIPD. “Asian countries are interventionist at a political and governmental level rather than a business level,” she says. “Governments

that are designed with people in mind; where being flexible and catering for the expectations and needs of diversity, ages, cultures, backgrounds and commitments is the new normal. So many of the questions about how business and society will operate in the future fall squarely in HR’s in-tray. Will we treat people as disposable cogs in the machine or hand them autonomy and stability? Will we increase bureaucracy or move to a model (best articulated, aptly, by Netflix’s visionary former chief talent officer, Patty McCord) where people are judged by their results, rather than a more traditional means of performance management? Will we allow the

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“HRshouldn’t beinthe cornerdoing admin–it shouldbe central”

PRESS ASSOCIATION IMAGES, GETTY IMAGES

PRESS ASSOCIATION; GETTY IMAGES

The future of


as it’s being created – and that means thinking about the public good is more important than doing the most shortterm, prosaic thing.” For HR to begin building on such thoughts, it must be willing to free itself from the purely operational and focus on the strategic. If you are spending a large part of every day dealing with immediate employee issues, are you able to think ahead, asks Harrison? “It’s important to ask whether the things you’re doing day-to-day add value,” she says. “Studies show HR is a devil for taking on new ideas and initiatives, but it The Netflix lesson: can be harder to never ignore the future, step back and ask what they are really even an upstart start-up achieving.” On these pages, People Management delves into some of the most pressing areas that may affect businesses in the coming years, and asks experts how Asian governments and businesses in particular should react to them. After all, the line between KPS Video Express and Netflix is thinner than you imagine. As Harrison says: “The only thing certain is there will be more change.”

f work is all about

who works for you – and why W hether it’s dealing with a surfeit of young people (the Middle East’s Gulf states have a huge issue finding enough jobs for their youthful populations) or needing to support a burgeoning number of retirees, no country can say it has a workforce that exactly fits its economic ambitions.

DEMOGRAPHICS

Workforce demographics throw up a complicated set of challenges, both for society as a whole, and for employers. They include education and skills; workforce participation (as younger family members leave work to look after older ones); tax burdens; labour

force under- and oversupply; and migration. Over time, many of these issues will land at HR’s door. “The workforce demographics of Malaysia, Indonesia and the Philippines are positive and offset the aging workforce of Singapore, Hong Kong and China. The questions are: do they have the skills needed? Are they educated? Are these countries growing fast enough to be talent attractors in the same way Singapore was a talent hub?” asks Bob Aubrey, consultant and chairman of the HR committee of the European Chamber of Commerce in Singapore. Hyperconnected Singapore is Asia’s proverbial poster child. But it is already grappling with a particular set of challenges as it holds on to its coveted role as a hub economy. Singapore is trying to get more people over 65 back in the workplace, and last year 10,000 were employed, a notinsignificant number in a city of 5.5 million people. In 2017, Singapore will raise the age at which people must be reemployed, if they wish to stay in work, to 67. China is also mulling raising its retirement age from 60 for men and 55 for women. Other countries will have to address such concerns further down the line, such as Indonesia – where demographers project the number of

Singapore’s ageing workforce Resident labour force of Singapore, 2006 vs 2015

16% 14% 12%

2006

10%

people aged 60-plus will treble by 2050. “In Vietnam and Thailand, the population is younger than in Singapore,” says Eric Tan, HR director Southeast Asia for automotive supplier Schaeffler. “This is normally portrayed as an asset, but the reverse is that most applicants were students not long ago. This means their CVs are short and their exposure to international company culture is limited. So you are limited to a small group of people in a large population. And typically, multinational companies seek people who speak English, which further limits this talent pool.” Part of the answer will be encouraging people to learn throughout their careers, so they develop and retain the skills that enable them to stay ahead of the changing world of work, rather than viewing education as a prelude to a career. But many countries will also need to think about how women, in particular, can take on more meaningful work and be supported in their own career choices. “We’d like to see policies that support people to stay in work longer, creating multigenerational workforces that draw on the expertise of older workers,” says Till Alexander Leopold, project lead for education, gender and work at the World Economic Forum (WEF). “We hope such policies are not forced on people, but are part of a mindset shift.”

2015

8% 6% 4% 2% 15-19

2006 median age = 40 20-24

25-29

30-34

35-39

2015 median age = 43 40-44

45-49

50-54

55-59

60-64

65-69

70+

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SOURCE: MINISTRY OF MANPOWER LABOUR FORCE IN SINGAPORE 2015 REPORT

emergence of the ‘gig economy’ to make some people’s lives more precarious, or will it mean flexibility and choice for all? The answer, says Harrison, is partly about a better grasp of work itself: “HR’s primary concern should be a thorough understanding of the work people do, and what enables them to do it – we need to reduce our focus on policies and processes and put the human back into job design.” Meanwhile, an understanding of behavioural science – how and why people do what they do, as individuals, teams or organisations – offers the opportunity to put the human into decision making and problem solving. Handily, these are also the exact sort of skills and knowledge that sets HR apart as a profession. And because so much of the future is contingent on what people, employees and consumers will look like, HR professionals have a vital stake in the discussion – to ensure the strategic elements of HR (such as skills development or workforce planning) are informed by the facts, and to help governments and experts make decisions that affect the future supply of talent. “HR should be absolutely central to discussions about the future of work,” says Harrison. “It certainly shouldn’t be over in the corner doing its admin. As an HR professional with an identity, you have to feel you have some stake in the future


but you’ll have to think fast to survive “I looked at the latest list of the 100 most innovative companies and I had never heard of 98 of them,” the self-styled ‘maverick’ entrepreneur and CEO Ricardo Semler said recently. “They are emerging from all over the place, and they work in a different way.” Semler was describing the concept of agility – businesses that react to fast-shifting markets by adapting and reinventing themselves in double-quick time. And he knows what he’s talking about: as a leader in Latin American companies in the 1980s and 1990s, Semler designed some of the most democratic and agile workplaces ever seen. Not everything he did worked, as he would be the first to admit. But the ideas he introduced inspired a generation of Silicon Valley entrepreneurs to build

organisations that look little like the multinationals of the past. Whether it’s the ‘holocracy’ system of management that was all the rage last year, or the AGILITY latticelike accountability pioneered by Spotify (where people work in cross-functional teams but are managed according to their technical discipline), rigid structures and austere performance management practices just don’t cut it any more. For Foo Chek Wee, Singapore-based HR director of online fashion retailer Zalora, corporate agility is essential. “In view of the dynamism in an e-commerce company, agility is a must-have, not a good-to-have,” he says. In Zalora’s case, this means “rolling out agile programmes that are simple to execute, scalable across departments and geographies, and sustainable.”

Specifically, employers are becoming more flexible over working hours – according to the Hays Asia Salary Guide for 2016, 52 per cent of 3,000 employers surveyed offered some form of flexible work practices and 71 per cent offered flexible hours. And they’re keen on agile approaches to recruitment, which see project teams form and disband at will, supplemented by talent on demand from the ‘gig economy’. This doesn’t work for all stakeholders. Being employed on a less formal basis can lead to higher rates of churn, says Jason Shaw, chair professor and director of the Centre for Leadership and Innovation at Hong Kong Polytechnic University. “Turnover rates have negative effects on company performance, with evidence pointing to a lack of loyalty. So while there is more freedom from the employee’s perspective, for the organisation it suggests more churn” he says. But regardless of the downside, it seems lean is here to stay – and that may mean the traditional nineto-five office job looks increasingly anachronistic.

“Agilityisa must-have, notagoodto-have”

and love the numbers

SOURCE: IBM

W

e know more now about our employees than ever before. But what do we do with this explosion of information? Does it have a role in predicting recruitment issues – whether recruiting the right staff, or predicting who might leave? And can it help guide discussions about future skills, remuneration and organisational structures? Broadly speaking, big data involves digitally collecting and analysing information from millions of data points, to draw out trends and derive insight. In HR terms, that could mean demographic information, performance management and employee 20

People Management Asia

when you look at your own – and required – workforce survey results come together relative to the labour market to create a ‘dashboard’ of from which you garner skills.” information that powers At its most flexible, decisions. analytics can enable This is, by some scenario modelling measure, the holy that shows what grail of HR, where the happens to diversity, function can influence skills and salary levels strategy. But Rhonda if you close a particular Brighton-Hall, operation, Research from a board member or channel IBM says 90% of the data in the world today investment in of the Australian was created in just Human Resources an unexpected the last two years Institute, warns direction. But that an insular approach does HR have the skills will lead to limited insight. to understand the quality “Rather than data for a of the data it handles, and single organisation,” she says, have organisations thought “we need to look at ‘whole through their reasons for economy’ or even global data. embracing big data, beyond Demographic and workforce feeling it’s a bandwagon they planning data is only useful ought to board? BIG DATA

90%

“Employeesdon’t justwantmoney; theywantalife experiencetoo” Pavel Liser, research and talent manager for Beijing-based consultants Grow HR As Chinese businesses embrace automation, how will companies’ recruiting strategies be affected? In the short term, automation is going to introduce sudden shocks to companies and the workforce, such as job losses and workflow changes. But in the longer term, there will be benefits for workers and employers. For example, in a highly automated plant, a worker will have to learn new skills through training – overseas, if they are employed by a foreign company. That means better career development options, and the chance to become a valueadded asset to the company. With automation, hiring strategy really goes from quantity to quality. Does globalisation mean companies in China will hire more foreign talent? From our perspective, yes. Foreign companies in China prefer local Chinese talent as they have the local resources and extensive knowledge of the market. But Chinese companies – especially those who plan to develop overseas –would like to add a few foreigners to bring in global thinking and new business ideas, as well as adding more dynamism. Dealing with millennials is a challenge for employers. What’s it like in China? Companies are still working on it. One approach is to inspire them by giving them a sense of ownership of their work and a visionarydriven career path, which can lead to a leadership position. Although many companies are still looking for the perfect mix, I think it’s the right direction. Are companies doing the right thing to keep talent? Overall, they are working hard, but turnover is still high. I think the key is the strength of the brand, which should be part of the identity of their employee. People are no longer looking for a high salary only. They expect an experience. Employer branding is big in China. There is training to be done about how to create a better image to attract talent, and how to develop a deeper relationship with staff.


“Automationis somonumental thatweoften avoidthedebate”

Has China’s growth stalled? 14.3 (1992)

Follow the money The changing origin of China’s GDP

GDP growth (annual %)

2016

14.2 (20 07)

7.6 (1999 )

2017

0) (19 9

3.1

2015

2010

2005

2000

1995

7.9 7.2

6.1 5.5

) 6.9 (2015

3. 9

the traditional employment relationships most corporations are built on, and can further marginalise people who are outside highly sought-after skillsets. Technology workers may be in a perfect position to manage a ‘portfolio’ or ‘gig-based’ career, but someone who works in manual labour, or who has a disability, may not be so well placed.

1990

I

n any discussion of globalisation, GLOBALISATION one word looms large: China. The country’s ascension to second largest global economy has gone hand in hand with the transfer of labour-intensive manufacturing from developed to emerging markets. China’s rise as a manufacturing hub has encouraged businesses to offshore production and introduced huge competition into previously slow-moving sectors, while the rise of its consumer 15 class has created vast opportunities for multinationals (in 2014, for example, China overtook the US as the number one target for 10 foreign direct investment, attracting US$128bn in funding). But, just as China’s own growth is stalling – and hourly manufacturing wages there have risen by an average of 12 per 5 cent a year since 2001, according to The Economist Intelligence Unit – there are signs that globalisation has peaked, and may even be slipping into reverse. The Peterson Institute for International Economics argues that ratios of world trade to output have been flat since the global financial crisis in 2008. Global Trade Alert calculates the volume of world trade has been static between January 2015 and March 2016. Protectionist sentiment has increased. The EU is stuck between a rock and a hard place, and the US-EU Transatlantic Trade and Investment Partnership is going nowhere fast. The Doha talks on multilateral trade have stalled. Apple and General Electric are among companies that have opened manufacturing facilities in the US as they begin to ‘reshore’ jobs, a phenomenon that has hit the Indian business process outsourcing (BPO) sector hard. Of course, globalisation isn’t over, and there are signs investment is shifting from the likes of China to even lower cost

2.9

Agriculture Industry

Services

economies. Africa has huge untapped potential as an employee base and a consumer market, and may be the story of the coming decades. But there is an increasing focus on regional trade, embodied by the ASEAN economic agreements (see page 28). This means a big change. Most Asian countries will have to leapfrog their current basic level of industrialisation (with sectors such as clothing and textiles predominating) to what is being called the ‘industrial revolution 4.0’ focused on automation and data exchange, while the likes of Singapore, Hong Kong and Shanghai will have to become ‘smart cities’ to remain as regional and global hubs.

Asia is well placed on this agenda. We can go back as far as the 2007 White Paper, Skills Development Policies and International Cooperation in East and South East Asia [published by the Switzerlandbased NORRAG’s Working Group for International Co-operation in Skills Development], to see that the potential of ‘above the brand’ data for recruitment and workforce agility has been well understood for some time. In practice, sadly, most companies are simply looking at internal data sets to lock down expectations (such as planning leave well in advance), instead of ways to increase agility.

government policy in the region is that of Singapore, where a wage subsidy for older workers has been in place since 2015. The feedback is that it is welcome, and is one of the factors assisting businesses to employ older workers.

How important is it for a company to walk the talk Australian Human on CSR? Resources Institute There is no question social media, Are companies making the most board member and the transparency it brings, of data on workforce analytics Rhonda Brighton-Hall has fundamentally changed our and mobility? expectations of businesses. In For more sophisticated workforce the past, we expected ‘good’ planning, we need to look at ‘whole How is the ‘gig economy’ companies to be socially economy’ (or even global) data, influencing how businesses responsible. We listened for the rather than a single organisation. approach talent? examples and news stories about Many large-scale businesses have a Demographic and workforce How are companies approaching programmatic work and its impact toe in the water of the ‘gig’ economy, planning data is only useful when you can look at your own workforce the issue of ageing workforces? on the broader community. Today, particularly in the technology (and required workforce) relative to This is a challenge for governments we assume ‘good’ companies are space where skills are scarce and doing the right thing in everything and policymakers. The financial the labour market from which you employees control the market – they do. We’re not looking for a challenge is obvious, and the but as yet, these are rarely at scale. can garner skills. By looking at single news story. We’re looking for impact of not addressing it can be capability across an economy or The gig economy is currently best social responsibility and a positive seen in some European countries. region, organisations are better used by start-up businesses. Their impact on the (local and global) Potential solutions (particularly in placed to predict skill shortfalls. mindset suits this way of working, community to be part of their DNA. democracies elected over short Better still, and more likely as the and they are building future-facing terms) can be unpopular. Who wants We also expect that every employee businesses that utilise this potential capabilities required are changing can participate. The next generation so rapidly, we could seek ‘potential’ to be told they must work longer? of a free-flowing workforce. see this as a baseline when they’re There are a range of ideas in in candidates and employees rather The gig economy has two trial. Perhaps the most established choosing a company to join. than fixed capabilities. significant restrictions: it breaks People Management Asia

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SOURCES: THE WORLD BANK, THE ECONOMIST INTELLIGENCE UNIT

in an increasingly global marketplace


People Management Asia

2014

2012

2010

2008

2006

1000s of units

22

2004

2002

SOURCE: WORLD ROBOTICS 2015

T

he robots manufacturer AUTOMATION are coming. Foxconn wants Fifty six per cent of to introduce to its workforce all jobs in Cambodia, in the millions. It’s about Indonesia, the Philippines, the ability of software and Thailand and Vietnam – which machines – particularly those comprise nearly 80 per cent that can “learn” tasks – to take of ASEAN’s over all kinds workforce of routinised – are at risk work over time, over the next from payroll two decades processing to from new receptionists via technology, basic medical according to diagnosis. a July 2016 “There needs International to be a sense of Labour urgency. It may Humanoid robot Organisation seem futuristic, ‘Pepper’ has been but according to (ILO) report on the a sales success impact of automation. experts, this labour The worry for these market is five years away, so now countries is that the capacity is the time to realise that and get for automation is higher in ready,” says Leopold. the very jobs they want to take The question mark here is from China. Half a million over whether automation will sewing machine operators in render huge swathes of the Cambodia could be outsourced human population redundant, to a machine, according to or in fact follow the path of the the ILO report, while less first industrial revolution, where educated, lower wage earners the onset of better machines face a higher risk of joblessness moved people into more because of automation. valuable, less dangerous roles. Of course, this isn’t just about Representing the latter view androids of the kind Chinese are the likes of US academic and technologist Erik Worldwide supply 229 Brynjolfsson, of industrial robots who says many Annual estimate fears over 178 165 technology are 159 overstated. And Aubrey points 120 121 114 113 112 to the ability 97 81 of technology 69 platforms to 60 help create new employment opportunities, citing Indonesian

high-tech ‘unicorn’ Go-Jek, an app for motorcycle taxis and delivery services that is valued at more than US$1bn and has 300,000 online employees. It formalises work that was formerly off the grid: cash-in-hand, no taxes, and no data. “Go-Jek provides work in a more formal way in the informal economy, for drivers that never had a smartphone or a credit card, so in a sense this use of tech is a sort of leapfrog,” says Aubrey.

“Performance feedbackwill bethekey differentiator” Foo Chek Wee, HR director for online fashion retailer Zalora Across developed economies, the population and workforce is ageing. How are HR departments coping? The change in demographics requires a paradigm shift, and companies that respond swiftly gain a competitive advantage. Progressive HR departments are enabling their businesses in two ways: first, by leveraging the use of data, enabling leaders to understand the realities of this trend objectively. And secondly, they are rolling out agile programmes that are simple to scale across departments and geographies, and sustainable over time. Globalisation essentially brings in the world’s best to compete with local companies. In hiring, businesses have to think outside the box about talent acquisition. For example, they can explore talent from other industries with transferrable skills, or use different types of employment arrangements (such as part-time or flexible working). They also ought to think outside the box about talent development. For

The alternative view is that we simply will not need people when machines can take on their tasks and governments may need to introduce guarantees such as a universal basic income, as part of a radical reshaping of how the economy works. HR may have a key role in countering such pessimism by emphasising the value of the human dimension of the workforce. ✶ Read more at the CIPD’s Future of Work is Human website: futureworkishuman.org

instance, they can enable people to build their skillsets and experiences faster by rotating employees to different roles, getting them to teach or train colleagues in a particular technique, or sending them on overseas assignments to gain exposure. What are the trends that are affecting your people strategy at Zalora? There are three main areas. First, the world is noisier. With technological advances and the exponential growth of social media, every respectable company has some form of employer branding presence. To truly stand out from the noisy marketplace, progressive companies are working towards driving authenticity and purpose in their employer branding activities. Second, smaller is better. As we further globalise how business is conducted, there is a trend towards work specialisation that cuts across geographies. HR functions will need to set up agile programmes that are able to cater to different workforce types and needs, from permanent employees to contingent workforces, to consultancy services and freelance services. Finally, performance feedback is paramount. HR functions will need to continue to ensure managers and employees engage in regular and meaningful performance feedback sessions. How well this is done across the company, at all levels, is the key differentiator to sustainable competitive advantage.

PRESS ASSOCIATION IMAGES

where the robots (and software) might take over


I

and you have to walk the walk on CSR (not just talk the talk) seeing is a new world of work where skill requirements change and millions of jobs will be automated away in a few years, so what this means for companies is that they should act in their own enlightened self-interest,” says Leopold. For BrightonHall, there’s no doubt the bar for With waste no longer CSR has risen being sent to landfill, considerably. Unilever has proven “We’re [looking its CSR credentials to companies] for social responsibility towards driving authenticity and positive impact on the and purpose in their employer local and global community to branding activities.” be part of their DNA. We also That means broad activities expect that every employee that demonstrate concern can participate.” It’s a tough for wider society, and the ask – but there may be little notion of being a good choice but for even the hardest‘corporate citizen’. It can be headed corporation to take seen in consumer goods giant a stake in the future. Unilever’s ‘Sustainable Living Plan’ that sets ambitious targets for In October 2015, the CIPD published a major environmental impact piece of research highlighting the gap between in its manufacturing ambition and practice when it comes to ethical processes (it now sends decision making in business. The results were no waste to landfill based on a survey of more than 10,000 HR from 600 different practitioners and business leaders. factories). But getting it 9 in 10 said that long term right won’t be easy. goals were more important Companies have to than short term gains, but in practice, only 1 in 4 were move beyond the actually prepared to make traditional concept short term sacrifices for long term gains of CSR, which involved old-fashioned 1 in 3 reported they have to philanthropy and compromise their principles to meet current business needs initiatives that were often more PR-oriented Find out more about the CIPD’s than societal. “CSR in ‘Profession for the Future’, which helps the old way is no longer HR meet the needs of a changing world of enough. What we are work, by visiting bit.ly/ProfFuture

PRESS ASSOCIATION

t is generally CORPORATE RESPONSIBILITY a given that companies can no longer put the pursuit of profit above all other goals. Social media means transparency is everything, and companies that do wrong – or don’t actively seek to do good – have few places to hide. At the same time, consumers expect high standards from the people they buy from, and millennials increasingly seek out employers who aspire to a higher purpose. Welcome to the modern-day version of respectable company today corporate social responsibility has some form of employer (CSR). And since employee branding,” says Foo Chek engagement is a critical Wee. “To stand out from side of the coin, it’s an area the marketplace, progressive where HR is involved. “Every companies are working

Why businesses care

Leaders’ views on corporate social responsibility

SOURCE: ETHICAL CORPORATION: STATE OF CORPORATE RESPONSIBILITY REPORT 2016 � CSR IN ASIA

The long term view

79% of executives polled said their CEO is convinced of the value of sustainability

66% stated that sustainability is driving revenue for their business

0-10k

24%

10-25k 25-50k

9% 5%

50-100k

6%

100-500k 500-1000k 1000-2500k Over 2500k Would not like to say

90% say CSR is becoming an increasingly important part of business strategy

7% 5% 4%

What budget d your company oes for CSR activityhave ?

5% 35%

People Management Asia

23


Family businesses

THE CENTRAL NEWS AGENCY

(Don’t) keep it in the family

Family businesses grow faster and last longer than their rivals. But managing them means negotiating some troublesome HR challenges WORDS JEREMY HAZLEHURST

24

People Management Asia


Founde r was ous ’s son Chang K conglomted from Taiw uo-wei a owner o erate Evergre nese half-bro f EVA Airways en Group, , succes thers who disp by two sion to a u leaders ted his hip role

N

obody who follows the business press can fail to be struck by just how deeply entwined the fortunes of family businesses are with the health of the wider economy. The likes of Stanley Ho, Li Ka-Shing, the Kwok brothers and Robert Kuok are household names. Around 85 per cent of $1 billion-plus businesses in southeast Asia are family-run, according to The Economist. In Hong Kong, the top 15 families control assets worth 84 per cent of GDP, while the figure stands at 76 per cent in Malaysia and 48 per cent in Singapore. There is little doubt family ownership can be very successful, promoting stability and deep engagement with values. But it comes with a complex set of problems for HR professionals. With a fondness for promoting sons (and, increasingly, daughters) to top management positions, and business affairs that can be tangled up in those of other families, these businesses can cause headaches for even the most confident HR professional. Can family firms modernise the way they work without losing what makes them special? Large or small (and most local SMEs are also family-owned), such businesses have a peculiar relationship with HR. Erman Tan, CEO of family business Asia Polyurethane Manufacturing, says that in SMEs the people aspects of the job simply aren’t a priority. Often, Tan says, “there is no proper payroll, things are done from memory, the founder decides who is hired and how much they are paid.” This might seem shambolic, but it means such firms can stay flexible, as well as friendly, informal and trust-based, which suits many employees and – importantly – keeps costs down. “We have four tyres and no spare,” is how Alvin Yap, the second-generation director of Singaporean advertising firm BusAds puts it. Many firms are not concerned with huge growth. “They produce enough money for the family and they would rather stay familyowned than grow,” says Professor Roger King of the Chinese University of Hong Kong Business School, who also has a family business. “That is their decision.” But things are changing because firms are beginning to cede control away from the People Management Asia

25


founders to their children. “Most firms are 30 to 40 years old, so they are transitioning from the first to second generations. The founder is probably still there and speaking very loudly behind the scenes,” says Annie Koh, a professor at Singapore Management University and an acknowledged expert on family businesses. That transition often involves a process of “professionalisation”, says Koh, where a sometimes-chaotic firm is given structure. Often, that is because the second generation have, unlike their parents, been to university and picked up formal business qualifications, often in English-speaking universities and schools. “The new secondgeneration family business managers are coming in, they have been educated overseas, they have a better perspective on life and work, and they are more receptive to new ideas,” says Wu Hong Chiu, head of enterprise at KPMG in Singapore. “In the past, they have relied on their own kind, either family or clan, because they felt that if you didn’t trust an employee you could be training your competitor,” says King. “But a lot of founders understand that to keep the business going, you need outsiders. That might change the company, but when you ask patriarchs what is most Foo Yew Ming

Fu Weng Leng

Chan Sang Koon

Chan Kum Cheon

Chan Leon Choon

Executive director

Foo Yin

Non executive director

important – the family or the family business – they always say the family.” If upgrading the business keeps the family fed and watered, the message seems to be, so be it. BusAds is a classic example. “My father dropped out of school at the age of eight,” says Yap, who worked at Singapore Airlines for 12 years before joining the family firm. He took on the HR role and had to introduce what he calls “basic hygiene”, such as employment contracts, salary scales, appraisal forms and official career paths. BusAds has so far chosen to keep the HR function in the family, but those who wish to expand into new markets or verticals often find they need an HR professional. “[HR] can make a very meaningful contribution. It can help a firm become more competitive and relevant, and remain innovative in the new economy. HR people can be a great catalyst to make family businesses more relevant, competitive and people-oriented. Ultimately, it can help the firm remain family-owned,” says Tan. When a family business does decide to professionalise, an HR director is one

“Apersonwho appreciates theirfamily issomeone Iwanttowork withlongterm”

Chong Tang Seong

Cheong Kim Nam (Chairman)

Non executive director

Chong Chin Sen

Cheong Wing Kiat (Executive director)

Executive director Executive director

WEN KEN GROUP ARCHIVE

of the first hires, and the role involves significant responsibility. “An HR leader must be almost like a business partner to the owner, and will probably have to put in place some things that are not in place, such as job descriptions,” says Koh. “Probably in the past there were no clear job roles, and no framework for recruiting staff. As HR director, you must educate but also influence that there is a need for change, which is for the good of the whole business.” She says the HR director has to be firm. “One family member CEO told me that in the first week the new HR director went into his office and told him that he needed to fill in a leave form because he was going on holiday. He is learning that if he wants people to walk the walk, he has to learn to as well, and if he wanted the rest of the C-suite and the senior managers to come to him to request leave, he had to do the same,” says Koh. “The HR director must be bold and fearless and educate the C-suite and family members that they have to behave a certain way if they want to attract the best people, while also respecting where the founder came from and respect him for building the business.” What does this mean in practice? “We talk a lot about transforming the organisation to a high-performance team, but not compromising on the family business ethos and the family values,” says Cecilia Ng, HR director of YCH Group, a pan-Asian supply chain management and logistics company which began in 1955 and is run by the founder’s son, Robert Yap. The principles of reliability, integrity, sincerity and enterprise (known as RISE) run through the family and the business, she says, which means a continuation between the two. “My favourite question when I am interviewing is: ‘what are the family values you have got from your upbringing that brought you to where you are today?’ A person who appreciated their parents is someone I want to work longer term with the organisation.” Family ownership can have great advantages when it comes to culture. The HR director at another large, family-owned firm, says that the senior management team has not changed for almost 30 years, which makes the company “very stable”. The culture is very clear, in contrast to large corporates where changes of personnel can mean radical changes of ethos, she says. However, family firms are clearly not perfect. The downside of long-term leadership can be that nepotism creeps in further down the ranks. “We have a lot of referrals from family members, and normally that guy will

Malaysia’s Wen Ken Group traces its ownership back to 1937, and is now on its third generation


Navigating the family firm: experts give their HR advice

Cecilia Ng

Wu Hong Chiu

HR director at YCH Group

Head of enterprise at KPMG in Singapore

“Understand that family values animate the business. Just as we are accommodating and show brotherly or sisterly love for each other, in a family business when someone is sick or down we all chip in and cover their work. But remember: you need to be clear about ownership, especially when things go wrong.”

“You have to make sure you have the buy-in of the patriarch. You have to say: ‘We need guidelines, and that might not be good for some people.’ The reporting must be solid. For example, if the HR director is hired by the patriarch, they should report to that person, and not to his son who is the CEO. You need to be seen to be fair and objective, and the HR director must show there are clear hiring guidelines and a development plan, or they won’t be able to compete with multinational companies.”

Annie Koh Professor at Singapore Management University

“If a family business has hired an HR director, it is because they are ambitious to professionalise and expand, and to attract the best talent. But you cannot pitch the business as a highly professionalised one. You have to say it is one that treasures its staff, is solidly anchored with a set of values and principles and that there are likeminded people here who are in it for the long haul. You have to say: ‘We are not offering you a job, but a career.’”

Alvin Yap Second-generation director of BusAds

“Have a very honest conversation with the family and ask them what they want. You need to know if they want an entirely professional, nonfamily-run business or not. You need to understand if they want to be in charge. They might have a CSR programme that is very important to them. They might

have strong values that will affect HR. Understand the family culture, then you can be guided properly and work with those guidelines.”

Cheong Wing Kiat Third-generation member of the Wen Ken Group

“A lot of family members want influence over HR. They might say they will look at KPIs and so on, but when it comes to signing the cheque, they still think that if they pay someone more, their family will get less. A potential HR director must really understand the shareholders’ thinking, the age profile, and how to communicate with family members. If they find the family is too stubborn and can’t accept modern HR thinking, I’d advise them not to join the firm. Why waste your life on someone who can’t change?”

get the job,” says the HR director, who wishes to remain anonymous. “Also, appraisals are one of the check-points for promotion, so the question of who will write the performance appraisal is important. If the supervisor is a relative of one of the staff, he or she will rate them well, so they will find it easier to get promoted. We ask the staff to state their relations, but if they keep it confidential we won’t know,” she says. It can be hard to recruit into familyowned firms, and some families have had to find innovative ways to attract new talent. Cheong Wing Kiat is a third-generation member of the Wen Ken Group, founded in Malaysia in 1937 and famous for its Three Legs brands of traditional Chinese medicines. When he joined the family business in the mid-1990s, he initially planned to float it, but when that plan fell through he opted instead to corporatise it. “It was hard for us to attract professionals to join us. I had been a venture capitalist before, so I fell back on an angel investing strategy and instead of recruiting professionals I invested in entrepreneurs,” he says. “They complement some of the HR gaps in the family business.” It has also helped nudge the business in directions that would be more likely to appeal to top managers. “It was not easy to attract top talent because of our company structure – they felt that being family owned there was a glass ceiling – and also we were not in a very sexy industry. Added to that, Malaysia and Singapore were really booming and they had lots of options. Why should they join a family business?” Wing Kiat extended the business into Western medicine, health supplements and functional food, areas that are “more attractive to talent.” Given that salaries are not as high as in some other companies, he also made sure the business was viewed as a good employer and that people were appreciated and respected, worked on projects they enjoyed and were given a degree of freedom (he calls the system RAFT, which stands for resources, appreciation, freedom and time.) Some HR professionals might decide that such lateral thinking is more trouble than it is worth. But they might be missing out, because there is another reason that family businesses are a growth sector in southeast Asia. “Many people are starting to realise that family firms are focused on the long term rather than quarterly reporting, and that they are better for building a longer career path,” says Koh. “A firm where there is a closer alignment between the workers and the talent could be a good opportunity for an HR director. I think HR will be at the heart of a lot of the changes we will see in the coming years.” People Management Asia

27


Free movement of labour is coming. Are you ready?

Laos

4.15m

(61% of population)

The 10 members of the ASEAN community are moving towards a new form of mobility for staff – but they won’t be copying the EU model WORDS MARK GODFREY & KEITH NUTTALL

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olitical and economic unions haven’t had the best press recently – Britain’s decision to quit the European Union is just the latest in a series of challenges to rock the organisation’s self-confidence, while the Transatlantic Trade and Investment Partnership (TTIP) is still in flux. But one group of countries is decidedly undeterred. The launch on 1 January of the ASEAN Economic Community (AEC) among the 10 members of the Association of Southeast Asian Nations (ASEAN) bloc may not have received major fanfare, but it capped 12 years of negotiations to forge a labour movement zone in southeast Asia. Among the legalese lies a series of agreements designed to make it easier for employers in one ASEAN country to hire the citizens of another. These include mutual ‘recognition of qualification’ deals – covering professions such as accountants, doctors, engineers, nurses and architects – which ensure credentials are valid across the bloc, and an agreement on ‘movement of natural persons’, which makes it easier to issue temporary visas or move individuals within countries.

7

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(6 The aim is clear: in its ASEAN Tha ila nd Community Vision 2025, the bloc agreed to strive for “a more seamless movement of (7 2% of p op ul at io n) investment, skilled labour, business persons and capital”, which will further erode barriers to the movement of labour. But while ASEAN has sought in many ways to mirror the free market of the EU in forging the AEC, there are some crucial differences. The economic diversity of ASEAN’s 10 member states, which contain 622 million people, means it requires free movement of e skilled labour rather than the apor Sing free movement of all citizens n) allowed by Brussels, according lat io popu f o to ASEAN secretary-general (73% Surin Pitsuwan. With Singapore’s per person gross national income of $52,090 more than 40 times greater than that of Myanmar (the group’s poorest member), the potential for surging migration flows is clear. So the AEC has tried to be more surgical. Even where mutual recognition agreements are in Size of working age place, work permits are still required population in ASEAN nations and individuals often have to take SOURCE: WORLD BANK 2016�09�09 professional examinations in their new WORKING AGE �1��64� POPULATIO NS host country, says Singapore-based Bob

49m

“CEOssaytheir HRpeopleare toofocused ontheirown national labourforce”

28

People Management Asia

of p op ul at io

r

36m

M ya

V ie tn am

64 . 4 m (70%

3 . 8m

Movement of people

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goals of businesses will have a “growing impact as the region integrates”, says Aubrey. Even state-owned enterprises will be forced to open up with the push to an ASEAN countries ASEAN single market. ranked by GDP Governments also favour per capita 2015 better mobility of talent to attract investment from 1.SINGAPORE $85,208 multinationals and Chinese 2.BRUNEI $70,817 firms seeking to relocate to 3.MALAYSIA $26,891 ASEAN members, where costs 4.THAILAND $16,305 regulate migration,” says are lower. “ASEAN needs 5.INDONESIA $11,035 Aubrey. He sees bilateral trends better flow over borders to get 6.PHILIPPINES $7,358 having an impact – pointing, the kind of benefits of scale 7.VIETNAM $6,022 for example, to large numbers from being a market of 600 8.LAOS $5,675 of Vietnamese workers learning million people,” says a seasoned 9.CAMBODIA $3,483 Thai in order to emigrate Vietnamese diplomat and trade MYANMAR N/A to the larger economy for official who has moved back to SOURCE: WORLD BANK 2016 opportunities. Ca m (6 Hanoi after a stint in But whatever happens, the bo 2% di Guangzhou, the mainland transfer of talent appears of a po Chinese city near Hong Kong. necessary and irreversible: the latest ASEAN pu la “Multinationals won’t leave China just Business Outlook Survey from the American tio for cost reasons because they have a huge Chamber of Commerce in Singapore shows n) market there... unless we can also say ‘you that 75 per cent of executives across all can move your staff easily around ASEAN ASEAN countries believe integration is and you can avail of lower costs and a big important in helping their companies do marketplace’,” he adds. business in the region. Data might also help shift employers’ Hong Kong will be watching closely. It perspectives. The current level of has long relied on low-cost domestic labour a i ay s cross-border movement is widely from ASEAN members the Philippines and Mal underappreciated: there are 18.8 Indonesia, but the country’s function as a n) o i t la million people working across financial services and legal hub for the opu of p B % 9 ASEAN borders, according to the region faces erosion if an equivalent base ru ne i (6 Asian Development Bank, emerges. Its role as a bridge to mainland although only 6.5 million of those China has so far given it an edge in its (7 2% of p op Phi ul at io n) lipp are formal labour migrants. rivalry with ASEAN member Singapore, ines (6 3 While AEC regulations another leader in finance and logistics. But a %o f po will not affect these workers, slowdown in the Chinese economy, helping pul at io national capitals are shifting push Hong Kong into recession this year for n) policy: “It is much more a question the first time in nearly a decade, has turned of how individual countries the heads of government officials in the esia n o d In territory towards ASEAN with renewed n) urgency: a Hong Kong-ASEAN free trade lat io u p o of p deal, scheduled for completion by the end of (6 7 % this year, will include trade in services. Indeed, the Hong Kong ASEAN Economic Cooperation Foundation Council set up in the city has a mission to make Hong Kong a “high value-adding hub, bridge, connector, investor” for the region. But it will need the staff: a survey compiled by the Hong Kong Institute of Human Resource Management between July and October 2015 showed 90 per cent of Hong Kong companies are finding it ‘very difficult’ to recruit. The answer, it seems, may lie just across the water.

10

m

2 1m 0. 3 m

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17 2 m

People Management Asia

29 23

PRESS ASSOCIATION IMAGES

Aubrey, an academic and HR practitioner who runs his own consultancy. There has been no ‘big bang’ of free movement of labour comparable to the EU, but that was never intended, says Aubrey. The real significance of the ASEAN initiative may not be in movement but in corporate culture. Aubrey sees the creation of an “ASEAN mindset” among HR professionals. Every one of 24 CEOs across the region who Aubrey spoke to for a white paper to be published by Singapore Management University agreed their HR professionals are “too focused on their own national labour force” rather than looking at the ASEAN region as a talent pool in itself. The ‘mismatch’ between HR’s priorities and the increasingly cross-border


THE KNOWLEDGE

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

30

People Management Asia

ALAMY

Philippines

6.8%

Malaysia

5.6%

4.6%

Hong Kong

“Firms should communicate theirpaypolicy ina manner consistentwith theirculture”

Executive salaries are on the up

Singapore

WORDS GEORGI GYTON

Finding out that your boss earns 183 times your salary could understandably be seen as demotivating. But this is the average a FTSE 100 chief executive earns compared to their lowest-paid worker – and while it is an extreme example, it poses questions for HR. High executive pay clearly bothers staff. In a CIPD report – The View From Below: What employees really think about their CEO’s pay packet – 71 per cent of respondents said CEO pay was too high, and 59 per cent reported that it directly demotivated them. So what is the best way to communicate an executive pay policy, to employees on all pay scales, to avoid negative feeling? According to Willis Towers Watson, the first questions organisations often ask are: ‘What are other organisations doing?’ And ‘How transparent should we be?’ Both are good questions, says the consultancy, but the key is to take into account your organisation’s compensation philosophy, and to communicate this “in a manner consistent with its employee value proposition and company culture.” According to Jon Robinson, executive remuneration practice leader for Mercer ASEAN, historically

communication of an executive pay large multinationals are likely to keep all policy to employees “has, at best, matters around executive compensation been an afterthought”. These kinds strictly confidential, local companies are of communications have typically likely to be more open to disclosing this been targeted at shareholders, and kind of information – and they with good reason, he says. are moving in the direction of “Shareholders are directly increased transparency. impacted by remunerations Neglecting to speak to staff costs, including when about remuneration matters Excessive pay some form of equity is can have direct negative can make bosses included in a package,” says implications, says Mosley, seem out of touch Robinson. “More importantly, by, for example, “providing communications around performance ammunition to unions when negotiating (measure and targets) can also be used labour contracts, as well as potentially to reinforce messages around strategic being demotivating.” directions and goals, by demonstrating When considering what approach tangible alignment.” to take, in practice there is little choice Robert Mosley, chief executive at but to use the same communications Lemon Pip Consulting, says that while to employees as to shareholders, says Robinson: “It is impractical and illegal to give different messages. Effective shareholder communication stresses the link between pay and Average increase in executive pay performance – a genuine link, not Average annual rise simply stating in executive salaries there is a link – and in Asia-Pacific in 2015 Jon Robinson: use the demonstrates that the same communications outcomes are within to staff as shareholders market norms.” That said, sky-high excesses seen in the US and UK are rarer in Asia. Culturally too, employees tend to have a more pragmatic approach, which means that tales of outrage over chief executives’ pay packets are not widely seen in the press. “The biggest cases of conflict that I have seen are in family businesses, where, for example, siblings working in the business are paid more than their brothers and sisters,” Robinson says. SOURCE: WILLIS TOWERS WATSON

4.5%

1

Communicate an executive pay policy


The Knowledge

2

Deal with an allegation of bullying

in establishing a workplace genuinely free of harassment. According to Julia Yeo, head of employment practice at law firm Clyde & Co in Singapore, it is likely that a bullying incident would be included under that Act. “In that instance, the victim has Bullying in the workplace can take many the option to either file the necessary forms – from threatening or insulting report with the authorities, or address language to cyber-bullying or trolling. it internally, through the employment Its effects can be toxic, including channel,” she says. increased levels of absenteeism, Companies should have an antidecreased motivation and negative bullying and harassment policy in impacts on mental health. place, which they need to actively Unsurprisingly, it is both an communicate, says Yeo. “This organisation’s responsibility, encourages employees to come and within its interests, to forward if such an incident tackle the problem head on. occurs, so that you can deal The issue is taken seriously with it internally, rather than in Singapore. Following the have an employee go direct to passing of the Protection the authorities.” from Harassment Act by Under the policy, it’s the Singaporean parliament also important to in 2014, the Ministry of communicate that there Julia Yeo: consider counselling for both the Manpower, National Trades would be a no-retaliation victim and the accused Union Congress, and stance for reporting, she Singapore National Employers says, and that the matter, Federation jointly issued a Tripartite and the identities of the individuals Advisory on Managing Workplace involved, would be kept confidential. Harassment in December last year. If an allegation is made, establish The guide offers practical advice a realistic timeline to deal with the on developing measures to manage complaint, and appoint a neutral person harassment in the workplace, including to handle it, says Yeo. early prevention and the importance of Investigations should be carried out neutrality and leadership commitment discreetly and the accused should be In an infamous incident earlier this year, employees of a Chinese bank were 'punished' on stage

What forms can bullying take? Not all types of bullying in the workplace are easy to spot, and victims may not even realise they are being bullied. These can include: Verbal hints or comments that an employee should quit their job

Excessive monitoring of an employee's work

An employee being ignored or being given a hostile reception when they approach

Information being withheld from an employee, which could affect their performance

Assigning an employee tasks that are impossible to complete within the given time frame

Instructing an employee to carry out inappropriate or humiliating tasks

SOURCE: PEOPLEPULSE

clear about what has been said about them. Both parties should have the opportunity to deal with the other person’s explanation for the allegation; only if it is necessary should other employees be called on as witnesses, and then on a strictly need-to-know basis. The HR practitioner or other individual appointed to investigate the matter “should have access to all the necessary documentation to make a fair decision, or at least achieve a closure of the complaint,” says Yeo. While an organisation’s full range of disciplinary sanctions would be available should an employee be found guilty of bullying, another option is to provide counselling, for both the victim and the accused. “Sometimes, it’s an issue of personality, for example not being able to manage your subordinates, so counselling might be a good option rather than just a disciplinary,” she says. As a matter of best practice, records should be kept of the investigation, as well as documentation of the decision made and any actions taken. People Management Asia

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Selecting a new piece of HR software is far from a simple ‘click and collect’ scenario. Like any significant investment, it should involve a considerable amount of pre-purchase research and analysis. Equally, once you’ve taken the plunge, it’s important to ensure you’ve bought the right software by conducting postpurchase checks and evaluation. The key starting point in any new software selection, says Denis Barnard – director of consultancy HRmeansbusiness – is to understand exactly what your company wants, and therefore what the software needs to achieve. Having realistic expectations is also important if you are to accurately evaluate whether a new piece of software is performing as it should. “If you have done your homework, then the rest is easy,” says Barnard. “You need to ensure your project sponsor is able to resource the project correctly throughout its duration, know what you need, in terms of modules for example, and how it needs to work in your organisation.” Barnard says it is important to have the ability to develop those processes into scenarios that can be presented to vendors, and to be sure that the software you choose can be configured to your requirements. Pritul Khagram, CEO at HR and recruitment consultancy People Force International, says there are a number of areas to consider when investing in new software. Denis Barnard and These include: Pritul Khagram: ask vendors for detail identifying the 32

People Management Asia

key stakeholders; how to document the supplier; ask as many questions requirements; and managing a as possible. Check their business selection process. continuity and their financial status Right at the outset, says – what technology they Khagram, it’s also critical to use, for example,” quantify your budget and Khagram says. And decide whether you require after you have obtained a cloud-based SaaS quotations, source (software-as-a-service) references from at least or an on-premise two existing clients for each solution. shortlisted provider. Evaluation criteria To assess whether a Technology is obsolete should be set during the product is right for you, it quickly – so it pays to be thorough in choices ‘exploration’ period, with is also important to carry each software provider out adequate due diligence, scored against these. “Challenge Khagram says. “This can be achieved by having several demonstrations of various systems; for example, you wouldn’t buy a house without seeing it a couple of times,” he says. Demonstrations should be bespoke, where the provider goes into detail If you’re thinking of buying HR software, these are some questions you can ask existing customers. on your various requirements, rather than just an overview. “It’s also important,” Khagram says, “to engage with all key stakeholders during the selection process.” Describe how you are using the product. Is it When you organisation-wide or a single department? have chosen your preferred software, Why did you select it over its competitors? achieved board sign-off and implemented the new kit, What are the best features of the product? And the limitations? measuring its success can be done in a number of ways, Describe any manual processes and workarounds you follow to use it says Khagram, “but documenting your requirements in detail right at the beginning will help evaluate the system and whether it meets those needs or What did you learn during the implementation that you would have liked to know before not, once it is implemented”. you started? Other methods of evaluating the success of new software might include conducting staff and HR team If you were doing the implementation again, surveys, analysing the turnaround what would you do differently? time for information requests from the board, checking the accuracy of the information and the processes – What was the ROI timescale? How does this ensuring nothing falls through the compare with what you expected? cracks – and analysing the cost savings SOURCE: PEOPLE FORCE INTERNATIONAL or ROI.

HR software selection: key quesions to ask

1.

2.

3.

4.

“Challenge the supplier– ask plenty ofquestions. Check their financialstatus”

5.

6. 7.

ALAMY, REX FEATURES/SHUTTERSTOCK

3

Evaluate new HR software


The Knowledge

4

Handling employees’ personal data

From emergency contact details to information on pay and performance, organisations are legally allowed to hold large amounts of personal information about their workforce – but with that responsibility comes a huge dollop of risk. So what are the requirements around the collection, usage and storage of this data, and what should you be mindful of? Hong Kong, Singapore, Malaysia and Taiwan all have comprehensive policy laws, but each deals with employee data in different ways, says Anne-Marie Allgrove, who heads Baker & McKenzie’s global IT and communications practice. In most cases, however, “the requirements in each jurisdiction reflect the core principles of privacy law: proportionality, accountability and transparency.” Bryony Binns, employment partner at Baker & McKenzie, recommends you “only collect information that is truly necessary for the job in question.” What is ‘necessary’ may extend to the collection of information through the monitoring of IT systems, and therefore it’s important to communicate to employees that what they are creating on employer systems is not private to them, she says. Organisations should have an email policy that clearly states if work email is being monitored, says Gabriela Kennedy, partner at Mayer Brown JSM. It’s generally recommended to segregate personal from work email, and employers should not access personal email unless under the compulsion of law. In all cases, staff should be notified about what data will be collected and what it will be used for. It cannot be used in an unlawful way, or for a commercial purpose that is not related to the employment relationship. “You can only use employees’ personal data for the purpose you have collected it,” adds Kennedy. “If you change the purpose, you would have to notify them.”

A widespread leak of emails from Sony included a pre-release version of the James Bond film Spectre

For companies that operate across several jurisdictions in Asia, be aware that there may be restrictions on creating information storage in one jurisdiction for the whole region. “In order to disclose personal information to a third party offshore and have them store that information, some jurisdictions require consent, some only notice,” says Allgrove, although there are some exceptions.

Be wary of data breaches Intel Security's report details what data is being taken in Asia-Pacific, and who is taking it 50% of thefts were carried out by insiders, though around half were accidental 27% of documents stolen were in a Microsoft Office format 27% of data taken was employee information 10% of companies reported more than 20 breaches in the past two years

SOURCE: INTEL SECURITY’S GRAND THEFT DATA REPORT, 2015

“Most privacy laws will also require organisations to have taken reasonable steps to ensure the adequate security of the data they hold,” she says. Arguably, using an experienced and reputable thirdparty service provider could reduce your susceptibility to cyber risk, as they are likely to have robust security systems in place. “If you are doing it yourself, you need to bring that same rigour to it, to check that you’ve got appropriate firewalls and other protections from a technological point of view to minimise the chances Anne-Marie Allgrove: use a reputable thirdof any unauthorised party service provider access,” adds Allgrove. When it comes to requests from employees to access the data held about them, “it’s important for HR professionals to understand that access principles don’t necessarily extend to entire files, but to particular discreet types of information that they may be allowed access to, but in a redacted form, for example,” says Binns. “In light of this, it is important that practitioners are careful about the types of records they keep together, understanding that access may need to be granted at some point in time. For example, they should not keep consolidated information that relates to more than one person together.” People Management Asia

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THE VIEW FROM HERE

Millennials need to be managed in a particular way. Are you ready?

Millennials want to make a difference – without compromise in their personal life

34 People Management Asia

There are three cultural habits which leverage flexibility to navigate the maze work well in evolving a contemporary, of forces all around them, within the firm inclusive and flexible work culture. The and outside it. fi first rst is authenticity. People instinctively In the words of Scott Adams, look for a workplace that values their creator of comic strip Dilbert: personal identity and self-expression. “Nothing is more important to When they are free to be themselves, my success than controlling my they emit positive energy and become schedule. I’m most creative from engaged. They know who they 5am to 9am. If I had a boss or are, and know they are being co-workers, they would ruin valued and respected. my best hours.” The inspiring workplace This means flexibility or is one that allows people agility not just in terms of to express their personal work schedule but in when, identity in a manner that where and how work is done. is a strategist, author and high performance makes useful contributions. It also means flexibility for coach based in When an individual can millennials to manage their Singapore bring their whole self to work, careers in tandem with their there is authenticity and true life. What does that mean for emotional connection. the organisation? Flexibility in workforce The second habit is autonomy. So often, planning, leadership development, we hear organisations saying: “People benefits, career development plans and are our greatest asset.” Yet the culture more, managing with mass customisation and management norms in these same where the philosophy is the guiding organisations rob people of their greatest principle to be applied and not just a rule motivation – autonomy that is dictated to the dot. to turn in their best Embedding such habits in the work effort. As influential culture means changing the way we work. tech entrepreneur Jeff It’s about gaining greater understanding Gunther realised, of the team we are part of, and moving management is about away from face time to performancecreating conditions based measurement. for people to do There are a number of steps you their best work on can take as a leader to show the way: their own terms. demonstrate you are embracing your Finally, there’s team and bringing your authentic flexibility. Empowered self to work; allow people to do their employees will desire best work through autonomy and more flexibility, as they full accountability; and be flexible, want to make a difference by coming up with collaboratively but seek to do so without designed solutions. Most of all, it’s time compromising their to recognise there is no quick fix – but personal life. They will equally, no better time to get started.

Cheryl Liew-Chng

PRESS ASSOCIATION IMAGES

Asia is seeing unprecedented demographic shifts in the talent pool. From established economies like Singapore, Hong Kong and Thailand to emerging economies such as Vietnam and the Philippines, this is a crucial time for firms who want sustainable growth and a more inclusive and agile work culture. The challenge is that the new talent pool is more diverse in terms of culture, gender and age than it has ever been before. And millennials – who will form more than half the workforce in the near future –have vastly different work expectations. We need a work culture that still delivers high performance, but we need to look again at what it takes to cater to this group This is a critical time for firms to embrace a modern, inclusive and agile work culture. Performance of individuals and teams is likely to be impeded by mistrust, disrespect and poor collaboration due to differences in expectations and ability to be flexible.


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People Management Asia Issue 5