Fiona Jury

[fionajury]

Innovations in Talent Management in Australia

In conjunction with Campbell Arnott’s and EY, The Chapman Consulting Group was delighted to host two HR Leaders Discussion Forums in Sydney on Friday 22nd May. Numerous companies were represented at the meeting including Aristocrat, Citi, Genea, IAG, IBM, Leighton Contractors, Lend Lease, Nikko Asset Management, Optus, Pfizer, Sunrice, Telstra, Vodafone, Westpac and Woolworths. These HR Leaders came together for a lively discussion on the topic: “Innovation in Talent Management: New Practices, Successful Experiments and Noble Failures.”

It was clear from what people shared that many organisations were facing similar challenges in the Talent Management space. However, the extent of innovation in Talent Management practices was seemingly determined by organisational maturity. A synopsis of the key highlights and takeaways of the group follows.

Mobility and Succession

A number of large ASX listed companies are striving for better internal capability building, mobility and succession. The right talent strategy, technology, and most importantly leadership ‘buy-in’ are the key elements of success in these areas. Capability mapping and career matrixes are some of the tools being used. As soon as Talent was placed at the top of the agenda in Executive Leadership meetings for a couple of large organisations present, things changed rapidly. Once the senior executives had ownership of the dialogue, willingness to move talent around internally increased.

Sometimes there can be reluctance for leaders to allow people to move into a new challenge in a different part of the business, as they may want to hold onto high potential talent. The language needs to change so that leaders are recognised and revered for fostering internal career paths (giving away and receiving) and moving top talent into -or out of - their teams.

The question was raised as to who should bear the cost of an international assignment. In some companies the recipient business unit bears the full cost. One large multinational has a Global Resources cost centre that quotes on and pays the relocation costs and the recipient business unit simply pays the salary.

Performance Management

There was significant discussion around big shifts in performance management. The trends look like this:

Moving Away From → Moving Towards:

Form filling and process → Meaningful ongoing conversations

Rigid numerical ratings → Agreeing the meaning of ratings in relation to an individual’s specific role

Quarterly, six monthly or annual reviews → Touch points with manager at any time

Linking performance to reward → Linking delivery and business impact to reward

Long lists of objectives → Three to five core priorities that will ‘move the dial’

Employer driven → Employee driven

Career Development and Succession Planning

A challenge for many organisations is the need to retain and develop the careers of “Value Professionals.” These are people in specialist technical roles for whom moving up to people management roles is not the best option. In many cases creative “in role” career progression within the specialisation and job category has led to increased retention.

High Potential Programmes

These programmes were seen to be working well in some organisation, although there was debate over how 'potential' should be defined and measured. One company had developed an 'Employee Value Quotient’ comprising Talent + Expertise + Performance (including leadership and agility). Others examined versatility, leadership, 360-degree feedback and test projects to identify potential.

The need to be careful with the language surrounding these programmes was noted. It is important to define ‘high potential’ in an appropriate way, otherwise you can inadvertently create monsters who have expectations of special treatment and reward. Another challenge was around individuals being rated “Ready Now” for a move upwards. There were times when the role above that person would become vacant and the CEO would decide that in fact the person is not “Ready Now” and would go external to search for better candidates. The employee then became disengaged and was a flight risk. Effective communications around these programmes throughout the organisation can minimise these issues.

Talent Acquisition and Flexibility

The focus on Talent Acquisition has been on increasing the sophistication of internal mobility, career planning for 'high potentials', creation of skilled talent pipelines and building diversity into the TA process.

There is also big shift towards flexible work practices in many large organisations. To attract different types of talent, flexibility is increasingly being seen in:

the way roles are constructed;

part-time roles;

late start or early finish to blend in with family life;

technology enabling work from home or different locations.

One top 10 ASX listed company is working towards every role in the organisation being flexible. In a recent example, one of the first questions the CFO asked a potential direct report in an interview was, “How can we make this flexible so that it works for you?” Whilst it was unexpected, and it wasn't something she had thought of asking for, the candidate ended up accepting a flexible opportunity that she couldn’t refuse.

Digital Advancement Is the Common Theme

The main thing that all organisations had in common was the technological advancement that can underpin better Talent Management practices. The likes of Workday, Success Factors and Taleo are digital enablers and many organisations are using social collaboration tools such as Yammer and Facebook at Work to track and mine employee data for predicative analysis and/or productivity enhancements. The enterprise version of LinkedIn is also being used by companies to help facilitate Talent Acquisition and internal mobility.

Many thanks go to Campbell Arnott's and EY in Sydney for hosting these valuable sessions, and we look forward to reconvening with this group later in the year.

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Gamification: Disrupting the HR Game

A recent research paper by Accenture entitled, Trends Reshaping the Future of HR: Digital Radically Disrupts HR, predicted that Talent Management processes would become more and more ingrained into the everyday work lives of managers and employees in the future. Through the use of digital technologies, Talent Management will become the responsibility of the leaders and the individuals, as opposed to remaining the domain of specialist HR professionals. Gamification is one key digital technology that will facilitate this shift.

What is Gamification?

Gamification is the use of ‘game thinking’ and the typical elements of game playing (e.g. point scoring, competition against others, rules of play), to engage users in an activity or behaviour and increase users’ self-contributions. In an HR context, gamified software and applications are already used in areas of Talent Management such as recruiting, performance measurement and recognition, learning and development, as well as culture and behavioural change.

Young people entering the workforce right now are the first generation to have grown up surrounded by computer games and technology. For many, their lives revolve around games, such as the socially connected Massively Multi-Player Online Role-Playing Games (MMORPGs). These young people socialise through computer games, and gaming terminology such as ‘levelling up’, ‘epic win’, and ‘GG (good game)’ have pervaded their everyday language.

“With gaming concepts and terminology gaining prominence among young employees, it’s probably not surprising that companies eager to attract, engage, incentivize and retain members of this generation have been taking games seriously. Gaming concepts have begun working their way into key HR processes in two distinct forms, often called serious games and gamification. Whereas serious games are actual games used in the workplace whose purpose is beyond merely providing entertainment, gamification is the weaving of game mechanics such as virtual currency, leaderboards (boards that display leaders in a competition), badges, or levelling up (progression to the next level in a game) into existing work activities or processes without the development of a full-fledged actual game.”1.

The use of elements of gaming in the workforce is not a new concept, but the use of gaming technology as an enabler is. For years sales teams have used leaderboards, sales competitions, special events and campaigns to track activity levels and performance. The difference now is that most employees are familiar with gaming, and cloud-based gaming technologies have become available, making enterprise-wide use affordable.

What are the Benefits of Gamification?

Gamification is particularly relevant for sales teams, in and outbound call centres, customer service, service technicians, shared services processing functions and virtual teams. I had the pleasure of speaking with Ian Burns, Director of iActionable AsiaPacific, who outlined the following five key benefits that can be derived from this trend.

Driving Performance and Culture - Gamification works particularly well when organisations need employees to focus on a particular set of KPI’s that are important at a certain time in the business cycle. It encourages people to interact with systems in a certain way i.e. input and record their activities on the system. Mobile-enabled games can help the message to reach the ‘shop floor’ and can drive behaviours and performance without the manager having to constantly push. It doesn’t make a big difference to super top performers, because they will always perform well. It does however, foster performance uplift in the other 80% of the business – the concept can have an enormous impact here.

Better Predictive Capability – Gamification enables managers to be much more accurate with sales forecasting and anticipating problems with employee performance.

Increases Employee Engagement and Reinforces Culture - The key purpose of gamification is to help employees to be more successful whilst engaging in friendly competition and having fun. Keeping the workforce focused on what is important helps individuals to achieve their personal goals, and companies to become regarded as best in their industry. Seeing one’s own results in real-time, and respect and recognition from peers is a far more powerful tool than the boss pushing.

Great for Virtual Teams - Gamified Applications give Managers access to a dashboard, so they can see what is happening in a timely way and can respond accordingly.

Managers Become Better Coaches – This is key when time or accuracy is important and there is benefit for the organisation in fine-tuning the goals and targeting a change of behaviour. With gamification, managers can pinpoint the quantity and quality of the activity, rather than simply beating the activity drum.

Examples of Gaming Applications in the WorkPlace

America's Army® (AA) - simulation-based game used by the U.S. Army showing the challenges involved in common Army missions; used for recruiting and has training modules.

Stone City - a serious game commissioned by Cold Stone Creamery Inc. The purpose of the game is to help employees learn correct ‘portioning behaviour’ for ice cream and to understand its effect on profitability and customer satisfaction. A viscosity model simulates the way in which various flavours ‘scoop’ differently. Success in the game requires speed and skill, which makes the simulation fun and effective.

TopCoder® - an IT programming community site that uses programming competitions to identify top programmers for contract work or permanent hire.

Work.comTM (from salesforce.com Inc) - uses gamification mechanisms to provide timely feedback to employees and to recognise high performers.

ContestBuilder (by LevelEleven LLC) – contests can be created around specific sales metrics tracked in salesforce.com’s customer relationship management (CRM) system.

Achievers - social recognition portal whereby staff can recognise each other with endorsements and virtual currency points. 2

iActionable – tracks individual performance versus targets, uses peer recognition to drive performance and culture. Unlocks ROI from the world’s leading CRM system and has a sidebar that contains a leaderboard and individual KPI achievement, which is displayed on your desktop or mobile phone.

Are Many Organisations Using Gamification in HR Today?

Although in its infancy, gamification is part of the overall digital disruption that will see HR professionals focusing more on culture and Talent Management levers to achieve competitive advantage. A recent example of this inTalent Acquisition is KPMG’s Australian graduate programme. “The 10,000 applicants will have to traverse an online game overlaid with psychometric tests and submit a four-minute ‘selfie’ video to prove they have enough ‘personal impact’ for the fast changing world of professional services”.3. Like KPMG, some large organisations have been early adopters of gamification, but overall penetration is not high – yet. As the uptake inevitably increases, organisations will benefit from improved employee insights, and consequently increased workforce capability and performance.

Accenture Strategy Research Paper 2015 titled “Trends Reshaping the Future of HR: Digital Radically Disrupts HR” by Tim Good, Catherine Farley, Himanshu Tambe and Susan Cantrell, page 8.

ibid, page 9.

The Australian Financial Review, “KPMG Hiring by Selfie” by Agnes Kind and Edmund Tadros, Wednesday 25th March 2015, page 39.

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The Top Five Reasons You Should Hire HR Talent with International Experience

At The Chapman Consulting Group we have the privilege of knowing a large population of international HR Leaders. Many have worked globally or across multiple regions, with some having spent time in emerging markets, developed westernised markets, or even in dangerous locations such as Afghanistan or Liberia. There is a perception in some locations that international HR experience is not relevant for domestic HR roles. However, we’ve observed that those with international experience have the capability to be successful in the domestic market, and they often bring added value and fresh ideas to the local setting.

Kirby Grattan, former Global HR Director at Schneider Electric, believes there is great value in bringing internationally experienced professionals into domestic markets. What follows is a brief description of the top five attributes observed by Kirby in internationally experienced HR talent:

1. Heightened Problem Solving Skills within a Complex and Ambiguous Environment

International HR Leaders learn to be more agile and creative in their thinking, because often there isn’t a precedent or ready-made solution to business problems that are faced in new markets. This requires adept thinking, collaboration and execution abilities to create some consistency and value across developed and developing markets. Things can shift quickly in different locations, and extracting the optimal performance from human assets when things are constantly changing in disparate ways and in various locations definitely hones HR capability.

It is noted that HR Leaders operating across many countries can become more outcome-focused while the pathway to reach the outcome becomes a bit less of a concern. It becomes a necessity to empower others to execute, rather than remain process focused.

2. Cultural Acumen

International experience builds understanding, and we learn to see our commonalities rather than our differences. Assessing and managing talent strategically using an international lens rather than a domestic paradigm can enable better business growth and can foster greater diversity and inclusion.

The cultural and linguistic diversity of Australia's resident population has been reshaped over many years by migration. Historically, more people immigrate to, than emigrate from, Australia. At 30 June 2013, 27.7% of the estimated resident population (ERP) was born overseas (6.4 million people). 1. With more than one in four Australian residents born overseas, cultural acumen is becoming more important than ever for HR Leaders operating in Australia.

3. A Fresh Perspective

An HR Leader with international experience may bring a new perspective to old business problems. Diversity of thought and experience enriches the leadership team’s ability to create and innovate. Having often built an expansive overseas network, these leaders frequently have a heightened ability to spot talent across the globe and leverage it into the business. It can be beneficial to bring in HR talent with experience in the next stage of your business cycle. For instance, we have seen domestic companies in rapidly growing emerging markets hire international HR Leaders to lead them through a downturn in business – a stage in the business cycle that the existing leadership teams had not previously experienced.

4. Resourcefulness and Resilience

Living and working overseas increases your resourcefulness and resilience because you need to set up your home and life again from scratch – this tests and expands you both professionally and personally. It also requires ingenuity and the ability to improvise when the resources you may be used to are scarce or not available at all. In today’s unpredictable economy, these skills can be critical success factors. Local knowledge and labour laws can be taught, but experience, wisdom and fortitude cannot.

5. A Broader Customer Focus

Your Customers are International. Even though a business is domestically based, through social media and the cloud, “business without borders” is an unstoppable mega trend. Information is global, and increasingly domestic businesses have international customers. An internationally experienced HR Leader can hone the business plan for the international customer, and can better understand the complexities involved in operating in multiple countries.

Emerging Markets Experience

It is clear that international experience can help develop skills that are highly valued in today’s workplace. While some industries are just waking up to this fact, the IT industry has been actively pursuing talent with emerging markets experience for many years. "Without question, I'm far more likely to hire MBA graduates who have had management consulting experience in emerging markets over graduates who have not," said Amit Sinha, former SVP Platform and Applications Marketing at SAP.

"Graduates who have worked on projects in emerging markets develop a unique blend of experience in innovating solutions, along with collaboration and teamwork, a can-do attitude and humility. These are vital qualities for professionals at a company like SAP because SAP works across all major global companies, impacting 70% of world trade. Cultural sensitivity to business practices is essential, and so is the ability to identify opportunities in fast growing markets. Our clients are global, so the problems they need us to solve are global. We can't help them if we don't understand the worldwide context ourselves," explained Sinha.

Source: Australian Bureau of Statistics

Source: Fast Company Magazine (Online), “MBAs Without Borders: Experience in Emerging Markets Give Graduates an Edge” Article by Alice Korngold, July 2nd 2012

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Beyond the Ulrich Model – Sydney HR Leaders Discuss the Next Phase

On Monday, the 10th of November 2014, The Chapman Consulting Group held two HR Leaders networking sessions, along with our hosts Origin Energy and Cisco Systems. The topic for discussion, “Beyond the Ulrich Model - What’s the next big thing in HR?” resulted in an energetic discussion amongst the HR leaders present from American Express, Avaya, Coca Cola Amatil, Cochlear, Deloitte, DEXUS, Diageo, Hewlett Packard, Lend Lease, Perpetual, Schneider Electric, Woolworths and others.

The Ulrich Model

Today’s HR Leader will certainly be familiar with The Ulrich Model, a ground-breaking model first detailed by HR management guru Dave Ulrich in his book Human Resource Champions in 1996. To provide a brief recap, in its simplest form the three-pronged model consists of shared service centres providing transactional HR work, business partners that sit within the business units, and Centres of Excellence (COE) providing consultancy on issues such as rewards, employee relations and talent management. It has been a direct consequence of Ulrich’s theory, that many organisations have chosen to move to this model for delivering HR consultancy and services. However, this framework is now 18 years’ old, and we were interested to find out what the gathered HR Leaders thought would be ‘the next big thing’.

Moving on from Ulrich

There was general agreement amongst the participants that the Ulrich model takes a number of years to master, and that those present were at different stages in terms of the sophistication and maturity of their HR organisation models. It was felt that ‘the next big thing’ should be a more customer led Ulrich model, because presently a common challenge is that COE’s are able to provide deep expertise, but they can become disconnected from business strategy and customer needs. The subsequent model needs to feed organisational design and external customer delivery. It was noted that where some large organisations have brought all of their HR expertise in house, there may be a balance and an understanding that it’s acceptable to use external subject matter experts, for example, in a talent acquisition situation where a certain skillset is particularly hard to find. The group also noted the importance of the in house team members closely managing these relationships with external providers.

Those HR leaders from smaller - medium sized organisations questioned whether it was possible in terms of budget and practicality to have specialist COE’s, because they are less able to serve smaller populations that are globally dispersed.

The following “Pain points” were identified within the Ulrich model:

It can take at least 18 months, and sometimes up to five years, to roll out Centres of Excellence and embed the process - and by that time it may all be irrelevant;

The experts in the COE’s need to ensure they understand the business better and sometimes response times can be too slow;

The global COE’s can be focussed on three to four main agenda items - if this is the case then who is really driving the business?;

Technology Solutions such as a Workday create efficiency and transparency and push HR responsibility back to the business and line managers. The risk of pushing too much HR management back to the business is that line managers may not be equipped to handle certain employee issues such as mental health or diversity and inclusion;

Transitioning existing HR employees into the model can be a challenge. For example, in some companies the Business Partner role is seen as the most appealing HR role, given its strategic function in comparison to the more operational HR positions. However, some employees who want to transition to Business Partner also want to hold on to the operations piece (which is their strong suit and in their comfort zone), and perhaps don’t yet have the strategic skills needed to move into the BP role;

Feedback from some leaders and Line Managers is that they want a “one stop shop” and don’t like multiple points of HR contact;

Some parts of the business don’t need as much - if any - strategic support, and so don’t benefit from the model.

Critical Success Factors

Key points noted by some as critical success factors to implementing the Ulrich model:

Education and solid guidance in the initial stages can turn the most adverse line manager into a firm supporter and promoter of the model to the business, once they understand the value. It was noted that often improving internal marketing and communication to showcase the successes of these programs adds considerable value;

Organisations must have the IT platform to support Business Partners and the COE’s because meaningful data is needed in order to fully leverage the Ulrich Model;

Clear communication and agreement on the delineation of roles and responsibilities within the model is vital. Strong collaboration, relationships and the ability to “flex” and adapt to the businesses ever-changing needs was also considered essential to success.

Danielle Weese, Head of HR ANZ / HRBP, APJC, Sales, and Vesna Jurcevic, APJC Sales HR Partner, described the multi-layered HR delivery model at Cisco, including simple features such as online searching for basic queries and ‘click to chat’ for answers to quick general questions. The next level of support involves a phone call with an HR consultant in the shared services centre, which handles country-specific queries, such as ER and payroll. Beyond that, cases can be escalated to a client facing HR specialist on the ground in the location. VP level business leaders have their own HR business Partners who are very senior and operate at the strategic and commercial level. According to Vesna Jurcevic, “Whilst a large volume of our operational HR services are delivered through ourshared services centre, which is supported by world class technology; the business is still highly relationship driven, and HR Business Partners are seen as providing high-value business outcomes.”

What Makes an Effective HR Business Partner?

Acquiring the right level of HR capability for Business Partners is another big challenge facing organisations today. In the current business environment, markets and businesses are in a state of continual change and evolution, so HR professionals need to have the ability to constantly and quickly adapt. It was noted that it is necessary to be disruptive when implementing new processes, in order to attract the required level of attention from the business, so people are ready and open to the change. All agreed that strong CEO and leadership support can assist greatly with the transition and implementation processes, with a ‘lead by example’ approach.

There was much discussion around the competencies required for business partners, as this role becomes more evolved, and the need for strategic capability increases. Austen Sharp, Senior Manager, People and Culture, Energy Markets from Origin Energy shared the competency framework for HRBP’s he and his colleagues have devised, which includes:

Organisational agility;

Managerial courage;

Business acumen;

Perspective;

Decision making;

Drive for results.

This framework poses a question around how to bring entry level or graduate level HR employees into the organisation, because it does presuppose quite vast previous experience. The point was made that positions inshared services and/or project related work can be good entry points into the HR Team.

Overall, the general consensus seemed to be that there is no “magic formula” in terms of the optimal HR model, given the significant variation in business stage, size, location and function. It is useful to be aware of the models implementing the aspects that work for an individual organisation in a given timeframe. The conclusion was that with markets and businesses changing so rapidly, the HR model will also continuously evolve on an on-going basis.

Many thanks go to our hosts, Origin Energy and Cisco Systems, and we look forward to reconvening with our HR Leaders in 2015.

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Attracting and Retaining Gen Y: Atlassian’s Got The Answers

In 2013, a global generational study called “NextGen” was jointly conducted by PricewaterhouseCoopers, the University of Southern California and the London Business School to examine the aspirations, work styles and values of “Millennial”/”Generation Y” employees (defined as those born between 1980 and 1995).

The study, which included more than 40,000 responses and is the largest comprehensive global generational study ever conducted into “Milennial” employees, identified many of Gen Y’s key influences in terms of career and work. The findings established the following primary drivers in the workplace for this generation:

Flexible work environment;

Strong cohesive team-oriented culture;

Fully leveraging technology;

Increased transparency around compensation, rewards and career decisions;

Sense of community;

Global mobility program;

Evaluation of the impact that “Millennials” may have on the contingent workforce strategy of your organisation;

Investment of time, resources and energy to listen to and stay connected with employees;

Remember that one size does not fit all.

Atlassian’s Got It Right

Atlassian is Australia’s fastest growing software engineering company, and was voted the best place to work inAustralia for 2014, and the seventh best place to work in the USA in the Great Place to Work Institute’s national survey of more than 28,000 workers. A private company headquartered in Sydney, it has grown to over 900 employees around the world during its ten-year history.

Atlassian’s employee population consists mainly of people between the ages of 25 – 34 (Generation Y), and I recently met Rick Von Feldt, Head of Learning and Development at Atlassian, to take a closer look at how the company manages to attract and retain this next generation of talent.

Is This the Workplace of The Future?

Intriguingly, Atlassian aims to create such an appealing work environment and culture that it “ruins people for life,” so that they will never be able to find a better job or a better place to work than Atlassian. The company operates according to the following five agreed values that resonate with their Generation Y employee population:

Open company, no bullshit;

Build with the heart and balance;

Don’t #%@& the customer;

Play as a team;

Be the change you seek.

Atlassian hires in line with these values, which have become the common language of the company. New employees enjoy a one-week induction program prior to commencement, where the above standards and expectations are reinforced. Other appealing aspects of the workplace include:

It’s a “Founder Driven” Business: Founders, Mike Cannon-Brookes and Scott Farquar are hands-on, humble and very present in the organisation. They want to build a business that will last 50 years and will grow far beyond the two of them.

Evolved Motivation: As explained in Daniel Pink’s book “Drive: The Surprising Truth About What Motivates Us” (Canongate, Edinburgh 2009), Atlassian enables people to be their best through providing opportunities for autonomy, mastery and purpose:

Culture: Adding more than 600 employees this financial year, Atlassian is effectively re-creating itself every 18 months. How do you preserve the company culture with this headcount growth? According to Jeff Diana, Chief People Officer,“You can never preserve a culture. What you can preserve are your values, and your values drive what you do.”

Work Environment: Being a 100% team based culture, there are no offices. Instead, there are rooms and open spaces with couches, tables and chairs, pool table/games room so that colleagues can collaborate and work in a relaxed yet inspiring setting.

Autonomy – people work in teams, each individual knowing what they need to accomplish. They receive lots of perks andbenefits, and there is also a strong culture of accountability;

Mastery – people are challenged. They’re also supported to do the work that they are most passionate about, with trust and respect;

Purpose – employees believe they are helping humanity by building software that people need, such as team based software.

Other Uniquely Atlassian Ideas:

Open and transparent isn’t just a slogan: the company’s financial statements and plans are published internally for comment, and leaders have “open mike” time answering questions from employees;

HackHouse Induction: graduate hires spend a week at the beach completing challenges and getting to know the company;

Twenty Percent Time: similar to Google, people can spend a fifth of the week working on their own projects;

ShipIt Days: each quarter time is set aside for employees to spend 24 hours working on anything they want, and then they can present their ideas to the rest of the company;

Beer Cart: at 4pm on Fridays newbie staff members will ride the beer cart (bicycle cart filled with drinks and snacks) around the office, as a way of meeting the rest of the staff;

Other Cool Stuff: a drinks fridge, craft beer on tap, pool table, table tennis, video games, board games, frequent celebration of wins, t-shirt wearing, bike-to-work culture and parties.

Atlassian is clearly getting quite a few things right. Last month the company announced a rise in sales of 44% to $215 million for the fiscal year ended June 30, an acceleration on last years’ numbers when sales rose 35% to $149 million.

In addition to this success, the organisation - primarily made up of Generation Y employees - is winning international accolades for being a great place to work. The Society for Human Resources recently reported that 30% of the worldwide workforce, or 81 million people are Generation Y, and this is set to increase over the next two decades. While the Atlassian environment and culture won’t work for all businesses, it is certainly interesting and worthwhile to understand what appeals to - and brings out the best in - Generation Y.

Article “The Best Places to Work” by Fiona Smith, Caitlin Fitzsimmons and Vanessa Desloires, Boss Australian Financial Review Magazine, September 2014, Volume 15.

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Suncorp Group: A Case Study on HR Innovation in Australia

On September 5, Suncorp won the Award for “Best HR Innovation and Corporate Creativity” at the 2014 Australian Human Resources (HRD Magazine) Awards. This win follows back-to-back years of strong financial performance: Suncorp Group’s net profit after tax for the 2014 financial year was $730 million (FY2013: $491 million), and its share price continues to go from strength to strength.

Whilst the numbers are compelling, it’s the exact correlation between employee engagement and financial results that is most exciting from an HR perspective. I had the pleasure of speaking with Naomi White, Executive GM Human Resources at Suncorp Bank, about the extent to which HR innovation and creativity has played a role in Suncorp’s success. Shared here is the story of Suncorp’s HR innovations, the reasons why, and how the leadership team has instilled a culture of innovation.

Why The Need To Innovate?

It was apparent the insurance and financial services industries were changing rapidly. Leadership was becoming much more complex, requiring management across four generations and many more employees requiring flexible work arrangements.

The added challenge in the commercial insurance business was attracting and retaining the best specialist talent and attracting more females into underwriting roles, which has traditionally been a male domain. Was it the right decision to keep senior underwriting specialists in people leadership roles, when it might not play to their strengths and they may not enjoy it? How could specialists be retained by offering them roles that maximise their skillsets, and how could a career path be forged for those who don’t want people leadership? How could we structure the roles to attract more women into specialist underwriting roles? Also, with many of the technical specialists moving towards the end of their careers, a creative approach was needed to retain their knowledge and pass it on to the next generation.

Suncorp’s Innovative HR Programs

Suncorp Group is a leading general insurance, banking, life insurance and superannuation brand in Australia andNew Zealand. To maximise the value of the group’s 14,500 employees, the HR team designed a range of innovative initiatives so that people could collaborate across brands and exemplify the company’s values and behaviours in a consistent way. A number of these key initiatives are outlined below.

‘Specialist Career Pathways’ and ‘Career Compass’

Within Suncorp Commercial Insurance, Specialist Career Pathways was designed to provide technical specialists with an alternate career path to people leadership. This meant that specialists could progress their careers, be part of the leadership team and have a respected voice at the leadership table without needing to take on team management responsibilities. The program has been very successful with retention of specialists increasing and the value added by specialists being easily quantifiable.

The Career Compass is the tool that supports the Specialist Career Pathways. It was designed to facilitate more meaningful conversations around development and career planning for specialists but has now expanded its remit to include career planning for leadership, specialist and generalist roles.

“We want to attract the very best people in the market and our aspiration is for Suncorp to be THE place to work inAustralia and New Zealand. The Specialist Career Pathways are about recognising that you don’t have to be a people leader to progress your career at Suncorp. You can be an expert in your field and still have a long, successful and rewarding career with us,” Naomi White, Executive General Manager, Human Resources, Suncorp Bank.

A “One Company. Many Brands” Business Model Delivers Results

2014 has been a very exciting year for Suncorp, marked by changes to the executive team: earlier this year, a third of Suncorp’s senior leaders were moved around the business, creating energy and enthusiasm across the Group. This has meant that high potential talent has been able to step up into new situations and bring fresh ideas and solutions, which proved to be of enormous value in many cases.

To help achieve the Group’s vision of creating a ‘One Company. Many Brands’ culture, everything at Suncorp is underpinned by the company’s Leader Profiles – which outline a shared way of working across the Group. They recognise that everyone is a leader at Suncorp, covering things like: customer focus, relentless execution, collaboration, simplicity and agility. All employees are also rated on these Leader Profiles in their performance scorecards every six months, and this provides a consistent framework and shared way of doing things. This goes a long way to fostering the desired culture.

Another uniquely Suncorp innovation are Leadership ‘Smashes’. These are short sharp two to three hour discussion sessions where leaders can share their successes around things like the importance of safety and wellbeing, customer focus and relentless execution – in an interactive energizing way. Suncorp has found that these shorter sessions are more effective than one to two day programs. The leadership curriculum is clearly delivering results: Suncorp’s Leader Index was 82 points in the most recent engagement survey, 12 points above global norm, according to Hay Group. And pleasingly, 84% of employees now say they are proud to work at Suncorp.

Flexibility

Flexibility is a key retention and engagement strategy at Suncorp – giving people more choice about how when and where they work. To foster collaboration and sharing, Suncorp offers ‘Smart Working Environments’ which are dynamic open-plan, hot-desking environments where all employees are encouraged to sit somewhere different each day and collaborate with colleagues from different parts of the business. Employees can bring their own devices, use the technology provided, work from home, work reduced days and feel supported to achieve a work/balance.

The ‘Work at Home (W@H)’ model supports contact centre environments and enables people who work mainly from home – not just occasionally. People are able to nominate the time of day and number of hours in a week they want to work. They all live within a 30-minute commute of a W@H Hub – a connection and collaboration point for training and team meetings.

This initiative has allowed Suncorp to attract high performing individuals who previously found securing work difficult due to factors such as a disability or their carer role. Suncorp’s employee surveys show that W@H employees are more engaged and less likely to leave than the workforce generally. These hubs make good business sense, as W@H employees perform better and have lower attrition and absenteeism than most other groups of employees.

“Having a flexible approach to when, where and how work is done is part of our commitment to supporting people to be the best they can be – inside and outside work,” Amanda Revis, Group Executive, Suncorp Human Resources.

Diversity and Inclusion

Suncorp is committed to supporting a culture of inclusion where diversity of thought, lifestyle and background are valued and celebrated. The Group’s main focus is on gender equality, specifically increasing the percentage of women in senior leadership roles. In 2014 Suncorp extended this focus to attract and retain mature aged workers, and will now look for opportunities to build a workforce that is inclusive of those with a disability.

In a demonstration of the company’s capability in this area, Suncorp won “Best Workplace Diversity & Inclusion Strategy” at the 2013 Australian HR Awards. Suncorp is also one of only sixteen ASX listed companies to achieve “green light status” on the Women on Boards 2013 traffic light index. Suncorp also exceeded its FY14 women in senior leadership target of 33% by nearly three percentage points, and 33% of the employee population say they have parents born outside of Australia and New Zealand (footnote: as per the 2014 employee engagement survey responses), further demonstrating the organisation’s successful D&I initiatives.

What Challenges Were Involved In Implementing These Changes?

For example, with Specialist Career Pathways it was important that people felt valued. When a highly skilled person was moving out of a leadership role and into a technical specialist role, it was made very clear that this was considered a significant career opportunity. Specialists in the organisation are considered valued, senior people who are often part of the leadership team, and they are as equally respected as people leaders. The appropriate infrastructure was implemented so that they were included in leadership meetings and, as key influencers in the organisation, invited to strategic conferences.

More broadly, the CEO’s of the individual business lines have all been huge supporters of these initiatives, so the changes have been leader-led rather than HR led. At Suncorp, they describe themselves as “extremely good at execution,” reflecting one of their Leader Profiles. The whole place comes together when you’re driving something forward.

How Has Suncorp Been Able to Cultivate an Innovation Culture in HR?

Innovation has come from the top level of the organisation. Amanda Revis, Group Executive Human Resources at Suncorp, has worked very closely with the executive team and together they have driven this exciting people agenda.

In their six monthly scorecards, all HR team members must demonstrate how they have added value, collaborated and shared. Everyone is expected to bring thought leadership to the table and HR Business Partners are encouraged to look at more futuristic ways of doing things. This tends to keep HR very commercially focused.

Innovation means many things to many people. It can be incremental, small continuous improvements; having a very open leadership style; encouraging people to ask why; and suggesting new ways of doing things. It was evident in Naomi’s voice that she clearly enjoys her job, and is proud and passionate about being part of the Suncorp story. Naomi said the next opportunity is to keep pushing forward and continue to look for ways to improve the business. Now clearly positioned as an employer of choice, the marketplace will watch with interest as Suncorp continues on the next phase of its journey.