Performance management, HR system software, recruitment and retention, total rewards, leadership development, the push to become strategic players in the organization — it’s all in a day’s work for the HR department.
Canadian HR Reporter
asked HR leaders about their challenges and priorities for the year ahead.
Technology services provider NexInnovations became wholly independent from EDS in 2001 and today employs about 1,400 people across the country.
For the past few months the HR team at NexInnovations has been busy inventing a new performance management system.
They knew they wanted something that would reinforce a high-morale, high-performance workplace culture, says Frank Price, Calgary-based vice-president of HR for the Mississauga, Ont.-headquartered firm. But most of all it had to clearly support the organization’s corporate objectives and it had to be simple. The problem was that most of the prefab systems in the market didn’t meet their needs.
“We have really invented this on our own,” he says. “We just sat down with the president and said, ‘What do you mean by simple?’”
Aside from being cumbersome, one of the problems with most systems is that they seldom start with a company’s overall objectives, Price says.
NexInnovations’ six key corporate objectives served as the starting point for the creation of its performance management system.
“We have gone to an objective-setting worksheet which basically is a grid with a bunch of boxes on it,” Price explains.
“We are literally making it that simple. We are going from left to right starting with corporate objectives, then business unit objectives, and then individual objectives and then your action plans and metrics that the individual has to do. Employees can see the corporate objectives and their objectives linked together on the same sheet.
“Every single person in the organization will have one of those in the next four months,” says Price.
“Anybody (the president) walks up to, wherever he is in the country, should be able to say not only what one of the corporate objectives are but what they are doing right now and how it supports it.”
The roll out will take the bulk of HR’s time for the next two or three months, the culmination of many months of hard work.
“You just can’t roll out a performance management system without having the underpinnings of things like job evaluation and job classification systems in place. So that has involved a rewrite of probably over 200 job descriptions and then going to the evaluation. We brought in Hay consulting to help us with that in terms of putting together those point-factor systems.”
Once the performance management system is up and running, Price wants to turn his attention to finding efficiencies in his department, without introducing new HR technology.
“Technology investments are a lot of money and you really have to pick and choose (where you spend that money). We are running our employee database on PeopleSoft. We have got an early version and there have been a few releases since then. The self service one would be a wonderful Web-driven self service kind of situation where we could probably streamline a lot of administration by giving it to employees to take care of changing their address and stuff like that. But for us to go there, we are probably talking, by the time it is all said and done, about a $500,000 investment.
“I have to go my president and he’ll say ‘Frank, okay so you want half a million bucks and what am I getting for that? How are you going to operate any easier, quicker, faster, smarter?’
“I could look at headcount as an example and I could probably eliminate three potential positions. The payback might be a hundred grand so where is the other four hundred grand from.”
It would be nice to have but the current system isn’t that bad, he says.
“Yes it does mean we control the administration of it but at the end of the day I don’t need to spend a half a million bucks to get efficiencies out of my own organization.
“So here is what I’m going to do instead. Instead of spending $500,000 on upgrading (to PeopleSoft self service) once we finish some of the performance management stuff in the next couple of months, I’m going to really put my people’s heads together and do a two- or three-day process mapping exercise.”
A lot of what they are doing now is left over from the previous owners and there are ways to streamline what they have been doing without spending $500,000 on the latest technology, he says.
Price has made other, smaller investments in technology where it was clear there would be a good return-on-investment.
“This past year when I put together very strong business cases for investment in some simple tools, my executive signed off on them and we got them. We purchased a package of Internet recruitment software called Webhire. You know, 30 to 40 grand kind of stuff, and it really only buys us two or three years with it. But that was a decision where I could justify $2,000 or $3,000 a month of recruitment spending.” With a recruitment budget of $200,000 for the first six months the product was in use, they only spent about $75,000. “So I had saved already about $125,000 by implementing a $30,000 package,” he says.
“I can avoid going to the newspapers ordering expensive ads. I am able to avoid like the plague the headhunters that come calling, the agency fees. That is all part of my recruitment costs.” By investing in a tool that gives his team access to thousands of resumes on the Internet, “I didn’t need to worry about all these agency agreements. In fact, I am very much anti-agency agreement. If I give my two or three recruiters the right tool they are capable enough of sourcing (job) candidates.”
Construction materials manufacturer Lafarge Canada has regional head offices in Montreal, Toronto and Calgary and employs about 10,000 people in Canada.
“What keeps me awake at night is my very thin bench strength,” says David Guptill, vice-president of human resources for Lafarge Canada. As a result his top priority for 2003 will be finding and developing people to fill the managerial and leadership positions within the company.
“It seems like we are continually chasing to keep up with ourselves with our skilled managers and leaders. We have surpluses of people in some levels — in our semi-skilled and unskilled trades areas we are still in a position of laying people off from time to time. But as you move into the skilled trades, skilled managerial and skilled accounting and skilled IT — the high end at each area — we have difficulties.”
The nature of Lafarge’s business makes this a particularly pressing concern, says Guptill. “We’re in what is very similar to a commodity industry — our products are very similar (to competitors).” Competitive advantage therefore stems almost entirely from the people who manage the assets and service the customers.
“There is a very strong correlation between high performing companies and high performing HR programs,” he says. “So we have been doing some significant navel gazing as to our HR programs. And good human resource programs take good managers and good leaders to implement them.
“And as we grow this business we are continually finding ourselves with vacant positions that are created as a result of normal turnover, normal promotions. Every time we have difficulty filling our positions. We have had a major focus on growing our own talent and yet we are short all the time — short at the management level.”
Important staffing lessons were learned from the actions of the early ’90s, he says, and he is determined Lafarge will not make the same mistakes again.
“We are resisting that temptation to scale back on our strategic recruiting,” says Guptill. “And when I say strategic recruiting, what I mean is you don’t wait for a vacancy and you don’t wait for the predicted turnover in retirees. I am always on the lookout and our senior managers are always on the lookout for talent that may be available. And this is something we didn’t use to do. If I find a very talented person who becomes available for one reason or another then my freedom is to go out and hire that person whether we have a vacancy or not.”
Guptill plans to maintain a Lafarge presence on university campuses so they can continue to send people into the Lafarge talent pipeline.
“We are scaling (campus recruiting) back a bit — we are reducing it by about 40 per cent this year — but we are not going to eliminate it. We don’t need any of those people but we are saying if we don’t put them in the pipeline now and start grooming them and start training them, where will we be in five years time? We’ll be exactly where I am today because we stopped our campus recruiting in 1992, ’93 and ’94 during the last downturn in the economy.”
In some cases, plant managers don’t like the idea of taking on someone when they don’t have a position for them to fill.
But that resistance stems not from principle but from underlying systemic concerns, he explains. Plant manages who are trying to maintain profitability may balk at the idea of taking on the costs of an extra young engineer when there isn’t a position for them to fill.
“We have to make sure that our systems, the way our systems function, reinforce our overall HR goals.” If the accounting system is creating a roadblock to HR programs, then changes need to be made to the accounting system.
The solution for Lafarge was to cover the salaries of the young recruits from a central account rather than creating extra overhead costs for individual plants. As soon as the plant manager hears he will get for free a young engineer who, after six weeks of training will be a contributing member of the team, then his attitude changes and he becomes much more receptive to the idea of helping to develop the companies next generation of leaders.
City of Saint John
The largest municipality in New Brunswick, The City of Saint John employs approximately 1,000 people.
Heading an HR department in the public sector is difficult enough, but when your organization has to go bilingual, it gets much harder.
John McIntyre, HR manager for the City of Saint John, has to deal with the usual issues all HR leaders have to confront, but this year, his biggest challenge comes from a new official languages law which mandates bilingual services at all levels.
“It’s something that affects all parts of our organization from council meetings to street signs to anything that happens in the city. It’s all got to be provided in a bilingual format, whether people walk into a fire station, or the city hall or a recreation area,” says McIntyre.
With the law introduced across the province last June, McIntyre has until the end of this year to bring front-line service up to speed. His approach, to begin with, is to identify bilingual capabilities across the municipal workforce of 1,000.
“Initially one would think, ‘Let’s just identify how many bilingual positions we need and get on with it.’ Well, the people that we talked to at the province said that’s not the best way to deal with this. The best way is to identify the capabilities within a certain sector and utilize those capabilities until you bring the people along.
“We’re going to identify our capabilities in our functional areas. So if we get those requests, we can have people available to handle them. In some cases, they’re going to be stepping outside their job requirements to handle those responsibilities, but the main thing is we’ve got to be able to meet that demand within a short time frame.”
Although the bilingual requirement may translate into a need for new hires, a budget shortfall at the municipality has already resulted in 40 people taking early retirement incentives.
“The biggest issue we face with the budget crunch is the fact that we’ve had to place a strain on our relationship with the unions. And we’ve had labour harmony for the past seven or eight years. Not one grievance. And it hasn’t been that way all around us.”
Reflecting on the constant pocketbook problems, McIntyre says the most serious impact would be the public sector’s enduring inability to retain talented people.
“It’s not going to be difficult recruiting people at the entrance level down the road. We’re going to have an awful lot of people getting out of here and retire. The City of Saint John is good enough of an employer that you’re not going to have difficulty attracting people,” he says.
“The issue is going to be when you bring people in, and you obviously want people with a lot of perspective, a lot of energy and enthusiasm for the job, when they start to generate ideas and you’re told there’s no money, and you’re told that year after year. It’s going to be difficult to keep the exceptional talent that you’ve recruited.”
Looking at common challenges that HR professionals face, McIntyre says there’s a need for HR people to think in terms of the measureables — the numbers, the bottom line — when they go to the corporate table. “What has to be the yardstick is the measurements that you’ve got out there. It has got to be the corporate measurement.”
Further, HR leaders have to stay on top of new developments in order to produce the right answers, he adds.
“And having the right answers isn’t as easy as it used to be because of all the legislative changes that are going on. When you think of all those lawyers out there making a decent living off of employment law, someone’s paying the bill. Just to stay current with HR issues today is a big job.”
RBC Financial Group
Canadian banking and investment giant RBC Financial Group employs 48,700 people.
Zabeen Hirji is in a good mood these days. She and her fellow executives at RBC Financial have been getting recognition among some of the toughest crowds. One was the RBC workforce, who put the company on the 45th spot in the
Report On Business
survey of M
50 Best Companies to Work for in Canada
. Then, the day of her interview with
Canadian HR Reporter
, RBC is announced number one in KPMG’s
Eighth Annual Canada’s Most Respected Corporations Survey.
The accolades stem from the company’s approach to building good relationships with employees, says Hirji, RBC’s vice-president of HR, which is similar to the approach it takes with clients. It’s about understanding individuals’ needs over time.
“With the workforce becoming more diverse, more educated, more mobile, more open about sharing their needs and their wants, the challenge for us is evolve to an approach in which reward programs are based on an “employee or segments of one” philosophy. You build a relationship with employees that really meets their needs while, at the same time, the needs of the company,” says Hirji.
It wasn’t long ago that most major corporations operated on a paternalistic model, she says. “I think, now, the pendulum may have swung too far the other way. You read things like, ‘employee loyalty is dead,’ or you get the sense that employees are out there on their own to manage their career.
“The model that we’re trying to build is relationship-based. I like that word because there’s a ‘give’ and there’s a ‘get’ in this relationship. It means that you need to look at things in the longer term. You recognize that employees, throughout their career life cycle, would have different needs, from a career point of view, from a life point of view.”
It’s not enough anymore to focus on traditional notions of remuneration like pay and benefits, says Hirji.
“We need to be competitive, but things like pay can easily be duplicated by other companies if they want to attract a person. When we look at things from the perspective of employee relationship management, we would look at career-life cycle.”
This means taking into account whether someone is new to the profession or whether someone has made a significant change in her career.
“There are also individual life cycles, like when somebody has a new elder-care responsibility or someone becomes an active member of the community. How do you take those things into account, and not see it as career-limiting? That requires a shift in organizational culture. It requires really helping managers recognize and get comfortable with the fact that people in the new workforce would like to have that flexibility.”
Hirji chuckles when she hears this integration approach called “the soft stuff.”
“It’s actually the hard stuff. It’s hard to do, there’s so much more customization. There’s the mindset that we have to change, but the other challenge is just the practical side of it. How do you manage that with 60,000 staff?”
One way, says Hirji, is to make use of an HR information system that “provides us the big picture, the small picture, the demographic point of view, and so on.” The technology is also a tool that gives managers the whole picture as they sit down and discuss performance planning with employees.
But getting the technology meant convincing the executives, she adds.
“It’s something that you have to think about and approach in a business-like way. And when you give employees access online, and you tell them to keep up their data and make their changes online because we trust them, it’s not always easy for people to do. It’s a cultural change.”
Based in Winnipeg, Pauwels Canada manufactures electrical transformers and employs 425 people.
The irony in being an HR leader is, sometimes, the better the company performs, the tougher the job becomes.
Over the past two years, HR manager Donna Rennie has seen the staff at Pauwels Canada grow by 42 per cent to 425 employees. The company is the only North American operation of the Belgium-headquartered Pauwels Group. And in North America, demand is rising for the its main product, electrical transformers. At the Winnipeg plant, as a result, the company has moved to a three-shift operation from one-and-a-half.
“This is an aggressive growth strategy, and we find that we’ve had some issues with training and quality as a result. We’ve had to reposition our internal strategy. And because of a growth in staff, we’ve had to review our leadership and communication styles. Strategies that worked when we were small no long apply in the bigger world. All of this has had an impact on training, on communication, on leadership, on sustaining a co-operative labour environment.”
To meet these challenges, Rennie is developing an in-house training program that has two objectives. On the one hand, it has to address “immediate training needs to deal with some of the quality issues that have emerged because of speed and growth.” On the other, the training will “look at the long-term growth and development of the people, in a multi-skilled context.”
Accompanying this growth is a new push at the company to move toward a more employee-centred philosophy.
“We’re not there yet, but that’s where we’re going, and we’ve found that some of the employees were resistant. We faced some credibility issues. People were saying, ‘Why should I give my input? We’ve been down that road before and nothing happened.’
“In the past, the company was very much managed by the managers, and the workers were workers. There wasn’t as much attention paid to their ideas for process change and innovation and root causes. So we’ve had some resistance there.
“Another challenge is in instilling a strong sense of accountability at all levels. There’s some resistance there, starting at the shop-floor level to the front-line supervisor to the middle management. What it takes is a tightening of the performance management process. But it takes time. Organizational change doesn’t take place over night.”
What’s important, she adds, is to celebrate the small gains.
And indeed, there has been a recent reason to celebrate, Rennie says. “It has been a rough year this past year. We’re growing our company and getting more work and in the last quarter we were getting behind on some of our orders. So we made a call out to the employees to give us as much support as they could, and they responded.” On Christmas Eve, workers assembling a tank discovered that the cover for it wasn’t the correct size. “It was an engineering problem, but everybody stayed. It was Christmas Eve, and they stayed to make sure that the job got done and shipped out in the morning. The painters stayed to paint it and the welders stayed to weld it. It was just incredible.”
Vice-president HR and Organizational Development
InSystems Technologies provides insurance portal software and employs 200 people at its Markham, Ont. based Canadian office.
The good times may be back one day, but Laurie McRae isn’t counting on a return to the flashy perks that typified the high-tech boom.
As a high-tech company looking forward to an upswing in the economy, what’s important is to learn from the mistakes of its past — namely, the overheated talent market of the dot-come boom three years ago, says Laurie McRae, vice-president, human resources and organizational development at InSystems.
At InSystems, the new focus for HR is to retain people through benefits and compensation that the company can afford to sustain over time, says McRae.
“While some of the software companies in our industry did things that could have been considered trendy, some found that over time they couldn’t sustain them, and in fact some of these companies are no longer solvent. What we’d like to focus on are the total rewards, the things that are meaningful to our people, that create value for the employees and that we can continue to support and sustain over their career with us,” says McRae.
“While I would say that the economy and the employment levels would indicate that there is quite a high volume of candidates available, we recognize that we must create an environment here where people would want to stay. So as the economy picks up as we fully suspect it will, we want people to make the choice to stay at InSystems,” says McRae.
The Markham, Ontario-based company puts much stock in its annual climate survey.
“It’s an important way of determining what adds value to employees, what’s important, what has meaning. Through that survey, we’ve undertaken a review of our total rewards. And by total rewards, we mean things like base compensation programs, incentives, performance recognition, performance management, and so we’re constantly looking at our total rewards offerings and either modifying or enhancing them.”
When employees told HR that they would appreciate more flexibility in their health benefits plan, the company responded by creating a spending account for certain benefits. For example, “we made an alteration in the paramedical, such as chiropractic care and massage therapy. Instead of limiting the amount individuals can spend on each of these practitioners, we said here’s a larger sum, a combined maximum. You decide how you’d like to spend that.”
But responding to employees’ wishes means you keep having to go back to the drawing board. The company made a mistake, says McRae, in removing vision care coverage when it created the spending accounts.
“We were thinking that creating this level of flexibility and giving employees control over their health-care spending was the right thing to do. And they told us very simply that they expected vision care to be part of the core benefits. We reinstalled vision care and this year we enhanced our health care spending dollar amount.”
Her job will only get tougher going forward, because “the needs of people are getting more diverse than ever,” says McRae. “In the past, we did offer incentives such as signing bonuses. But obviously the landscape has changed dramatically in the high-tech sector over the course of the last two years. Rather than doing things in a reactive way, we’re thinking about the total rewards. What will differentiate us and make our total offerings competitive, so that we’re not in the position of having to respond to fluctuations in the labour market? So that what we offer is attractive – in any market."