Late last year, a group of senior HR professionals who are members of the Strategic Capability Network gathered in downtown Toronto to conduct a sort of “State of HR” session. The conversation was moderated and facilitated by Ian Hendry, president of SCNetwork, an association for senior business leaders. (See www.scnetwork.ca for more information.)
Participating in the discussion were:
• Victoria Hubbell, senior vice-president of strategy and stakeholder relations at the Healthcare of Ontario Pension Plan (HOOPP)
• Judy Hunter, vice-president of HR and organizational development at Holland Bloorview Kids Rehabilitation Hospital
• Laura Dunne, senior vice-president of human resources and organizational development at Indigo
• Warren Bell, executive vice-president and CHRO at OMERS (Ontario Municipal Employees Retirement System)
• Suanne Nielsen, senior vice-president and chief talent officer at Foresters in Toronto.
Governments are known for being lethargic and slow to react to changing landscapes, so the speed at which some decisions were made in the last year surprised a number of senior HR professionals.
“What genuinely astonished me was the extent and speed of pension reform across Canada,” said Victoria Hubbell, senior vice-president of strategy and stakeholder relations at the Healthcare of Ontario Pension Plan (HOOPP) in Toronto.
New Brunswick, Quebec, Alberta and British Columbia all took “pretty sweeping actions” on the pension front, she said. However, the focus of pension reform should not be on cutting pensions for those who have them, but expanding coverage for those who do not, she said.
A study by the Boston Consulting Group last October showed the importance of retirement income adequacy, said Hubbell. It found that defined benefit (DB) pensioners in Ontario spent $27 billion on shelter, goods and services in a typical year, plus a further $3 billion in taxes.
“That spending helps our economy. It creates jobs and the taxes support government programs,” she said.
Further, DB pensioners are less reliant on government programs, such as the Guaranteed Income Supplement (GIS). About one in 10 DB pensioners receive the GIS, compared to 45 to 50 per cent of non-DB pensioners, said Hubbell.
Governments need to think long-term on the pension file as short-term thinking might create greater dependence on government by seniors, she said.
Ian Hendry, president of the Strategic Capability Network, wondered how labour would react to these unilateral changes.
“The bashing of public sector employees is sport now,” said Hubbell. “And yet it’s a really good political platform for whoever wants to get elected, to jump on the old ‘It’s unfair to taxpayers.’”
In Ontario, that accelerated pace of change is visible on the labour front, according to Judy Hunter, vice-president of HR and organizational development at Holland Bloorview Kids Rehabilitation Hospital in Toronto — and it can sometimes have unintended consequences.
For example, in 2010, the provincial government passed Bill 16. It froze all non-union wages, which included many front-line clinical staff who ended up making less money than their counterparts in the same jobs — which led to some unionized workers signing up with unions to circumvent the freeze.
“They executed that legislation almost overnight and we had pay disparity issues all across the sector,” said Hunter. “Hospitals got unionized as a result of this legislation.”
That pace of change has continued, she said, pointing to recent negotiations with the Canadian Union of Public Employees (CUPE) and the province taking on teachers and doctors in 2013.
Executive pay has been frozen in the public sector for three years in Ontario and it will be frozen until the provincial books are balanced, she said — which could be five years away. The freeze only saves the government about $3.5 million per year, said Hunter — “It’s so miniscule but it’s popular.”
Hendry wondered if public sector compensation freezes had made it difficult to retain workers or bring in top leadership.
“It hasn’t yet in my hospital or, so far, in the large hospitals,” said Hunter. “But at the community hospital level, where a vice-president makes $100,000 or $105,000, you can have nurses making more than that with overtime. They’re having a real problem getting executive talent in smaller hospitals where they don’t pay as well.”
Hendry then turned his attention to the impact the government’s move is having on patient care — “Obviously, you’re being hit by challenging budgets.”
At Hunter’s hospital, which is a pediatric rehabilitation hospital, the work of staff is their calling, she said.
“It’s very specialized and they love what they do. We have a very well-run organization, and our employee engagement scores are exceptional — critically important in keeping talented people.”
Ontario’s Excellent Care for All Act created quality indicators around dimensions of patient care, safety, access — something which has been helpful to hospitals, and a portion of executive compensation is tied to those indicators.
“In our case, we had a big focus on wait times for many of our client populations,” said Hunter.
For example, in early 2012, it took, on average, about 450 days for autism patients to get an appointment to be diagnosed, and patients couldn’t access services until they had been diagnosed, she said.
“Through a focus on process improvement and a redesign of model of service, we got those wait times down to 140 days,” said Hunter. “Some would say that’s still not acceptable but it was a massive, massive improvement. It was because we needed to significantly challenge our status quo — ‘We need to do this differently.’”
In this case, the Excellent Care for All Act was helpful because it put a specific executive focus on a couple key dimensions of quality and care, said Hunter.
Getting more with less
Hendry then turned his attention to how firms are able to cope with demands for improvements at a time when resources are being cut — a problem that cuts across both public and private sector firms.
“What falls off the bottom? What is it you stop doing? Are you consciously stopping doing things that you once did? We keep bleeding this thing,” he said. “We take more and more out of the stone. And you expect we’ll hit a wall.”
Laura Dunne, senior vice-president of human resources and organizational development at Indigo, said typically there is an opportunity to eliminate waste and drive productivity. Her company had a similar problem of trying to drive productivity — but it is customer-driven, not legislation-driven. One example of this is the exponential increase in online sales, leading to changes in the work at the company’s distribution centres.
“The cost of fulfillment in an online business is huge because when you’re shipping to a store network, you’ve got large shipments of similar complexion going to a fixed number of stores,” she said. “With online fulfillment, every package is unique. Every address is unique. Customers could choose 24-hour delivery. They could choose four-day, free delivery. And so the work processes vary considerably, which makes it a challenge to drive productivity.”
Indigo went into the distribution centres with lean methodology, using a cross-section of employees — many had worked for the company for more than a decade, said Dunne.
“We looked at the picker-packer processes that are used for fulfillment,” she said. “The employees redesigned it in five days… and we increased productivity by over 30 per cent.”
The employees redesigned the carts they had been using for more than a decade and eliminated a lot of wasted time spent looking for the right box for a customer shipment. The company used to have a role of picker-packer but now the roles have been separated into two jobs — picker and packer.
“Our employees were very satisfied with the blend of picking and packing in their work and they preferred that to specialization. But they identified the fact that specialization drove productivity and allowed them to better meet our customers’ needs. We will carefully manage the implementation of the changes so that we keep engagement levels high,” she said.
Hendry found it interesting that when burning platforms are created, a solution is usually found.
“And if you’re the CEO, you’re saying, ‘Why did I have to do this to generate this sort of change? It’s part of your role as an executive. You should be living this, thinking it all the time. So why must it take me hitting you about with a two-by-four?’” he said.
Warren Bell, executive vice-president and CHRO at the Ontario Municipal Employees Retirement System (OMERS) in Toronto, said it’s becoming increasingly obvious that getting people to do new things isn’t hard.
“But getting people to stop doing old things is really hard,” he said. “Sometimes, leaders get sucked into thinking it’s easy to get people to do new things. But the reality is you might be creating huge inefficiencies in the organization by not dealing with the other part of the process.”
And when roadblocks appear, or resistance to change, sometimes the best solution is to look outside the company for fresh thinking — “Hire some people who don’t know anything about it, and they can do it,” said Bell.
That’s what Holland Bloorview did to bring the autism number down — “We brought in some people who just ask questions: ‘Why do you do it that way?’” said Hunter.
Suanne Nielsen, senior vice-president and chief talent officer at Foresters in Toronto, said the biggest development that surprised her over the last year was how high profile the topic of talent management has become.
“We’ve all seen the research that talent issues are becoming among the top risks about which CEOs and boards are concerned,” she said. “In a recent planning meeting among Foresters’ leadership team, I was pleasantly surprised to note that virtually every executive who presented talked about how their talent priorities lined up to their business plans to ensure they had the right people with the right capabilities in the right roles in order to achieve their business goals. It seemed like only yesterday that I was the only executive who talked about talent in the organization.”
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