CEOs Talk

The evolution of HR

Brian Scudamore
1-800 Got Junk?

This junk-removal company, with 325 franchises across North America, has 300 employees at its head offices in Vancouver.

When Brian Scudamore started junk-removal company 1-800 Got Junk?, he was the HR department. As the company grew, the HR function was decentralized among all the departments, with each department responsible for its own hiring, as well as other functions such as benefits administration.

But with 300 employees at its headquarters in Vancouver, the decentralized nature of HR was no longer working and the company hired its first human resources professional in January.

“For the first time in 18 years we actually brought on a director of people, a person who is heading up our HR department,” says Scudamore.

The department, which the company calls its people department, is headed by the director of people and there are also two recruiters and an assistant. Already the department is having an effect by creating more formal and structured processes.

“It’s brought a level of comfort to people that there will be a high level of consistency starting to develop within our HR practices,” says Scudamore.

One way the department has made a big difference is in the recruitment side of HR, says Scudamore.

“Now at least our people department can do first-level screening and at least help coach a department through the recruiting process.”

Scudamore works very closely with the director of people. He hand-picked her for the role and the two of them have created a yearly and quarterly plan together.

“She’s one of my direct reports,” he says.

When visitors walk into the 1-800 Got Junk? headquarters in Vancouver, the first thing they see above the reception desk is a giant quote from Scudamore that says: “It’s all about people.” Scudamore takes that philosophy very seriously and, as such, HR is a very important and strategic component of the company.

“This is really a business based on people. It’s about the right people and treating them right and we want our HR, our people department, to support that,” he says. “A company is really only as good as its people.”

HR has a large role to play in ensuring the company hires the right people, gets rid of the wrong people and develops employees so they can continue to grow and succeed in the company, says Scudamore.

“If we pick winners, if we pick the right people every single time, our company will grow in a much faster and better way than if we don’t pick the right people. I think it’s pretty much the most important department in the company,” he says. “Everything starts there.”

In order to hire the best people, the company has to ensure its culture is conducive to attracting and retaining the right employees.

Part of the company’s culture is that of an employer of choice. This year it ranked second out of 50 companies on Canadian Business’s Best Workplaces in Canada list.

“It’s a tough market out there to find people,” says Scudamore.

So the company actively tries to win employer of choice awards “so people are coming to us instead of us always chasing people,” he says.

Part of creating a culture where people enjoy coming to work is ensuring there’s a means for two-way communication. When the company was smaller, it was more efficient just to have each individual department handle its own communications.

However, four years ago, the company instituted a regular company-wide morning meeting. Every day, all employees gather at 10:55 a.m. to discuss news and any issues facing the organization.

“It’s been an absolutely critical component of communications in our company,” says Scudamore.

Doug Lord
Chairman, President and CEO
Xerox Canada

Headquartered in North York, Ont., document solutions giant Xerox Canada employs 4,200 people across the country.

Doug Lord, chairman, president and CEO of Xerox Canada, can’t help but boast about his company’s human resources strategy and its goal of keeping in-step with the gradual development of a new Canadian workforce. In fact, he believes his organization’s HR department has invariably taken a forward-thinking approach.

“HR has always played an integral role inside Xerox Canada,” Lord says. “It has already played a counsellor role to the CEO, not only on employee relations, but on trends and workforce development, those kids of things. It has never been an administratively focused function. It has always been a very robust function that plays a pro-active role with managers inside the company... it plays a very strong part in all of the thoughts and plans and strategies inside the company.”

With labour force growth that is expected to drop below one per cent between 2005 and 2009, and below 0.5 per cent by 2015, according to the Canada Labour and Business Centre, HR must evolve with the changing demographics. Including, says Lord, understanding what graduates need when they enter the workforce.

“We’ve got to understand the drivers that are out there for new people entering the workforce,” he says. “We need to ensure that we are right on top of understanding the value system, the desires that are going to make today’s graduates and people entering the workforce excited about working for Xerox in the future.”

Key to this, he notes, is developing a comprehensive compensation and benefits program that will appeal to employees, along with a system of communication within the company that engages staff and encourages them to participate. Recognizing the human side of the business is key to HR success.

To this end, the company teams the personnel function of HR with the industrial relations function, led by Martine Normand, vice-president of HR at Xerox. On an employee relations side, says Lord, HR operates as full partners with all other departments within the organization.

“On the more pure professional side, HR provides the vision and leadership in terms of where we need to be going,” says Lord.

Three years ago Lord decided it was time for Xerox to reinforce the relevance of HR internally, so he took senior management out of their regular departments and “brought them into the HR function to work with their peers in the field. So people with a strong operational background, but not in human resources, were brought in to learn about human resources, and then went back out to work operationally from an HR perspective in the functions they originally came from.”

This, says Lord, gave each of those managers more credibility with their staff and resulted in an increase in employee engagement with managers.

“It ends up being a far more consultative, interactive process where HR works to support the manager and that manager is the vehicle that manages the employees, but with the support and council of the HR folks,” he explains.

Heading into the next 10 to 15 years, Lord believes HR at Xerox will remain a catalyst for change in the organization. Forecasting the need for diversity in the company’s work pool, and understanding the benefit of molding HR to the times, are central to the company’s HR strategy.

“HR is seen as the guiding light in terms of where we need to go from a whole HR strategy point-of-view,” he says. “Whether that be on hiring and recruitment, whether it be on benefits and pensions, or whether it be on employee engagement, it’s that whole visionary side of ‘Here’s where we are today, but here’s the world outside and what’s changing?’ How are we going to adapt, and lead through some of these things, as opposed to sitting back and letting things happen to us?”

Jordan Banks
Managing director
eBay Canada

The online auction site has 30 Canadian employees spread between its Canadian headquarters in Toronto and offices in Burnaby, B.C.

During his career Jordan Banks, managing director of eBay Canada, has seen the HR function evolve into a strategic partner.

HR is now included in discussions about mergers and acquisitions, as well as the talent considerations for business expansion at eBay Canada, says Banks.

“The HR function has gone from an administrative process to a business process,” he says. “It used to be a backroom function and now it’s very much a boardroom function.”

Even though the company’s senior HR person is the head of HR for eBay North America and is based out of San Jose, Calif., she spends a lot of time in Canada working with Banks on the company’s strategic planning process and looking at the organization’s future needs.

More importantly, Banks sees the focus of human resources shifting away from “resources” and focusing on the “human” element. This includes issues such as work-life balance and creating a total compensation package that will attract and engage employees.

“Our HR staff is very much involved in the cutting edge of determining what’s important and what isn’t,” says Banks.

When it comes to giving employees balance and flexibility, HR has to be flexible as well, he says. The summer tends to be a slow time for eBay, so that’s an ideal time to give employees more time off. But as business picks up around Christmas, it isn’t possible to provide the same kind of flexibility, he says.

“It’s important to know when to put your foot on the gas and when to ease up,” says Banks.

The other big challenge facing companies trying to offer work-life balance is the nature of technology and the fact people can be connected to work 24 hours a day, seven days a week, says Banks.

The challenge is to figure out how to make work-life balance and flexibility work for both the employee and the company, he says.

“Really good companies are getting their heads around how to manage that and acknowledge that,” he says. “The more flexible we can be, the better the talent is that we can hire and ultimately the better the productivity.”

In the face of increased competition for workers, some companies are willing to scoop up any warm body they can find, but not eBay. Instead, eBay’s hiring process has become even more rigorous in the past few years, says Banks.

The added rigour comes from creating and fostering a healthy work culture, which starts with hiring the right kind of people. While skills are important for an online company, it’s even more important for HR to find people with the right personality to be able to work with the team and best serve eBay users who call for support, says Banks.

Four years ago, the company instituted four main behavioural values for all employees: trust each other; practice judgement; keep it human; and lead completely. The behaviours are embedded in the quarterly performance review process of every employee at eBay.

“The HR function is very much in charge of making sure new employees are aware of these behaviours and understand how it impacts what they do and how they behave. They’re in charge of making sure that the current employees never forget that at the end of the day we’re only as good as the people who exemplify those behaviours,” says Banks.

For any kind of cultural change to take place, the organization’s leader has to walk the talk, says Banks. He spends about 30 per cent of his day dealing with people and organizational issues. On top of that, he wants to ensure every employee understands his place in the overall scheme of things.

“I spend a lot of mind share on ensuring that our workforce is charged, is passionate and that they understand exactly how what they’re doing fits into our overall strategy,” as well as how what they do directly affects eBay users, many of whom are using the site to make a living, says Banks.

Mark Henderson
Ericsson Canada

The international telecommunications company has its Canadian headquarters in Mississauga, Ont., but the majority of its 1,900 employees work out of the research and development offices in Montreal.

Technology is always changing and evolving. In some cases, by the time a new product gets to market, it’s already outdated. Keeping pace with the fast-paced world of technology and finding the people who can constantly innovate and create new products is one of the greatest challenges facing human resources at Ericsson Canada, says the company’s CEO Mark Henderson.

“The technology that Ericsson works with is accelerated at a tremendous pace, which means the competence of the employees and the kind of knowledge that we need in this company and the continued requirement to have youth brought in to keep pace with what’s changing out in the market is a tremendous challenge for the HR department,” says Henderson. “That’s where we really push the HR people to help us.”

The challenge is not only to ensure the company has the right kind of people but that it has enough people as it grows. This is made more difficult by the fact the HR department has been shrinking over the past few years.

When Henderson started out in his career 20 years ago, the HR function was very logistical and transactional. But over time, and especially since he became CEO of Ericsson Canada in 2001, he has seen many of those old HR functions become automated or outsourced.

“The HR function internally in companies has become a lot more driven to managing and promoting and improving the human capital index. It’s a much better tool box of soft skills that are required in the HR function today than it was maybe 20 years ago,” he says.

HR plays a pivotal role in ensuring employees have the skills and competencies needed to succeed at Ericsson and to drive the company’s technology even farther.

“The HR function is very much responsible for helping push that forward and creating an environment of innovation and loyalty for the employees,” says Henderson. “There’s a strong focus on what it is that the employee has, where are they going in their career path and what do we have to do from a competence perspective to make sure that they continue. It’s really building the value and the innovation in the employee.”

With the evolution of HR, the skills needed to be successful in the position are no longer the straightforward project-management skills of the past, says Henderson. Instead the soft skills and interpersonal skills are the most important.

The main focus is no longer ensuring employees have filed their performance reviews or helping them get registered in the benefits program. Rather, HR has really taken on a key employee development role and has to foster a sense of trust between employees and the company, says Henderson.

“The way the HR function has changed, they really have to stand here as a champion for the company, as a go-to person for the employees from a relationship point of view. The soft skills and interpersonal skills of the HR person are what’s most important,” he says.

Henderson and the entire management team work closely with the HR department.

“In our Mississauga offices, it’s almost a daily interaction,” he says.

The most senior HR person, the vice-president of HR, is located out of the research and development offices in Montreal, where the majority of the 1,900 employees are based. Henderson co-ordinates with the vice-president on a weekly basis and goes out to visit in person regularly.

“It’s a bit of a partnership that you have to create,” he says.

Human resources is considered a strategic partner, on par with other core functions such as finance, he adds.

“In a company that’s knowledge based, people are really the only asset. The HR function is really a cornerstone of making sure that asset continues to grow and has the value and is moving forward with the rest of the company. It’s a pinnacle part of what we do here.”

Sid Bildfell

SaskCentral is the central organization for Saskatchewan credit unions. Founded in 1938 and based in Regina, this 70-employee business provides support for credit unions across the province.

For Sid Bildfell, human resources is no longer just about making sure that everyone gets paid. Over his 40-year career, Bildfell has seen a “phenomenal” transformation in the stature of HR in any successful business.

“When I started, HR was mostly a transactional part of the business making sure that the payroll got through and if there was a change in some labour standard, they made sure that the company knew it was changed,” says Bildfell. “It really wasn’t seen as a critical component of the company.”

Bildfell first noticed a deficiency in the HR function in the late 1980s, when competition for the best and brightest workers was fierce. As the job environment changed, greater emphasis by HR to attract candidates to the company was needed.

“There was a higher awareness that we’ve got this HR component that we’re really not paying as much attention to in terms of making the business successful and winning in the competition area,” Bildfell says.

“It’s evolved to where now it’s just part of a company’s strategy.”

At SaskCentral, Bildfell identifies his vice-president of HR as just as important as any other department head in his company.

“Our HR executive is as critical a component of our executive management team as our finance or our technology or anybody else — a full participant in building company strategy right from the top to the bottom,” says Bildfell. “We’ve seen this as a critical component of our success.”

This increased focus on HR has continued, especially in connecting with the current generation of employees who demand different things from the workplace.

“The generation coming up now I see as much more enthusiastic. They are looking for challenging, productive work that contributes not only to the organization, but the community in a larger sense.”

Around the turn of the millennium, the tide turned in terms of the HR department. It had to work harder to cater to prospective employees’ needs, on their terms, in order to attract the most desirable candidates.

“They’re very demanding, as they ought to be. They’re highly skilled, they’re in high demand, there’s lots of options and opportunities for this next generation coming into the workforce and the economy, and those companies that are able to attract that generation with the things that drive them will have the opportunity to be more successful,” Bildfell says.

As a result, Bildfell predicts future HR strategies will have to change quite dramatically.

Their focus has been to get employees into the company as rapidly as possible, but also to be flexible to allow employees to get what they want out of their employment.

“We want to make sure that they’re doing meaningful work, making sure that they’ve got the opportunity to participate in the larger community, embraced and supported by the company, giving them opportunities to work not only in your industry but to allow them to extend nationally and internationally.”

Bildfell sees the payoffs to attracting this new stream of employees as well worth the extra effort.

“There are tons of those folks (coming into the workforce) with tremendous skills and experiences (who) will be willing to participate in the economy, but not in their current state,” Bildfell says. “Those companies that can have strategies that will attract those skill sets on their terms have got untapped resources that are unbelievable if you can really think that through carefully.

“If you haven’t got a winning strategy around HR, you’re not going to be a successful organization — or as successful as you could be.”

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