Over 200 HR Directors and Heads of L&D turned out to HR Magazine’s April Conference to get their fix of the latest trends and best-practise sharing from a packed line up of HR figureheads.
The event, which has now moved to a new, even more convenient home, at Cliftons in the heart of Central was focused on staff retention strategies. With advice from IBM, the Hong Kong Trade Development Council, the alphaeight institute, DLA Piper, Agility Logistics, BASF, the Institute of Executive Coaching and Leadership, and PricewaterhouseCoopers China there was plenty for HR to learn.
Tony Tenicela
Business Development Executive,
Global Diversity/GLBT Mkts, Global Business Services,
IBM
Topic: The Power of Diversity—Leveraging Differences to Foster Collaboration and Optimise Staff Retention
Tenicela highlighted the importance of diversity and how it can heavily influence not only retention but the bottom line of any organisation, explaining what CEOs around the globe listed as key success factors for business. While there were some differences, he noted that cultural intelligence—the extent to which the organisation understands local cultures— was cited in every region as a key factor.
Tenicela noted that collaboration is a large factor influencing both diversity and staff retention. He stated, “Collaborative environments are where you engage employees, and they are able to engage and contribute assets. These aspects are a critical enabler to staff retention. If all of your employees feel that they are contributing all of their talent, assets, data, PowerPoint’s, information and they are able to share it with their colleagues, you start to create loyalty, and a collaborative environment where the team dynamic comes into play.”
Most companies’ goals in the region are to become an employer of choice, but there is a very competitive market for talent. Tenicela questioned, “Can you imagine if your company was able to invest time and resources to understand the communities out there? You would massively broaden your talent pool. Once you attract that talent, you need to retain them—this is where diversity strategies come into play. All the various diversity programmes that promote employee engagement lead to the creation of an atmosphere where workforce effectiveness is at its ultimate level. ”Once HR managers address and meet these workforce needs this quickly translates into business opportunities and growth.
Tenicela commented, “Once you are able to link diversity to your revenue streams, you have the attention of your C-Suite. All of a sudden, it’s not just about creating a corporate culture or HR programmes, it’s a business opportunity.”
Tenicela went on to highlight what IBM had done to foster staff collaboration including the use of software similar to Second Life. He said, “Using this technology is thinking outside of the box, there is a lot of technology out there, and these are some of the most effective strategies IBM has deployed over the years in order to gage and create customer and employee loyalty, which in turn optimises staff retention.”
He concluded, “In the spirit of staff retention and happy employees, it is critical for employers to say ‘How can I make this a more welcoming environment for my business partners, my customers, suppliers, and employees.’ If you do this, you will create more opportunities and a healthier workforce.”
Angela Lee
Head of HR,
Hong Kong Trade Development Council
Topic: Staff retention strategies adopted by the HKTDC
Lee talked about how to retain talent, and more specifically what the HKTDC does to retain talent. She started by listing five key strategies her organisation takes to increase retention:
- Cultivating a supportive environment: employees need to be happy, feel recognised, respected, with a connection to Hong Kong.
- Self learning and development: a holistic approach to L&D including external company visits, language and practical training for all employees and management development programmes.
- Broad-grade structure: the organisation structure allows employees to have more flexibility in advancement.
- Lateral movement transfers: the organisation is set up so HiPos e.g. executive trainees spend only three to four years in each department before being given the option to move to another department. After the move HR, line managers and the employee will assess whether the employee is a good fit, and move them laterally if they are not. Lee highlighted, “If the employee shows management skills and the ability to grow, they will be given a higher position, normally a half or a full grade higher, where they can stay for a few years and from there may advance further.”
- Performance-linked remuneration system: the organisation offers a base wage, with a performance-type system based on employee performance and selected KPIs.
Lee went on to highlight that HR not only needs to find the right person, but also to put them in the right place at the right time. She advised, “HR needs to be seen to understand business and know where to go and who to hire to sustain growth.” On staff retention she explained, “If HR managers strive to make employees—no matter who they are, where they are, or what they are doing—happy and successful, there will be good retention. There’s no magic formula to retention, however, HR Managers should conduct a ‘pulse check’ to know exactly where employees are before taking any action.”
Professor David Arthur
RN, PhD, Med, Bed, BAppSci,
Psychologist—Researcher and Advisory Board Member at the alphaeight institute
Topic: How powerful is money in staff retention?
Professor Arthur explained that while it is generally accepted that motivated people are more likely to stay in an organisation, evidence is still being compiled to better understand the complex issue of what exactly motivates people. He suggested that it was important for HR to take an active interest in research and to examine the ‘evidence’ around them to better understand why people do what they do.
Motivation has long been a controversial issue in psychology. In the 1960s, it was generally thought that people were extrinsically—externally—motivated and that behaviour could be changed by using/withdrawing rewards or by administering punishment.
Subsequent research then indicated that motivation was shaped by more than the external environment and was also intrinsically—internally—driven by the enjoyment of the task itself by the person. Studies regarding rewards have shown that expected rewards have little effect on performance, indeed ’expected prizes’ turned play to into work and activities into a chores.
With this in mind, Professor Arthur contended that higher staff incentives might actually lead to lower overall performance. This led onto the six million dollar question: does money increase or decrease motivation? He cited an on-going study of 20 middle management staff who have been observed in two groups: one offered a reward to complete a very engaging and difficult task and a control group that was offered no financial incentive at all.
The results showed the control group performed the task for longer than the paid group did. Moreover, when the paid group was later informed that “there was no more money to pay” their performance decreased even further. Conversely, the control group—offered no money at all—were far more interested and motivated to continue with the task. Prof. Arthur concluded that HR needs to accept that some people are more intrinsically or extrinsically motivated than others, just as some tasks require more intrinsic motivation than extrinsic.
He stressed that these qualities can be taught but that, “Human motivation is counter to what most of us believe and extrinsic rewards can provide a short-term boost, but can have a negative impact on long-term motivation.”
Pattie Walsh
Head of Regional Asia Employment Practice,
DLA Piper Limited
Topic: Minimum Wage Ordinance
Pattie Walsh presented an update on the Minimum Wage Ordinance (MWO) and what HR should be looking out for. She cautioned that this was a complex piece of legislation which threw up several contentious issues for HR.
Walsh advised to start by looking at the existing contracts of employment before considering the MWO. She used the metaphor of already having made a deal for a red convertible mini that the showroom could then not give her a green one— the same applies to employment contracts. Employment contracts have legal rules: there is an offer, consideration, acceptance and then payment, as such; the contract cannot be changed without the agreement of both parties.
HR needs to determine what is incorporate into the contract, for example, policy regarding working time. If there is a change in policy regarding this, then to change the contract you need to first get agreement.
Walsh explained that employment contracts are not just documents, but rather ‘relationships’ between the employer and the employee. For example, if the contract work day states 9am to 5pm, but the employee actually works 9am to 6pm, then the contract can be considered to be ‘varied by custom and practice’. Most contracts do not address rest days or paid lunch breaks, so Walsh advised HR to look at their actual employees’ practice.
She cautioned that the new MWO does not allow employers to change their existing employment contracts. Breaches of such legislation are criminal offences. If a company does not comply with the MWO, there is a HKD 350,000 fine and up to three years in prison. She warned that penalties apply to the company, but that the responsible person is the one implementing the decisions—so those in HR need to take this issue very seriously.
Walsh’s personal view is that one of the reasons for enactment of the MWO is to try and move toward a maximum number of working hours, which she feels is contrary to how Hong Kong works. She added that this might well bring Hong Kong to a standstill if employees could no longer work longer hours than their officially contracted hours.
The basic premise is for HKD 28 per hour on average in the wage period. The wage period is in the agreed contract or, if there is nothing in the contract, the presumption that it is one month. She added that if there was a commission structure—which often leads to certain months with large salary payouts and some with very minimal payouts— there may be a need to change the wage period in order to ensure that the minimum figure was being achieved at all times.
She highlighted that the number of hours worked was the big issue—either in accordance with the contract or at the direction of the employer. For the purpose of the MWO, it is complex involving place of employment and travelling time. She advised that employers may be able to use more than one ‘place of employment’ to help alleviate such issues, but at the same time warned HR to take care not of get caught up in the complex tax and labour laws in mainland China, if this was being cited as one of the places of employment.
For any employee whose income is below HKD 11,500 per month, records need to be kept for 12-months and then a further six months after the employee leaves. HR cannot just simply ask employees to advise them of when they have worked over their contracted number of hours, as the obligation falls to the employer to monitor this.
Walsh also advised to review contracts with contractors if there is an employment relationship. See if they meet the test.
For unpaid interns and people working to gain work experience—if conducted as part of a course registered with the Government—this falls outside the MWO and employers do not have pay. Walsh also highlighted that there is a similar exemption for work experience undertaken by those under the age of 26, but she warned that this exemption only applies for up to 59 calendar days in one year, and only with one employer.
A list of common questions raised by HR about the MWO, compiled by Pattie Walsh, DLA Piper, is available for download at www.hrmagaizne.com.hk
Sean Hurley
Vice President,
Human Resources APAC,
Agility Global Integrated Logistics
Topic: Engaging staff and keeping them motivated during times of dramatic change.
Hurley began by describing the challenges that Agility faced as a result of a 38 company merger, and a headcount growing from 5,000 in 2004 to 25,000 within six years. Challenges the company experienced included a de-centralised corporate culture, employee concerns about job security, resistance to change, and HR becoming more administrative and transactional. In order to heighten employee engagement and motivation during this time of change, Agility sought to create a single brand identity and company culture; transform and empower HR; and listen and respond to employees. To meet these goals they established a company culture by encouraging an entrepreneurial ‘can do’ spirit and emphasising corporate social responsibility by engaging staff in volunteer schemes both locally and globally. He explained HR was empowered through several key enhancements:
- establishing HR as a change agent;
- creating a new culture with a talent management plan as the foundation;
- establishing consistent people programmes, policies and processes; and
- replicating best local practices across the network.
Hurley also noted that, for the first time, they conducted an employee engagement survey and were able to target 40% of the employee population in each country. Based on employee responses, the survey revealed low levels of satisfaction in several areas including performance management, training and development, career growth and company strategy. With these challenges in mind, Agility took several measures including creating an internal company intranet to increase communication and providing an internal job board to allow employees to see job openings in any other locations.
A policy was established that enabled any employee to apply for an internal position as long as they had completed at least two years in their role. This not only promoted increased transparency but also helped enhanced career development opportunities.
In order to yield even greater transparency, Hurley shared that a former company leader in Indonesia asked all of the branches on a monthly basis to post the P&L results on the office bulletin board. Hurley revealed, “People were shocked and previously had no idea whether the company was making money or not. Now they were seeing how their role on a daily basis impacted the results and they felt a greater accountability. I have a firm belief that you can have values and put them on a poster on a wall, but what defines the values and cultures of the company are the people that you bring in the organisation. If those people eat, drink, and sleep those values—that is going to define your company’s culture.”
Viola Hoffmann
Director,
Talent Management Human Resources Asia Pacific,
BASF
Topic: The role of talent management in staff retention strategy
Hoffmann described the current resourcing challenges facing companies in today’s markets. Chief among these is a growing talent shortage caused in part by demographic changes to the global population. She also pointed out the need for companies to adapt their HR practices to cope with generational shifts, such as the current one which sees the young blood of Gen Y replacing Baby Boomers.
This phenomenon has resulted in what Hoffmann described as, “A prevailing trend towards lower engagement and loyalty than previous generations.”
She shared the results of an analysis of anticipated employment trends which revealed that, by 2020, substantial talent challenges were likely to be felt worldwide, particularly in the developed economies of northern Europe, North America, Japan, Korea and Australia, because of retiring baby boomers and declining birth rates.
Southern hemisphere countries, with the exception of Australia, generally indicate lower talent shortage trends but high employability challenges. It is predicted that China will encounter major challenges with employability by 2020, if the Government does not continue to increase spending on education. Based on the current GDP growth rate, Hoffmann projected that China needed to double its talent base by 2020. She also noted that over the next decade, Western Europe’s talent supply will decrease leading to ’almost empty talent pipelines’ beyond 2020, resulting in a war for available talent—particularly those mobile talents.
According to Hoffmann, on a global scale, employee engagement is low, with fewer than 1 in 3 employees fully engaged. The situation is particularly severe in China, where surveys have revealed very high employee levels of disengagement.
Partly to help address these issues, BASF has enhanced its recruitment process by encouraging greater diversity, targeting underutilised sectors of working populations such as older and mobile workers and encouraging female employees to return to the workforce following maternity leave. They are also looking to develop their workforce from within by encouraging movement throughout the company and involvement in projects region-wide or even globally, as well as hiring and developing a strong pipeline of local talents in their key markets.
On a more holistic level, together with more flexible reward strategies, the company has recently re-defined and strengthened its EVP to help draw and retain key talent.
It is also introducing a new 7-step employee development process, which it hopes will help maintain high levels of engagement among employees in the region through a combination of process transparency, open communication and increased trust. The manager and employee will dedicate time to work through a series of steps together and agree on a clear development plan, to help them to reach the next steps in their career and beyond. As Hoffmann says, “employees now demand a clear idea of where they are going.
This means a transparent and structured approach to development, which is what our new process is all about.”
Tony Dickel
Executive Chairman,
Institute of Executive Coaching and Leadership
Topic: The importance of coaching in enhancing staff retention
Dickel advised those in HR to help nurture a ‘coaching environment’ within their organisations that allowed staff to grow, encouraged them to stay longer with the company longer, and ultimately enhanced performance. Highlighting the need for staff retention, Dickel revealed that, in China, 40% of management-level staff leave their job within the first 18 months. He noted that to have an effective coaching culture, HR managers first need to know why their mid- to senior-level managers are leaving. He put forward four key reasons why such managers leave:
- Negative relationship with immediate boss
- Too little coaching and feedback
- Insufficient recognition of achievements
- High stress and poor work-life balance
To help with retention, he advised HR to ensure that their staff were sufficiently challenged in their work, and properly led and supported by their immediate line managers. He also highlighted the importance for companies to promote good work-life balance. On coaching, Dickel defined three different dimensions that coaches must consider in order to be effective.
Firstly, mindset: HR managers must have a coaching mindset. Dickel explained, “In this mindset, the person has unlimited potential, they can shift the dirt to get to the gold.”
Secondly, relationship: a coach can develop powerful relationships with their coaching counterparts. Dickel noted, “Friends have high trust, high value and low tension; micro-managers have low trust, low value and very high tension; while coaches have lots of trust, high value and high tension.”
Thirdly, landscape, which Dickel defined as both inner and outer interactions that staff have—how well coaches can read when people need/want to be coached. Dickel said, “Next time someone comes to you with a problem, ask: what are you trying to achieve? In doing this you can be more effective in helping people grow.”
Ewan Clarkson
Assurance Human Capital Director,
PricewaterhouseCoopers China
Topic: Breakthrough HR
Clarkson introduced breakthrough strategies recently adopted by PwC to help further enhance levels of staff engagement and retention.
The organisation, like many in the industry, faces relatively high turnover—making attracting and retaining qualified candidates a constant concern. Clarkson acknowledged that the situation was particularly challenging in mainland China, with high levels of competition and a limited talent pool.
To help address these challenges, PwC launched the unique: Breakthrough Programme (for full details refer to cover story in HR Magazine Spring 2011 issue). Clarkson explained the benefits that programmes like this bring in terms of increased engagement both for employees and customers, which ultimately leads to higher levels of retention. To launch the programme the organisation firstly, defined what it considered to be consistent good behaviours. Then, they addressed actual behaviours and set out to align these with the defined behaviours.
The programme involved a Day-of-Change where staff were brought together to kick-start the process, followed with regular forums in which individuals could focus on changing old behaviours to bring them in line with defined ones. Breaking with tradition, the organisation encouraged feedback from new junior-level staff on the performance and behaviours of senior associates in the organisation.
The move proved to be a great success, and really helped staff look at themselves, their own behaviours and how they could be more engaged and contribute more to the entire organisation. Clarkson advised HR, “You shouldn’t just look at what are good behaviours, but also the behaviours you want to improve—and then work on them. If everyone commits—everyone will improve. Beyond that, you must also assess your own personal commitments to strengthen your own weak points.”
The process also ensures junior-level staff are engaged and can submit performance reviews, thoughts and opinions on any issue related to their job via internal message boards and blogs. Clarkson agreed that highly engaged employees lead to highly engaged customers, he added, “If employees are not engaged and retained, how can you expect to offer world-class services?”
Finally, he noted, “It can be difficult to orchestrate change unless you are very clear about what specific change is required, what change is acceptable, the corporate direction after that change, and most importantly—how you are going to effect that change. Sometimes one big change can be easier than little changes.”
Paul Arkwright
Publisher
