Daily Top 5 Global HR News – 11 October 2017

Daily Top 5 Global HR News – 11 October 2017

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We bring together from ICube Research and published news, a summary of 5 items that are contemporary. The news is curated from more than 50 HR related websites across more than 15 countries including Singapore, USA, UK, Canada, Australia, India, Malaysia and Kenya, among others.

The Daily Digest covers the Global view of latest people practices and technology developments amongst other areas.

1. How Building A Cohesive Culture Increases Talent Retention

When we talk to HR directors, we always hear the same thing: “We need to improve our culture.” In fact, my company took a survey of 29 respondents at the 2017 California HR Conference and found that about 55% of these HR professionals would like to improve corporate culture. This trend is not new.

For years we’ve seen all kinds of programs and training to create the best corporate culture — everything from short-term motivational tactics to standing desks. The problem with these trends is that they fade; they don’t address the real issues that exist in an organization.

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    In our survey, we also asked the HR professionals what their biggest challenges are related to corporate culture. They said overwhelmingly creating a cohesive culture (55%) and retaining talent (41%) gave them the most concern.
    So let’s start there: building a cohesive culture and retaining talent. Luckily, they are very closely related. If you are able to build a strong cohesive culture, your talent will stay. In fact, everyone will want to stay.

    The Key Is Emotional Connection

    Emotional connection is the foundation on which you build the culture. It provides the emotional safety humans need to thrive and perform, and maintaining its strength is what gives you the teeth for long-term success. By disrupting negative cycles of interactions we can reset relationships and inspire secure connections. This is based on attachment theory and group bonding.

    Basically, when everyone is in emotional balance, each team member can finally reach their potential. It’s truly a team effort because each person impacts their fellow team members in unimaginable ways. Emotion is contagious, so when emotion is negative, you have to act fast.

    Research shows that emotional connection is our strongest motivator — not money or power. This means that if you can create a corporate culture that emphasizes connection, you will not only have more fulfilled teams, you will also retain and attract talent. Treating employees to lunch is a great way to show them you care, but the conversation at the lunch will determine if it will create any long-term motivation.

    Back to our challenge — creating a cohesive culture. This takes some commitment. Introducing and then maintaining emotional balance can be tough, especially if the culture is stuck in a negative cycle. If team members are constantly arguing or criticizing one another, it may seem overwhelming.

    The Process Of Emotional Connection

    At my company, we use a three-stage process called the Board/Team Dynamics Process or BDP. When everyone is familiar with and understands one streamlined process the culture becomes much more cohesive. Team members start speaking the same language and using the same tools to work through conflict. This is where you start to see some really positive changes.

    In our work, we’ve found that culture has to start from the top. Everyone tends to look up to learn behavior. This is backed up by a recent study from Duke University that says 52% of executives feel that culture is primarily set by the current CEO. And, while boards of directors do not directly choose the firm’s culture, they influence the choice of culture by picking the CEO. Boards also modify the eventual success of the culture by reinforcing or undermining it through their approach in addressing challenges together and making that emotional connection with the executive team.

    So to have a long-term effect on culture, you have to start with the board and the executive team. This might seem overwhelming, but in that same study, 91% of executives said culture is important at their firm and 78% view culture as one of the top three or top five factors that affect their firm’s value. Executives and boards understand the value of culture and they are looking for long-term solutions.

    Improving culture is within arm’s reach. We know how to fix culture for the long haul; it’s just a matter of committing to it. Addressing emotional connection is the way to arrive at a cohesive culture that retains and attracts talent. This is the HR revolution — are you on board?


2. Recent Trends in HR Outsourcing

As the years go by, HR administration continues to evolve. The growing need for improved operational efficiency and compliance has led more business owners to turn to HR experts for help managing crucial business functions.

This expansion has been so great that the Professional Employer Organization industry has nearly doubled to around $168 billion dollars in the past six-and-a-half years. The need for human resource outsourcing isn’t just a need for one or two different industries, as HR providers saw a 23 percent or greater increase in business from blue collar, white collar, and grey collar businesses.

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    While businesses often turn to PEOs for help with benefits administration and risk management services, there are other additional HR functions and benefits that have become more popular in recent years. Two of the more intriguing recent trends in human resource outsourcing is a move toward investing in online payroll and workplaces wellness programs.

    Online Payroll

    Technology is giving businesses a greater ability to track and store crucial business information. Outsourcing online payroll services to a PEO is one way businesses are taking advantage of advancing online capabilities to improve business efficiencies and save money.

    According to a survey conducted by cashflow management site Bill.com, nearly half of accounting professionals wish that they could eliminate paper checks. With online payroll services, you can. Nearly half of CEOs name sustainability as a top-three initiative for their organization, and a paperless workplace can help your business take a big step toward that goal.

    More businesses are turning to online payroll because it benefits your business, your employees, and the environment. Businesses benefit from a streamlined payroll solution that cuts down on management time and allows you to manage and access all your important information from anywhere. This easily-accessible system also makes it easier for employees to track time and access W-2s and paystubs. Finally, the lack of physical checks and files lowers your paper usage and storage, aiding the environment and allowing you to “save between $2.87 and $3.15 per pay run by paying employees electronically” according to Business News Daily.

    Workplace Wellness Programs

    These days, businesses are looking to pump up their health-related benefits offerings, especially workplace wellness programs and other related wellness perks. According to a research report by the Society for Human Resource Management, 24 percent of organizations increased wellness benefits in 2016, more than any other specific type of benefit.

    Why are businesses gravitating toward adding wellness benefits? SHRM offers the following reasons:

    88 percent of organizations with a wellness program rated their initiatives as somewhat or very effective in improving employee health
    77 percent of organizations indicated their wellness program was somewhat or very effective in reducing health care costs
    53 percent of organizations wanted to create a culture that promotes health and wellness
    A workplace wellness program is a great way to benefit both your employees and your business by actively promoting a healthier lifestyle inside and outside the workplace. The CDC Foundation notes that the average productivity loss linked to absenteeism was $1,685 per employee. Promoting wellness can improve the lifestyles of your employees and help you cut down on productivity loss and rising healthcare rates.

    Take Advantage of HR Outsourcing Trends

    Whether you’re looking for help managing the latest HR trends or more traditional business functions, a PEO can be the way to go. A PEO can help you manage a wide variety of critical tasks through, offering a variety of the benefits associated with HR outsourcing, such as saving yourself time and money while protecting your business from compliance concerns or retention woes. Contact GMS today to talk to one of our experts about how we can help your business manage HR.


3. What does seasonal hiring look like in 2017?

As October hits, prepared consumers may already be planning their holiday shopping. But employers have no choice in the matter: the time to staff up is now.

As shopping habits change, so do employer practices. Quite a few brick and mortars have gone bankrupt this year, but there’s still a strong call for talent across in-store, logistics and remote positions. Seasonal hiring has averaged 604,000 job announcements per year since 2012, according to Challenger, Gray & Christmas, an analyst.

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    But some argue that the U.S. is nearing full employment, meaning it may be easier to find Santa’s shop than to find the right people to fill jobs. Luckily for employers, recent innovations in the customer service space could make these important seasonal jobs more effective and more appealing to potential applicants. Remote work opportunities and in-store job flexibility are helping employers differentiate themselves from the competition.

    Where is seasonal talent growing and going?

    The usual rules still apply. According to Challenger, Gray & Christmas, retail store jobs make up the bulk of seasonal hiring. But in recent years, transportation and warehousing employment has increased. Between 2015 and 2016, employment in that sector increased by 8%, or nearly 20,000 jobs. With continual pushes to e-commerce, those numbers are likely to rise.

    More employers are moving their in-store personnel to last-mile, shipping and warehouse locations, Greg Dyer, president of commercial staffing and enterprise accounts at Randstad U.S., told HR Dive. Unfortunately, those jobs aren’t always easy to fill; they tend to be physically demanding.

    “It’s created a bit of a shortage in certain markets,” Dyer said. “It’s very difficult to get the talent.”

    As the markets change and technology improves, employers are getting creative in trying to retain those key workers. Flexible work schedules have begun to emerge in the hourly space, partly thanks to the contingent workforce. Apps like Shiftgig allow workers to pick up last-minute shifts for client employers that need to fill sudden schedule gaps.

    Changing technology has even shifted how employees and the end consumer interact — though consumers always expect the same quality of experience be it via website, social media or an in-person conversation, Ryan Lester, director of emerging technologies at LogMeIn, said, meaning employees need to be skilled no matter the medium.

    Developments in e-commerce have expanded the need for call center customer service agents, and many of those jobs can be done remotely. Jobs that can be done from home can have higher engagement rates than jobs that require employees to be on the premises.

    Improving the employee (and customer) experience

    But not everyone can go remote. What can those employers do?

    That’s the question of the day, Dyer said. Retailers and seasonal employers of all types are figuring out how to become better brands in the market. Transparency tools like Glassdoor and Kununu have put the onus on employers to create better employee experiences, especially with unemployment at 4% in many places.

    The classic lever is, as always, better pay. Financial incentives will likely increase, Dyer said, be it shift completion incentives or higher hourly wages. Target recently announced it was raising its base wages just as seasonal hiring season began, for example.

    For those looking for long-term investment in the workforce (as well as long-term benefit), more employers are turning to better training programs to both prepare employees for the changing retail environment and improve the customer experience overall.

    “There’s a separate trend that has to do with the complexity of products,” Lester said. “[Employers] are trying to diversify through better customer services. Products have inherently become more complicated and may complicate questions from customers.”

    Remote workers are at a disadvantage due to this growing complexity of offerings. In the store, an employee can specialize in a department and gain deeper understanding of offerings — while having the added bonus of merchandise all being right there in front of them. Remote workers will need more training to accommodate customers who may have complex questions about merchandise that the employee may have never seen.

    So what is the recruiting pitch here? Such complexity is actually a boon for employers that are prepared for the coming changes, Lester said. Improving the customer experience through better technology — think AI — can create a better job experience for agents, who can specialize and increase their own value.

    The tech is still developing, but its potential is promising for employers. During a crisis mode — an airline facing multiple delays due to weather, for instance — AI can handle questions about flight times or options and human operators can handle more complex issues. It can also provide agents information about a customer’s previous buying habits.

    In the long term, agents who are well-trained for such situations will feel more empowered to actually help customers. Employers won’t have to tell agents to focus on call-time or speed of transaction.

    “We think what will be successful in hiring and retaining good agents is that agents must feel empowered. They must feel well-trained,” Lester said. “So your pitch is that you can remove the mundane, and we want you to do your job better — delight the customer.”

    Well-trained agents can build customer relationships and curate expertise, which can transform customer service into a revenue generating aspect of the business instead of a cost driver.

    “It will come down to treating employees as critical to the business,” Dyer said. “Companies that are willing to look at a very employee-centric culture will succeed, assuming they are paying market rates.”

    The struggles forethought can answer

    Employers can adopt a number of strategies to beat the competition. First: Start now.

    “If you are late to the game, you could literally be out of luck in these situations,” Dyer said. Setting the right wages upfront for each job and market will be critical. So get on it.

    Vary the job experience. An in-store employee may be hired to do a particular type of job, but if another job role interests them, let that employee try it out. Get creative with alternative job formats and give employees opportunities to truly own their work.
    Optimize your tech use. For remote call agents, most interactions on the phone are already captured. Use those interactions, good and bad, to better train agents for future calls. And experiment where you can, not just in e-commerce but throughout the organization, Lester said.
    “If you aren’t setting up now,” Lester added, “you are inherently setting yourself up to be behind your competitors.”


4. Managing talent in the new age economy

Corporate houses are experiencing ever increasing changes and challenges in the new age economy. Innovation, creativity, brand new ideas, research and development, and managing changes have become common phenomenon. The work environment is forcing people to renew their competencies and commitments in order to make the necessary contributions and have a competitive edge.

Having a proper understanding of changes and challenges lying ahead of us is immensely important. Identifying top performers and preparing them for strategic and leadership roles has become imperative. Hence, talent management has come into the picture as the dominating theme for the 21st century in business arenas. It is an essential force for achieving bigger goals, going from good to great, and long-term sustainability.

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    HR management has evolved through different phases. It started with administrative functions to personnel management, record keeping, management of attendance, leave, canteens, cleanliness, etc. With the increased responsibility of HR, the theory of Human Capital Management is taking its root in management, replacing earlier concepts. One of the prime HR thrusts is talent management. Talent management is nothing but a strategic role of HR management aligned with business goals and objectives, encompassing acquisition, development, engagement and retention of talent.

    HR management is tactical, dealing with the day-to-day management of people, while talent management is strategic, associated with business goals and objectives. HR management is creating a congenial working environment where people can be more productive while talent management is engaging people who are talented, highly skilled, and specialised, with the objective of retaining them for a longer period for competitive edge and business success. Effective talent management is a win-win game. It ensures higher productivity than peers.

    We may divide people working in any organisation into three categories: A, B, and C. Category A is the real talent in the organisation—they are mission-critical, self-motivated, proactive, highly energetic, creative, and full of ideas, trendsetters, and trouble-shooters. They energise others and are able to take tough decisions and maintain discipline in executions. They like and enjoy challenging and purpose-driven careers and rewarding experiences. They would like to work for a greater cause and in value creation. This category of people are small in number—they may make up a maximum of 20 percent of the organisation. It is very important to engage and retain this type of talented people. They should be given recognition in terms of pay and opportunities.

    Most of the organisation is full of Category B—around 70 percent. They are reactive and critical to organisational success. They are followers, and require push and pull. Management requires extra attention, time and effort in developing and managing their performance at the desired level. Training, coaching, mentoring and counselling are essential for them. They need recognition too, mostly in monitory values.

    Category C is non-productive—they are demotivated and destructive for the organisation. They kill other people’s enthusiasm, time and energy. C types may make up 10 percent, but honestly should not be allowed to continue their job for long as they hold a higher risk of negatively influencing peers and co-workers.

    Talent management is not straightforward; it is a very critical role. As a top-down approach, the relevant authority in the management has to be convinced and supportive of talent management approaches and culture. The HR department or function heads are handicapped in acquisition, development, engagement and retention of talent and obtain benefits without sponsorship by the top management.

    There is talent at different levels and individuals other than Category A who are highly mission-critical. It is important for HR and functional heads to look for such talent for strategic roles and leadership apart from nourishing existing talents properly. Engagement of talent is relatively more important, requiring a proper performance management system and feedback. Business leaders must reshuffle their perception and focus in order to promote and retain talent for greater success today and tomorrow.

    M A Mannan is Head of Human Resources at Bangladesh Express Co Ltd, licensee of Federal Express Corporation.


5. Human Capital: Risk vs. Uncertainty

When it comes to human capital, “risk” and “uncertainty” are two different concepts, and they need to be addressed separately in order to minimize risk.

In a world characterized by rapid technological change, perpetual product innovation, economic globalization, and generational and cultural shifts, the life cycle of products and business designs is shortening. Companies are constantly obliged to adapt.

It is often human capital, more than financial or physical capital, that enables effective adaptation to these new realities. And it is often human capital that is at greatest risk of sudden depreciation or outright obsolescence within a business.

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    In face of this business reality, the absence of disciplined management and quantification of the risks to business performance and value emanating from the people side of operations — i.e., human capital risks — is particularly glaring. Unfortunately, those in the finance and risk management functions who are traditionally in charge of risk management often lack the perspectives and tools required to do this job.

    All too often, HR remains shut out of the risk management function. The sheer number of company meltdowns that have originated with problems in human capital management makes clear that the failure to embed human capital (HC) risk assessments within the risk management function is a major and dangerous omission.

    Such problems include, for example, inadequate supervision or governance, sales incentives that inadvertently encourage opportunistic behavior or outright malfeasance, and executive compensation plans that encourage myopic decisions or excessive risk taking.

    The good news is that the proliferation of workforce data and spectacular advances in the new discipline of “workforce sciences” offer the means for organizations to address this gap in risk management. Today’s workforce analytics enable organizations to identify and measure the workforce and business impact of their management of human capital.

    Effectively mobilized, these methods can help improve workforce decisions as well as flag and prioritize looming HC risks. Spurred by these developments, HC management is emerging as the newest, often most important and surely most complex form of asset management, subject to the same kind of disciplined thinking and quantification traditionally applied to the management of other assets.

    The flip side of optimizing HC investments is minimizing and effectively allocating HC risks. A simple framework for characterizing and assessing the nature of the HC risks confronted can help organizations better understand how to apply appropriate measurement tools.

    Drawing on the seminal work of the 20th-century economist Frank Knight, we propose a taxonomy to classify HC risk, distinguishing HC risk from HC uncertainty.

    The former signifies workforce-related fluctuations in business performance that, although unknown before they materialize, nonetheless emanate from a known or knowable probability distribution that can be identified and measured based on the relative frequency of their past occurrence. The latter pertains to situations in which not only the outcomes but their underlying probability distributions are unknown.

    The fluctuations in outcomes associated with HC management are so idiosyncratic or “one-off” in nature that there is no reliable basis for deriving a probability distribution from which they can be generated. As such, these fluctuations cannot be anticipated on a quantitative basis.

    The analytical approaches best suited to address HC risk as compared to HC uncertainty are distinct. The approach to HC risk involves statistical modeling of the running record of business performance (e.g., profitability, revenue growth, workforce productivity, etc.) to identify and quantity their sources of variation and the specific workforce characteristics and practices that affect them.

    Understanding which people factors most influence these variations and how to optimize can help a management team expose and contain HC risks to the business.

    The approach to HC uncertainty involves institutionalizing strategic workforce planning as a business process, backed by statistical modeling of the key talent flows of entry, development, retention, and rewards — what we call “internal labor market” (ILM) dynamics — that actually create an organization’s workforce. It combines rigorous analytics with disciplined process to engage HR, operations, and finance around a common goal, rooted in future business requirements and realities.

    So, for instance, a major technology company in the midst of a far-reaching business transformation launched an enterprise workforce planning process to identify what new knowledge, skills, experience, and workforce behaviors would be required to make new business models successful. The company undertook advanced “ILM Modeling” to determine how well it was, in fact, transforming its workforce to meet the new talent requirements and where significant gaps would likely materialize.

    In this way, the company could anticipate and address the human capital uncertainty that posed a serious risk to their ability to transition their business successfully.

    Following are two case examples that illustrate the value of applying workforce analytics and the specific measurement and statistical modeling methodologies used for each type of HC risk.

    Measuring and Modeling HC Risk
    A large health services organization used statistical modeling of longitudinal data on business performance to estimate the impact of rising employee turnover across its operations. This modeling determined that, all else being equal, each five-percentage-point reduction in turnover was associated with a reduction in unit cost of about $65 million and an increase in margin of more than $30 million.

    So, a trend toward higher turnover certainly posed a significant HC risk to the business. How could the organization insure against this form of HC?

    Statistical modeling of the drivers of voluntary turnover showed that health benefits were among the strongest predictors of employee retention. Employees covered by company health benefits were more than 70% less likely to turn over than otherwise comparable employees who were not covered. In effect, investments in health benefits for employees functioned as an insurance premium to guard against the documented cost increases and reduced margins resulting from excessive turnover.

    Businesses routinely secure third-party insurance against different forms of business loss. In this instance, the company had the option to “self-insure” against the negative effects of unwanted turnover using one particular component of their total rewards program.

    The insurance worked both by encouraging selection of employees with a lower propensity to turn over (the “adverse selection” issue) and by motivating incumbent employees to remain (the incentive or “moral hazard” issue).

    Backed by hard evidence on business impact, such a perspective changes the calculus of cost and return that should guide HC investments. Applying a purely financial or expense lens to the consideration of health benefits, as is the norm, would not generate the same insight.

    Measuring and Modeling HC Uncertainty
    Sometimes the very policies designed to shift HC risk from the employer to employees actually result in raising HC uncertainty for the organization.

    For instance, when organizations shift from traditional defined benefit (DB) to defined contribution (DC) or other account-based pension plans, they can end up forfeiting their influence over the timing of retirement, leaving it instead to the vicissitudes of the market that affect account balances.

    This in turn constrains the choices regarding hiring, promotion, and career development. The cascading interactions among these talent flows can be dramatic; they limit management’s ability to shape their workforce and thereby generate HC uncertainty.

    This is precisely what happened to a large, global consumer products company; call it ConsumerCo. Like many companies, it had abandoned its DB plan, relying instead on a DC plan to support employees’ retirement needs. When the financial crisis hit in 2008-2009, the value of employees’ DC accounts imploded, leaving many with inadequate income to retire.

    In the low-growth environment of that time, the slowdown in retirement led inevitably to a significant slowdown in the velocity of talent movement inside the organization, manifested in the emergence of career “choke points” at rather low levels in the career hierarchy.

    This is a particularly dangerous pattern for organizations that build their workforces from within, as was the case for ConsumerCo. Reasonably high talent velocity, via promotion and lateral moves, is critical to delivering incentives for employees to join, grow, perform, and stay with the organization.

    The cascading effects of delayed retirement are inimical to this outcome. With nowhere to go, up-and-coming, high-performing talent at ConsumerCo were heading out the door, challenging the company’s ability to secure the workforce the business required. ConsumerCo was now awash in HC uncertainty, something their leadership had not anticipated because measuring the likely workforce impact of changing the retirement plan design was not even on its radar.

    From a financial perspective, DB plans are indeed associated with significant financial risks and liabilities that can be circumvented by DC and other account-based plans. But from a human capital perspective, they have an important attribute not inherently present in DC plans: they offer built-in incentives for employees to retire once eligible.

    The strength of these incentives can be manipulated through changes in key plan-design parameters. As such, DB plans facilitate hands-on management of retirement choice and thereby strengthen management’s control of the dynamics of the internal labor market.

    By shifting away from its DB plan without countervailing measures, ConsumerCo, in effect, had given up managerial control over the one market it actually had the ability to steer, its internal labor market. The result, ultimately, was to impede workforce optimization and increase labor cost. Once again, an organization had fallen victim to the law of unintended consequences that plays out so pervasively in the area of human capital management.

    Advanced workforce analytics combined with disciplined process and the right mindset can help organizations anticipate and mitigate such unintended outcomes and make HC risk management an integral part of the enterprise’s risk management function.

    Finance needs to raise its game by finally recognizing HC management as a form of asset management and displacing the standard accounting view of human capital, with its focus on expense, with an economic view that emphasizes workforce productivity and value.

    HR needs to come off the sidelines, delivering the quantification and business-driven insights that constitute the hard science of HC management in a language that business leaders understand.

    Together they can usher in a new era of enterprise risk management where the identification and mitigation of HC risk and HC uncertainty are every bit as prominent as the management of financial, operational, and hazard risks.

    Haig Nalbantian is senior partner and co-leader of the Mercer Workforce Sciences Institute.


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(The articles above have been curated from various sources but not been edited by ICube staff)

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