The company says a series of reforms dubbed Employee First, including better communication with CEO Vineet Nayar and a pay scheme giving more income security to workers, has curtailed attrition and fueled fast revenue growth. HCL’s revenue jumped 146 percent in the past three years, to $1.9 billion for the year ended in June.
In fact, customers have been seeking to learn from HCL’s people management philosophy in addition to tapping its IT services, says Shami Khorana, president of HCL America, a unit of the company in Sunnyvale, California. The customer interest has been a pleasant surprise to Khorana, who initially worried about the impact of the initiative.
“My first thought was, ‘How will the customers react when they hear employee first, customer second?’ ” he says. “In the end, it’s very easy for them to understand and even appreciate.”
Eugene Kublanov, CEO of outsourcing advisory firm NeoIT, says HCL now routinely is one of the top two or three vendors that make it through NeoIT’s vetting process for clients. Kublanov says that’s an improvement for HCL in just the past few years, adding that HCL’s customer service stands out.
“When they do win deals, we are definitely seeing a high level of client satisfaction,” he says.
HCL may be proving the maxim that delighted employees make for happy customers. But this wasn’t always the case. HCL was a late entry in the IT services market, which refers to services such as custom software development and technology consulting. As a result, earlier this decade it struggled to compete for talent with India-based rivals such as Infosys Technologies and Tata Consultancy Services. The company concedes it suffered from above-average attrition of 30 percent in 2004.
HCL’s leadership also determined that the firm needed to pursue more complex, higher-value contracts, competing against global players such as IBM and Accenture.
To juice up the firm, HCL in 2005 decided to focus on employees. Goals of the Employee First reforms included creating a unique employee experience, inverting the organizational structure and increasing transparency.
A signature piece of the overhaul is what the company calls trust pay. In contrast to an industry practice of making 30 percent of engineers’ pay variable, HCL decided to pay higher fixed salaries that included all of what would have been the variable component—essentially trusting that employees would deliver. The policy, put in place for 85 percent of employees, was intended to increase trust and trim the number of decisions HCL had to make about compensation.
Another initiative encouraged HCL employees to communicate with CEO Nayar. Through an online forum called U&I, he answered 100 questions from workers each week. “I threw open the door and invited criticism,” Nayar says. “We were becoming honest, and that was the sign of a healthy company.”
Employee First hasn’t just helped goose HCL’s growth, it has also made the firm more of a talent magnet. Attrition dropped below 15 percent for the year ended in June.
For turning employees into a strategic asset with a novel philosophy and programs, HCL Technologies earns the 2008 Optimas Award for Innovation.
Based in Nodia, India, HCL Technologies is a publicly traded firm that employs 49,800 people in 18 countries. Its HCL America unit employs more than 3,000 people in 15 states. For the year ended June 30, HCL reported net income of $280 million on revenue of $1.9 billion. |
HCL Technologies sells a variety of information technology services, such as custom software development, application maintenance and technology consulting. HCL is part of the burgeoning Indian outsourcing industry and also offers business process outsourcing in areas including finance and accounting. |
Workforce Management, October, 2008, p. 25 —Subscribe Now!
Luxottica Group Optimas Award Winner for Managing Change
She and about a dozen Luxottica HR officials made the journey to make sure that approximately 600 former Cole employees in Twinsburg understood that they mattered and could get their questions answered.
“It was all designed to ensure that we demonstrated a culture of inclusiveness,” Wilson says.
Before the $501 million deal, Milan, Italy-based Luxottica owned major chains LensCrafters and Sunglass Hut, employing 23,100 people in North America. Cole had upwards of 10,000 employees working at store brands including Pearle Vision Optical, Target Optical and Sears Optical. The combined company now employs more than 36,500 people, with nearly 5,400 retail locations in the U.S., Puerto Rico and Canada.
Mergers can fizzle when firms flub employee relations. Among Luxottica’s concerns during the integration was retaining key Cole talent. Luxottica immediately made it clear that it was going to close Cole’s Twinsburg headquarters. But vital Cole employees were given retention bonuses to keep them on board during the transition. Luxottica also set up a call center exclusively to field questions from former Cole employees. There also was the consistent presence of the Luxottica HR contingent—one of a number of Luxottica teams that spent weeks in Twinsburg.
All the reaching out came in the wake of an earlier merger mistake. When Luxottica bought Sunglass Hut in 2001, the acquisition was hampered at first by a cultural rift, Wilson says. “It wasn’t a better-together mentality going into it,” she says.
“Better together” was the slogan Luxottica used for the Cole acquisition. But it was more than a slogan, says Mark Hess, senior manager of compensation programs at Luxottica. Hess was director of store operations for Pearle at the time of the merger. He says Luxottica treated Twinsburg employees honestly and fairly. The 2004 merger was much more respectful than what Hess experienced eight years previously, when he worked at Pearle and it was gobbled up by Cole. “Cole to me seemed to act as the conquering hero that came in to save our company,” he says.
Hess is one of more than 200 employees from Cole headquarters who landed jobs at Luxottica. Fifty-five percent of the Cole employees in Twinsburg who were offered posts in Mason accepted.
According to Luxottica, integration efforts held down store-level turnover. From October 2004 to October 2005, just 15 percent of the more than 6,000 Cole retail associates at optical stores resigned. The overall U.S. retail industry quit rate was 35 percent in 2005.
In addition, the combined sales of Cole and Luxottica Retail grew 13 percent in 2005 versus 2004. Combined operating income grew by 44 percent.
For not losing sight of the value of cultural integration during a major merger, Luxottica is the winner of the 2007 Optimas Award for Managing Change.
Milan, Italy-based Luxottica Group designs, makes and distributes prescription frames and sunglasses with a focus on luxury eyewear. Its North American retail division, Luxottica Retail, employs more than 36,500 people and has nearly 5,400 retail locations. For the first nine months of 2006, the group’s sales totaled $4.4 billion. Net income was $409 million. |
Luxottica Group makes frames and sunglasses under its own brands, which include Ray-Ban and Revo. Through license deals, it also makes eyewear for such brands as Dolce & Gabbana and Polo Ralph Lauren. Products are designed and manufactured at six plants in Italy and two wholly owned plants in China. |
Workforce Management, March 26, 2007, p. 29 — Subscribe Now!
5 Questions for Ravin Jesuthasan: Out of Job Site, Out of Mind
To Ravin Jesuthasan, continued high unemployment in America isn’t just about tough times for jobless workers. Jesuthasan, global practice leader for talent management at consulting firm Towers Watson & Co., says it’s also about bias and missed business opportunities.
Workforce Management: Are companies dismissing the unemployed in their hiring decisions?
Ravin Jesuthasan: There’s this belief that there’s all this talent out there given our [9.2 percent] unemployment rate, and that we can get world-class talent for any position. Unfortunately, the best person, in the minds of many organizations means someone who is still employed. There is a belief that anyone who has been laid off, for whatever reason, is not of the caliber of the talent that is still working—which is a real myth.
WM: Why is it a myth?
Jesuthasan: Companies made a number of major decisions about what work to keep within their organizations during the course of this recession. They made decisions like ‘I’m not going to have an in-house accounting function, because I can outsource it to Poland.’ In those instances, jobs were eliminated because whole functions were eliminated. So the caliber or performance of the individual had nothing to do with their job being eliminated. The other reason this is a myth is the belief that most companies have robust and rigorous approaches for differentiating performance and identifying lesser-performing talent. In fact, at many organizations, the process can be highly politicized.
WM: Do companies miss out when they frown on the unemployed?
Jesuthasan: With any inefficiency in a market, there is the potential for arbitrage. At some point, as the economy starts to recover, someone’s going to say, ‘Look! We’re struggling to fill some of these jobs. We’re having to pay a huge premium to get people who are employed at other companies to move. Let’s take a good look at folks who maybe are not employed. Am I going to pay the accountant who’s still employed 40 percent more than the last guy who did the job, because that’s what it’s going to take for him to move? Or am I going to hire an unemployed accountant who is just as capable for, in many cases, less than I was paying the previous guy?’
WM: Is that 40 percent figure realistic?
Jesuthasan: It might be a slight overstatement. But you are starting to see the premium get ratcheted up. Our last global workforce survey, at the end of 2010, pointed to a profound shift toward a focus on security and compensation. In the past, when we asked this survey, people were much more focused on, ‘can I grow, can I advance, can I acquire new skills?’ Unless they are unhappy, employees today are going to demand a premium to move and give up the security of their current positions.
WM: What should companies do with respect to hiring the unemployed?
Jesuthasan: Ensure that they give them an equal opportunity. Get their résumé looked at with the same rigor as someone who is employed. Give them an opportunity to be interviewed.
Workforce Management, August 2011, p. 41 — Subscribe Now!
More Companies Go With Online Tests to Fill in the Blanks
Companies are giving employment testing high marks these days. Despite a still-tepid hiring climate, spending on assessments of job candidates and existing employees rose about 20 percent last year, according to vendors in the field. Josh Bersin, president and CEO of Oakland, California-based research firm Bersin & Associates, estimates the global market for assessment tools and consulting to be between $1.5 billion and $2 billion annually.
Bersin attributes increased interest in testing partly to the rise of software systems that let employers create detailed profiles of employees and plan their development. “With the growing awareness of integrated talent management and the new talent management systems becoming implemented in many companies, the role of assessments is growing,” Bersin wrote in a January blog post.
Other reasons for the assessment uptick include the high volume of applicants in this weak job market, a push for globally consistent recruiting and promotion methods, and the need for legally defensible hiring practices.
Pre-employment testing can make for more efficient hiring at a time when companies are flooded with applications from unemployed workers, says Russ Becker, managing partner of Wayne, Pennsylvania-based Kenexa Corp.’s assessment unit. “People are applying for every job they can.”
Employment assessments can range from online exams for a specific computer skill to personality tests intended to predict customer service prowess to extensive evaluations of potential executives. A study published last year by consulting firm Rocket-Hire found that about two-thirds of companies use some form of pre-employment assessment tools. The report, which surveyed 148 recruitment and hiring professionals, also found that personality, knowledge/skills, and cognitive testing remain the most popular types of assessments.
Timken Co., a Canton, Ohio-based manufacturer of bearings, lubrication products and seals, hopes assessments will help it make smarter hiring choices. “We really are trying to improve the quality of hire,” says Candice Young, a talent acquisition specialist at the company.
Timken recently rolled out an online assessment for applicants in the United States who are interested in hourly positions. Among other things, the assessment covers math skills and other traits, such as attention to detail. Last year, the test was validated with existing Timken employees. Higher performers did better on the test. Timken, which employs some 17,000 people globally, plans to expand the testing of hourly candidates worldwide within the next two years.
Indeed, more multinational companies want to do consistent assessment throughout their global workforces, says Scott Erker, senior vice president of selection solutions at Bridgeville, Pennsylvania-based Development Dimensions International Inc. Through standardized testing, he explains, companies hope to create a “consistent customer experience” no matter where they operate.
Employers’ desire to work with a single vendor on a worldwide basis helped fuel a recent merger between assessment providers PreVisor and SHL. The resulting company, London-based SHL Group, has such multinational clients as Barclays Bank, Microsoft Corp. and Timken. (Initially, SHL Group will be called SHLPreVisor in the United States.)
Robert Morgan, chief marketing officer of SHL Group, says creating a standard, global approach to testing isn’t as easy as translating a test into multiple languages. Because of different cultural norms, companies and test-makers must “localize” tests. Morgan points to an assessment of situational judgment that asks test takers to imagine they are retail employees and to react to an incident in which a wine rack is bumped, resulting in a spill. This test item isn’t effective in Arabic cultures, Morgan says, given that some Muslims will not touch alcohol. “You have to show olive oil or something very different,” he says.
Businesses also are turning to tests to help them make promotion decisions, Morgan says. Judgments, he adds, about which employees are prepared to move up shouldn’t rely only on performance reviews. “The real issue is understanding potential,” Morgan says. “Past performance can also hide some key weaknesses.” (See “The Reviews Are In,” p. 20.) In addition, companies increasingly are using assessments to make sure their hiring methods can stand up to legal scrutiny, Kenexa’s Becker says. The objective nature of skills tests and other assessments makes it harder to accuse companies of discriminatory hiring.
Nonetheless, some employment tests have been challenged in court. Last year, for example, the U.S. Supreme Court ruled that a group of African-American job applicants could pursue a discrimination lawsuit against the city of Chicago related to an employment test. The applicants claim the city’s use of a test for firefighter jobs negatively affected African-Americans’ chances of being hired.
Employment testing presents other challenges, including the possibility of cheating and many people’s aversion to being assessed. Vendors have tried to counter the public sharing of test content through techniques such as adaptive tests, in which subsequent questions vary depending on the test taker’s answers to items. Providers also are working to make assessments more pleasant by giving them a video game feel.
Companies can appeal to job applicants by offering them feedback from the assessment, Erker says. Even those who don’t match up well for a particular job would receive advice on the kind of position that might be a better fit. “You’ve got to turn testing on its head and say, ‘What is in it for the person taking the test?’ ” he says .
Workforce Management, May 2011, p. 12-13 — Subscribe Now!
Numbers Game: Companies Utilize Data to Predict Workforce Needs
Employers are beginning to turn their gaze from the rearview mirror as they develop and analyze workforce metrics.
For the past decade, large employers have tried to get a better handle on basic data, including head count and turnover. Some have taken those initiatives a step or two further by calculating such metrics as the attrition rate of high-performers or the amount of revenue and profit per employee. But generally, workforce metrics have tended to focus on past activity, with limited attempts to peer into the future. Now, that’s slowly starting to change. With the help of software tools and expert statisticians, organizations are beginning to project their labor needs and challenges with greater precision. Already, predictive workforce analysis is standard operating procedure at some companies, such as weapons-maker Alliant Techsystems Inc., better known as ATK.
The company began a metrics push in 2008, aiming to improve the recruiting function of one division. Gradually, the effort morphed into a broader workforce planning project. The company, which makes aerospace, defense and commercial ammunition products, continues to work to more accurately anticipate its labor supply and demand.
Based on an analysis of past departures, ATK officials created a “flight-risk model” that calculates the probability of attrition for each employee. Last year, for example, ATK correctly projected unusually high turnover in a vital plant maintenance group.
ATK will likely have more company soon. Jac Fitz-enz, head of the consulting firm Human Capital Source and a pioneer in workforce metrics, expects more organizations to take advantage of their human resources data to forecast what’s ahead. With better predictions of expected attrition among key performers, for example, firms can take action to try to prevent or prepare for the losses. For instance, employers can develop targeted recognition programs to try to retain flight risks or they can prepare for departures through better succession planning, training and recruiting campaigns. “Those who are into predictive metrics have a competitive advantage in the war for talent,” Fitz-enz says. “They know more about hiring and developing people for business opportunities, as well as how to contain attrition of high-potential talent.”
To be sure, the number of firms jumping into predictive workforce analytics remains small. In fact, only 20 to 25 percent of companies have a workforce metrics system of substance, Fitz-enz estimates.
A variety of obstacles have slowed the adoption of workforce data analysis. For one thing, companies have tended to prioritize data related to sales and production, which can more easily be tied to the bottom line, says Lois Melbourne, CEO of Aquire Inc., a software firm in Irving, Texas, that sells tools for workforce analysis and planning. Another hurdle is the plethora of HR systems many companies use, each with its own set of data. Multiple systems can complicate big-picture analysis because they can be difficult to integrate and may contain contradictory data. What’s more, Melbourne says, many people drawn to the HR field tend to be uncomfortable with number crunching. Still, the tide might be about to turn. Melbourne sees companies studying their workforce information more carefully and notices growing interest in prediction. Employers “know they need to get there,” she says.
Employers want to take a longer view of their labor needs now partly because of the shortsighted way many managed their manpower during the recent recession, says Jason Averbook, CEO of the consulting firm Knowledge Infusion in Minneapolis. Averbook estimates that 30 to 40 percent of the employees laid off by firms during the downturn were the wrong choices. “Organizations for the most part did a slash-and-burn of talent,” Averbook says. “Most HR leaders never want to do that again.”
Hunger for more data-based decision-making prompted a workforce metrics project at Nationwide Mutual Insurance Co. Launched in 2009, the effort has resulted in monthly “score cards” for managers that contain a number of metrics, such as head count, turnover of high performers and span of control—which shows the average number of direct reports per manager. The score cards also display organizational goals for each of the measurements and managers’ performance relative to those goals.
The reports generally amount to rearview-mirror workforce metrics. But the Columbus, Ohio-based insurer is shifting its gaze forward, as well. The company began its metrics with Excel spreadsheets but is upgrading to an analytics tool from software provider Oracle Corp., which will speed up creation of the score cards. “That frees us up to focus on that next step,” says Scott Nemeth, senior consultant for human capital analytics at Nationwide. “We will use historical data together with market intelligence and benchmarking data to provide better workforce forecasting.”
Software is crucial to a cornerstone of predictive analytics: mining the valuable data and insights that can be buried in a mound of information. Computers act as the drilling equipment to discover nuggets difficult to find by hand.
That computer gear, in turn, requires skilled operators who are well-versed in data analysis. ATK, for example, hired a statistician as part of its initiative, and Nationwide brought on Nemeth to beef up its analytical and planning expertise. Before arriving at Nationwide, Nemeth spent five years in General Motors Corp.’s corporate strategy and planning department and another five in GM’s global workforce planning unit.
But powerful software and data analysts alone won’t result in effective forecasting and planning. Companies need to set goals and ask the right questions. A cutting-edge computer system for analyzing data is no more than a metal detector, Averbook says. Companies must know where to sweep to find useful insights. “You are walking around on a golf course with a metal detector looking for needles,” he says. “In every business, there are different needles.”
Some HR experts worry that companies could focus too much on hard numbers and neglect the softer side of talent management. University of Michigan management professor Dave Ulrich says companies shouldn’t obsess over measurement to the exclusion of inspiring employees and helping them feel part of a team. “Turning work into a series of numbers and analytics may take away the emotion that brings meaning to our lives,” he says. “When people find meaning at work, they are more productive, which leads to companies being more profitable.”
Fitz-enz and other analytics advocates say organizations usually err in the other direction, making less-than-optimal decisions about talent because of a lack of concrete evidence. In any event, Fitz-enz says fears of overemphasizing metrics are overblown. HR professionals, he says, tend to blend hard calculations with a soft heart.
Workforce Management, March 2011, pgs. 20-21 — Subscribe Now!
Companies Focus Their Attention on Flexibility
Staffing flexibility has a new look these days. You might call it a vintage approach to workforce planning.
In recent years, companies have sought greater labor force agility largely by paring back their payrolls and tapping temporary workers or independent contractors when needed. Now, some employers are exploring ways to make traditional full-time and part-time employees fit more flexible workforce strategies. Given people’s desire for more stable employment and the potential drawbacks of hiring contingent workers, organizations as diverse as Hilton Worldwide and Eden Medical Center in the San Francisco area are bucking the trend to ramp up the number of temporary hires.
Hilton, for example, coordinates its staffing on a regional basis, sending full-time employees from one hotel to another nearby hotel to address temporary spikes in demand. This strategy not only makes efficient use of the hotel chain’s staff but also helps develop an agile workforce, says Jim MacDonald, Hilton’s vice president of human resources for the Americas. The employee-swapping approach “allows us to invest more in full-time team members that have a wide range of specialties,” MacDonald says. “Our ultimate goal is to have as many full-time team members as possible.”
To be sure, contingent labor arrangements are growing. Between September 2009 and December 2010, the number of temporary help jobs increased by 495,000, or 29 percent, according to a preliminary government estimate.
Turning to temporary workers is typical during economic recoveries, but some workplace experts are raising questions about the move to a “just-in-time” labor model. Among the concerns are: lack of commitment to the employer, steep wage markups for some temporary jobs, uncertain qualifications of contingent workers and the risk of misclassifying workers as independent contractors, a problem the Obama administration has been targeting.
Rather than rely on contingent workers, Peter Cappelli, management professor at the University of Pennsylvania’s Wharton School, says companies can remain agile through job-sharing, redeployment of workers to different parts of the business and temporary furloughs. “Most U.S. companies have way overdone their use of contingent labor,” Cappelli says. “They haven’t thought through the alternatives of being internally flexible.”
The HR consulting firm Mercer expects more of its clients to develop innovative staffing models. “More creative, flexible work arrangements are going to be the future,” says Andy Geller, a partner in Mercer’s Human Capital practice. For example, one of Mercer’s financial services clients is exploring a novel staffing approach to deal with blips in demand in the mortgage business. The company faces cyclical swings, such as higher processing volume in the summer, as well as unpredictable manpower needs, such as during a surge in home buying when interest rates drop.
In the past, Geller says, these challenges led to significant overtime demands for full-time employees even as the company tried to tap temporary agency workers.
Now, Mercer and its clients are considering setting up a pool of on-call employees. These workers would not be paid a fixed salary but would be guaranteed a certain amount of work each year. They also would receive training and possibly some benefits such as tuition reimbursement. To keep costs down, the company could target workers who already have health insurance, such as retirees or spouses of people with full-time jobs. Like a substitute teacher who comes back to the same school regularly, these employees would have more continuity with the business than a typical temp, Geller says. “The aim is to keep them linked to the organization.”
In the wake of the recession, many workers want a close connection with employers. A 2010 study of U.S. employees by consulting firm Towers Watson & Co. found that respondents ranked “security and stability” as their top priority, ahead of both “significantly higher pay” and “opportunity to rapidly develop skills/abilities.”
Closer ties and greater stability will likely result in a more engaged workforce that is committed to the company and willing to put in extra effort. The prospect of a more dedicated staff is a key reason that hiring more full-time workers appeals to Pete Eggleton, administrative director of human resources at Eden Medical Center, a hospital system. “If you have people who are contingent, they’re not necessarily loyal to you or to the patients that you serve,” he says. “They’re loyal to the paycheck.”
Eden Medical Center meets its nursing needs largely through a combination of nurses who are “benefited,” meaning they receive benefits such as health insurance and work a minimum number of hours a week, and “per diem” nurses who fill in as needed and don’t collect benefits.
Currently, about two-thirds of Eden Medical Center’s workforce is made up of nurses with benefits. The remainder are primarily per diem nurses, along with a small percentage of nurses from temporary help agencies. Eggleton says he would like to bump the share of nurses with benefits to 75 or even 80 percent.
On the other hand, flexibility is important at Eden Medical Center, which employs about 1,700 people, including roughly 600 registered nurses. For instance, patient demand can increase as much as 50 percent between summer and winter, when people are more likely to be sick.
So during a recent recruiting campaign to fill about 70 registered nurse jobs, roughly 35 percent of them were designated as per diem slots. Eggleton, though, says he can imagine his benefited staff taking on more hours in the future. Nurses can work just two 12-hour shifts a week and still get benefits.
Eggleton remains wary of hiring too many temporary employees because he says he believes they could have a “renter” as opposed to an “owner” mindset. A contingent nurse, Eggleton argues, could work night shifts in one facility and then show up for the day shift at Eden. And Eden officials wouldn’t necessarily know about the nurse’s extensive hours.
This concern applies equally to per diem employees and agency temps, Eggleton says. “It’s not good from either the nurses’ perspective or from a patient perspective to have somebody routinely working a double shift. We would have no clue about that.”
Workforce Management, February 2011, p. 3-4 — Subscribe Now!
LinkedIn Referral Policies Could Raise Legal Rift
The recommendations on LinkedIn pages are usually pretty straightforward: current and former business colleagues tout the person’s skills and experience.
But these online testimonials are anything but simple for companies. On one hand, allowing employees to write recommendations for current or former co-workers raises legal risks, especially for financial services firms. On the other hand, muzzling workers might smack of censorship and create resentment.
“Companies attempting to ban employees from writing LinkedIn recommendations are going to appear overly controlling and out of touch,” says Jennifer Benz, founder of San Francisco-based consulting firm Benz Communications. “Aside from being unnecessary and harsh, trying to enforce a policy like that is a poor use of resources.”
The recommendations are likely to grow in importance as LinkedIn profiles become a de facto résumé in the digital era. LinkedIn, a professional networking website where individuals can describe their career experiences and connect with others, has mushroomed over the past several years. Launched in 2003, it now boasts more than 90 million members worldwide.
The site makes it easy to ask for references by providing a template for those requests. “Recommendations help illustrate your achievements, project credibility and show why people enjoy working with you,” LinkedIn states on its site.
The testimonials, however, can trigger trouble for companies, some analysts say. LinkedIn endorsements raise the same legal risks for companies as other references for former employees, labor lawyer Shay Zeemer Hable, from the law firm Bryan Cave, argued in a Workforce Management commentary last year. If a former worker is suing for discrimination, Hable contends, a positive LinkedIn recommendation from a co-worker could harm the company’s case. Praise for a worker fired for poor performance could help that ex-employee argue that the company lied about the reason for termination.
Hable says she has “a number of clients that apply their regular reference policies to LinkedIn, meaning employees are not supposed to write recommendations that may appear to be on behalf of the company for colleagues at the networking site.”
Financial services firms have particular reason to worry about LinkedIn recommendations. A U.S. Securities and Exchange Commission regulation bans certain ads by registered investment advisers, including those that refer “directly or indirectly to any testimonial of any kind concerning the investment adviser.”
The Financial Industry Regulatory Authority Inc., which is known as FINRA and oversees securities firms, also has rules related to ads and testimonials that might come into play with LinkedIn recommendations.
A recommendation on LinkedIn merely stating that the writer used the services of an investment adviser likely would pass muster with the SEC, as long as it does not comment positively on the services, says Barry Schwartz, founding partner of ACA Compliance Group, a consulting firm based in Silver Spring, Maryland, that works with financial services companies. Still, Schwartz would like to see clearer SEC guidance on the issue.
SEC spokesman John Heine says that the commission hasn’t issued specific guidance related to the investment advisers’ ad rule and social media. Whether a LinkedIn recommendation violates the law “depends on the facts and circumstances,” he says.
Given the uncertainty, Schwartz says, most financial services companies are prohibiting their financial advisers from publishing LinkedIn recommendations “at least for the time being.”
Among the companies taking this approach is Ameriprise Financial Inc. The Minneapolis-based financial services firm bars employees who are registered with FINRA—mainly financial advisers—from accepting LinkedIn recommendations, says Ameriprise spokeswoman Stacy Housman.
“We expect the social media landscape to continue to evolve rather quickly and regularly review our policies to make sure they are still appropriate for the current environment and aligned with the SEC and FINRA’s guidance,” Housman says.
Companies in other industries also have limited LinkedIn references. Warner Bros. Entertainment Inc., for example, has a policy prohibiting employees from giving recommendations for current or former co-workers as a representative of the company. But social media guidelines at Warner Bros. allow workers to write LinkedIn recommendations as personal testimonials, says Todd Davis, executive director of worldwide recruitment at the firm, which is a division of New York-based Time Warner Inc.
If employees write a personal recommendation, Warner Bros. advises them to choose their words carefully. “We counsel people to use a great deal of deliberation,” Davis says.
In another sign that social networking practices are outpacing business policies, some organizations have yet to tackle the issue explicitly. Consider, for example, Singapore-based electronics manufacturer Flextronics International. Kristi Oetken, a Flextronics recruiter, has written several LinkedIn recommendations about current or former Flextronics co-workers, and she reads LinkedIn testimonials as she pursues job candidates. Flextronics instructs employees not to give references regarding co-workers or former co-workers over the phone. But Oetken says that the company has no policy about typing out such a peer review on LinkedIn. “At this point, it’s not disallowed,” she says. “It hasn’t been addressed.”
Although Flextronics does not have an official policy, some common-sense guidelines apply, says Tudor Coray, senior manager of national recruiting for a division that provides services to retailers. Employees should stress that the references are from the individual, not the company, and they should not disclose proprietary information, Coray says.
Coray has written LinkedIn recommendations for two former members of her Flextronics team who lost their jobs amid a restructuring last year. It’s common in these uncertain economic times, she says, for people to write unsolicited LinkedIn recommendations as a way to give laid-off colleagues a little boost. “They just want to help,” Coray says.
Besides wrestling with whether and how to restrict LinkedIn recommendations, employers also must determine how meaningful the recommendations are.
The testimonials can reveal a person’s ability to maintain an active professional network, Warner Bros.’ Davis says. On the other hand, he adds, a glowing LinkedIn recommendation does not replace a thorough professional reference check.
Oetken of Flextronics says the testimonials can offer insight into specific projects a job candidate worked on. Additionally, she says, clicking on the names of people providing the recommendations can lead to new prospects. “By following the links you can easily build a pool of individuals to reach out to,” Oetken says. “It is much like following bread crumbs.”
LinkedIn recommendations also can provide valuable intelligence to companies about their employees. Max Drucker, president and CEO of Social Intelligence Corp., which helps companies research candidates and employees on social media sites, says a flurry of new LinkedIn recommendations can signal that the worker is looking for a new job.
“When you see someone accumulating many recommendations quickly, it is often a sign or an indicator they are trying to increase their relevance and persona,” he says.
Workforce Management, February 2011, pgs. 21-22 — Subscribe Now!
Holy Human Resources! Comic Book Character Captures Dual Nature of HR Pros
First there was Catbert, evil director of human resources.
Now comes another less-than-positive portrayal of the HR profession in the realm of cartoons and comics: The Human Resource.
A sultry and somewhat sinister figure dressed in a miniskirt and thigh-high boots, The Human Resource is one character in a graphic novel published earlier this month called The Adventures of Unemployed Man.
The 80-page book recasts the recent recession and contemporary corporate life as taking place in a world of heroes and villains.
The Human Resource is billed partly as a seductress to the central hero, Unemployed Man. But despite what affectionate feelings she may have for him, she belongs to the Just Us League with fellow villains The Man, The Boot and The Outsourcerer.
Is this a reason for real-life HR leaders to take offense? Not at all, says Sue Meisinger, former president and CEO of the Society for Human Resource Management.
“I think it’s a hoot,” Meisinger says. Most HR professionals will look at the satire and laugh as well, she predicts. After all, she says, the job all but guarantees facing some heat. “It comes with the territory,” she says.
Polly Pearson, a consultant and former vice president of employment brand at computer storage maker EMC Corp., says The Human Resource captures the dual nature of HR officials. On the one hand, they advocate for employees. But they ultimately serve management.
“In all humor,” Pearson says, “there’s a seed of truth.”
There’s also a true-life story behind the book for co-creator Erich Origen. He lost his job at a media company in 2009 and has been unemployed since. To Origen, the book is a chance to provoke fresh thinking about flaws in the economic system.
As for The Human Resource, Origen claims no ill will to the profession as a whole.
“I’ve had great HR people on my side,” he says. “That said, I still find the term ‘human resources’ disturbing. It sounds like something the machines in The Matrix would use to talk about their human batteries.”
Origen and co-creator Gan Golan modeled The Human Resource after Catwoman, the wayward anti-hero who has a love-hate relationship with Batman. At one point during Unemployed Man’s job interview at her company, The Human Resource leans in close to the hero, putting her hand on his chest. But in the next panel she rejects him as lacking experience as a “sidekick”—and he falls through a trap door.
“It’s obviously a complicated relationship,” Origen says of the two characters. “Just like Batman’s is to Catwoman.”
She may not be as evil as cartoonist Scott Adams’ Catbert, who takes a kickback, conspires to give bad job reviews and fires an employee by ejecting him with a giant spring,but The Human Resource nonetheless can be a menace.
Her superpowers are detecting strengths and weaknesses, Origen explains. And, he adds, “She can do mass layoffs.”
Workforce Management Online, October 2010 — Register Now!
Special Report on HR Technology In SaaS Battle, Customers Win
A holy war is under way among HR product vendors over “software as a service,” or SaaS.
The phrase generally refers to providing software applications over the Internet rather than installing them on a company’s internal computers. But as this approach to software delivery has grown more popular and branched into multiple methodologies over the past decade, vendors have staked out contrasting positions on the subject.
The battle over what’s sometimes called “on demand” software comes with strong rhetoric among combatants. But it’s not clear whether customers need to choose sides—they may benefit from all the competition.
On one side of the fight are the fervent believers. These are vendors, including Workday and SilkRoad, that say a pure form of software as a service—in which all customers run just one or two versions of the software and it is provided only over the Internet—is the way to go.
On the other side is a range of software providers offering some sort of hybrid approach. They may allow for their software to be installed on customers’ machines or accessed via the Web. They may focus on delivering their software over the Internet, but put customers on a dedicated copy of the application.
Hybrid backers say their products offer benefits such as improved data security and more customer control over software settings and the timing of upgrades.
But SilkRoad co-founder Brian Platz says “pure” SaaS is used by the vendors of the best talent management software products. (Talent management software refers to tools for key HR tasks such as recruiting and performance management.) Platz also says the pure SaaS model has the lowest costs. Maintaining many versions of software is expensive, Platz says. And those costs increase further if the vendor also sells software to be run on customers’ internal computers, because extensive testing may be needed in advance of new releases.
“There’s no doubt that pure SaaS is going to win out,” Platz says.
Companies shouldn’t worry too much about the sectarian software strife, says Jason Averbook, chief executive of consulting firm Knowledge Infusion. Instead, they should appreciate their options and choose what’s best for them. “It truly is the Baskin Robbins 31 flavors of software as a service,” he says. “There really isn’t one way that’s better or worse.”
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Appetite for SaaS
Companies like the taste of SaaS. According to a 2009 survey of North American and European companies by Forrester Research, just 14 percent of respondents said they were not interested in adopting software as a service. And in late 2008, Forrester found that 29 percent of companies had tapped HR software through SaaS, making human resources one of the business functions that is using SaaS most heavily.
“SaaS adoption will become the direction of choice for many large and small companies,” Forrester said in a January report on HR software. “Application flexibility, cost predictability and ease-of-use make SaaS very attractive.”
Software as a service is largely a reaction to the way companies bought and ran business software for most of the 1980s and 1990s. Under the “perpetual license,” “on-premises” model, organizations purchased copies of applications and installed them on their own computers. In this scheme, customers typically pay vendors annual maintenance fees that can be 20 percent of the original license fee and entitle clients to tax updates and more substantial upgrades with new features.
The on-premises approach lets companies tailor applications extensively. But software delivered in this way is costly and time-consuming to implement and upgrade.
About a decade ago, vendors pitched the idea of hosting applications remotely and letting companies access the software over the Internet. This approach reduced hardware and maintenance headaches for organizations. But having to manage many customized applications for customers was not cheap.
So the idea of “multi-tenancy” gained ground. Just as the many tenants of an apartment complex share the same roof and infrastructure, applications with a multi-tenant design are run for multiple clients simultaneously—and at a lower cost for vendors. The principle is similar to the way consumer-oriented websites such as Google and Yahoo serve many visitors at once.
As the term “software as a service” emerged over the past several years, it typically meant a multi-tenant application delivered over the Web. It also generally referred to subscription pricing, in which customers paid to use the application for a fixed period of time. SaaS, then, offered the benefits of quicker implementations, lower upfront costs and fewer technology aggravations.
Still, the approach raised fears that a company’s sensitive employee data could be seen by unwanted eyes. Another concern has been that a single shared application would not be able to match companies’ idiosyncratic business processes.
But SaaS products have proved themselves on the privacy front and have become quite flexible by giving customers the ability to configure a variety of settings, says Karen Beaman, chief executive of consulting firm Jeitosa Group International. At the same time, she says, customers have realized that extensive software customizations lead to major hassles when it comes to updating the software later.
“Large companies are now understanding that SaaS has tremendous advantages,” Beaman says.
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Hybrid approaches
Nonetheless, some organizations prefer to stick with on-premises software, says Lisa Rowan, an analyst with research firm IDC. She says security-sensitive government agencies and large, complex businesses in fields such as manufacturing are more likely to shy away from SaaS.
“You’re still going to have a certain segment of clients for whom that just doesn’t work,” Rowan says.
HR software provider Accero gets most of its revenue from clients with applications installed on premises. But the company has joined the SaaS world in its way. Accero, whose human resource management and payroll system used to be called Cyborg, offers to host its software for customers and let them access it over the Internet. For its Accero On-Demand product, Accero does not have a multi-tenant setup. Each on-demand customer has its own dedicated “instance,” or copy, of the application. But Accero uses “virtualization” software to allow multiple clients to be running on the same computer server.
Virtualization software allows a single computer to create multiple virtual computer systems. By slicing up computer resources in this way, Accero’s operating costs are just a fraction more than a pure SaaS vendor, says Accero CEO Tom Malone. And Accero can continue to meet the needs of large customers who want more than a plain-vanilla version of HR software.
“They need a degree of customization,” he says.
Lawson Software has taken a similar approach. For customers that want software delivered over the Internet, Lawson provides dedicated copies of applications and uses virtualization technology to optimize its computer resources.
Lawson customers can choose between a version of SaaS where no customizations are possible or pay a higher price for the ability to make modifications that Lawson will maintain over time, says Larry Dunivan, the vendor’s senior vice president of global human capital management products. Lawson also offers its HR applications for on-premises installation.
As part of its overall SaaS strategy, Lawson is tapping the computing power of Amazon, which provides access to its computer servers via a product called the Amazon Elastic Compute Cloud. Dunivan argues that companies opting for a “single-tenancy” model of SaaS may prove to have the leanest model in the long run.
“As virtualization technologies are leveraged in combination with cloud computing, it’s possible that multi-tenancy won’t offer the lowest long-term cost of ownership,” he says.
Software vendors that insist on the purist approach to software as a service are “multi-tenant SaaS bigots,” Dunivan says.
Others in the hybrid SaaS camp include Softscape and Halogen Software. Softscape sells on-premises HR software, a multi-tenant application typically used by midsize businesses, and what it calls “Secure-SaaS,” in which each customer has a dedicated instance of the application and additional security features.
Steve Bonadio, vice president of product marketing at Softscape, says Secure-SaaS is appealing partly because it means customers aren’t forced to take upgrades, an aspect of pure SaaS that can throw off users and create problems with the way the software integrates with a customer’s other business applications.
Those upgrades, typically zapped out several times a year by SaaS vendors, come with new features but “can break what customers have already launched across their organization,” Bonadio says.
For its SaaS product, Halogen employs virtualization technology and gives each customer its own instance of the application. The company also sells its HR software for on-premises installation. The on-premises product entails testing new versions on a variety of computer operating systems to mimic customers’ computer setups. But the company says testing for those customers is largely done through software tools. “We work very efficiently,” says Donna Ronayne, Halogen’s vice president of marketing.
Vendors of hybrid SaaS products also make the point that the debate over SaaS purity is largely inside baseball: Customers don’t care about it nearly as much as vendors.
But the particular flavor of SaaS did matter to Nebraska. The state signed a deal with Cornerstone OnDemand last year for a suite of talent management software tools to be delivered over the Internet. Cornerstone is among the more pure SaaS players, keeping all customers on the same code.
Carlos Castillo Jr., the state government’s director of administrative services, says state officials appreciate the way pure SaaS prevents extensive customization by clients and thereby “encourages consistency across our organization.” Castillo says custom modifications in the state’s on-premises system for core HR tasks are expensive to maintain when the application is upgraded. “Customization always translates into higher costs for us,” he says.
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The purist argument
Even so, pure SaaS advocates say their products can accommodate even the largest, most complex companies. Workday points out that its single line of code is working at firms including Chiquita Brands International, Lenovo and Flextronics, which employs 165,000 workers worldwide.
Purists also downplay difficulties from the upgrades that SaaS vendors impose on customers. Roughly 10 percent of the changes sent out quarterly by Cornerstone OnDemand are mandatory, and typically involve the user interface.
“The remaining 90 percent of updates are optional for clients, and they can decide whether they want to activate them for use in their organization,” says Michelle Haworth, Cornerstone’s director of corporate communications.
SaaS flavor matters in terms of software vendors’ long-term viability, pure SaaS vendors say. If there are fewer lines of software code to develop and maintain, that translates to a “leaner model,” says Deepak Rammohan, director of product management for Taleo Enterprise, Taleo’s software product for large organizations.
“A pure SaaS model … leads to a leaner sales model, a leaner consulting services model and a leaner support model,” Rammohan says. “A leaner model for the vendor then also means a better price point for the customer.”
Taleo keeps its largest customers on one of two versions of its Taleo Enterprise application.
It has emerged to be one of the leading talent management firms, and a profitable one. Its revenue grew 18 percent last year to nearly $200 million, and it recorded a profit of $1.3 million.
Another major HR software firm pursuing the pure multi-tenancy SaaS model is SuccessFactors. “We actually turn away companies that will only do on-premise,” says Dominic Paschel, director of global public and investor relations. SuccessFactors, which spent $80 million on sales and marketing last year, posted a net loss of $12.6 million for 2009, but revenue grew 37 percent to $153 million.
Platz of SilkRoad says a typical customer company of a couple thousand employees can expect to pay about $80,000 per year for one of SilkRoad’s six modules.
“Hybrid SaaS vendors are fairly competitive with price. They have to be, or else they wouldn’t sell any,” Platz says. “They tend to, however, have less innovation and functionality. They are tied to that boat anchor of their licensed software.”
SilkRoad’s pure SaaS is selling fast. New sales grew 30 percent last year, Platz says.
But hybrid SaaS vendors also are doing a brisk business. Halogen, for example, enjoyed a 41 percent increase in recurring revenue last year.
Averbook of Knowledge Infusion says it’s generally a good time for SaaS in the HR arena. Companies with tight budgets for information technology projects are willing to let HR proceed with the relatively small investments needed for software delivered over the Web, he says.
Workforce Management, June 2010, p. 29-34 — Subscribe Now!
Managers Don’t Matter
The old saw that “people don’t leave companies, they leave managers” has become outdated—if it ever was true. Recent polls on retention reveal that crummy managers aren’t the principal cause of employee defections. While employers say the manager-employee tie is the biggest or second-biggest reason workers jump ship, employees put many other factors ahead of the manager connection, such as stress and base pay.
Still, some experts argue that getting manager-employee relations right is vital now. Managers, observers say, play a crucial role in inspiring workers in firms that are often in flux, frequently riddled with distrust and increasingly distributed across the globe. Studies show employee engagement has dropped during the recession. And in the wake of company decisions to cut staff, freeze salaries and take other cost-cutting steps, many workers are itching to bolt their firms.
To knit alienated employees into cohesive, innovative teams, companies will have to rely on savvy supervisors, says business consultant Karen Lojeski.
“What I’m finding is, managers matter more than ever,” she says.
Key connection
Linda Devlin says her boss matters more these days. Devlin, a senior manager at consulting firm Accenture who is responsible for leadership development and succession planning, says her supervisor has become more important to her engagement in the tough business climate. Devlin’s boss, global director of leadership development Camille Mirshokrai, has translated Accenture’s overall strategy in concrete terms as well as acted as a kind of sentry, passing on information about how the company is doing, says Devlin.
“The importance has grown in terms of feeling connected to our organization and not feeling lost in a black hole,” she says.
Mirshokrai, for her part, says managers are crucial when it comes to an increasingly important retention factor: shaping jobs so employees get to do what they’re best at each day. Generation Y’ers in particular want to be able to tout their achievements at work, she says.
“The company that offers you the best experience is going to get you,” Mirshokrai says. “And that’s where the manager plays a key role.”
For years, managers have been at the heart of Americans’ job experience. Supervisors not only have delegated tasks to workers, but have also judged their performance. Over the past decade or so, managers have been asked to take on more roles for employees, including career development coach and onboarding guide for new hires. According to research firm Gallup, the relationship with the manager is the largest factor in employee engagement, accounting for at least 70 percent of an employee’s level of engagement.
Employee engagement is a concept that captures retention—how committed employees are to their firms—but also reflects how willing workers are to put in extra effort on the job. Gallup has documented a connection between higher levels of engagement and higher productivity and profitability.
Engagement has fallen during the recession, a number of studies show. A May 2009 survey by consulting firm Watson Wyatt Worldwide (now Towers Watson) of 1,300 workers at large U.S. employers found that engagement levels for top performers fell close to 25 percent year over year. Employees overall experienced a 9 percent drop in engagement year over year.
Sixty percent of employees intend to leave their firms as the economy improves this year, and an additional 27 percent are networking or have updated their résumés, according to a late 2009 survey of 904 workers in North America by advisory firm Right Management.
Influence overstated?
But you can’t pin all that dissatisfaction on direct supervisors. Managers have never been the sole factor in worker engagement and retention, says Jack Wiley, executive director of the research arm of employee survey firm Kenexa. Wiley has reviewed data going back to 1994, finding that the key drivers of retention have remained consistent: confidence in an organization’s future; recognition for contributions; opportunities for growth and development; and a good fit between the job and a person’s skills and abilities.
Managers influence the recognition component and probably the development and job-match pieces, Wiley says. But they have limited power over the confidence component and may be hamstrung on employee development if executives slash training budgets.
“If you’re in love with the company, you can outwait a stinker of a manager,” Wiley says. “The role of the manager is often exaggerated.”
A report last year from Watson Wyatt found that “relationship with supervisor/ manager” was the top-ranked reason employers gave for why employees leave an organization, cited by 43 percent of respondents. But employees themselves rated stress levels as the top reason, followed by base pay. Four other factors tied for third place, none of which was the manager relationship.
Similarly, a report last year by Salary.com found that employers ranked “poor relationship with manager(s)” as the second-most-important reason employees leave a job. It was cited as a significant factor by 38 percent of employers. But bad blood with the boss didn’t rank in the top five reasons employees gave for leaving a job, which included inadequate compensation, inadequate professional development opportunity and boredom.
Managers may be less central to employees these days in part because of the lingering recession. The downturn threatened the very survival of firms, forcing employees to pay more attention on their organization overall. The ways companies have responded to the recession also is a factor, experts say. Rusty Rueff, a consultant and board member of job feedback site Glassdoor.com, says lower-level managers used to act as a buffer between employees and company policy, with some control over workers’ destinies. But much of the downsizing and cost-cutting during the downturn has been dictated by top executives, leaving frontline supervisors without any influence.
“At that point, you’ve neutered the manager,” says Rueff, who worked as an HR executive at Electronic Arts and PepsiCo. The result, says
Rueff, is that workers have less reason to care about their connection with their supervisor. “The employee feels they’re out there on their own,” he says.
Brian Kropp, analyst with the Corporate Executive Board, says managers have had less time for their direct reports, which has made it harder for them to be effective at spurring above-and-beyond efforts from their team members. The average manager worked about 10 percent more hours a week in the first half of 2009 compared with the first half of 2008, but spent 20 percent less time with their team members, Kropp says.
Recession’s effect
Kropp also says the ongoing upheavals at so many firms have loosened the bonds between bosses and workers. In a recent Corporate Executive Board survey, 60 percent of employees said they had a change in manager in the past six months or expect one in the coming six months. Given that grooming employees is a long-term process that pays dividends over the course of years rather than months, managers are bound to pour less into their people, Kropp says. “I don’t have the same incentives I had to be with them, to develop them, to care for them, to invest in them as I had before,” he says.
In addition, changes in the workplace that predate the recession have made the immediate manager relationship less relevant for workers, says Ilene Gochman, a consultant with Towers Watson. She notes that many companies have adopted “matrix” structures in which people have multiple managers. Firms have been conducting work in the form of ad hoc projects that may utilize employees from different business units. Rather than asking managers questions about company policies or training courses, employees can get much of the information they need from online portals.
And, Gochman says, companies often have mentoring programs that give employees a connection to another more-senior person in the organization besides their manager. “You don’t have to ‘leave your manager,’ ” Gochman says. “You can work around them now.”
Still, some observers say managers remain crucial to company efforts to win over a workforce that is skittish, skeptical and seeking greener pastures.
By giving employees a good understanding of how their individual efforts contribute to broader company goals, managers increase workers’ sense of control amid challenging times, Gochman says. “A good manager is going to be that guide for you,” she says.
Companies also are under pressure to redefine a worthy employment deal for workers in the wake of layoffs, salary freezes and benefit cuts. Gochman says managers play a key role in reinforcing messages about the new “employment value proposition.”
Managers continue to be essential to engagement at financial services firm Ameriprise, says Nick Nyhus, vice president of talent management at the 11,000-person company. Ameriprise cut about 300 positions early last year, and the firm is highly matrixed—factors that can diminish the importance of the manager-employee tie.
But Nyhus says Ameriprise has a culture of fostering strong relationships, which is a foundation of the firm’s work as a financial advisor. And in an employee engagement survey conducted in the third quarter of last year, Ameriprise found that the significance of the manager-employee bond remained steady. “That relationship was pretty key, still,” Nyhus says.
Building trust
Managers are vital to reducing the “virtual distance” that can exist in geographically distributed teams, says consultant Lojeski. Virtual distance refers to feelings of isolation among colleagues who typically communicate through e-mail, telephone or other technologies, and it can hamper financial performance and innovation, Lojeski says.
Managers need to develop “techno-dexterity,” Lojeski says, which means knowing how to communicate through a range of tools depending on the message and the audience. She cites the example of an executive who sends “video e-mails,” which gives people the richer experience of seeing facial expressions and hearing a voice rather than simply reading text.
Kropp, of the Corporate Executive Board, says a key is to make sure managers are focusing only on the handful of things that matter most. Companies, he says, have pushed many HR tasks onto supervisors in recent years, including greater responsibilities for handing out pink slips. “We’ve just gone too far,” he says.
But organizations would err if they removed talent management duties from managers altogether, says Tim Ringo, global leader of IBM’s human capital management division. The traditional manager, who merely allocated work and judged performance, is “dead,” says Ringo, whose unit sells HR software and services. He says firms need leaders who can hold on to high-potential employees by paying attention to their career development.
To this end, talent management software systems serve a critical function, Ringo says. In an era in which managers may change quickly, tools like performance management systems can help new supervisors quickly grasp the strengths, history and future plans of team members. Without such a system, “it’s just chaos all the time,” Ringo says.
While cutting-edge software may be part of the solution, so is old-fashioned empathy. Brad Federman, president of consulting firm Performancepoint, says that supervisors need to take a genuine interest in others. “The more self-interested we are, the more our relationships will suffer or be superficial,” Federman says. “Firms must help managers learn ways to reduce their self-orientation to build a culture of trust.”
A demanding role
It all adds up to a tall order for managers these days. Accenture’s Mirshokrai says supervising people is tougher now than it was when she first became a manager at the company about 15 years ago. That’s partly because of the rise of virtual teams and the communication challenges posed by managing at a distance.
Mirshokrai has 11 direct reports scattered across North America, Asia and Europe. Back in 1994, she ran a group of about a dozen employees located at a single client site. “We all sat together in one room,” she recalls. “You could tell by people’s facial expressions or moods how they were doing.”
Strong generational differences in the workforce today also are tricky. Mirshokrai has found that younger employees tend to want more frequent assessments. “Some people only want feedback twice a year. Some people want feedback two times a month. Some people want feedback on every interaction,” she says.
Given the demands put on managers, companies would do well to help them do their jobs well. At the same time, organizations should not home in on managers too exclusively, experts say. McGill University professor Henry Mintzberg says companies should fix corporate cultures that hinder managers as they try to lead teams.
For one thing, he calls for an end to incentive plans that single out individuals. He also says firms should stop axing employees casually every time quarterly numbers are missed. “A lot of the coldbloodedness of stock market pressure has driven a wedge between managers and employees,” Mintzberg says.
Kenexa’s Wiley agrees that firms seeking to engage and retain employees have to look at the bigger picture. The most important driver of engagement, Wiley says, is leadership that inspires confidence in the future. Focusing too much on managers, Wiley says, “takes the organization off the hook.”
If companies don’t do a better job putting the importance of managers in perspective, they might suffer more than just the disengagement and defections of individual contributors. They might find effective managers heading out the door as well—and taking teams of people with them who might help rival firms.
Rueff says he knows of cases in which leaders broke off from their companies with a group of employees and became a kind of business-unit-for-hire. “In the free-agent market, you’re already starting to see it,” he says.
Workforce Management, April 2010, p. 18-24 — Subscribe Now!