For Garth Henning, it must have felt as if the planets were aligned at NASA. “When you saw somebody in the hall who was kind of close to your age, you’d stop and introduce yourself. This was very unusual behavior for introverted scientists and engineers,” recalls Henning, an engineer in the Space Operations Mission Directorate at NASA headquarters in Washington, D.C., which oversees the Space Shuttle and International Space Station programs. Henning, who is 36, says there were so few employees under the age of 40 that younger workers almost instantly gravitated toward each other.
Most workplaces aren’t nearly as “monogenerational” as NASA, which employs 18,000 people. Because of a big recruitment surge in the mid-1980s, followed by a hiring freeze lasting through most of the 1990s, the average employee age at NASA exceeded 47 by 2007 and less than 20 percent of the federal agency’s workers were under 40. Aside from limited social interaction with other young employees, Henning says, “We had difficulty seeing any promotion potential for ourselves.”
Clearly, NASA needed to prepare for its future by trying to recruit more people from both Generation X and the millennial generation and create an appealing workplace for younger employees. Like many employers, NASA also had to develop programs to integrate younger workers with the older baby boomer and traditionalist generations. Indeed, it was Gen Xers like Henning who got the ball rolling. Younger workers found one another and began organizing. They tackled social stuff first. “Most people wanted to know more about softball teams than retirement planning,” Henning says. Grass-roots groups gradually sprang up in more centers, and people with contacts at multiple centers began stitching together an agencywide group known as “Next Geners.”
Toni Dawsey, NASA’s former assistant administrator for human capital management, brought some Next Geners to a Strategic Management Council meeting in 2008. The workers identified significant concerns, including the need to gain leadership training and experience, a perceived lack of advancement potential and limited communication and collaboration across generations. Impressed by the feedback, then-administrator Mike Griffin charged center administrators with setting up cross-generational meetings to address the Next Gen concerns.
Dawsey, who retired from NASA in 2010, was put in charge of implementing changes agencywide. One of her first acts was to dust off NASA FIRST, a leadership development program for early-career professionals that had languished on a shelf for two years. FIRST, which stands for Foundations of Influence, Relationships, Success & Teamwork, targets GS-11 and GS-12 employees—on the federal government’s 15-grade General Schedule wage system—who are usually in their 20s. “Professional development is a huge part of the NASA culture, but the Next Geners had identified a gaping hole,” says Erica Bovaird, FIRST’s program manager.
The competitive program guides 40 high-potential participants, who are selected by judges, through a yearlong leadership development curriculum. Participants work in small groups on projects, and the teams are each assigned a sponsor, adviser and mentors. Many individual centers have created their own mentoring programs and social groups. For example, a Developing Professionals Club at Glenn Research Center in Cleveland focuses on career growth, community service and networking. Its members interact with senior management at various events.
Another priority identified by Next Geners was a desire for formal employee orientation. In response, Ames Research Center at Moffett Field, California, formed a multigenerational group called OpenAmes that eventually spread to the agency level. “Our onboarding programs are now very advanced and multigenerationally friendly,” Dawsey says. Each new employee is paired with an experienced sponsor who serves as a guide.
New technology often provides opportunities for collaboration across generations. At Goddard Space Flight Center in Greenbelt, Maryland, Next Geners assisted with the redesign of the intranet and launched Spacebook, a NASA version of Facebook, to help workers connect. Spacebook proved so popular that it was soon adopted agencywide. Despite such efforts, the percentage of NASA workers under the age of 40 stubbornly remains below 20 percent. But the space agency remains hopeful that its programs for the younger generations will ultimately produce a galaxy of new stars.
Workforce Management, May 2011, p. 16 — Subscribe Now!
Coca-Cola Division Refreshes Its Talent With Diversity Push on Campus
Although Coca-Cola products are staples on college campuses nationwide, recruiters for a major division of the world’s largest soft-drink maker were marked as absent.
But in 2009, Coca-Cola Refreshments—the company’s sales and supply operation—launched the University Talent Program. Its creation was spurred by compelling business needs.
Although Coca-Cola is one of the world’s most-recognized brands, supply-chain jobs aren’t high-profile, hotly sought positions. The company faced a common problem: a shortage of talent.
“We wanted to infuse talent into the organization that would add value to the business through participation in targeted leadership and internship programs,” says LaTashia White, director of talent acquisition for Coca-Cola Refreshments, which employs 75,000 people in North America.
To make Coca-Cola Refreshments opportunities especially attractive, White put together a program structure that would ensure participant success. Its crucial elements are real-world responsibility, executive exposure and support and built-in professional development.
White sought to leverage the Coke brand not only to interest more candidates but to also help expand the division’s diverse workforce.
“We developed a major initiative to attract more women and people of color, so we turned to campuses to establish a diverse pipeline,” she says. College recruiting seemed to provide access to large numbers of candidates cost effectively, so the company launched University Talent Program to plumb a previously untapped resource.
The U.S. Equal Employment Opportunity Commission reports that, in 2009, women accounted for 48.45 percent of the total workforce and constituted 54 percent of professional workers. Minorities, meanwhile, comprise 34 percent of the total workforce but only 24.5 percent of professionals.
“We should always be looking for top talent wherever we find it, and looking to increase representation wherever we identify gaps,” says Linda Stokes, president and CEO of PRISM International, a consulting group based in Sanford, Florida. “Inclusive, respectful workplaces lead to increased employee engagement, which has been shown to positively affect business results.”
Hired during the spring of their senior year, Coca-Cola Refreshments’ new hires, who are known as “leadership associates,” can specialize in human resources, business, sales, supply chain, or finance. Once hired, they enter a 24 to 36-month, full-time program, rotating to new assignments within their specialty every six to 12 months.
Participants are supported by rotational managers, sponsors and coaching peers. Brian Weston graduated from Emory University in Atlanta in May 2010 with a bachelor’s degree in economics and entered the company as part of the finance team. He recently completed his first rotation in forecasting.
“It was an excellent place to start, at the center of finance, sales and the supply chain. It gave me a sense of who the players are,” he says. Weston is now beginning a rotation in procurement.
“Learning activities, such as capstone projects at the end of rotations, enable our participants to get leaders’ ears,” White says.
The new hires must meet performance expectations, complete a functional learning curriculum that includes on-the-job training and an annual leadership conference and are evaluated like other employees. Those who excel are eligible to take on leadership roles.
White immediately pushes for the retention of the young workers. She partnered with learning and development professionals to create an onboarding toolkit that would help develop an affinity for the organization and set participants up for success. Each entering class participates in a weeklong series of learning and social activities.
Each year, the division accepts 60 full-time associates and 80 interns. In the first year of the program, 32 percent of full-time recruits were people of color; 44 percent were women. In the second year, 45 percent were people of color while 54 percent were women. White recruits at 29 colleges and universities nationwide, selecting historically black colleges and others based on their U.S. News and World Report rankings in such relevant programs as industrial engineering.
Workforce Management Online, March 2011 — Register Now!
Benefits of Workplace Ranking Programs Extend Beyond Recruiting
As teenagers, Kari Yuers and her brother did their chores in the factory founded by their dad, an inventor and entrepreneur.
At the Vancouver, British Columbia, headquarters of Kryton International Inc., Yuers hauled buckets and cleaned floors—and experienced life as a Kryton employee firsthand. As Yuers advanced through the company that her father founded, becoming general manager and eventually CEO in 2001, she resolved to add the personnel systems and programs Kryton was lacking.
“When I became CEO, I was keen to build a great company to work for,” she says.
Yuers has since achieved her goal. Kryton was named the top manufacturing workplace by BCBusiness magazine in 2010 and the No. 2 workplace overall. Yuers began entering workplace ranking programs in 2008.
“One of my goals when I hired a full-time human resources professional was to win one of these awards,” she says.
But Yuers’ objective wasn’t just publicity. She saw the ranking program, which surveys the employees of organizations that enter the competitions, as an opportunity to get feedback on what Kryton was doing well—and what it wasn’t. In 2008, the company placed ninth; Yuers used the results to identify the 10 lowest-ranking areas and created a plan to address each.
Organizations enter workplace ranking programs for a variety of reasons. The National Rural Electric Cooperative Association, or NRECA, has been entering since 2003, primarily to attract qualified candidates.
“Our employment brand is not a big name. We felt we needed something extra special to get the attention of candidates,” says Paul Hvidding, director of human resources at the Arlington, Virginia-based association.
The organization regularly enters four major programs: the Northern Virginia Family Services Companies As Responsive Employers, or CARE, Award, Washingtonian magazine’s Great Places to Work, Computerworld’s 100 Best Places to Work in IT, and the AARP’s Best Employers for Workers Over 50.
The positive PR generated by the awards extends beyond recruiting, says Hvidding. “The recognition reassures current employees as to our value proposition, and it sets the bar pretty high. Our managers and supervisors aspire to create a work environment we can all be proud of.”
Hvidding also uses the information generated as a benchmark and a driving force. When NRECA entered its first program in 2003, it did not win. “We learned from that experience and made some substantive changes to our benefits and programs,” he says. Hvidding also reviewed the information submitted by the winners and realized that NRECA did do some things he hadn’t highlighted well.
Medallia Inc., a Palo Alto, California-based maker of customer experience management software, is new to the rankings game, having entered its first program last year. Employee recruitment was the goal, says Amy Pressman, president and co-founder. “The company had doubled in size in the previous year. We had a great culture but were kind of a well-kept secret,” she says. “Although we have a strong employee referral program, we wanted to cast our net wider.”
To enter the program sponsored by the Bay Area News Group, Pressman permitted an online survey of all of her employees.
“I like that employee participation eliminates a company’s ability to spin” the information submitted, she says.
The reward was twofold: Medallia received customized survey results that showed how it did in various dimensions as well as how it compared with other companies. Recruiting benefited, too, although not exactly as Pressman had planned.
“The payback was slightly different from the goal,” she says. “I’m not sure how many candidates [the award] attracted, but it added to our credibility and made [working here] a faster sell.”
Some companies find that the benefits of workplace ranking programs can extend over time. Beryl Cos., headquartered in Bedford, Texas, entered and regularly placed high in workplace ranking programs for about seven years. The company, which was named No. 2 in the nationwide Great Places to Work program in 2007, stopped entering programs about a year ago.
“We had won the best of the best,” explains Lara Morrow, who goes by the title “queen of fun and laughter.” “It is a lot of work to gather the information, and we felt that we were inundating our employees with surveys.”
Morrow estimates that completing the application for the Great Places program took about 100 hours. However, the company has reaped significant advantage from the recognition, and continues to do so.
“Employees, vendors and clients want to work with us. Our recruiting costs have declined by half, and we now enjoy a 60 percent employee referral rate,” Morrow says.
She also notes that the awards aid retention. “People are aware that they have found a job someplace special and are much less likely to jump ship for 50 cents or a dollar more per hour.”
Workforce Management Online, February 2011 — Register Now!
Small Banks Make Change in Layout, Job Descriptions
Banks and their employees are branching out in new directions. Because more people are doing their banking online, financial institutions are opening smaller branches that leverage staff and technology in new ways.
Teller lines and drive-up windows are disappearing, replaced by consultation areas and two-way video feeds in the drive-thru lanes. At the same time, the dividing line between branch job functions has become blurred; employees are expected to learn and perform tasks ranging from check cashing to account services to sales, driving banks to recruit “universal associates.”
“Technology has brought fantastic efficiencies to the banking industry,” says Scott Smith, senior vice president of Interbrand Design Forum Inc., a branding consultancy. “Banks must focus on that technological enablement while still trying to attract customers to their branches,” where most products and services are sold. In its third annual financial management survey, Intuit Financial Services found that more than a third of consumers use online banking and more than a quarter say they have cut back on branch visits.
The traditional areas of a branch have been the teller cages and the “platform,” which is the desk area where managers and relationship bankers conduct client consultations. But secure cash recyclers that dispense currency have eliminated open cash drawers and thus the need for physical barriers, enabling tellers to step out into the open. “Tellers now greet customers at the door and walk them into the branch while asking about their needs,” says John Hyche, principal of Level 5, an Atlanta architecture and interiors firm that specializes in branch design. “Banking is now a whole new world of communication, engagement and listening.”
Many financial institutions have changed their hiring and training practices to reflect this new paradigm. At Bank of Georgetown in Washington, D.C., for example, the teller window has been replaced with desks and comfortable chairs for customers. And all branch employees are known as customer service representatives.
When she recruits, Christine Linford, vice president and director of human resources, focuses on attitude: “We look for energetic people with a service mentality and a warm personality.” She finds prospective employees in some unlikely places. Linford gave her business card to an airline ramp agent whose can-do attitude and helpfulness under pressure impressed her so much that she hired the woman a few weeks later.
“As the branch becomes a rich sales environment, bank tellers have the wrong skill set moving forward,” says Brett King, a consultant and author of Bank 2.0: How Customer Behaviour and Technology Will Change the Future of Financial Services. “Strong advisory and sales capability is needed.” King reports that several of his clients have turned to hiring from the hospitality and advertising industries in the quest for associates with stronger people skills.
Fewer in-person transactions have driven banks to deploy staff more strategically. “They must share the work to maximize productivity and efficiency,” says Jackie Hudson, retail practice director of enterprise solutions for Verint Systems Inc. She says some clients are gearing up for total “cross-channel workforce optimization” in the next two years; this approach will assign call-center and back-office tasks to underutilized branch employees.
WSFS Bank in Wilmington, Delaware, trains new employees to become universal associates and has created a “permeable” teller counter in its branches, a barrier-free design that permits associates to move about with customers.
Instead of hiring people with banking experience, Rick Wright, the bank’s executive vice president and director of retail banking and marketing, says he seeks recent college graduates and candidates with retail experience. To assess applicants’ potential, WSFS conducts extensive testing and considers about 100 candidates for every two to three open positions.
“Our HR design plan makes employees very difficult to hire,” Wright says. Banks traditionally have used on-the-job training, but new WSFS associates spend 16 weeks in classroom programs. These testing and training practices have proven to be a worthwhile investment, Wright says. Turnover at WSFS is just 17 percent while the industry average is 40 to 50 percent.
WSFS has been deploying universal associates for about eight years. Gallup surveys commissioned by WSFS show that customers are more satisfied, and the approach is also more efficient. “We can staff a 4,000-square-foot branch with two or three people,” Wright says.
Workforce Management, January 2011, p. 12 — Subscribe Now!
Employee Referrals Remain a Recruiters Best Friend
The old adage “People are our most important asset” is particularly true when it comes to stocking the workforce.
Consider that 88 percent of employers rate employee referrals as their No. 1 source of above-average candidates, says John Sullivan, a San Francisco State University professor of management, who adds that employee referrals top executives’ lists in terms of quality and longevity of hire and return on investment. And, Sullivan says, turnover of new hires from employee referrals is 32 percent lower after six months.
“Employees refer candidates with similar qualifications and skills,” says Anne Murguia, vice president of marketing at Jobvite, a site that merges referral and tracking capabilities with social networking. “They’ve set the candidate’s expectations, so there’s likely to be a better fit.”
Murguia adds a statistic discovered in Jobvite’s research: One in 10 employee referrals are hired vs. 1 in 100 applicants who apply over the transom.
Chicago-based consulting firm Accenture has been recognized frequently for the quality and strength of its employee referral program. Its goal, says John Campagnino, senior director of recruitment, is to make current employees Accenture’s top source of talent.
“The quality of employee referral candidates tends to be very high,” Campagnino says. “There’s a strong sense of stewardship and understanding among our employees.”
Policy and process is key to the program’s success is two critical elements. Campagnino says to build a policy that lays out internal rules and regulations as well as reward and recognition potential. Then craft a process that is easy to use and that lays out intelligence—how the program will be tracked and measured—upfront.
Rewarding employees who make referrals are common and help organizations demonstrate their appreciation. At Accenture, more than one-third of new hires are generated by referrals; rewards range from $2,000 to $7,000 or more.
“We run special campaigns for specific skills” that might net higher rewards, Campagnino says.
R.J. Morris, director of staffing for McCarthy Building Cos. in St. Louis, regularly encourages the company’s 1,600 employees to refer candidates. His program includes a variety of rewards, ranging from gift cards at the interview stage to bonuses up to $5,000 for a successful hire.
Accenture recently launched a one-step referral website that allows employees to suggest candidates for specific openings or to make general referrals; its use is open to all employees as well as Accenture alumni.
Morris says it’s important to make the referral process easy for employees. He relies heavily on referrals as a source of qualified candidates and ensures company colleagues that the staffing team will do the legwork.
“All you have to do is give us a name and a phone number or e-mail address; we will do the rest,” he says.
To Morris, the ability to accommodate outliers is crucial.
“I would much rather spend my day trying to figure out how to fit a really good person into our organization than trolling social networks looking for candidates,” he says.
Company culture underlies policy and process, Murguia says.
“Building a culture of referral is fundamental,” Murguia says. “Employees must be excited about their company, and the company must send the message that recruitment and hiring are everyone’s job.”
If employees feel that they are a part of the company and its success, they won’t refer unqualified people, says consultant Simma Lieberman, who blogs about recruiting for the website Fast Company.
Lieberman says that a robust referral program can also help to increase the diversity of a candidate pool, but “you need to let employees know that you desire that greater diversity,” she says.
Accenture has created an internal marketing campaign that includes a variety of communications strategies and a special landing page on the company intranet that includes photos and testimonials of successful program participants; employees can even shoot and upload their own videos. The referral site also features online help that allows employees to track the progress of their referrals in real time.
To promote the referral program, Morris posts stories about employees and their successfully hired referrals on the McCarthy intranet. He does presentations on the program at new employee-orientation programs at the company’s annual meeting and peppers all staff members with regular e-mails reminding them about the program, its rewards and any special skills the company needs.
Morris says the effort has paid off. In 2009, 36 percent of new hires came through the referral program and received referrals from more than 10 percent of his employees.
Workforce Management Online, December 2010 — Register Now!
Training Is an Essential Ingredient
In late 2004 and early 2005, Ruby Tuesday was in trouble. The casual dining chain’s restaurants were under-maintained; employees were leaving; guests were unhappy and weren’t returning. Same-store sales and profits declined. In his letter introducing the annual report for fiscal year 2005, founder and CEO Sandy Beall wrote, “We did not perform well or provide financial value for any of us, and it is our top priority to make sure that doesn’t happen again.”
The company moved swiftly to reverse the downward trend, investing heavily in the brand, the product, the places and—most important—the people of Ruby Tuesday, all in an attempt to create “flawless food and service” in a new, high-quality casual dining environment. Those initial investments in 2005 set off a multi-year process of continuous improvement that values employee training and development and has helped the restaurant chain weather the economic downturn.
Although revenue was down 3.5 percent in fiscal 2008, Ruby Tuesday’s guest satisfaction scores are at historic highs and employee turnover is at historic lows, says Jim Domanic, who has been director of training and development since late 2006.
Domanic has worked for Ruby Tuesday since graduating from college in 1992, and has either performed or managed every role in the company. “That operational knowledge has really helped me to understand the realistic obstacles to effective training,” he says.
Ruby Tuesday pursues a field-based, centralized model for employee training. Soft-skills and management classes are delivered by local and regional leaders and franchise owners, many of whom have been trained at the company’s Center for Leadership Excellence. Standardized, consistent food and drink preparation and guest service procedures training is delivered via a kitchen display system and bar display system in each restaurant. Electronic recipe cards display four-color photos of all food and beverage menu items using an “exploded-build” version of the food product. In addition, all training documents have been converted to electronic format, and can be accessed through the corporate intranet.
“This system enables real-time updates, supports our ‘green’ initiative, produces higher-quality materials and permits prescriptive testing,” Domanic says.
The company integrates individual learning with quarterly development plans, specified career pathways and corporate training initiatives. In order to establish instructional objectives that are customized to the employee, needs assessments and skill inventories are conducted. Multi-unit operators and managers are evaluated quarterly and are eligible for merit increases. Online assessments are conducted through the learning management system, which facilitates the selection of employees for advanced training. It also identifies gaps and develops course content.
Career pathways spell out specific goals that must be met in order to advance to the next career level. Basic requirements have been established for each position, and are then adjusted to the individual based on the results of skill assessments. This “prescriptive training,” as the company terms it, focuses training on what the employee does not know, rather than wasting time and money training skills that have already been mastered.
One key element of Ruby Tuesday’s turnaround was giving employees more control over decision-making at work. Hourly employees, who formerly had to get a manager’s approval for every decision, were given training on how to handle guest dissatisfaction with a meal and were given the power to implement one of several options: They could offer to recook the meal, take the charge off the bill or offer a free dessert. The benefits were multiple: Checks were higher, the servers made more money, and managers were left free to manage. Further, management training costs were reduced by $1.5 million in the first year alone.
In early 2008, Ruby Tuesday further revised its service procedure, analyzing and refining every step of guest interaction from greeting them to anticipating their needs to saying goodbye to them. The new “Service Excellence” program was delivered to all 40,000 team members via the field-based training team, and the results are measurable: Guest satisfaction ratings are higher than ever before, Domanic reports.
Although the company constructed a state-of-the-art, 6,000-square-foot Culinary Arts Institute in 2006 (now known as Wow U), the current economic climate has forced some hard choices about whom to bring to Tennessee, and for what. The result is innovation, though: Because the company’s commitment to employee training and development is unwavering, Domanic and his staff have been inspired to explore new and more cost-effective delivery methods.
“We are working on delivery in every form—Web-based, podcasts, mobile phone delivery,” says Domanic, who has a video production department as part of his team. Food and beverage preparation is well suited to video, and Domanic relies on it for high-quality content that is also cost-effective.
The company also uses a “master’s training” approach. “We have two intended results for all of the training that takes place here at Wow U,” explains Domanic. Intended to be more in-depth than a simple train-the-trainer program, on-site training at HQ is intended to make people experts in the subject matter, and to prepare them to teach others.
For example, when Ruby Tuesday switched to fresh proteins only in 2008 (meaning no meat, poultry or fish to be cooked in the restaurants is ever frozen), that change affected restaurant supply ordering, receiving, handling, storage, and inventory management procedures. Through the “master’s training” approach, general managers were trained on the new procedures during their quarterly meetings in Tennessee, then returned home to teach restaurant managers and staff.
The company launched new management training materials in February as it continues its shift to being a high-quality casual dining brand. Managers follow structured outlines as they pursue training and continued development; they must score 100 percent on every assessment in order to proceed.
However, with change comes challenge: Same-store sales were down more than 9 percent in 2008. In his annual report for last year, Beall wrote, “Making significant changes to nearly all our company-operated restaurants certainly caused distractions for our Operations team and some confusion for our guests.”
“Timing is everything,” Domanic says. He estimates that the company has invested $70 million to $80 million in executing a five-year strategic plan.
Employees have been recruited to serve as “Brand Champions,” provided with field-based education on how to explain the changes at Ruby Tuesday and the new things in store.
“When you change, you do lose guests initially,” Domanic says. “However, we feel fantastic about our brand. We just need more guests to give us a try and tell their friends.”
He recommends the ribs.
Perfecting Performance Management
Upon joining LPL Financial as head of human capital, Denise Abood found that people were confused about the link between performance and pay. Employees felt that the existing system was arbitrary, subjective and inconsistent. In her drive toward increased employee engagement, Abood listens carefully to what LPL’s employees have to say.
“We have made significant progress in the past eight or nine months in creating venues to get employee input,” she says, citing focus groups, town hall meetings and a company intranet that allows for interactive Q&A. The company’s first employee engagement survey, conducted in 2007, uncovered the confusion around pay and performance.
“LPL Financial has always been a very entrepreneurial organization,” says Sheila Hunter, director of human resources. “We had been investing our time in creating systems and leveraging results, but the survey made us realize that we needed a structure for compensation and bonuses.”
Furthermore, the new human resources organization wanted to be relevant to its business partners, says Jodi Gold, senior vice president of organizational development and training. “Working with the survey results, we had to create a system that showed a link between tenure and engagement, and allowed users to apply consistent measurement.”
LPL worked with Hewitt Associates to create a new performance management system. This meant going back to square one, laying the groundwork by defining goals and competencies for each position, then creating a system that is customized and tailored to LPL. Goals are fluid, and roll up to the enterprise level. The weighting of the ratings—75 percent goals to 25 percent competencies—is a manifestation of LPL’s keen focus on results.
“The breakdown keeps the emphasis on achievement, but also shows that we do care how you get there, and that you’re not leaving a trail of bodies in your wake,” Hunter says. New people management goals were incorporated for all managers, including staffing, retention, development and appraisals. All of the elements were then combined into one easy-to-use tool.
More than 700 managers were trained on using the tool in August and September. Fifteen HR business partners received train-the-trainer instruction, then went out nationwide, conducting classroom-based training sessions to groups of 30 to 35 managers. The training consisted of three main parts: a PowerPoint presentation explaining the new system and its reason for being; a workshop on goal setting and goal writing; and hands-on exercises with the new tool. Participants are intended to practice and get comfortable with it through December, then begin using it to implement 2009 goals in January.
“We have gotten great feedback from managers, saying, ‘We needed this,’ ” Gold says.
The Balancing Act
As LPL Financial’s head of human capital, Denise Abood is responsible for everything that relates to the company’s relationship with its 3,000 employees—training and organizational development, human resources, compensation and benefits, even real estate and facilities. This comprehensive approach, bringing together all of the hard and soft elements that shape the employment contract, is typical Abood.
She will tell you up front that she’s a Libra, astrologically driven by the sign of the scales, and an eternal optimist. She says she is “completely passionate about people,” and has crafted a career path that combines balance sheets with work/life balance and other employee engagement touchstones. At LPL since January 2007, Abood has forged her own job description with an intense focus on improving—and lengthening—the company’s relationships with its employees.
Focusing on development and retention
LPL Financial is one of the nation’s leading financial services companies and largest independent broker-dealer. The company has experienced double-digit growth for the past 15 years, and now employs nearly 3,000 people in its core business serving independent financial advisors. Such rapid growth has generated a new commitment to employee training, development, and retention.
There have been significant challenges to overcome. As recently as two years ago, LPL’s employee attrition rates were hovering around 25 percent. As it grew and acquired other companies, including UVEST Financial Services, its business model became more complex, requiring more from its employees. Yet, because of turnover and rapid hiring, more than half of the employees were new to the company at any given time. Many were being thrust into management and leadership roles for which they were unprepared. More than 50 percent work on the front line, as phone representatives or processors, forging crucial customer relationships.
Abood was chief financial officer of UVEST and point person for the due-diligence process during the acquisition. This gave her a close look at the acquiring company and its leadership, and helped her decide to accept LPL’s job offer.
The role was created for her. She was given a blank slate to create her own job description, driven by an overarching goal: LPL had been very focused on its external business, and needed to turn its focus inward. It needed to show that it recognized employees as a valuable asset, but 53 percent of the workforce had been there less than a year.
“For me, it was a real opportunity to combine my passion for people with my business and financial expertise … an opportunity to run an internal business that brings the interpersonal and the financial together and watch it grow,” Abood says.
Abood earned her bachelor of arts degree in business administration from Wittenberg University in Springfield, Ohio. She had served previously as chief financial officer for the TIG Insurance Co. commercial division, chief operating officer at PricewaterhouseCoopers Financial Solutions, and head of the technology business office at Wachovia.
Sheila Hunter, senior vice president of human resources, worked with Abood at PwC and joined LPL in order to work with her again. “Denise has a management style that combines linear thinking with vision,” Hunter says. “Her CFO background helps the human capital organization with ‘street cred’ within the business.”
Abood agrees, and says she leverages that advantage: “My background brings credibility that opens people’s ears; people listen to my perspective.”
Jodi Gold worked as an external consultant to LPL for 12 years before signing on last year as senior vice president of organizational development and training.
“The last couple of years have not been typical,” she says. “The company is now making an overall commitment to its employees in general. Leadership is working to understand the relationship between employee training and development, employee satisfaction and business success, and as such has made a big investment in the human capital group.”
Broad strokes
Under Abood’s leadership, Hunter and Gold have been working to develop an infrastructure to support and guide LPL’s employees through the career relationship. In the training area, the focus is on developing mandatory, brand-related training in values and actions, such as onboarding, communications and harassment prevention; customer service skills and financial knowledge; and management and leadership development. Whereas previously five to 10 people had worked in human capital, Abood now supervises a staff of 100. Their capabilities are supplemented by the judicious use of external consultants.
“This is a totally new function,” Gold says. “We are focused on the broad strokes, using internal people to work on the basics, and bringing in external consultants to partner with them. In order to determine the need, we ask ourselves, ‘How long is the training need? What is the driver? Does the training require specialized expertise? Do we need external perspective or credibility in order to sell something new within the organization?’ ”
Gold and Hunter are jointly responsible for onboarding. “Previously, new employees faced baptism by fire hose, and were left to sink or swim,” Hunter jokes. “Now we give them a boat and a map.” The new onboarding program includes detailed background on the business and its channels and organizational charts for every area; responsibility is shared between the employee and his or her manager.
The organization has also focused on creating career-path guides for various functions, beginning with the compliance area. The guides illustrate the many facets of each job and illustrate possible lateral and promotion paths.
“That’s been an education for people in and of itself,” says Abood, who reports that all training and development efforts are driven by a new focus on performance management. “We had a very subjective system before. You do have to have a meaningful structure, but we want to provide guardrails, not bureaucracy.” Some 700 people within LPL recently received training on performance management.
“We’re just getting people to understand talent management and succession planning,” Gold says. “The company has always used people on a project basis; now we’re engaging in conversations about long-term needs.” Next steps include a reworked compensation structure that aligns pay with performance. Through her leadership, Abood enables these initiatives, ensures their funding and educates other company leaders as to their importance. Having come up through the financial ranks, she has done some learning of her own.
“I have learned that training and development are extremely critical. Employees must be trained and must understand their career paths. Organizational development is a massive responsibility: How will we lead and motivate our people? How do we prepare for the future? How do we think strategically? I didn’t realize how quickly you can impact that curve,” she says.
Abood never leaves her financial training behind, however. “I torture people with financial questions, and am very aware of ROI issues. But I believe that there is so much power in information if we look at data in a certain way.”
She admits that “human capital” is an impersonal term.
“I would change it if I could,” she says. “When we were creating this position, I researched titles online, and that’s what the big companies were using.”
Although it’s now a big company, LPL Financial still thinks like a small one in many ways. Abood makes frequent references to “Mark and Esther”—that’s Mark Casady, chairman and CEO, and Esther Stearns, president and COO.
“LPL feels like a family business; and its culture has enabled my position and my ability to be effective. We are very focused on cultural integration, and I am a living, breathing example of Mark and Esther’s commitment to people,” Abood says.
She wants to share that good fortune: “I always want to be in touch with and positively affecting our employees’ psyches and their profitability,” she says, describing herself as a “high-energy” manager who delegates well, doesn’t micromanage, and will volunteer for anything—which is how she ended up with payroll and mail services on her plate.
Hunter thinks it’s a good thing: “Corporate facilities, office locations, look and feel, building amenities—all of those things have an effect on our culture,” she says.
In the near future, Abood plans to do pulse surveys of employees. She wants to know more about how they view LPL’s progress—but she knows things are on the upswing.
“I feel way better now than I did a year and a half ago,” she says.
How Leaders Can Take Charge of Change
Your firm may be introducing Web-based training, a knowledge-management system, Windows XP. Whatever the flavor of the month, new technology can create real resistance in your workforce — and, in some cases, anxiety and fear.
David Dell, research director for capabilities management and HR at The Conference Board, has observed, “Both HR and IT have many new issues to address and many decisions to make and implement. But the speed of change in both areas makes the challenge more difficult as it increases the promise.”
Why do people resist change? Leslie Smith, a clinical psychologist and former Web designer in McLean, Virginia, outlines these reasons:
Fear of making mistakes or looking foolish.
A lack of understanding or confidence about the new system and its benefits.
Anxiety about doing more. Employees often feel overworked already, and resist learning something new when it’s layered on top of their existing duties.
Change fatigue. Once people learn something new, they’d like to stick with that new knowledge and take a rest.
Jeanie Daniel Duck, author of The Change Monster: The Human Forces That Fuel or Foil Corporate Transformation & Change, writes, “The knee-jerk answer (to failed change efforts) is the people ‘resist change,’ as if ‘resistance to change’ were some kind of sorry genetic code that, if it could be reengineered, would magically produce people instantly eager to do things differently whenever anyone asked. The ‘resistance to change’ answer… is appealing because it takes the blame off the leaders and puts it on those ‘no-good followers.’”
Leaders must take charge of change. There are many things that you can do to ensure a more successful initiative, including:
Communicate. Explain what benefits you expect from the new system and how people’s roles might change. Also make sure that change is championed from the top of the organization and communicate that support.
Collaborate. Involve prospective users in change decisions and choices. Duck says it’s not the change that’s the problem, but the way it comes down. “People are changing all the time, but those are changes of their own choosing,” Duck says. “People resist being told they have to change.”
Demonstrate. As Duck observes, people are powerfully motivated by self-interest. Technological change is likely to be more successful if people are shown what’s in it for them. “When they’re motivated, it’s amazing what people can do,” she says.
Evaluate. Look at the whole corporate culture, not just IT, to determine how many other changes people are being asked to deal with at the same time, such as a merger or reorganization. Perhaps it’s time to give them a breather.
Commiserate. Let people know it’s okay to complain, Duck advises. It provides a useful outlet. Although IT may feel like the corporate whipping boy, “that’s the nature of the beast. IT departments have a checkered past,” she says. “They must accept that and be more careful.” Further, allowing complaint and disagreement might enable you to measure resistance before you spend millions of dollars on that new initiative.
Don’t denigrate. Mary Lynn Pulley, Ph.D., is a faculty member at the Center for Creative Leadership in Greensboro, North Carolina. She maintains that the learning curve is upside down: “It’s more of a valley than a hill,” she says. “Whenever you learn anything, your performance actually declines before it improves.”
She refers to that performance dip as the Valley of Chaos, and urges learners to remember that chaos and creation go hand in hand. “Things have to fall apart or disintegrate in some way so that they can come back together in a new way.” Managers must make it clear that mistakes are okay and avoid any kind of punishment for error in a learning environment.
Eradicate. “You must allow for the notion of un-learning as people abandon old ways,” Pulley says. Know that people have to rid their minds and routines of that which no longer works, but be aware that getting rid of the old and familiar can engender fear and confusion.