HCHUMAN CAPITAL MAGAZINE | www.hcamag.com ISSUE 9.07

HOT SPOT RISK MANAGEMENT P.40 »

INSIDE HR AT MASTERMYNE P.46 »

TABOO TOPIC? RELIGION AT WORK P.50 »

Best practice examples

IN EVERY ISSUE:

Profile case studies

The forum Expert opinion columns

Topical news briefs

Your guide to: International attraction & recruitment Mobility & relocation Migration Offshoring

The global talent puzzle

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EDITORIAL

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EDITOR Iain Hopkins

COPY & FEATURES

JOURNALIST David CorkeryEDITORIAL ASSISTANT Rebeccah Elley

PRODUCTION EDITORS Moira Daniels,

Jacqui Stone, Carolin Wun

ART & PRODUCTION

DESIGN PRODUCTION MANAGER Angie GilliesCHIEF DESIGNER Lucila Lamas

CONTRIBUTORS

Carroll & O’Dea Lawyers, The Next Step, Kenexa Australasia

Ticket to ride

The Beatles may have breezily sung that headline without a care in the world, but getting that ‘ticket to ride’ is not as easy as it sounds. As Vivienne Gayton, HR manager of mining services contractor Mastermyne

says in our profile on page 46, “International recruitment is hard work!” She’s not wrong. As soon as cross-border recruitment is involved, the number of decisions that need to be made escalates. Is it any wonder that a smorgasbord of service providers have sprung up to meet those needs? From executive recruiters and regular recruiters with global reach, to specialised websites, through to migration agents and relocation experts, HR can be guaranteed there is someone out there ready to make their job easier.

A good thing too. AIM’s National Salary Survey 2011 indicated that 49.7% of large companies report difficulties in recruiting some staff due to skills shortages. A whopping 65.5% are now willing to hire staff from overseas to fill those gaps.

It’s not all one-way traffic either, as our feature on offshoring (p 28) reveals. While offshoring has long been the province of blue collar manufacturing roles, it’s increasingly impacting on white collar professionals in IT, procurement and HR. Although often these decisions are branded (and criticised) solely as ‘cost saving’ initiatives, there are actually three key drivers: economies of scale, scope and skill. That last point will become increasingly important, as Mary Sue Rogers from IBM points out: “At the moment it’s probably not so much Australian clients saying, ‘I can’t find that payroll clerk’, but in the next 3–5 years I do think that’s going to start hurting. For some of our clients, with average workforce ages of 40 and above, those things will drive that push. Where’s the next generation of talent going to come from? That’s hard to find in Australia.”

SALES & MARKETING

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CORPORATE

MANAGING DIRECTOR Mike ShipleyCHIEF OPERATING OFFICER George Walmsley

SALES DIRECTOR Justin KennedyCHIEF INFORMATION OFFICER Colin Chan

HUMAN RESOURCES MANAGER Julia Bookallil

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be kept as HC can accept no responsibility for loss.

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CONTENTS

Inside this issue

Letters to the editorDo you have a burning HR or people management issue you would like to share with others? If so, Human Capital would like to hear from you. Send through your comments to editor@hcamag.com. Alternatively, express your thoughts on the readers’ forums at www.hcamag.com

12 Sink or swim? Luring foreign executive talentAustralia continues to lure prominent and in many cases highly paid executives from abroad. In a global market, is the question of nationality relevant? With the stakes high, what makes or breaks a foreign executive hire? Iain Hopkins asks the experts

28 The great divideOffshoring remains a contentious issue, but with the practice increasing for white collar roles, including HR, Human Capital weighs the pros and cons

36 Vive la difference!Before entering into a diverse workplace or travelling abroad, managers are encouraged to increase their cultural intelligence, or CQ. Dr Des Tubridy outlines CQ and provides his top tips for undertaking business in a number of popular destinations

40 Brace, brace, brace!How well prepared is your business when the unexpected strikes? Human Capital talks to Gary Anderson, managing director, Protiviti, about business continuity and emergency response plans

Regulars4 In Step – HR career experts6 Legal8 HR Consulting

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CONTENTS

HR Career Experts

Craig Mason is a Director with

The Next Step, a specialist consulting

practice in the human resources

market. For more information

call (02) 8256 2500 or email

cmason@thenextstep.com.au

or visit www.thenextstep.com.au

SPEAKING THE SAME LANGUAGE

The employment markets overseas are still very soft. This is notably the case in most Western economies such as the UK, Europe and the US.

With this as a backdrop, what are the implications for Australian HR professionals? What skills need to be developed to deal with offshore stakeholders effectively? These are the key questions for this month’s Instep.

Lost in translationAs we come to the end of the Australian financial year, the US economy is still struggling. They have just capped a bleak period of economic news and statistics. A faltering economic recovery has been demonstrated by poor data in the areas of jobs, house prices, manufacturing and confidence with fears that growth will not fuel an economic recovery. The official unemployment rate is now back to 9.1% after spending some time in the 8s from a high of 9.8%.

Under a heading of “Long road ahead for US job seekers” in the AFR on 6 June, the picture painted for employment recovery in the near future was poor. Talk of 4–5 years before any true recovery continues to impact the equity markets and employers are in a “hunker-down” mode as caution is the rule of the day.

Europe and the UK don’t appear much better, with Greek bond issues, record rates of unemployment in Spain, and a sluggish financial services market in the UK.

Whilst Australia is also softening again, the reality is that we continue to be in a strong economic position. Therefore, cross-boundary HR interactions about labour availability and its cost can be lost in translation as both parties are in very different economic circumstances.

The skill of translation A recent discussion with a globally experienced HRD with strong insights into local and overseas market conditions highlighted that being globally aware in HR wasn’t just about understanding differences in culture. She pointed out that, “it’s also about understanding the differences in current work experience and environment”.

She said, “imagine the pressure in many US-based companies for middle managers to hang onto their jobs due to the state of the economy. Across the US, management teams are grimly hanging onto their positions knowing that there’s not much on offer outside. They feel under siege”. She went on to say, “that’s why they think that talent is on tap everywhere!”

She quipped, “imagine what happens when little ‘Mr or Ms Happy Times’ from Australia emails a request for a headcount increase or to increase packages as they have fallen below market. An answer like, ‘You have got to be kidding! What planet are you on?’ is probably the most likely response.”

She further commented that one of her key contributions recently has been to coach a local CEO on how to get his agenda approved by his offshore masters. This has been for both business initiatives as well as locally-sponsored hiring decisions.

The trick then for HR professionals is to translate what is happening overseas back to the local business. By putting themselves in their overseas colleague’s shoes, local decision makers can more easily develop their ability to “pitch” their communications with the right issues covered. This is certainly a higher order influencing skill that HR practitioners need to develop.

Translating for the HR function So what does the issue of translating overseas conditions mean for local HR leaders? Firstly, the market in Australia is patchy. HR professionals are working in industries that extend from boom times to reasonably soft, but there are common elements:• There are significant HR skill shortages in areas

such as resourcing, safety and compensation; and• There is pressure on wages in the generalist

market right across the board.What does that mean for HR Leaders? There is a

need to influence overseas stakeholders on what the market is doing here compared to offshore locations. This can be tough. There isn’t much in the way of reliable industry data on HR roles and pay levels and anecdotal feedback looks self-serving. Having said that, to get extra headcount or meet market demands, HR Leaders need to achieve this trick.

The final word The HR profession in Australia is being asked to assist local business leaders to understand how to pitch their business and labour requests to overseas stakeholders. This “translation service” is all about communicating to overseas decision makers the balancing act that is being managed locally between required commercial outcomes and the challenge of the Australian labour markets. This is an important tool for any HR Leader with offshore stakeholders to add to their tool kit.

Recent HR Market Movessupplied by The Next Step

By supplying Market Moves, The Next Step is not implying placement involvement in any way.

Annabelle Wood has commenced in the role of HR Business Leader for the Energy Group of Schneider Electric. Annabelle brings strong HR management experience within the engineering, finance and IT sectors with businesses such as Aurecon and Alleasing.

Joining The Smith Family in the role of Head of People & Culture is Annette Young. Annette previously held the role of Human Resources Manager for the Sheridan division of leading retailer Pacific Brands. She also brings experience in learning and organisational development.

Tracy Tuman has joined Best & Less as their Human Resources Manager – Support Centre & DC. Tracy has enjoyed a successful HR management career, most recently within the FMCG industry.

Joining MTV Networks Australia in the role of Director, Human Resources is Nathalie Appels. She was employed previously with Moet Hennessy Australia as the HR Manager for Australia & New Zealand.

Peter Normand has been appointed the HR Director for the Business Banking division of Bankwest. Prior to joining Bankwest, Peter held the role of Vice President Human Resources ANZ with American Express Australia. His previous experience spans the professional and financial services sectors.

ANSTO has appointed Rob Blissett as their General Manager Human Resources. Rob has extensive experience in senior HR management roles with businesses such as Staging Connections, Coates Operations and National Hire Group.

Bernadette Giliberto has accepted the role of Senior Reward Consultant with AON Hewitt. Previously holding the role of Strategic Reward Business Partner with Virgin Media in the UK, she has also enjoyed roles within the Australian market with organisations such as TRU Energy, KPMG and Ernst & Young.

The Guild Group has appointed Anli Roelofse into the role of Strategic HR Business Partner. Anli’s experience has been gained within the financial services sector in both the Australian and South African markets.

Kristy Lane has accepted the role of HR Manager with Sportsbet. Kristy’s previous HR Generalist experience has been gained in both public and private organisations including Ombudsman Victoria and DST Global Solutions.

Intervet/Schering Plough has welcomed Carlo Galati as a HR Business Partner. Carlo was previously employed as the Regional HR Director Australasia for AIG.

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SERIOUS SAFETY BREACHES – UPHOLDING DISMISSALS

As a result of the overhauled Unfair Dismissal regime in the Fair Work Act 2009, dismissed employees now have

a greater capacity to dispute the ‘fairness’ of their dismissals. Fair Work Australia (FWA) is required to assess the fairness of a dismissal by reference to whether the dismissal was ‘harsh, unjust or unreasonable’, a test which examines the employer’s assessment of whether an employee’s conduct justifies dismissal. The tension inherent in this test is particularly apparent where an employer has obligations arising under relevant health and safety laws (such as the upcoming harmonised Workplace Health and Safety Act, which imposes a specific statutory duty on every employee to comply with the employer’s safety instructions) and an employee’s conduct results in a risk to workplace safety. In order to ensure that a dismissal is an appropriate response to such conduct, the employer must give due consideration to the seriousness and circumstances of the conduct and be aware of the factors that may lead to findings of unfairness.

A number of recent FWA decisions have upheld dismissals in a range of different circumstances. These include circumstances where a gas plant worker attended to duties without possessing a work permit for a particular day (Chadwick v Woodside Energy Limited [2011]); where a fuel tank driver was caught operating a mobile phone whilst driving his tanker (Starkey v Cootes Transport Group Pty Limited [2011]); and where a barge engineer breached a zero-tolerance alcohol policy following an official work function (Dowling v Atwood Oceanics Pacific Limited [2011]). In each case the employers had instituted policies regarding the conduct breached, communicated the occupational health and safety rationale for the policy, enforced the policy consistently, and afforded the employee appropriate procedural fairness before dismissal.

However, the recent case of Lawrence v Coal & Allied Mining Services Pty Ltd [2010] illustrates the ongoing tension between the need for safety compliance and the principles of procedural fairness. In this instance, a senior production engineer had, without authorisation, removed a number of isolation locks from a pipeline that had been left engaged by repair workers. The employee was aware of the employer’s safety policy which required isolation locks be applied before any repair work could be undertaken along the pipeline. The employer considered this removal

a serious breach of its safety policy and dismissed the employee notwithstanding the employee’s unblemished employment record of 28 years.

Although the dismissal was found to be fair by FWA at first instance, this was overturned on appeal by a majority of the Full Bench of FWA. The Full Bench cited the fact that the employee had driven alongside the length of the pipe immediately prior to the locks’ removal, and had assessed that there were no workers operating on the pipe who would be liable to injury by their removal. The Full Bench held that although the policy breach constituted a valid reason for dismissal, the dismissal was unjust since the employee had assessed that the risk of injury to workers was virtually non-existent. The Full Bench also considered that the employee’s age and length of service rendered the dismissal harsh in the circumstances.

This decision illustrates that a dismissal for a serious safety breach may still be unfair notwithstanding the existence of a clear and legitimate safety policy, particularly if the employee turns their mind to the circumstances relevant to the safety policy prior to committing the conduct that constitutes the breach. Furthermore, the decision illustrates that the age or experience of the dismissed employee is relevant to the question of fairness. Therefore, to ensure compliance with relevant Unfair Dismissal laws, an employer should ensure that an appropriate safety policy is in place and clearly understood by its employees. The employer should also:1. Objectively assess the seriousness of the

conduct and circumstances 2. Afford the employee an appropriate level of

procedural fairness through an appropriate investigative process

3. Consider the particular characteristics of the employee concerned

By complying with these obligations, an employer can bolster its protection against unfair dismissal proceedings whilst preserving its freedom to deal with serious workplace safety concerns. However, professional legal advice should always be sought if an employer remains unsure of the appropriateness of disciplinary action.

Legal Experts

Peter Doughman, Solicitor Carroll & O’Dea LawyersLevel 18 St James Centre111 Elizabeth StreetSydney NSW 2000Phone 02 9291 7100

www.codea.com.au

GLOBAL RECRUITMENT – UNITY WITH LOCAL COLOUR

Increasing numbers of our clients are asking us to work with them to implement a global approach to recruitment, assessment and

selection. This is extremely exciting and offers a range of benefits – but what is driving this trend?

The movement to a global model is often a result of a recognition that similar jobs exist in different parts of the world, leading organisations to strive for consistency, enhanced efficiency and progress towards a globally-determined strategy rather than perpetuating divergent local practice.

Global assessment and selection also fits naturally with a ‘shared services’ or ‘HR consulting’ model – particularly when assessment techniques are designed to meet wide-ranging needs. By investing globally, it becomes possible to implement highly effective and cutting edge solutions. The advent of assessment technology that dovetails naturally with applicant tracking systems (ATSs) clearly encourages such a unified mindset, since investing in such technology is generally an enterprise-wide (or at least regional) decision.

Of course another driving force in this field is the advent of genuinely international roles that span different territories and which can only be delivered successfully with a global mindset.

So what are the key factors in enabling international assessment solutions to be effective?

The first thing we have found from experience is the critical importance of working with the experts and stakeholders in local markets to understand what works, rather than seeking simply to impose a global approach. Although it is perfectly legitimate for people at the centre of a business to work towards a consistent strategy, this can backfire if not implemented sensitively. We have frequently found that local ownership, nuances and experience make a big and important difference, even within a global solution.

The starting point should always be an objective understanding (based on job analysis) of what truly leads to successful performance and results in each market. This need not be a recipe for ‘watering down’ the global strategy – rather, it suggests that global principles can be successfully implemented with ‘local colour’.

One example from our experience of how globally consistent assessment methods can be applied flexibly ‘on the ground’ is related to an assessment centre project in Hong Kong; if a western-designed group exercise had simply been ‘parachuted’ into the local environment without any adjustment, most candidates

would have been scored down for being passive or unassertive; in fact, when judged locally, they were being strong but respectful. It is not that the local market requires less assertiveness – merely that it manifests itself differently. Any global approach to selection needs to understand such dynamics.

A related issue is the attributes/competencies that we are seeking in candidates. Too often, global firms put together models that seem, on the face of it, to be universally applicable but which, in fact, impose subtle, culturally-specific (or simply incomprehensible) expectations. Since these models are supposed to lie at the heart of assessment processes, it is unfortunate that these issues lead either to locally irrelevant decisions or even a tendency to disregard the global model.

Much better to create a truly global framework in which the requirements of each part of the world can be successfully accommodated, in which language is accessible everywhere, which focuses on directly observable behaviours and which allows cultural flexibility about the details of how people demonstrate positive behaviour.

Another strong idea is assessing candidates for ‘culture-fit’ (both in terms of organisational and local cultures), rather than allowing the sole criterion to be job-fit. Linking assessment solutions to culture and engagement surveys can be very powerful ways of achieving this outcome.

When hiring people into truly international roles, a key consideration is the attributes that enable someone to thrive in such a challenging and potentially nebulous role. Although there is naturally a lot of variation, we generally find the following traits to be of vital importance: flexibility, empathy, cultural sensitivity, independence and resilience. All of these qualities are very readily assessed using modern, objective methods. Some of our clients, when hiring for international roles, are also widening what they consider beyond the actual applicant – and considering how meeting the needs of their families can make or break an international appointment. This delicate but powerful area is often of critical importance.

Overall, this is a space in which much can be achieved – but only if we blend an appreciation of the value of a global strategy with a clear awareness of how to implement it flexibly in different parts of the world.

HR Consulting

Ed Hurst, Managing Director Kenexa AustralasiaLevel 2 451 Little Bourke StreetMelbourne, VIC 300003 9602 3899ed.hurst@kenexa.com

http://www.diversityatwork.com.au

I am often asked what I think of social media and in particular, Twitter. My standard response being: Facebook is for people you used to

know, LinkedIn is for people you know, Twitter is for people you want to know. Each has a unique value proposition, but in terms of delivering real-time information, empowerment and engagement, Twitter is clearly ahead of the pack.

Twitter is a micro blogging platform that allows you to instantly send and receive short, 140 character messages, tweets, to your followers and those you follow. As such, the power lies in the people you decide to connect with. In short, it’s a tool that supports relationships in the form of conversations. Its real-time nature facilitates immediate feedback with the ability to re-transmit the message quickly across multiple, seemingly unconnected networks. Furthermore, this message can be enhanced, analysed, and explained with added commentary. In terms of idea or meme, it provides unprecedented two-way access to the collective stream of knowledge, wisdom and consciousness. From a cultural evolution perspective, its impact will be measured alongside language and the printing press.

In practical terms, it has empowered humans to serve as sources of truth and information, through observation, opinion and analysis. The only prerequisite is a desire to share. These tweets also have a set of embedded metadata such as location, time and topic. Furthermore, users can also aggregate their messages by hashtagging a keyword which triggers access to all tweets with that particular hashtag. This drives a sense of community, affinity and collaboration on a scale never before seen.

Messages can be searched and analysed across different metadata dimensions giving us

an opportunity to understand what is currently happening and the sentiment towards that idea or event. This is known as trending. Twitter’s role in recent political events and crisis management was unprecedented; in fact, Twitter itself is sometimes the message. We have entered an era of citizen journalism, where the news no longer breaks, it tweets.

It’s clear that Twitter offers a whole new way to share with people you would probably never meet, crossing cultural, age and language barriers. It’s an environment full of serendipitous discovery limited only by imagination and accompanied with feelings of elation, power and creativity. But does that translate to value in the workplace?

At first glance, you read banal messages like what people eat and where they are going, coming to the conclusion that Twitter is a productivity vacuum with no relevance as a workplace tool. It’s a fair call, but not representative of the true Twitter stream. This kind of messaging is a common trap for the novice Twitter user. In fact, self reference is inversely proportional to the number of followers you have.

You’re still not convinced. At best you might see it as a recruitment tool or a customer feedback channel.

But considering your most valuable asset is your employee, sanctioning an environment for them to build their expertise and professional reputation, through direct access to thought leadership and knowledge shared through conversations and conferences, will only add value to your organisation.

Recent surveys confirm innovation and idea exchange as Twitter’s biggest value proposition.

In part two, we will look at the specific ways you can harness Twitter to add value.

Twitter’s value proposition for HR

EXPERT INSIGHT TECHNOLOGY

About the authorAri Kopoulos is the national sales & marketing manager at EmployeeConnect. For further information visit www.employeeconnect.com.au

In part one of a two-part series, Ari Kopoulos outlines whether Twitter holds any value for HR

The resources boom and falling unemployment rates have created a migration policy dilemma – how to properly meet Australia’s significant

skills shortages without compromising the size or shape of the skilled migration program as a whole.

Traditionally, there has been a reliance on the points-tested General Skilled Migration (GSM) program, supplemented by employer-sponsored migration to meet Australia’s need for skilled labour. By 2008, it became evident that the GSM program was incapable of delivering as record numbers of Australian-trained hairdressers, cooks and accountants were qualifying for a limited number of permanent skilled visas. By announcing the pre-eminence of employer-sponsored migration in meeting Australia’s skilled needs, the newly-elected Labor Government put in train the most dramatic shift in immigration policy in the last 20 years.

After a series of relatively minor changes to GSM designed to stem the flow of eligible GSM applicants, the first major step in implementing this policy occurred in 2010 when the list of occupations suitable for independent GSM was cut by half. Shortly afterwards a new improved points test was announced that would come into effect on 1 July 2011. Throughout, the Government has continued to emphasise demand driven employer-sponsored migration and temporary residence as the preferred option for delivering a focused and economically beneficial skilled migration program.

The 2011 Federal Budget unveiled a number of initiatives, all aimed at rebalancing the migration program. The growing labour needs of the resources sector, coupled with a predicted unemployment rate of 4.5%, is creating an unprecedented demand, not only for professionals and tradespeople, but also for semi-skilled workers. The need for an immigration policy that deals with labour requirements beyond the usual highly skilled roles is the elephant in the room. Is there a system which satisfies this need, yet ensures Australian employment, appropriate work conditions for overseas workers and minimises the risk of abuse of the system?

These three initiatives are: • Enterprise Migration Agreements • Regional Migration Agreements • The Skilled Migration Selection Model (Skills

Select) An Enterprise Migration Agreement (or EMA)

can be entered into between the project owner of a major resources project (or the prime contractor where the project owner allows) and the Department of Immigration to facilitate the sponsorship of overseas workers by contractors associated with the project. Contractors will then enter into a sub-agreement that will reflect the terms of the EMA. The terms of an individual agreement may include a capped number of semi-skilled positions provided that the need can be justified. EMAs are a type of labour agreement and further information is available from Fragomen’s Centre for International Employment and Migration at www.centiem.com.

In recognition of the needs of regional areas experiencing high growth and economic need, the Government also announced Regional Migration Agreements or RMAs. Similar in structure to an EMA, there will be an umbrella agreement for a particular region with individual employers signing a sub-agreement in order to sponsor an overseas person. It is likely further details of the arrangements will be released following consultations later in the year. Like EMAs, RMAs are likely to cater for semi-skilled workers.

The introduction of ‘Skills Select’ in July 2012 is perhaps the most dramatic reform to the migration program. From that date, intending migrants to Australia will be required to lodge an expression of interest through the Department of Immigration’s website. Candidates will be ranked according to how they score on the points test, and will only be legally able to make a visa application if invited to do so. The number of invitations in each occupational category will be capped to ensure particular occupations are not overly represented in the annual intake. The database of interested migrants will be available to state and territory governments to offer sponsorship and registered employers looking to source temporary or permanent employees.

The initiatives announced by Government are certainly more sophisticated and strategic than previous attempts to manage the migration program, however, given the volume, pace and complexity of these labour needs, particularly in major projects (whether or not resource based) and in high growth regions, will this combination of strategies be nimble, fast and effective enough to meet Australia’s immediate labour needs in lesser skilled occupations?

Where is Australia’s migration policy headed?

EXPERT INSIGHT

Contact usJane GoddardSpecial Counsel and Accredited Specialist in Immigration LawFragomenT: +61 2 8224 8527E: jgoddard@fragomen.comwww.fragomen.com

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INTERNATIONAL ISSUE:Executive recruitment

Sink or swim?Luring foreign executive talent

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INTERNATIONAL ISSUE:Executive recruitment

Australia continues to lure prominent and in many cases highly paid executives from abroad. In a global market, is the question of nationality relevant? With the stakes high – and the fallout often so public – what makes or breaks a foreign executive hire? Iain Hopkins asks the experts

W hen Rod Eddington, an Australian, took over as CEO of British Airways in 2000, one of the first things he did was

take a British Airways flight and talk to customers, flight staff, pilots and ground crew. While that might not sound unusual – at least to Australian ears – there’s a fair bet that Eddington’s North American or British counterparts at senior level would not have done the same thing.

Paul Gollan, associate professor and director of research, department of marketing and management at Macquarie University, suggests that Australian executives do take a more inclusive approach to leadership when compared to their European and American cousins, who Gollan says can be “standoffish: you’ve got your role, I’ve got mine”.

“Traditionally Australian leaders have taken more of an easy going approach to leadership, very much about people, about networks, I suppose also mateship. That’s a generalisation of course, but it’s an important issue – the cultural conflict that can occur in leadership if the fit is not right,” Gollan says.

Destined for failure?In the past 3–5 years Telstra, AMP, AGL and BHP Billiton have all seen foreign chief executives part ways with their respective companies. Most of these executives produced disappointing results and some produced quite bitter feelings on both sides – Telstra’s Sol Trujillo being the obvious example. The workforce has been global for a number of years, so what goes wrong?

Sink or swim?

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INTERNATIONAL ISSUE:Executive recruitment

Gollan says that often these executives do not understand either the cultures of the companies they lead, or the wider market in which Australian organisations operate – or both, as was the case with Trujillo. “I don’t think he understood the history of Telstra as a former public-owned company going through the various privatisations while still remaining partly owned by the government,” Gollan says. “The American emphasis is on transaction based relationships – and by that I mean many American firms have to report every quarter as opposed to every year, so the pressure on share performance is far greater there than it has traditionally been here. That produces a certain mentality based on short-term decision making.”

There are also important internal structural differences between Australian and overseas based organisations. For one thing, people are generally much closer to the CEO in Australia;

there are fewer levels from top to bottom. “Even our internationally focused companies are a lot smaller than North American and European companies so as an executive you’re closer to your employees. From an IR/HR perspective this is extremely important because you have to understand your workforce. It’s a smaller workforce generally and they perhaps identify more closely with their organisation; when that starts to break down and you’re putting another identity on the organisation that causes a lot of conflict, all the way through the hierarchy,” Gollan explains.

’Rock star’ CEOsThere are, of course, circumstances in which those ‘outsider’ eyes can benefit an organisation, “especially if you want change”, says Gollan. For example, prior to Bob Joss’ tenure at Westpac, the company was struggling with corporate governance and a dysfunctional company culture. It needed a fresh perspective to take the company in a new direction.

Indeed, Gollan suggests that in theory the appointment of Trujillo at Telstra was not necessarily a bad idea; rather a poor decision was made about the type of person required. “Getting someone in from outside with new ideas and perhaps a new vision, without the legacy of the past, to change Telstra from an old and not particularly customer focused organisation into something new, was probably a smart move. But still that person needed to understand the context in which they were in.”

And of course there’s nothing to say a locally appointed CEO could have produced different results. Dan Hammond, managing consultant at LIW3, suggests there are huge and often unrealistic expectations placed on individual leaders. He says the expectations placed on “rock star” CEOs are untenable.

“This guy who has run a telecom company in the past is bought in, so there are immense expectations on him to pull a rabbit out of a hat. But potentially it may be that he’s not up to the job, and in fact no one is,” he says.

Hammond believes this ‘saviour’ approach misses the mark. Companies themselves should be able to generate a culture of constant renewal without the need for a CEO to swoop in and make

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INTERNATIONAL ISSUE:Executive recruitment

massive changes. “If you can do that, and aligned with that, constantly bring on high performing talent, the organisation will be constantly questioning and challenging the status quo. You don’t really need someone to come in and do that,” he says.

“The key here is what does that person do when they come into the job? If they say ‘I’m now sitting in this chair but we’re in a continuous journey, what can I do to move this forward?’ rather than ‘What can I do to make my mark, things are going to be done differently around here’, that’s the difference. The latter is ego and style driven, rather than clearly aligned to the higher intent of the organisation.”

It’s also incumbent on the CEO to know their own strengths and weaknesses, and to bolster those weaknesses with other members of the executive team who perhaps excel where they do not. “The whole concept of leaning on this person so heavily

is not necessarily the way to go. That’s almost where it’s flawed – that this amazing person is going to come in and transform things. In reality that person should have a rather more subdued ego so they can find the stars in their team, who will then unlock the stars in their teams, and so on,” says Hammond.

“If you don’t have the support of the lieutenants, it doesn’t matter what charisma you have, you just won’t bring employees onboard” – Paul Gollan

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INTERNATIONAL ISSUE:Executive recruitment

Gollan echoes this: “If you don’t have the support of the lieutenants, it doesn’t matter what charisma you have, you just won’t bring employees onboard. The days of dictatorships within hierarchies of organisations are long gone. Would the Kerry Packers of yesterday survive these days? I’m not sure they would.”

Not a passing fadDespite a somewhat patchy track record, it’s likely that organisations will continue to look overseas for executive talent. Jason Johnson, vice chairman of the AESC Council for Asia Pacific and managing partner at executive search firm, Johnson, says a number of factors will contribute to a “flush” in the market of executive changes. “The GFC caused people’s tenure to be extended beyond the average that we’ve known for the last decade or so, which has been sitting just under three years. People were looking for security and some longevity during the GFC when there were far fewer roles on the market, so there is a pent up demand for change. It will be released on organisations over the next 12 months, given that it should be more benign times in most Western economies.”

The GFC was, in many ways, a watershed period for local companies hiring executive talent from abroad. Johnson says those organisations that were courageous enough to seize the opportunity were able to attract talent to the Australian market that they never would have been able to attract before, thanks to overseas economies struggling much more than the Australian economy. “All of a sudden the impediments for people moving, heavily laden long-term incentive plans and the like, evaporated overnight.”

Since the GFC, with unemployment currently sitting at 4.5% and certain sectors crying out for talent, this trend of looking to overseas talent is likely to continue. “Whilst the economy here is a little patchy, and I agree with the multispeed economy, there will be some profound talent shortages. Mining and resources is at the forefront of that. They are crying out for global talent both at senior executive skilled and the unskilled levels, and that’s a sign of what will come for other sectors,” says Johnson.

According to Johnson, it’s not a foregone conclusion that executive searches will be

EXECUTIVE INSIGHTS

n 26.5% of executives credit recruiters for delivering their last job. 27.1% found their new job through personal contacts and networking. Referrals worked for 15.3% and job boards contributed 15.4%

n Only 0.9% credited social networks for successfully landing a new job, even though uptake has spiked with 53.4% registering on social networking sites in the last 12 months*

n 48% were willing to relocate overseas, while 30% will consider the option if an opportunity arises*

n Executives in Australia, on average, have worked for eight different employers since joining the workforce*

n Tenure with an employer is generally short. 72% of executives have been working with their current employer for less than five years. Only 18.5% have work tenures between 5–10 years with their current employer*

Source: The Executive Monitor, 2011, a joint project of Destination Talent and Six Figures in

which 890 executives participated between Dec 2010–Jan 2011 to gauge the behaviour,

perception and opinion of high-income executives in Australia. For the full report

visit: www.executivemonitor.com.au or www.sixfigures.com.au

*The Executive Monitor 2010

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INTERNATIONAL ISSUE:Executive recruitment

conducted overseas. He notes that it depends on the client brief and an assessment of the core competencies and experience sets that will drive superior performance in the role. “In some cases it’s true that there are market leading technologies or cutting edge markets that are outside of Australia – for example, some segments of financial services in markets overseas are more competitive than Australia. Equally, there are some segments where Australia leads – for example, Australia would be the leading incubator of talent in the real estate funds management area,” he says.

What places candidates from overseas above those from Australia is often their proven ability to handle scale and complexity. An organisation looking to progress operations in emerging markets, particularly Asia, India or Brazil, will likely find those candidates sitting offshore.

Incidentally, Johnson adds that the same rules

apply to senior HR professionals. Those who have had overseas experience are more desirable to local employers. “For the most strategic HR executive, and those that find themselves in those very exciting roles where they help to look at the growth strategies for Australian organisations, those growth strategies will typically involve some of those emerging markets. So if they’ve had experience and they understand the cultural differences and some of the operational challenges of doing business in those markets, that would be a huge advantage and would improve their employability,” he says.

Deeper issuesGlobal talent market aside, does the insistence on hiring overseas executives point towards deeper issues? Perhaps it’s a poor reflection on the management bench strength and succession planning abilities of local companies?

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INTERNATIONAL ISSUE:Executive recruitment

The claim that Australia is “too small” to produce good leaders does not hold water. There are countless examples of Australians leading organisations abroad, and many more examples of Australians leading both Australian and multinational organisations on our shores.

However, Gollan does suggest that traditionally Australian companies have handled succession poorly, and that, in part, is why talent is coming from overseas. “We’ve never really paid much attention to management or leadership,” he says. “We’ve had limited access to really decent management education; that’s only changed in the last 20 years or so. The last 5–10 years has seen a far more globalised environment, higher levels of education, and a real focus on leadership. Leadership, entrepreneurship and innovation are the buzz words, as they should be.”

Hammond finds the traditional concept of succession planning problematic because it suggests a linear, ladder approach: ‘you’re going to be me next, and these are the steps you’ll need to take to get here’. However, he says the longevity of roles is now so short that the job someone is preparing for may not even exist in three years.

“Succession planning is almost not a suitable model for today. A more dispersed view of this is how can I build a bench of versatile leaders in the organisation, one that’s going to adapt to different situations, and allow people to move into different roles to create a network of leaders? It’s gone from the ladder to the lattice. It’s not step, step, step any more, and you can’t bet on the future, so choose leaders who are versatile.”

RetentionIt makes no sense to run an international search and bring in international talent unless an organisation is prepared to put all the support behind that candidate to make it work, Johnson says. He suggests that best practice in 2011, if talking to an executive who has never lived in Australia, is to invite that executive and their partner and family out to Australia at company expense, and for them to spend a significant amount of time with a relocation assistant to get a sense of the local market.

“I would suggest that of the international moves to Australia, around 50% would fail due to the

inability to integrate their family into the Australian environment successfully. With that in mind it’s critically important to ensure the family and partner are engaged in the process. We also find coaching for the placed executive to be critically important. The Australian market and culture is not the most complex, but at the same time, we take for granted that people will understand what a footy tipping comp is, what the cultural norms are, that the laid back executive doesn’t necessarily mean they’re laid back in their work ethic. Having coaching and mentoring around international transfers helps them integrate both culturally and into the business,” Johnson says.

While lifestyle factors certainly play an important role in retention of international talent, it’s also important to consider remuneration. Johnson says that typically his clients would have internal scales of remuneration for a particular role but he stresses that they should also be looking to international markets, which may have different scales. He confirms that in order to look globally for talent, companies must be prepared to benchmark remuneration against the global market. (See remuneration article on p.19 for more tips to consider.)

Don’t forget the basicsGiven the risk and expense involved, the decision to hire an executive from overseas – whether that call is made by the board locally or via a distant multinational HQ – should not be taken lightly. As a final tip, Gollan urges organisations to remember what leadership is all about:

“Australia is a small but sophisticated market, and we’re quite fortunate to have a good pool of people who show very strong leadership qualities. But it’s a global market. There are plenty of Australians overseas leading corporations, and likewise plenty of foreign executives leading Australian corporations. Leadership is about bringing people on, stating a vision, and helping others; it’s not about telling people what to do. The benefits of having a person with international experience at the top can be hugely beneficial as a learning experience for other executives. Nationality can make a difference but it doesn’t necessarily have to make a difference.” HC

“We sometimes run searches for clients who want us to look in international markets but they don’t have the appetite to remunerate at the appropriate level” – Jason Johnson

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INTERNATIONAL ISSUE:Remuneration

T he Australian market has always been reliant to some extent on expatriates, with many incentives offered to lure international talent

including sign-on bonuses, salaries above the market rate, health benefits, spousal support and relocation packages. While demand for international workers fell significantly during the GFC, appetite has once again returned, though not with the same vigour.

Several recent macroeconomic forces have impacted Australian employers’ ability and desire to lure foreign or returning talent to Australia.

On the plus side, there are a number of factors indicating both stability and opportunity for overseas talent, such as the rapid appreciation of the Australian dollar against other major currencies, the growing economy, strong local labour market, comparatively high GDP and low inflation.

However, the attractiveness of working in Australia is levelled somewhat by the rising cost of living which shows no indication of slowing. The Cost of Living Index compiled by ECA International looks at the cost of living around the world for international assignees. In the 12 month period from March 2010 to March 2011, Sydney jumped up 13 places from the 29th to the 16th most expensive place to live for expatriates. All major Australian cities are now ranked in the top 30, with Adelaide showing a higher cost of living than Manhattan. Furthermore, the report showed that in the 12 month period from March 2010 to 2011, goods and services in Sydney jumped from 3% to 17% more expensive than when purchased in Hong Kong. A startling increase; offsetting some of the benefits just outlined.

The last 10 years have seen attempts by companies to reduce the cost of expatriate assignments by moving from a ‘best of everything’

approach to a more balanced one. Common to the market are packages consisting of a competitive local salary and then ‘on top of package’ adjustments to compensate for personal circumstances (eg tax and pension equalisation, cost of living and insured benefits). More often than not, however, these packages are still relatively high-cost for employers.

Has our appetite for international talent finally been satiated? There is certainly a move towards hiring local talent where possible, which is both cost and compliance driven.

We are seeing some talent gaps in the market especially in mining, resources and engineering and across those professional services firms that support these industries. However, while international talent was once a common and sustainable long-term strategy, it is now more often than not seen as a short-term solution to transfer knowledge.

If a specific skills or knowledge gap exists, companies will ensure they offer an enticing package over and above a mere alignment of pay and benefits to secure talent. However, once the initial period of employment has passed and the knowledge has transferred, employers will often aim to localise both benefits and pay if the contract is to continue.

This approach shows a dramatic shift in the opinions and preferences of employers. Whether the push for local talent be due to cost, to avoid increasingly complex visa requirements, to ensure a long-term sustainable workforce, or simply patriotism, the recent economic forces that make the hiring of foreign talent more attractive than in the past are balanced by these longer term trends. HC

With a strengthening economy, unemployment figures reaching pre-GFC levels, plentiful job opportunities and a strong Australian dollar, our country is becoming an increasingly attractive place to work. But still, HR professionals are urged to weigh all the data before making the decision to hire from overseas

Getting the package right

About the authorsThis article was co-authored by Jairus Ashworth, head of reward at Aon Hewitt, and Erik Gyllenhammer, principal, health and benefits, Aon Hewitt.

Home is where the heart is

EXPERT INSIGHT International hiring

Want to get in front of candidates based overseas but could do without the exorbitant fees charged by recruitment agencies? You’re not alone. Fortunately, there is a solution…

Alongside quality of hire, a key driver of recruitment process is cost. And when the equation is broadened to sourcing overseas

talent – whether it’s handled through a recruitment agency with international reach, or via attractive careers microsites and internal recruitment processes – the cost element can be prohibitive.

Service providers have caught on and now a growing trend is seeing employers accessing third party databases or talent pools. LinkedIn’s Hiring Solutions product line has been a boon for professional recruiters, and it has also provided internal recruiters with access to a wide talent pool.

Along the theme of bringing recruitment power back in-house, Track Me Back is a unique offering with the overarching goal of linking expats overseas with local employers. Typically, candidates will register their profiles on the Track Me Back online community several months out from their planned return to Australia. They attach their CV, enter details about when they plan to return home, and then what careers and locations they would consider returning to.

Employers pay an annual subscription to access the database, which consists of degree qualified, experienced candidates (5–10+ years’ minimum)

across a range of industries. Since launching in 2008, Track Me Back has helped thousands of international job seekers find careers at home in Australia or New Zealand. When one considers that more than 250,000 Australians are estimated to live and work in Britain alone, it’s a talent pool that simply can’t be ignored.

Lauren Winters, national HR manager at MultiChannelNetwork, says the greatest advantage of third party databases and social networks are that they attract proactive candidates and those who have a genuine interest in the business, allowing companies like MCN to source and maintain an engaged talent pool. “As a broker of new business relationships, databases like Track Me Back allow MCN to brand the business both locally and internationally and connect with enterprising candidates,” she says.

According to Caroline Rafferty, Track Me Back’s Australian general manager, it’s a win-win scenario for employers and candidates.

“In addition to being contacted directly by employers about jobs, candidates also get a community feel. We create some interaction between these expats and give them the opportunity to attend our events internationally. There are even tips on

EXPERT INSIGHT International hiring

shipping rates and all the other details that surround relocation,” she says.

Mark Devine, senior marketing & sourcing manager at NAB confirms that the early pipeline development created by sites like Track Me Back is useful for both the employer and candidate. “Track Me Back enables us to start identifying returning expats earlier on in the process, prior to them returning back home. We can then build relationships and work out their suitability prior to them arriving back in Australia.”

Rafferty adds that the GFC changed the landscape dramatically in many industries, so expats are keen for as much information as possible about who the major players are, what the regional hot spots are, and where their skills might be best utilised. Track Me Back’s team of experts – many of whom come from recruitment backgrounds – are at the forefront of the expat recruitment market, with strong connections globally. For candidates unsure of which city to move to, Track Me Back can also offer advice and support and match candidates to areas which offer the best work opportunities for their skills.

“It’s definitely a good avenue for candidates to get a real sense of what’s going on at home,” Rafferty says. “A lot of the time recruitment agencies are flavoured by the organisations they work for and obviously they are restricted to the positions they have sitting on their desk at that particular moment in time; they often don’t know what their client’s recruitment needs will be in six months’ time.

“Being able to talk with hiring managers and organisations about what they are doing directly and what opportunities are available gives candidates a much better view of who they want to work for.”

Employers have direct access to this candidate pool and can build their own profiles with up to four landing pages, company logos, and information about the company. “The content is driven by the organisation. Candidates are able to click through to their careers website and they get a boost to their employment brands by being profiled in all of the events we run internationally and all the campaigns we run on Twitter and Facebook,” Rafferty explains.

It’s also cost effective. The annual subscription is not based on a recruitment fee for a placement. Instead, it provides employers with unlimited access; they can use the database as much or as little as they desire, and it’s all priced at less than one recruitment fee through an agency. “Employers have complete control over what happens; but perhaps most

importantly, it’s an honest conversation between the candidate and the employer organisation,” says Rafferty. “In a lot of situations, when people register to Track Me Back, they are not looking to come home for 6–12 months but they’re still keen to start those conversations. It’s about securing those candidates before they even hit the ground, before they start talking to agencies and start talking to competitors about jobs.”

Lured by a resilient economy, Rafferty says 2011 has proven to be a popular year for expats returning home.

“There are definitely a lot of Australians wanting to return home, and we’ve also seen a lot of Brits that want to relocate to Australia for many of the same reasons – economic stability being a major factor.”

Given the global talent marketplace, Rafferty adds that Track Me Back has also widened its offerings to facilitate international movement to other parts of the globe. One client – Credit Suisse – has a major presence in Singapore, and they access Track Me Back’s database to target Aussies looking to return home who perhaps might be interested in a detour en-route to spend a couple of years working in Singapore.

“There are Australians who might be living in New York or London that would consider coming back to Australia but would also consider stopping for a couple of years in Singapore. Given the strength of the Aussie dollar and the cost of living in places like Sydney, it’s becoming a common path for Australians at the moment,” she says.

Whichever way they arrive back on Australian shores, one thing is certain: candidates with international experience are highly sought after.

“Global experiences are invaluable, particularly for MCN because many of our channels and providers are based internationally. Candidates who have been able to work and assimilate in other cultures can often provide a fresh, open-minded approach to things,” Winters confirms.

Rafferty adds that there are so many industries that simply don’t have the skills locally. “Digital media is one example – there are just not enough people here to fill the needs and drive businesses forwards in this area. Yet there are many Aussies coming back from the UK with strong digital media experience. Being able to attract people who have gone overseas, developed their skills further, and are now looking to add their knowledge to local organisations is hard to pass up.” HC

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INTERNATIONAL ISSUE:Relocation

Rebeccah Elley investigates the relocation of employees from overseas to Australia, discovering the importance of HR strategies in providing support to these candidates

A home away from home

Moving an employee to a new country can be a tricky task, especially when you take into consideration the many issues

involved in integrating the employee into Australian life. This is where HR professionals come in – to provide support through policies and programs to help employees feel at home.

Linda Pendlebury, director of Life Relocation, says: “Employee considerations have a major influence on corporate relocation strategy. Recognition of the host location amenities and offerings for the employee is extremely important. Relocations can be a highly emotive subject for staff, and companies should recognise this and include the proper management of this issue as a key part of their relocation strategy.”

Pre-arrivalIn many relocation cases, the role of HR begins long before the employee steps foot on Australian soil. Peter Acheson, CEO of IT recruitment company Peoplebank, advises that global mobility programs and policies should be put in place pre-arrival to avoid any negative outcomes.

“There is a whole host of recruitment processes to ensure the person has the right skills, the right attitude, the right experience, as well as strong reference checking to make sure they are applicable for a role we are putting them in,” he says.

Acheson explains that one of the conditions of an employer bringing in a candidate is that they need to undertake both a commitment on the return airfare and the appropriate insurances. “They must ensure that the person is in good health, but also that they are insured while they are here in the event of any medical ailments,” he explains.

Once the employee has the relevant insurances, a ‘needs assessment’ should be applied to help understand the needs of the candidate.

Kate Weaver, HR director of law firm DLA Piper Australia, says that flexibility is the key when it comes to mobility policies and programs. “My best advice would be to set up a framework that allows for different jurisdictions, different backgrounds, circumstances and career goals. It must be designed to meet the needs of the business, but flexible

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INTERNATIONAL ISSUE:Relocation

“My best advice would be to set up a framework that allows for different jurisdictions, different backgrounds, circumstances and career goals”– Kate Weaver

that the new employee will need a large amount of assistance with integration into Australian life. Slang such as ‘G’day mate’ or ‘I’m as mad as a cut snake’ may be confusing to most, let alone someone new to the English language.

Acheson says: “When the employee arrives, we give them background information on Australia: our customs, our traditions, our history, our slang language and even the fact we eat with a knife and fork. All those sorts of things ensure they are prepared for life in Australia.”

DLA Piper Australia uses external service providers to supply specialist immigration support and taxation advice for those employees relocating. Relocation services are also used to help manage the logistics of relocation and establish a foothold in the local environment, including cross-cultural awareness training.

Homesickness is very common among expats while they are establishing life in a new country. Acheson explains that there are many extra steps a company can take to help the employee settle into Australian life, such as arranging morning teas and lunches with people in the community, joining clubs, and introducing them to the appropriate religious denominations.

“Our primary focus is about making sure the employee is successfully integrated into the company they are joining. We typically find that the individual arrives here on their own a month or two ahead of their family. In some instances, they come here in advance to identify if they want to bring their family out or not.

“Once they are here we introduce them to their colleagues and employer and show them around the workforce they are joining. We focus on managing that social interaction so that they are successfully integrated into the work environment,” notes Acheson.

According to Life Relocation, 82% of employees tend to be accompanied by a spouse, with most putting their own career on hold. Pendlebury recommends finding the appropriate accommodation, schooling for their children, childcare and financial institutions. “This can be done by providing support services to ensure

enough to apply to the unique needs of individual employees,” she says.

Another important factor prior to the candidate’s arrival in Australia is providing them with cultural awareness programs. According to Acheson if you do not prepare the candidate for what life is going to be like in Australia then you run a high risk that the international hire will not work out.

“Going through the process of preparing them for what it is going to be like is important in terms of their frame of mind and even helping with any culture shock. In some instances, they will not get on well within the new workplace and will return home,” he says.

This can be extremely costly for the employer, as the return airfare has to be funded by the company. Pendlebury notes, “the cost of a failed relocation can run into hundreds of thousands, taking into account the initial cost of hire, relocation expenses, downtime in between new hire and re-hire costs”.

“On the flip side from the dollar-value loss, the returning employee may feel a loss of self-esteem and failure if the relocation has failed for reasons relating to adjustment. This could have a detrimental longer-term effect than the loss of company revenue.”

Ensuring that there is pre-arrival support by providing the candidate with the relevant information and providing co-ordinating services will help prevent the failure of the relocation.

Pendlebury adds that information is key to any relocation, particularly as most relocations are now being undertaken by a younger generation than in years gone by. “Life Relocation offers our clients access to our web-based information area that provides everything that the employee needs: pre-departure guidelines, driving and local transport, cafes and restaurants, education, health services, insurance, real estate information, shopping areas, banking and taxation,” she says.

Making Australia homeHelping the employee settle in begins from the moment they land in Australia, by making sure they are met at the airport and accommodation is arranged. Arriving in a foreign country will mean

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INTERNATIONAL ISSUE:Relocation

Human Capital’s essential relocation checklist✓ Ensure that everything is in order for the visa

✓ Complete a detailed needs analysis. Your relocation company can do this on your behalf either by email questionnaire or by telephone

✓ Accurately assess the cost of living and allow a reasonable budget for accommodation

✓ Inform employees of their accommodation budget. Failure to do this can lead to an enormous amount of lost time whilst the transferee views properties that are not appropriate for their budget (when writing your letter of offer to the transferee, make sure that you stipulate the monetary amount after tax)

✓ Arrange medical cover for the transferee and anyone accompanying them

✓ Ensure that the company relocation policy and the provision of relocation services meet the needs of the employee and family

✓ Involve the whole family. Your company now has a duty of care for these people. They will have an enormous influence on how your transferee feels about the move

✓ Decide on payment methods for rental properties before the transferee starts searching for a home. If the company will be paying, it may be a good idea to arrange for one month’s holding deposit to secure a potential property. This will allow the company time to arrange all other monies

✓ Arrange for the transferee to be in contact with the relocation company as soon as possible. This is best done before they arrive to avoid any disappointment

not simply an altruistic gesture on the part of the employer. It makes commercial sense to protect the greatest resource to the organisation: the employee.”

Post-arrival and repatriationThe relocation process does not end after the employee’s initial three-month probation is up. With sub-class 457 visas lasting for four years, Acheson advises that HR needs to think of this as an ongoing process, as the trip back home is just as significant as the candidate’s arrival in Australia.

“Skills visas are for four years; realistically, the employer needs to be thinking about how they are going to continue to assist that person in that four-year period. A very high percentage of those people do apply for permanent residency. We always recommend that the host employer should be willing to support that application for permanent residency, and be able to assist the candidate in the application process and residency.”

If the candidate does not decide to prolong their stay in Australia, repatriation strategies are important for a successful return home. Pendlebury believes that repatriation can be the least understood and most neglected area of international assignment management.

“The world did not stand still while the employee was abroad. The individual has changed, the home organisation has changed, and friends and family have changed. The employee may also miss the status conferred by the posting overseas; this is often a challenge for employees who are in government postings.”

The ‘perks’ that were part of their relocation are no longer provided. Pendlebury suggests that these are all issues that the organisation must consider to maximise their investment in the employee.

The employee’s repatriation should be planned from the beginning to ensure the candidate leaves the country in a positive state. A large factor in this being successful is the candidate’s constant communication with their home office and homeland. The actual repatriation process should begin at least six months to a year before their return, by establishing the schedule and planning the logistics of repatriation. Pendlebury says, “maintaining connection with the home location lays the groundwork for a smoother re-entry”.

Recruitment at the best of times is difficult to get right. Add the complexities of relocation and it can be a recipe for disaster. “Willingness to relocate is one thing; adaptability is another thing and is the key for any successful relocation,” concludes Pendlebury. HC

that the partner’s needs are met by getting the partner involved in the process from the very start, alleviating any fears or concerns.

“Most companies that Life Relocation works with understand the challenges of the newly-moved employee and their family. We often find that the new employee has a ‘buddy’ who will be there to support them socially and also keep an eye on them over the first few months of their transition,” says Pendlebury.

Pendlebury warns that a lot of relocation failures are due to the lack of support on arrival for employees.

“Many companies are still relocating employees without providing the assistance from a relocation specialist. One of the great mantras of management gurus is ‘Concentrate on your core business’. If your core business is administering the benefits system in a given area then your HR department’s core business is recruiting and keeping the staff that will fulfil this remit. They will have as much knowledge of relocation issues as the accounts department will have about developing a website.

“The single most compelling reason for using specialists in relocating employees is to reduce the stress on the individual and the family. This is

“There are a whole host of recruitment processes to ensure the person has the right skills, the right attitude, the right experience”– Peter Acheson

Companies have long recognised the need for business travel to maintain their edge over its competitors while meeting

their business and marketing goals. With the development of information technology, there are many key opportunities to outsource tasks to other organisations, but there are still times when employees, rather than the work, must be relocated. Studies have shown that business travel, including relocation and overseas assignment, is the third-highest expense for major corporations.

The 457 visa enables companies to import expertise that is not locally available. Companies take advantage of this provision due to a shortage of local experts in a particular discipline. More often, there’s a shortage of specific vendor technical expertise in a product or service which has not yet been established in the local market. Contrary to some opinions, the overall cost of importing personnel can be as high as or higher than using local personnel.

Companies find it essential to minimise these costs to keep the project or assignment within budget. The 457 visa does not include accommodation, rental assistance or living-away-from-home-allowance as part of a salary. Many overseas consultancies and high-value engineering centres include a minimum standard of accommodation in their employment contracts. Typically, these include one-bedroom plus one-bathroom per employee, cooking and laundry facilities, and transportation to work.

Corporate Keys Australia Pty Ltd was established in 2005 specifically to address the needs of project teams, consultants and relocating employees on assignment from one month to two years. Corporate Keys provides apartments in over 40 residential buildings, located in and around major business districts. In addition, Corporate Keys has contracted over 200 self-contained apartments in major hotel chains, known as Corporate Keys Residences.

Corporate accommodation is categorised similar to airline industry classes such as first class, business class and premium economy. First class represents new premium residential apartment complexes or stand-alone properties based in key locations such as waterfront, riverfront or those with garden views. Featuring gyms, pools, car parking, internet and cable TV, first class properties are ideal for project managers and senior executives. Business class properties have similar features, but come at a lower

rate, with car parking optional, while premium economy boasts high-quality, fully-equipped features for comfortable living, with the lowest cost option. All properties have air conditioning, heating, cable TV and internet.

The most cost-effective option for project teams is often twin share in two-bedroom, two-bathroom apartments, as rates are per apartment, not per person. All Corporate Keys apartments have state-of-the-art high speed ADSL2+ internet with both cable connection and secure wireless to keep your employees happy and productive.

The advantage of Corporate Keys Apartments and Corporate Keys Residences over hotels and serviced apartments is, based on length of stay, a cost saving of up to 40%. There’s also the convenience of having larger living spaces and better in-room facilities, such as kitchens and laundries. The benefit over residential real estate leasing is the luxury of having the furniture, power, gas, cable television, internet, housekeeping, maintenance, airport transfer, meet-and-greet, induction and rental of additional items all done for you, while you can lease for as short as 28 days.

Corporate Keys accommodation has been designed specifically for the convenience of businesses. Billing can be done by credit card, bank transfer, online, by telephone, individually or consolidated for an entire team across multiple properties with varying start and finish dates and length of stays. Invoices and reporting can be matched to your WBS codes or cost-centre coding. All clients are assigned a specific account manager to make communications efficient and personal.

Corporate Keys website, www.corporatekeys.com.au, includes a live availability listing with full pricing, photographs of each actual apartment and often a floor plan. Typically, there are 60–80 apartments available each month at any given time, and additional availability in Corporate Keys Residence apartments located in third-party hotels. Alternatively, clients can contact the office with their requirements and a consultant will match a property to their specification. The Corporate Keys website also contains further information about the business and the advantages for organisations looking for a high-quality, cost-effective solution to accommodating project teams and visiting consultants holding a 457 visa and those employees who are relocating.

Providing a solution to business accommodation

EXPERT INSIGHT

Contact usCall Corporate Keys on 1300 CORPORATE (1300 267 767) or visit the website for more details

26 www.hcamag.com

DIVERSITY indigenous recruitment

With the unemployment rate at 4.9% and projected to drop to 4.5% in 2011–2012 employers are facing not just a skills

shortage but a labour shortage. Businesses will need to look to foreign nationals

to fill the gaps in both skilled and semi-skilled work. This is nothing new: currently, 1 in 4 people in the Australian workforce have a visa. Have you checked if your employees have work rights?

Employer-initiated visa applications are given priority. These include the sponsored employee 457 visa for temporary residence or the Employer Nomination Scheme (ENS) for permanent residence.

What visa is best for an employer to use? A brief overview of 457 and ENS visas as well as the pros and cons of each are outlined below. We conclude with a look at some other temporary residence visas for employers to consider as solutions to labour shortages.

457 visaThis program enables approved businesses to sponsor multiple-skilled workers on 457 visas in the three-year validity period of the sponsorship. Training benchmarks, typically 1% of gross payroll, must be met. No evidence of labour market testing is required. Market salary must be paid. For semi-skilled roles not on the gazetted list of over 600 occupations for 457 visa purposes, employers need to negotiate a Labour Agreement with the Department

of Immigration and Citizenship (DIAC) to sponsor their 457 visa holders.

Sponsored employees can work from one day to four years and then apply for a new 457 visa, if required. More often than not, they want to remain in Australia and obtain permanent residence. So, a 457 visa is a good way to see if a foreign national employee is a good fit for a business.

Advantages of the 457 program include:• contractscanincludeaprobationaryperiod• doesnothavetobeafull-timeposition• accesstolegitimatetaxbenefits,suchasLiving

Away From Home Allowance (LAFHA)• quickprocessingtime(fourweeks),anticipated

to reduce to two weeks shortly• familymembershavefullworkandstudyrights• canbeapathwaytopermanentresidence

Disadvantages/challenges of the 457 program include:• meetingtrainingbenchmarks• statutorysponsorshipobligations,suchaspay

return travel costs, notify DIAC when certain events occur (eg, appointment of new director or change in duties of the nominated person), keep records and provide them on request at a DIAC audit

• failuretocomplywithsponsorshipobligationscan have serious consequences such as barring

Navigating the migration maze to meet employer needs

SPONSORED FEATURE katie malyon

DIVERSITY indigenous recruitment

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SPONSORED FEATURE katie malyon

the sponsor for a time, cancellation of approval or fines

• inflexibility,eg,employeemustworkinthenominated occupation only pending a new nomination approval

• meetingthesalarythresholdof$47,480pa(thismay increase in line with the CPI on 1 July 2011) and, in any event, pay the market salary

• schoolfeespayableinsomestate/territorygovernments, and overseas student fee rates payable to universities

• ForeignInvestmentReviewBoardapprovalrequired for most property acquisitions

ENS The ENS scheme enables employers to nominate skilled workers already in Australia or from overseas in nearly 500 skilled occupations. Many Labour Agreements also facilitate permanent residence.

Advantages of the ENS include:• nosponsorshipobligationsoraudits• expeditedprocessing(1–3weeksifmigration

agent-certified)• paylocalratestoattendschooloruniversity• accesstoMedicare• pathwaytoAustraliancitizenship• abilitytosponsorothersforpermanentresidence

Disadvantages/challenges of ENS include:• positionmustprovidefull-timeemploymentin

Australia for at least three years – this does not

For more information on the topics discussed in this article, Labour Agreements, meeting training benchmarks, how to prepare for a DIAC audit, clauses for inclusion in contracts with expatriates, checking work rights, please contact one of the professionals at Australia’s second largest immigration law firm Katie Malyon & Associates on (02) 8247 8247 or email info@malyonlaw.com

Katie Malyon

mean a fixed-term contract is required • somerestrictionsonuseofaprobationaryperiod• mustmeettheminimumsalarylevelofatleast

$47,480paor$65,020paforICTroles(thesemayincrease in line with the CPI on 1 July 2011) and otherwise paid in accordance with the relevant award or collective agreement

Comparing 457 and ENS Both schemes have advantages and disadvantages/challenges. Employers need to assess their needs and make choices based on their business aims and objectives.

At the HR coalface, there are many competing factors for employers to consider in relation to the timing of support for a permanent residence application including:• thevalue/contributionoftheemployeeto

the business• thepotentialfortheemployeetoleavethe

business once granted permanent residence• minimisationofsponsorshipobligations• LAFHAconsiderations

Additionally, there is a range of other temporary residence visa programs including Working Holiday 417 and 462 visas. Overseas Students studying in Australia, Skilled Graduates 485 visa holders who have completed their studies in Australia or overseas Recognised Graduate 476 visa holders of certain overseas engineering institutions are further options for businesses with short-term labour needs to consider.

28 www.hcamag.com

INTERNATIONAL ISSUE:Offshoring

Offshoring remains a contentious issue, but with the practice increasing for white-collar roles, including HR, Human Capital weighs the pros and cons

The great dividenet in collaboration with Aegis, while 81% of all outsourcing was undertaken within Australia, the remaining 19% was divided between the Philippines, India and Malaysia.

The study divided outsourcing into five categories – customer interaction (contact centres), back-office processing, IT, finance and HR.

The study showed that Australia is still dominant – undertaking 73% of all customer interaction, 67% of back-office processing, 91% of IT, 75% of finance. Interestingly, 100% of HR outsourcing is handled on Australian shores – at least in this sample*.

That’s not to say that HR offshoring is not occurring. Transactional HR functions – employee helpdesks, payroll and HR administration – are increasingly being offshored. For example, since 2007 NAB has undertaken an outsourced arrangement whereby those HR functions are handled by an Infosys team based in India (see case study, p34).

Evolution of BPOMary Sue Rogers, head of IBM’s global HR, learning & recruiting business process outsourcing operations, notes that multi-process HR outsourcing (MPHRO) in general has moved into a more

On 27 May one of the headlines in The Sydney Morning Herald read: ‘Heinz sheds more than 300 jobs as it moves sauce, beetroot

production to New Zealand’. Earlier that month, Qantas came under fire from unions for threatening to offshore engineering and pilot roles. If there’s one aspect of business guaranteed to capture people’s attention, it’s offshoring. And while the practice has commonly hit manufacturing and blue-collar roles, increasingly white-collar professionals in IT, procurement and HR are being affected.

Outsourcing of various back-office functions has been commonplace for years, but the notion of offshoring still rankles many.

It’s important to clarify the two terms: outsourcing generally refers to passing over an intact business process – such as payroll – to a third party; offshoring refers to having work done in another country. Although there are similarities between the two, the terms are not interchangeable; many outsourcers provide offshored services, while some are locally based. Both scenarios frequently fall under the term ‘shared service centres’.

According to the Australian Contact Centre Outsourcing Market Study 2011

released by callcentres.

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INTERNATIONAL ISSUE:Offshoring

The great dividemature business phase, if the test of being a mature business includes steady growth, profitability, competence in the broad fundamentals, strong business controls, career paths for professional members of the industry and adequate clarity for infrastructure investment.

“The first chapter of history was almost steeped in over-exuberance of the benefits and the value of outsourcing HR. People thought: ‘I’ll outsource all those things that have never worked for me in HR, fix everything and it will all be perfect’. The naivety in the market at that time – about what MPHRO could do – was probably way out of balance with reality,” Rogers explains.

There followed a period of much more considered growth, which Rogers believes continues to this day. The difference now is there are more educated buyers, along with more cautious and sophisticated providers working together to create win-win situations. “From IBM’s perspective we’ve put a tonne of investment into delivery excellence with continuous improvement, best practice, and standardisation,” she says.

And yes, the future points towards more outsourcing locally and offshore, as traditional shared services firms evolve into global business services organisations. Over the last two decades, companies have realised significant efficiency gains by consolidating work from multiple business units into shared services organisations.

According to The Hackett Group, there are three main value drivers:• Economiesofscale: Operations must be

of sufficient scale to offer opportunities for value realisation. This is especially true for organisations looking to offshore work, which typically involves significant investment in new management, facilities and technology over and above the cost of the transition itself. To create scale, offshore operations can be leveraged for the benefit of the entire organisation regardless of the original work location, business unit or functional orientation.

• Economiesofscope:Expanding the portfolio of services offered presents additional opportunities for value realisation. For example, a centre that is very efficiently processing invoices has much of the physical infrastructure, technology platform, service management capability and skills/talent to deliver transactional HR services efficiently as well. Economies of scope are among the reasons that organisations are expanding their business services portfolio, in most cases beyond functional boundaries, to realise value.

• Economiesofskill:Common, knowledge-centric processes (including some accounting functions, analysis and reporting, and strategic sourcing) are very amenable to leveraging in a dedicated service delivery organisation. The leverage factor here is skills, enabling higher utilisation and productivity of skilled resources.

30 www.hcamag.com

INTERNATIONAL ISSUE:Offshoring

Good financial sense?

Although recent research is thin on the ground, according to a 2006 analysis by advisory firm The Hackett Group, Fortune 500 companies could together save $58bn annually, or over $116m on average per company, by offshoring many HR and back-office activities.

The study, 116 Million Reasons Why The World Is Flat, estimated that the increased use of offshore labour may impact up to 1.47 million general and administrative jobs, or nearly 3,000 at a typical Fortune 500 company.

The study’s analysis of the savings opportunity for a typical Fortune 500 company is based on the median number of full-time employees per corporate department/process area, labour arbitrage cost differentials and the potential degree for offshoring by department/process area. The table below provides a summary of the analysis:

Sticking pointsThere are still some hurdles to overcome before offshoring is widely accepted. Clifton Warren, vice president of sales and marketing at Aegis, says that for larger organisations the challenges are increasing productivity, and upgrading technology and budgets to meet business requirements. For smaller organisations the key concerns are employee turnover, increasing HR costs and the ability to acquire/retain customers. “One of the key concerns is simply letting go, especially if a function has been done in-house over a long period of time,” he says.

Rogers frequently handles these queries: “When clients say, ‘I’m interested in outsourcing but I’m not sure if I’m keen on offshoring’, we can create a value proposition with a mixture of onshore and offshore. It’s not all offshore for HR; it can never be. Statutory and legal requirements in many countries around the world require that the work is done in-country. That’s not Australia specific – we’re very used to having a hybrid model of local, regional and global. You outsource the work to where the best delivery location is – for statutory and legal reasons and also for cost point reasons,” she says.

Furthermore, Rogers says the numbers don’t add up if a client wants to keep it all in Australia. “When a client says they’re not keen on offshoring and request an Australian top-to-bottom operation, and then say they’d also like to have 20–30% operational savings – the maths doesn’t work.”

So why would an Australian company want to have its HR support centre in Kuala Lumpur rather than Canberra? The obvious reason is cost. Salaries in the developing world can be a fraction of those in Australia, the US or Western Europe. Moving jobs over to where labour costs are lowest is a practice known as wage arbitrage.

Rogers cites Manila as an example. She likens operations there to “an HR production line”, which can take up to two million calls a month and process just as many payslips. “You’ve got volume, you’ve got skills and expertise, you can hire talent and it becomes a future career for them. There’s the quality perspective of putting someone else’s work into an already well-run production line. That gives you efficiency, effectiveness and quality improvement, and then on top of that you have labour arbitrage,” she says.

Offshoring back-office operations: ROI for Fortune 500 companies

Department/process area

Estimated annual savings per company

Number of staff impacted per company (average)

Activities offering largest ROI opportunities

IT $58.5m 1,223 •Application management•Technology infrastructure

Finance $32.1m 1,045 •General accounting/ external reporting•Cash disbursements•Revenue cycle activities

HR $15.6m 390 •Data management reporting and compliance•Total rewards administration•Payroll administration

Procurement $9.9m 275 •Purchase order processing•Sourcing execution

Total per company $116.1m 2,933 --

Total for Fortune 500 $58bn 1.47 million --

Source: The Hackett Group

FEATURE business communication

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“Because it’s in Manila I get a labour cost saving, as it has a lower-cost labour base than Australia. But for a client in Thailand or Malaysia, or a client here who has a significant footprint in the ASEAN region, the labour cost saving is not that significant. Instead, the quality of standardisation and having business controls and compliance is very important – and that’s one of the reasons why they find it attractive.”

Indeed, the cost savings promised by offshoring are mitigated by two issues. One is that companies that focus primarily on cost savings often have unhappy experiences with outsourcing. A company can reduce costs by having its outsourcer reduce service levels. However, employees finding they can’t get the support services to which they’ve been accustomed may not be impressed. Cost savings may be further negated when employees approach the local HR department demanding assistance.

The other issue is that the cost advantages are disappearing as salaries in the developing world increase. These shifts are already apparent in the Aegis study. The Philippines was ahead in all categories – undertaking 20% of customer interaction compared with 13% for India, 33% of back-office processing compared to zero in India, 18% of IT compared to India’s 9% and 25% of finance compared with zero in India. It’s unlikely that this constant

search for a cheaper hourly wage is a sustainable business model.

Companies can reap potential savings by bypassing an outsourcer and setting up their own offshore shared services centre. The main advantage of in-house offshoring is that it can be tailored to suit the organisation’s needs and changes can be made without having to worry about contracts and service level agreements.

However, it can take some time to ramp up the business before any savings are made. Creating a shared service centre requires building infrastructure and learning to operate efficiently in a new environment.

Perhaps cost reduction is the wrong measure of success. Asheesh Mehra, head of BPO, Asia Pacific, Infosys, says that while labour arbitrage is an immediate benefit that organisations derive by moving to lower-cost geographies, most organisations are looking to transform the way they are undertaking a process or function. “This includes not just doing it cheaply, but also doing it better and differently,” he says.

Mehra notes that the driving factor for NAB – and one of the key ROI statistics looked at – was employee satisfaction. “They wanted to make sure every process was tracked. How many people are calling for

“You outsource the work to where the best delivery location is – for statutory and legal reasons and also for cost point reasons”– Mary Sue Rogers

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INTERNATIONAL ISSUE business communication

Assessing processes, risk and value

Organisations should analyse multiple factors as they evaluate their offshoring decisions, including the current performance levels of each process as well as:• Complexity of the process. Look well below the functional level at

individual processes and the learning curve required to become proficient at them. The longer the learning curve, the more likely the process will benefit from transformation prior to offshoring.

• Risk of transformation and globalisation. Risk should not be an excuse to avoid globalisation. But mitigation strategies should be considered based on the risk assessment and the risk tolerance of the organisation.

• Net present value of the strategic alternatives. Look beyond labour arbitrage to construct a business case that assesses implementation costs, additional management overheads and also the potential upside of globalisation.

Source: The Hackett Group

Why performance matters

AT Kearney’s study, Execution Is Everything: The Keys to Offshore Success, looked at why some companies gain performance improvements and cost savings from offshoring while others find them elusive. The research looked at the post-offshoring change in operational performance reported by 42 companies across six measures: capacity, organisational flexibility, revenue performance, organisational capability, process maturity and service levels.

Key findings include:• Despite the cost savings, 60% of the companies failed to meet their

operation performance expectations and 34% failed to meet their savings expectations.

• Companies tended to achieve more savings and better operational performance improvement when they offshored advanced BPO functions, defined as unstructured, ad hoc work requiring substantial judgment and discretion. Offshoring these types of functions saved an average of 38%. Low-complexity functions, defined as highly transaction-driven, rule-based activities such as call centres or transaction processing, sent offshore saved an average of 28% in costs.

• Surveyed companies that chose the captive model (where management maintains direct control over the operations) over the third-party model averaged better savings and better operational performance improvement, mainly driven by the higher investment in the offshoring management team.

particular issues? How can we then go back and fix those issues?” he says.

“It was more about how we could move the needle to provide better services to NAB employees.”

Warren suggests that all companies need to first understand the reason why they are offshoring. What are they trying to improve? Perhaps it’s better customer service, or to improve customer acquisition, or reduce customer churn.

“When offshoring, the focus should be on the key areas for improvement and understanding the capabilities of the country. For example, the US and South Africa can provide a high level of customer, technical and fulfillment services, the Philippines is excellent with customer service and working multiple time zones, and India’s strong capabilities are in back of house and collections.

“Understanding the capabilities of a country enables you to mix and match your needs, creating a flexible solution. Companies do need to be wary that one size does not necessarily fit all.”

Rogers adds: “One of my key themes in terms of investment with clients is we don’t want to be just a delivery organisation that has each client being an individual silo in the centre. In order to drive the right business objectives and direction for our clients, it’s about being truly multi-client – and that’s multi-client on the technology, on the processes, with the people.”

IBM has therefore focused on segmenting the work and knowing what truly can be multi-client and standardised (for example, running a payroll process or undertaking the admin associated with a superannuation policy) versus what truly needs to be unique (such as some of the ‘soft-end’ steps in recruitment like looking for potential hires and calling up candidates), in order for each client to be the best in the market.

Further considerationsIf the wider population is uncomfortable dealing with call centres based overseas, it’s no less of a problem for employees. Having to call overseas for HR support is potentially problematic due to language and culture differences. Even offshore staff completely fluent in English will have different accents and limited experience with Australian culture. Although this is unlikely to be problematic if the employee is

FEATURE business communication

33www.hcamag.com

simply asking about annual leave accrual, for more sensitive issues – such as changes in personal details due to a divorce – the discomfort with language barriers may be heightened.

Mehra suggests that a change management program is required to prepare employees. Employees should be kept abreast of what is happening, why it is happening and how it will affect them – and the earlier the better if job cuts or restructuring will occur.

Quality of service also needs to be at the top of considerations in the negotiations with an offshore service provider. HR teams need to be part of the negotiations – a step that may seem obvious, but is often not the case when finance or procurement is in charge of making the deal. Indeed, it’s likely that a different type of service level agreement – with different measures of quality – will be required for offshoring HR functions, as opposed to finance or IT.

’One team’ approachNone of the challenges relating to HR offshoring appear to be deal breakers. Mehra concedes that just like any transition, NAB’s path to offshoring had its share of problems – but nothing that couldn’t be overcome with transparency and commitment on both sides. The NAB leadership team spends time at the Infosys delivery centres and vice versa.

Recognition programs run across both teams – but really it’s about one team, as Mehra explains:

“NAB doesn’t look at it as, ‘you’re our service provider; it’s your problem’. We don’t look at it as, ‘you’re the customer; you’re supposed to provide the data so it’s your problem’. We looked at it as ‘our’ problem and I think that made the difference. We addressed any challenge on the NAB side or the Infosys side together.”

His advice would be to not underestimate the effort that something like this takes. “I don’t want to scare people away but definitely over-invest in knowledge transfer because that investment now will serve you well in the long run. Knowledge transfer is critical – you can cut corners upfront, but it will come back to bite you in the long term. So for every organisation looking to outsource, the knowledge needs to be passed on. Each process needs to be documented. What screen do I go to? What button do I press? Do it by the keystroke. You’re taking knowledge out of people’s heads, which has been there for five or 10 years, and you’re moving it from being people dependent to process dependent.

“Don’t get over-ambitious in trying to achieve this quickly. The approach NAB and Infosys took was, ‘let’s not focus on time; let’s focus on quality’,” Mehra concludes. HC

*Based on 54 detailed case study interviews undertaken between November 2010 and January 2011

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INTERNATIONAL ISSUE:Offshoring

Human Capital talks to Stuart Wood, head of people services – operations & service delivery at NAB, about his company’s industry-lauded relationship with BPO provider Infosys

Case study: NABquality of some calls needing improvement which we are working to rectify with Infosys.

HC: What sort of factors have you built into your service level agreement, and are these the factors that the success of the arrangement is measured on?SW: We have a number of service level agreed targets, around two components – turnaround times and quality measures.

While we have service level credits attached (ie penalties for not meeting target), we prefer to manage things as a partnership using metrics as opposed to managing via a contract.

For example, one area in which we assist our Bangalore-based teams is measuring their team member’s productivity. Our Melbourne-based process leads use these metrics to understand any impacts on team workflow and to enhance forecasts and schedules.

Rather than being reactive to performance results, our process leads work with our Bangalore teams on a daily basis to ensure we achieve our targets.

Additionally, we have ‘calibration sessions’ to ensure quality scores are to the standard we require. This is an example of being proactive – it provides real-time corrective actions as required – and ensuring the success of the services we deliver to the organisation.

HC: Any advice to other HR professionals or business leaders looking to offshore parts of their HR offerings?SW: Be prepared to invest in inspecting what you expect. Utilising an offshore solution does not mean that the business can abdicate responsibility to the service provider. A far more successful approach is to work with the service provider to ensure that deliverables are met. This means that key processes need to be regularly monitored and managed, and appropriately resourced. The resources are often subject matter experts, however they will eventually become your ‘process leads’.

Ensure that you really know your operation and that it is mature. You must have a thorough understanding of your processes for an effective transition.

The residual team should comprise subject matter expertise, but with a view to transpose that knowledge into documented sustainable processes. The expert knowledge will be superseded by a resource who can ensure that the process delivers to expectations. This person becomes your process lead and provides leadership and management of day-to-day operations. HC

Human Capital: Can you briefly outline what HR functions NAB partners with Infosys on in its business process outsourcing (BPO) arrangement? Stuart Wood: Infosys has been providing services to NAB since April 2008 and supports a range of our HR processes including processing payroll, supporting employee placement, administration of employee benefits including FBT and the provision of generalist advice to employees via a helpdesk-style service on payroll, leave, employee benefits, learning & development and HR case management issues.

HC: Were these functions handled in-house prior to the decision to outsource?SW: Prior to our partnership with Infosys, these processes were managed in-house.

HC: What were the driving factors behind the decision?SW: This was part of looking at how we could run some HR services with greater efficacy. The changes were designed to consolidate activity and processes to deliver cost benefits, gain efficiencies through standardisation of processes and leverage some time-zone difference for better service levels.

HC: The Infosys team is situated offshore. Did the offshoring question pose any dilemmas for NAB?SW: NAB considered many factors when making the decision to outsource these processes. We followed appropriate governance and due diligence to ensure it was the right decision. We’ve established a true partnership with Infosys that has allowed us to function well and deliver effective service to the business. HC: Have you had any feedback – positive or negative – from customers (that is, your workforce) about queries being handled by workers based outside of Australia?SW: We encourage and welcome feedback from our employees on the service provided by Infosys. We’ve set up a number of channels to facilitate the feedback, ranging from ‘real-time’ structured surveys immediately after a transaction, a feedback mail box, structured periodical surveys open to all employees and we have also set up a process for issues requiring escalation.

While a 2009 employee survey highlighted some initial concerns about queries being handled by offshore workers, our 2010 survey revealed this is no longer the case. There is, however, some feedback around the

T o employ a foreign worker in Australia, you are required to ensure they have the appropriate work-rights and that you comply with

immigration law obligations. The Migration Act and the Employer Sanctions Act imposes civil and criminal penalties on employers and on persons who employ or allow an unlawful non-citizen to work.1

The most appropriate visa to work in Australia is a Temporary Business (Long Stay) Subclass 457 Visa.

BackgroundA Subclass 457 visa allows the visa holder to live and work in Australia for up to four years, and can include family members. The employee can only work for the sponsoring business or its related entity. Family members have no work or study restrictions.

Process To arrange a Subclass 457 visa, a business must have Business Sponsorship Status. Then it must lodge a Nomination Application and Visa Application.

If the employee already holds a Subclass 457 visa with another sponsor, there is provision to transfer their visa to your Business Sponsorship facility, without the need to lodge a new application.

Business Sponsorship ApplicationThe Business Sponsorship facility is valid for three years and is available to use for an unlimited number of positions.

Nomination ApplicationOnly positions which significantly correlate with an occupation on a gazetted list can be put forward in the nomination. The Nomination Application identifies the employee, tasks, location, salary, and terms of employment.2 It also confirms that the salary being offered meets ‘market rates’,3 and that the nominated employee has the qualifications and skills for the position.4

Visa ApplicationThis is submitted on behalf of the employee and dependent family members and addresses criteria such as skills, health, character and English language fluency.

Health ExaminationsThe employee/family member may be required to undertake health examinations at an approved centre. The requirement is dependent on a number of risk factors.

Character RequirementsAll applicants will need to be of ‘good character’. Applicants who have a penal history are required to provide character evidence.

Skill RequirementsThe employee is required to provide evidence of their skills to fulfil the position. The Australian and New Zealand Standard Classification of Occupations (ANZSCO) identifies the skills threshold with reference to a qualification and/or relevant employment experience.

English Language RequirementsEmployees will be required to give evidence of vocational English. Some applicants, such as eligible passport holders, professionals or employees offered a certain salary5 are exempt.

Health Insurance RequirementsAll visa holders must have a minimum level of health insurance cover stipulated by the Department.6 Evidence of this7 is to be submitted.

Concluding RemarksWe recommend that you consider obtaining legal assistance, as this area of the law is constantly changing and developing. MB Lawyers have a dedicated corporate immigration practice and can assist you with arranging appropriate work visas (including permanent residence visas), business sponsorship, monitoring and compliance.

Right to work in Australia – tackling the ‘457 visa’

EXPERT INSIGHT

About the authorMarsha BassilyPrincipal Solicitor Registered Migration Agent, MARN 0701366MB LawyersSuite 802A, Level 8, 309 Pitt St, Sydney 2000e: mbassily@MBLs.com.auw: MBLs.com.aut: 02 8999 8012

1 An offence is committed if the employer knows, or is reckless as to whether, the worker is an unlawful non citizen.2 Note that the position offered must be a full time position.3 This is a two pronged test. The market evidence needs to show that current market rates for the position is above The Temporary Skilled Migration Income Threshold (TSMIT), presently set at $47,480 pa. Secondly, the proposed salary and terms of employment will be ‘no less favourable’ than the terms and conditions that are, or would be provided to, an Australian employee performing equivalent work in the business at the same location. 4 The employer is required to certify that the applicant has the skills as specified in ANSZCO. 5 Presently the salary is specified as base salary equal or greater than $85,090 pa.6 The minimum level is stated on the Department’s website at: http://www.immi.gov.au/skilled/457-health-insurance-faq-visa-holder.htm7 For example, under Reciprocal Health Care Agreements between Australia and relevant country (eg Ireland), an employee may be exempt from obtaining health insurance.

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INTERNATIONAL ISSUE:Cross-cultural business

Before entering into a diverse workplace or travelling abroad, managers are encouraged to increase their cultural intelligence, or CQ. Dr Des Tubridy outlines CQ and provides his top tips for undertaking business in a number of popular destinations

Vive la difference!

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INTERNATIONAL ISSUE:Cross-cultural business

• astrongsenseoftheirownvaluesystemandrecognition that other people and nations have their own unique values

• patienceandunderstandingofothers’valuesand behavioursIt may seem like a lot of effort to build

cross-cultural business relationships – and it is! Nonetheless the benefits of building these relationships far outweigh the costs. Culturally diverse working groups are known to have the following benefits: • morelikelytoidentifygapsinaspecificmarket

and better able to develop a strategy that will target specific cultural groups

• enhancedcreativeproblemsolving–more likely to develop innovative strategies for overcoming issues in the workplace (as they bring in different approaches to viewing potential problems)Conducting business in cross-cultural settings

is well known to have its challenges and indeed its rewards. No one can avoid all the pitfalls and nuances of cultural miscommunication. Cross-cultural training sessions will mitigate some of the issues.

Here are some tips for avoiding some of the more obvious faux pas when undertaking business overseas.

China• Attempttotransactbusinessthrough

intermediaries since the Chinese will not relate as well to strangers.

• Connectionsandnetworksareextremelyimportant.

• Businessmeetingsmustcommencebyemphasising mutual benefits and long-term associations. ‘Guanxi’ means a network that binds people though the exchange of favours rather than through expressions of sympathy and friendship.

• Favoursneedtobereturned.• People’snamesareveryimportant.

The Chinese only use first names with their relatives and friends. Western negotiators must greet their business partners with their title and family name.

Culture has no one accepted definition, but may include assumptions, behaviours, norms, values, language, religion and

dress. Culture is acquired early on in childhood and is reinforced by the important people in our lives, including teachers, peers and parents. Individuals do not learn culture consciously and are not aware that their behaviour is usually in accordance with the extant known culture of their region. Culture is not static and changes from generation to generation.

It is widely believed that cultures are interacting across borders around the world due to the process known as globalisation. It needs to be noted that globalisation, which leads to greater interaction and interdependency, does not mean that cultures are assimilating. Overt manifestations of culture such as fashion, multinationals, languages and colloquialisms should not be mistaken for cultural shifts. On the contrary, according to DuBrin, Dalglish and Miller (2006), “the underlying value system may be very different and relatively unaffected by globalisation”. As countries become increasingly interdependent, the need to preserve cultural differences seems to have become more important.

It can also be observed that cultural differences occur within the same country, city or even social group. Understanding your own values and cultural perspectives before going into your meeting will help you deal with prevailing cultural issues. For example, Australian managers are known to value honesty and creativity. However, if they work in India, they will realise that Indian managers place a stronger emphasis on values such as obedience, loyalty and trust.

Before entering into a diverse workplace or travelling abroad, managers are encouraged to increase their cultural intelligence, or CQ, which is constituted of a number of competencies. A cross-culture-competent manager will display some, if not all, of the following: • awarenessthattheyarenotfullyinformedabout

any one culture• preparednessandcopingstrategiesforcross-

cultural situations• abilitytodeveloprespectfulandcooperative

relationships with individuals from diverse backgrounds

“Globalisation does not mean that cultures are assimilating”

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INTERNATIONAL ISSUE:Cross-cultural business

offer their hand to a westernised Indian man, but not normally to others. Traditional Indian women may shake hands with foreign women but not usually with men.

• Itisconsideredrudetoplungeintobusinessdiscussions immediately. Ask about your counterpart’s family, interests, hobbies, etc before beginning business discussions.

• BusinessisslowanddifficultinIndia.Bepolite,but persistent. Do not get angry if you are told something “can’t be done”. Instead, restate your request firmly but with a smile. Plan on several visits before you reach an agreement.

• Arrive15–30minuteslaterthanthestatedtimefor a dinner party.

• Ifyourhostseatwithhands,assurethemyouenjoy doing the same. If utensils are not used, use your right hand and your first three fingers and thumb only.

• Decisionsaredeterminedtop-down.Usuallyoneperson makes all major decisions. Attempt to deal with the highest-level person available.

• BusinesscardsareexchangedandIndiansarevery conscious of the protocol. Always present business cards when introduced. English is appropriate for business.

Malaysia• SpendtimegettingtoknowyourMalaysian

colleagues and network. Many Malaysians wish to comprehend Australian culture and will spend much time at the beginning of the meeting asking diplomatically and indirectly worded questions.

• Respecttheirhierarchicalstructure.Whenconducting meetings with Malaysians, ensure that the leader of the Australian team facilitates the introductions and discussion.

• IfyourMalaysiancounterpartfallssilent,donot feel pressured to keep talking or to fill the silence with conversation. They are more than likely contemplating the propositions postulated by your team.

• Whenhandingoutbusinesscards,haveoneside printed in their local language. Although most Malaysians understand English, this action demonstrates that you have made an effort to relate and therefore respect their culture.

• Whenshakinghands,donotgriptheirhandtightly. This will be interpreted as a non-verbal power move. HC

The Emirates• Dressprofessionally(despitetheclimate)with

suit and tie. Long-sleeved shirts are preferred. For a female manager, it is recommended to wear high-neck blouses or tops and skirts, which should be well below the knee.

• Shoesareusuallyremovedbeforeenteringahouse, however follow the lead of your host before doing so.

• Fridayisconsideredthebeginningoftheweekend in Abu Dhabi. Do not be surprised when everything shuts down on that day. You cannot catch a train from the airport into the city after midday on a Friday. Holidays are based on the Islamic calendar, therefore pre-plan your meetings a few months ahead.

• Giftsareexpectedandwellreceived.However,avoid giving alcohol, or images of dogs or pigs.

• Avoidthediscussionoffemalefamilymembers(if you are a male manager).

Germany• Alwaysbeearlyoratleastontimeformeetings.

German business people do not look kindly on late arrivals.

• Bepreparedwithfactualanddetaileddocuments to back up any business projects or proposals. Germans will take the time to read through these documents and read everything.

• Avoidsarcasm,ironyorhumourduringbusinessmeetings. Germans do have a sense of humour but believe that humour should be kept for non-work matters.

• [Thismaybeanobviousstatement,but]avoidtopics of Nazis or Hitler as many Germans are sensitive to these topics and will not appreciate any humour instilled in these topics.

India• WhenanIndiananswers,“Iwilltry,”heorshe

generally means “no”. This is considered a polite form of “no”.

• ManyIndiansdonotwearshoesinsidea home. Follow your host. Make sure your socks are clean.

• Useyourrighthandonlytotouchsomeone,passmoney or pick up merchandise. The left hand is considered unclean.

• Malesshakehandswithothermaleswhenmeeting or leaving. Men must not touch women when meeting or greeting. Western women may

About the authorDr Des Tubridy is a director of Quantum Management Indicators, which specialises in employee engagement, organisation culture and customer satisfaction surveys. Des has a Doctorate in International Business Administration and has an MBA from the UK. He studied multicultural subjects in both these programs. He also participated in a Harvard University residential program. Des can be contacted on 03 9249 9570 or dest@qmisurveys.com.au

COVER STORY employer branding

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Everybody has a different definition of culture. We know that cultures (and sub-cultures) exist on a national, organisational, familial

and individual level. Each has norms, values and behaviours that are adhered to. Culture has been defined as “the collective programming of the mind which distinguishes the members of one group or category of people from another” according to Hofstede, a forerunner in the field of cultural studies. Culture shapes us and we shape culture. It is fluid and complex and no two people are ‘programmed’ in exactly the same way. That’s what makes the study of culture both fascinating and fraught.

Cultures are rooted deeply in our past. Many speculate about the influence of Plato and Socrates on Western culture and Confucius and Lao Tsu on Far Eastern culture. Over the thousands of years since, other influences have come to bare. And so our norms, values and behaviours are handed down to us as given ‘truths’ on how we should live our lives and conduct ourselves. The problem is, so few of these ‘truths’ are explicit. There is no rule book.

Many people see culture primarily on a behavioural level. Consider the experience of a recent migrant to Australia. Where is the Australian Culture Rule Book that says, “When you meet someone for the first time you look them in the eye and shake their hand firmly.” In virtually every one of Diversity@Work’s cultural awareness workshops we hear participants decry the limp handshake and the ‘shifty’ person who won’t look them in the eye. Opinions are made in those split seconds about the character and integrity of the person. In Australia, (unlike Japan), this is a cultural norm.

If we look deeper at culture we see ingrained value systems. They can be largely implicit and powerful but are the bedrock on which our laws and institutions are based. Social researchers like Hofstede and Trompenaars have quantitatively measured national value systems. We all fit along the continuum of various identified Dimensions of Culture. For instance, Australia is a relatively egalitarian society. We intuitively treat others with a degree of respect. For instance, we queue. First come, first served. If someone were to push in this would be ‘un-Australian’, a cultural value has been transgressed. Hence our dominant culture is revealed.

Many leaders of organisations are striving to develop their cultural competence. With multinational clients, multi-lateral collaborations and an increasingly culturally diverse workforce

they need to understand different perspectives and motives. The knowledge we glean from engaging with difference can provide new insights to trigger greater innovation. It can also provide new perspectives to understand and redefine our evolving culture.

Cultural competence requires curiosity, commitment, self examination and an ability to uncover the deep, ingrained patterns of our collective and individual unconscious. The key to directing, influencing, even changing cultures is to recognise your own. Like the Ancient Greek aphorism “Know thyself”, cultural competence is firstly based on understanding and constantly analysing your own conscious and unconscious belief systems. These form your realities.

Here are four steps to build your organisation’s cultural intelligence:1. Explore the dominant culture of the organisation from the leadership team down to frontline staff. How is this dominant culture portrayed in both the internal and external communications? What images are being used? What does a typical employee look and sound like? Does this relate with the demographic of the organisation? What sort of subliminal messages are potentially being sent out both externally to customers and internally to staff? 2. Turn motherhood value statements into value statements that mean something. All too often the values within an organisation don’t bear any correlation to the culture that is present. Encourage individuals to cultivate organisational culture through positive reinforcement of the values. Demonstrate to staff how these values drive the organisational culture by providing authentic examples from all levels across the organisation. 3. Provide opportunities for employees to develop a deeper understanding of themselves as individuals by exploring their own culture and unconscious bias. This level of self awareness will then begin to impact on behaviours and decisions in the workplace.

4. Expand the organisation’s cultural competency by delivering ongoing programs that explore dimensions of culture as opposed to developing specific “culture” specialists. Through the many dimensions of culture such as Hofstede’s: Power Distance, Individualism, Masculinity, Uncertainty Avoidance and Long-Term Orientation, individuals develop a broader cultural intelligence.

Culture – Know ThyselfEXPERT INSIGHT

About the authorsCo-authored by Donna de Zwart, General Manager – Diversity@Work and Fiona Jewell, Lead Consultant – Culture and Gender – Diversity@Work. For more information on solutions, strategies and programs in Diversity & Inclusion please visit our website www.diversityatwork.com.au, where you will also find information on the Diversity@Work 2011 Employment and Inclusion Awards.

Donna de Zwart

Fiona Jewell

40 www.hcamag.com

INTERNATIONAL ISSUE:Risk management

When the unexpected strikes – be it

political crisis or natural disaster –

how well prepared is your business?

Human Capital talks to Gary Anderson,

managing director, Protiviti, about

business continuity and emergency

response plans

Brace,

brace,

brace!

Human Capital: What is an employer’s duty of care when it comes to employees based overseas? Are there minimum risk management practices and policies they must have in place?Gary Anderson: Australian companies have a responsibility to provide a safe workplace for their employees whether they are stationed locally or overseas. In politically volatile countries, this obligation includes responding to emerging situations that pose a risk to staff and their families. In such cases multinational employers would be expected to take additional actions and precautions.

With geopolitical risk and natural disasters a fact of life, prudent companies operating abroad and in disaster-prone regions should develop comprehensive business continuity and emergency response plans so they are prepared to act quickly when a crisis erupts.

Key features of such a plan include: mitigation strategies for business disruptions that may affect staff resources, supply chains or critical infrastructure; safety procedures, such as shut-downs, evacuations, opportunities to work remotely; establishing a crisis management team and safety officers who are up to date on the company’s policies and procedures and are able to facilitate clear communication; and creating an emergency contact system for employees to report their status and whereabouts.

Remember, however, that the most thorough emergency response plan is only as good as how well it can be translated into action. This is where training comes in. All relevant staff must understand the hazards they potentially face, the steps they should take and who to contact within the organisation for information. Employees in particularly high-risk areas may require more in-depth training on specific issues such as travel security or protective driving.

HC: Can you provide recent examples where political unrest or natural disasters disrupted business operations?GA: The political upheaval in Egypt affected many multinational companies that, within days, took steps to evacuate non-essential and non-Egyptian employees and their families from the country. In the wake of the riots and unrest, many businesses also shut down as a protective measure and local staff were advised to remain at home for their safety.

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INTERNATIONAL ISSUE:Risk management

In situations like these, employee safety trumps all other aspects of the business and local management must be empowered to take all necessary steps to protect staff.

For Australian companies, natural disasters can be a significant risk to local operations and as such, many have similar emergency protocols in place. For example, when the floods and cyclones hit Queensland, mining companies with operations in affected areas or locations under threat took similar measures such as evacuations and shutting down mines and worksites.

Where the circumstances require employers to direct employees to stay away from work, emergency response plans should also incorporate policies to address temporary business closure and reduction in working hours. Being on top of local regulatory requirements is essential as this can determine how employees are compensated during the period when the business is unable to function, whether accrued leave can be applied and the like.

HC: How well placed are Australian companies with overseas operations when it comes to risk management for employees? Is there more they need to do?GA: In my experience of working with Australian multinational mining companies, I can say that employee safety is always a priority. This is the case whether there is a political crisis overseas or a natural disaster closer to home.

Getting policies and procedures right when it comes to employee safety in a crisis requires time, commitment and investment. The better resourced companies generally do a better job than smaller ones, but the challenge for all is to keep plans current, responsive and realistic. Many risk maps tend to underestimate the consequences of a crisis. Equally, in many instances, there is over-optimism about the effectiveness of the plans in place.

Senior management and boards should therefore seek independent validation and assurance that the planning and procedures they have in place will be effective in mitigating the impact of a crisis.

HC: Where can employers turn for more information on risk factors and warning signs? How can employers be more proactive?GA: Employers should establish a program for actively monitoring and managing political risk on

an ongoing basis. The process would operate across business lines and establish effective procedures for collecting and assessing political information from multiple sources. These sources may include travel advisories issued by the Department of Foreign Affairs, reports from local management and being attuned to current events that may signal an escalation in political risks such as deteriorating economic conditions, imminent changes in government, growing social unrest and the like. When the stakes are high, employers may also wish to submit their assessments to a third party for independent evaluation.

HC: What role does HR play in all this?GA: HR is critical to an effective emergency response plan. Its role is to ensure staff have regular, practical and up-to-date training so they understand what to do and what to expect when a crisis strikes. HR will also be instrumental in ensuring there are appropriate contingency measures where a crisis impacts staff working arrangements. These include policies relating to compensation, reduced hours, remote working or relocation where the business is temporarily unable to operate.

Importantly, companies that have robust policies and processes to protect employees and their families and safeguard their financial interests during a crisis stand a better chance of attracting and retaining top talent. Attractive remuneration is almost a standard incentive for ex-pats to relocate to less developed or less stable countries. But as we know, the lure of the big dollar can become very insignificant in the face of a life-threatening crisis. Having good policies that prioritise the wellbeing and safety of staff stationed in risky environments can therefore be a real differentiator for an employer.

HC: Following an event like the Egyptian uprising, how important is it to undertake a post-mortem?GA: An actual crisis puts a company’s emergency and business continuity plans to the test. Conducting a post-mortem helps determine whether those policies and procedures did the job they were meant to do. It may reveal weaknesses in training, flaws in emergency protocols or an insufficient emphasis on strategic business issues. These insights will be of enormous benefit in refining the company’s approach to future situations. HC

“HR is critical to an effective emergency response plan”– Gary Anderson

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TEAMBUILDER stuart alexander

Three employees from Stuart Alexander have ditched the office to embark on a journey across Australia’s Simpson Desert in an attempt to raise awareness of youth issues and build team spirit. Rebeccah Elley speaks to Garry Browne about the intense training involved, the unique fundraising activities, and the commitment to team values

A fter 130 years in business, Stuart Alexander has grown into a prominent marketer and distributor, with famous household

brands such as Tabasco, Guylian, Mentos, Werther’s, Fisherman’s Friend and Chupa Chups. Stuart Alexander is a private company owned by several families including the Browne family. Wesley Browne retired 13 years ago after working with the company for 50 years. His son, Garry Browne, is now CEO and managing director of Stuart Alexander and has worked for the company for 34 years, starting as a territory manager and working his way through the business. Browne has changed the face of Stuart Alexander from being a company purely focused on importing, to an organisation specialising in marketing and distributing FMCG within Australasia. With a turnoverof$150mand150staffacrossAustraliaandNew Zealand, Browne understands the importance of teambuilding.

Balancing values and valueWithin every company, a culture is formed that defines that company and its employees. Browne describes employees as being an integral part of the values at the heart of Stuart Alexander.

“The culture is very much focused on values and value and a good balance between both. The company respects the participation and involvement of its people. It’s about strong, solid, loyal and committed experts and professionals – because without good employees, the business does not exist.”

Stuart Alexander has developed unique ways to implement teambuilding activities. These range from traditional Australian lawn bowling days, to exercises involving group performances in front of an audience of co-workers. Browne describes one especially successful teambuilding exercise as being “different”

and “interesting.” The activity is conducted over six hours with around 100 employees participating in group activities that are filmed and screened to other employees. The aim is not to create an internal Stuart Alexander version of Australia’s Got Talent but rather to foster a sense of team spirit and to encourage colleagues to get to know each other.

Browne believes that being creative with teambuilding improves the overall work environment: “When you have to perform in front of your colleagues, it really changes your mindset and the way you interact and deal with your colleagues. We look for activities that are different.”

It’s that commitment to offering “different” teambuilding activities that has seen the values of philanthropy encouraged in the culture of the company, through working with not-for-profit organisations in specific fields, and using their expertise in order to add value to the business. Through solid CSR and community service strategies, Browne says a strong motivational force that goes far beyond loyalty created via a pay packet can be created within the organisation. “Different experiences, where you can help someone in need, certainly lift you and make you feel even stronger about yourself,” he says.

The desert challenge One of Stuart Alexander’s most recent teambuilding exercises was the Youngcare Simpson Desert Challenge. Three employees from Stuart Alexander – Garry Browne, Josh Scott Paul and Craig Urquhart – along with a team of 21 other adventurers tackled 1,000 sand dunes over 10 days. The trek started from Alice Springs and crossed into South Australia before finishing in Birdsville, Queensland, after covering some 320km.

It’s good to give

43www.hcamag.com

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“Different experiences, where you can help someone in need, certainly lift you and make you feel even stronger about yourself” – Garry Browne

44 www.hcamag.com

TEAMBUILDER stuart alexander

“The presence of nothing more than natural beauty around you makes you reflect on life” – Garry Browne

In preparation for the Youngcare Challenge, the Stuart Alexander team trained for two hours every day, with many training sessions starting at 4.45am before a full day in the office. The training included walks of 25–30 km with 10–15kg backpacks. Browne described the training as a real “challenge” – it was the challenge before the challenge, if you will.

The three Stuart Alexander team members participated in the initiative as part of the organisation’s S’Team Foundation, the charitable organisation through which Stuart Alexander channels all philanthropic activity.

The Simpson Desert Challenge was a first as far as a not-for-profit event is concerned. And it was also a unique opportunity. Browne comments, “I think there are only six others that have attempted to walk this particular route...If you’ve ever been in a situation in the middle of nowhere walking, mountaineering or climbing, in many respects you really find yourself. The presence of nothing more than natural beauty around you makes you reflect on life”.

The adventure aims to raise funds for Youngcare, the charity dedicated to raising awareness of the issues associated with youths living in aged care facilities. There are currently more than 6,500 young Australians with full-time care needs living in aged care because there is a lack of specialist care facilities in Australia for their age range. Browne expects the funds raised by the Stuart Alexander employees to go a long way in providing suitable care to the young Australians in need. “The purpose of this event is to build a profile for Youngcare and also to build revenue for the organisation,” says Browne.

Each of the participants committed to raise at least$35,000forYoungcare.Avarietyoffundraisingschemes was implemented by the Stuart Alexander

team. These included a YouTube video, a Hugos Bar fundraiser, free media on the main television stations and corporate and individual donations. Browne has reached$110,000todateanddescribestheresponseto the Youngcare Challenge as “overwhelming” and “amazing.”

Future teambuilding initiativesThe Youngcare Simpson Desert Challenge was just one of Stuart Alexander’s many philanthropic teambuilding exercises. Browne has found that a successful way to implement teambuilding activities is through collaboration with not-for-profits and he plans to work with these organisations in future initiatives. Browne explains, “Not-for-profits have a lot to offer within the corporate world. If you’re going to help the community, this is the best way to do it.”

Indeed, there is much the corporate world can take from not-for-profits. A Towers Perrin study of over 35,000 employees from not-for-profit, public and private sectors showed that while a competitive base salary is one of the most important factors when attracting employees, other elements of the job have a greater impact on employees’ intentions to stay. Regardless of whether an employee is from a not-for-profit, this study showed competitive benefits, such as retirement benefits and work-life balance – as well as a competitive base salary – were the most important factors when attracting employees. However, career advancement opportunities, retention of high-calibre people, the overall work environment and development of employees’ skills were the most important factors determining staff retention in all three sectors.

Under discussion for future initiatives is the Australian Children’s Music Foundation which uses music to help those who are less fortunate. Stuart Alexander is also running the SMILE Foundation’s bike ride around Australia supported by Chupa Chup, and has entered a group of cyclists from the company in the City to Wollongong Bike Challenge.

Browne explains that the mix of not-for-profit and teambuilding exercises works well within an overall teambuilding strategy. “There are a whole host of different things which we find can happen when you bring your team together and at the same time support a not-for-profit organisation,” he says.

The Desert Challenge is an example of the creativity that can be involved in teambuilding exercises. Through the combination of working with not-for-profit organisations on projects of common interest, productive teambuilding activities that add to the ‘values’ and the ‘value’ of a company are ensured. Get your walking shoes on… HC

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TEAMBUILDER stuart alexander

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PROFILE Vivienne Gayton

Ever walked the shopfloor and helped serve a customer in your role as HR manager, or perhaps helped the concierge with a guest query? Kicking the concept of being ‘hands-on’ to the next level, Iain Hopkins talks to one HR leader who encourages her team to spend time with workers down mines

W hile the media can be criticised for making mountains out of molehills and creating stories where there is nothing

at all, in the case of the extreme skills shortages occurring in the mining and resources sector what’s being reported is no exaggeration.

Mining and resources is feeling the pinch more than any other sector in the Australian economy, so it’s no surprise to learn that organisations in this sector are using quite innovative means to secure the talent they need to keep up with growth.

One such company is Mastermyne Group, a market leader in underground coal mining services in the world’s largest resource of high quality coking coal, Queensland’s Bowen Basin. Although they don’t own the mines – that’s left to the massive players like Rio Tinto – Mastermyne is a mining services contractor that has seen rapid expansion over the past decade, including transition from a privately owned company to a public company in 2010. From 400 staff in January 2010 to current numbers above 800, HR manager Vivienne Gayton has had her share of challenges.

Gayton, who has a background in IR, including time as regional manager for the Australian Chamber of Commerce and Industry (ACCI) in Cairns, has tackled the skills shortage on two fronts: employing skilled workers from overseas, and training unskilled workers locally.

On the overseas front, Mastermyne has formed a long-term relationship with Randstad to source 300+ operators and skilled underground tradespeople for

their coal mines in Queensland and NSW.“There is no one solution that is going to address

the increasing competition for labour,” says Gayton. “Mastermyne believes the practice of increasing pay rates to secure personnel is only inflating wages beyond unjustifiable levels, jeopardising the long-term international competitiveness of the industry and creating unsustainable rotation of the same pool of labour between different employers.”

Looking overseasOver the past five years Mastermyne has recruited from the UK and the US but has since recognised that international recruitment is not a core capability. “International recruitment is hard work!” Gayton says. “What I didn’t appreciate is we can’t apply the same techniques that we use in Australia for recruitment overseas. Randstad has that knowledge about the unique recruitment and attraction methods in different cultures.”

The processes are still evolving to support the onboarding of international employees, but Gayton comments that Mastermyne has improved its financial relocation policy, bumped an underperforming migration agent and found a new one that holds the same service delivery culture as Mastermyne and acts as a partner.

Randstad and Mastermyne conduct a series of detailed interviews – some focused on technical capability, others quizzing the candidates on their research into cultural and community difference

Mining for talent

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Family: I was a teen mum. My 20-year-old daughter has done a wonderful job parenting me over the years!

Favourite sports: I’ll watch just about all sports and give anything a go too

Favourite movie or TV: Chocolat, Inglourious Basterds, Pretty Woman

Best advice ever received: Effort and reward are undeniably related

Self-described: Positive, resilient, innovative, driven

Hobbies: Cooking, fishing, camping, fitness

First job and/or worst job: I worked in a nightclub on Hamilton Island when I was 18 – that was pretty horrid

If not in HR: My dream is to be a luxury white boat skipper for some multi-millionaire!

PERSONAL FILE Vivienne Gayton

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PROFILE Vivienne Gayton

of living and working in our regions. The wives or partners of the candidates are also included in the process.

“Where Randstad are able to provide a number of screened candidates, an HR and a technical representative travel to the international destination to undertake interviews face to face,” Gayton explains.

Randstad has developed a microsite that sits with the Mastermyne website to provide candidates with information about Australia including our tax and super systems, education and health systems.

“We’ve learnt from our mistakes over the years and are pleased to say we are improving our processes that introduce international employees into the community and workplace. For example, a new workplace buddy system ensures international employees are supported during their first three months. The greatest challenge we experience is housing. Rental properties are scarce and expensive in mining communities. Also, international candidates often don’t have a great deal of savings so purchasing a vehicle on arrival is difficult.”

Gayton has found there is a great deal of interest from overseas workers looking to relocate to Australia, but she is quick to point out to them the ‘tyranny of distance’ that exists in the Queensland Bowen Basin compared to other mining areas around the world. “People have a strong willingness to relocate here, but when they start considering the cultural differences and the fact that they can’t be home with their families every night after work, that’s where we find a significant drop-off in candidates.”

Gayton adds that international recruitment is very much a mutual relationship – both parties need to contribute to the process. “We need significant buy-in from these candidates. They need to almost convince us of the research they’ve undertaken and investment they’ve made to make this move. Now we’re setting the expectations, we’re saying you must have at least $5,000inthebank,youneedtothinkaboutnotseeingyour family for seven days at a time, or driving three hours to work. We want them to tell us what they’ve learnt about the price of housing and the quality of housing in the Bowen Basin,” she says.

On the home front…A new two-week transition program for all international candidates is being set up via the

How the recruitment partner pitches inHuman Capital talks to Zena Clark, general manager of Randstad’s Construction, Property & Engineering division, about the Mastermyne partnership

HC: How has Randstad partnered with Mastermyne? ZC: It’s about being proactive to find a recruitment solution for them. We sat down with Mastermyne and talked about the skills shortage and what they needed, and we tried everything we could to find unskilled workers domestically who are what we call ‘cleanskins’. The overseas equation is to find skilled underground miners with at least 4–5 years’ experience. We went live with the search in November, after identifying the main mining regions in the world. Then we had to discount certain areas if the health and safely culture wasn’t appropriate. The key areas we looked to were the UK, US, Canada, Poland and South Africa.

HC: How does the process work?ZC: When we’re working with the Randstad offices in Poland, as an example, they are identifying the skilled underground miners, shortlisting them and identifying the candidates on behalf of Mastermyne that we think are appropriate. Then we go back to those people and put them through the IELTS English language test and ensure they fulfil all visa requirements. Once we have a critical mass of candidates Randstad and Mastermyne representatives go to Poland to interview people face to face.

HC: Does Randstad assist with the relocation process?ZC: Once visas are approved we work with Mastermyne to ensure they are being onboarded appropriately. For example, you wouldn’t want 15 people landing onsite on the same day, who all need the same level of training and development to get up to speed in the Australian market. We also need to make sure they have somewhere to live, that they can get to the site, send their children to the best schools, and make sure they get settled in with the community.

HC: Do many of these workers have much knowledge of Australia?ZC: The key thing is making sure we get the right people, with the right attitude and approach and right skills, rather than just anybody. We work hard to make sure they are aware of everything Australia has to offer but also the fact they won’t necessarily be sailing on the Whitsundays every weekend. We built a microsite for this project where candidates can jump online and have a look at the sites where Mastermyne operates, the tax rates, all those things, which goes a long way towards them feeling they – and their families as well – know a lot about the country before they arrive.

In her own words…

What are your thoughts on the future of HR as a profession? I believe there will be a long future for HR professionals. However, I encourage HR practitioners to develop their broader commercial and business acumen to ensure they align their HR activities against organisational strategies. Also, regardless of deadlines and priorities, we as HR professionals have an obligation to get out with the crews. The moment we lose that connectivity with our workforce the relationships waver and it simply becomes harder to achieve what we need to.

What is the HR initiative that you are most proud of in your career?There would be no one initiative. My ability to build relationships and apply innovation and intuition have best served me to kick some goals over the years.

PROFILE Vivienne Gayton

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Myne Start Training Complex to familiarise them with the Australian mining legislation, company OHS practices and other cultural or community issues. They will undertake this training prior to commencing onsite.

TheMyneStartTrainingComplex–a$1.2mworld-first, purpose built underground facility in Mackay city – is central to the company’s second sourcing strategy: training inexperienced locals. It provides a controlled and consistent pathway for inexperienced workers to gain a level of understanding of the underground mining environment, its distinctive hazards, safety requirements and associated control processes; all the while accelerating them into productive work in a far reduced timeframe (when compared to traditional training methods) and ultimately improving retention. Enabling inexperienced personnel to train away from the mine site also improves site safety and productivity and supports the workers to be more gently introduced into the unique mine sector.

Culture challengeWhile Gayton concedes that the culture of Mastermyne has inevitably been impacted by such an influx of new employees, she says the company never wants to “corporatise” the processing of its people. She quotes the mantra of the managing director who wants to “keep it human” and focus on the small (but important) things. “The Board and Executive support a strong investment into strategies that will assist Mastermyne to maintain its culture,” she says. “ ‘People’ is a significant focus of the business plan and the development of our front line and senior leaders is a strong goal – during our ongoing growth our leaders will reinforce the culture and drive the behaviours that promote the Mastermyne way.”

Hands-on HRGayton and her team of six HR professionals will play an important role in future growth. She notes that risk analysis in the business has established a risk framework and revealed seven key risk factors. Of the seven, four relate to the people or the HR side of the business.

She’s worked hard to ensure her team is ‘hands-on’ in order to build credibility in the company. One of her first strategies was to arrange for each HR team

“We need significant buy- in from these candidates. They need to almost convince us of the research they’ve undertaken and investment they’ve made to make this move”– Vivienne Gayton

member to champion a particular site or division of the business, thus bringing about accountability and responsibility to build relationships, and commit to getting the HR crew out to site (including underground!) at least every six weeks.

“We had an HR team who were engaging 70 people a month in the business, who were prominently managing this process, but they’d never been underground in a mine. We needed them to get out on site and watch crews operate underground. It was also important for them to eat and sleep in the camp, be there for crew start and finish, and work rosters so they could see not just the technical functions of the role, but experience that remote living,” Gayton concludes. HC

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Dealing with spirituality at work need not just be about avoiding discrimination claims or imposing burka-bans; it could be an important component of employee engagement, writes Gary Taylor

Headlines rang out “Hallelujah” in Britain’s Daily Mail earlier this year, when 64-year-old Colin Atkinson won the right to display

a cross in his company electrician’s van after an 18 month battle with his employer. He was about to be dismissed under rules (issued ironically on Christmas Eve last year) outlawing the display of religious insignia – this after a company-designed burka had already been allowed. His Christian defence was supported by Hindu, Muslim and Sikh clerics in the community.

Although religion remains taboo with most employers, some companies are now allowing workers to embrace their spiritual beliefs while on the job. So, in the spirit (so to speak) of open investigation, let’s examine whether HR should be reconsidering the secular approach to the workplace which we have so carefully crafted over the last few decades.

Working in a country governed by Sharia Law, I have now got used to people leaving their work stations for prayer breaks, paid leave for Hajj pilgrimage, and all employees forbidden from eating or drinking during daylight hours throughout the month of Ramadan. Now, that’s one model of religion in the workplace.

But, for most countries, HR has secularised the work environment primarily because of the contentious nature of religion, and wanting to avoid any possibility of conflict along religious lines at work. ‘Practise your religion at home,’ we say,

assuming that most employees regard their faith as something to be parked outside the office block, even though the best atheist knows that religious people of any persuasion regard their faith as a way of life. So much for our cultural sensitivity.

The real reason for our aversion to the subject is that we’re as sensitive as hell (pun intended) that any outward expression of religious affiliation at work will lead to a repeat of that nasty incident we had a few years back, remember? Of course, ignoring it does not make faith issues go away, nor does it prevent incidences from cropping up. But are there mainstream employers actually doing something different?

Tyson Foods in the US puts their new recruits through the same kind of orientation as the rest of us, but they also get to hear from one of the company’s 120 chaplains, explaining why the company’s mission was rewritten to include the term ‘faith-friendly’. Tyson Foods has nurses to take care of their physical needs, and chaplains to assist with the spiritual component of people’s lives. Hmmm.

“We’re not about religion; it’s not about Christianity or Islam,” says Richard McKinnie, head chaplain at Tysons (PS imagine grading his job?). “This may surprise some but, in the course of my day, I can’t think of a time I’ve ever uttered a word of scripture from the Bible.”

While chaplains are probably an extreme example, usually confined to the military (you wonder why), it can be argued that spiritual

In God we trust

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VIEWPOINT religious discrimination

affiliations – similar to race and gender issues before them – are an increasingly important part of today’s diverse workplace. “Religion is the next big frontier in which companies will have to shape policies that engage the whole person,” claims David Miller, director of the Faith & Work Initiative at Princeton University.

What was private is becoming public, and the personal is becoming professional. “In the old business model, you were at your job to work. In the new model, people want to balance their whole life,” Miller says. Wow, is this what HR had in mind when we advocated work–life balance? This is a whole lot deeper (or is it higher?) than just an EAP issue.

Some employers are saying that religious diversity is not only acceptable, but even welcome in the workplace. According to DiversityInc magazine’s 2011 Top 50 employers, 28% report that they have faith-based employee resource groups, up from just 10% in 2006. At the Ford Motor Company, the Ford Interfaith Network has its own intranet serving over 4,000 staff, and supports all groups. American Airlines even uses its employees’ faiths to help understand its diverse consumers.

Convinced yet, or is it too much of a risk to open these pearly gates in your workplace? Are progressive HR professionals going to respond to emerging religious issues like we did in the early days of the HIV challenge? ‘Let’s pretend it’s not there, because it’s controversial’. For the reluctant IR practitioners reading this, could a workplace interfaith network not actually be a viable alternate dispute resolution facilitator in the cases of those awkward workplace disputes that involve religion?

Dealing with spirituality at work need not just be about avoiding discrimination claims or imposing burka-bans. It could be an important component of employee engagement. Risky, but probably worth walking down the road.

Pray about it. HC

About the authorGary Taylor has worked in HR for 25 years, at National Mutual of Australasia and Unilever, then as HR director at South Africa's largest health insurer Medscheme for 14 years, followed by three years at Wits University, Johannesburg. Two years ago, he was appointed to start up HR for a new university in Saudi Arabia, where he is now director of the policy office

STATS

n According to the Australian Bureau of Statistics, 67.9% of Australians identify themselves as Christian. 1.9% of the population are Buddhist, 1.5% Muslim, 0.5% Hindu, 0.4% Jewish and 0.5% are other religions. 15.5% do not have a religion, and 11.7% are not stated.

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IN BRIEF australian news

Fast factFair Work Australia has announced an increase to the Federal Minimum Wage of $19.40 per week (51 cents per hour). The wage increase is effective from the first full pay period on or after 1 July 2011. A basic retail worker’s award rate will rise by $21.28 per week; the trades rate by $22.56.

Better leadership needed to manage surge of new talentThe Federal Budget’s $3bn workforce training and participation initiatives to address Australia’s skills shortages may go to waste if business leaders aren’t properly equipped for a surge of new employees.

According to Rosemary Howard, executive director of AGSM Executive Programs, workforce participation initiatives need to be matched with investment in leadership capabilities over the long term. While Howard applauded the move to invest in building frontline technical skills, she warned that leadership must face up to the challenge.

Natalie Ashdown, CEO of The Open Door Coaching Group, added that managers need to have the skills to lead an increasingly diverse workplace.

IBM’s 2011 CIO study also supports the call for strong leadership in the face of an evolving global environment. The study encouraged organisations to create a culture that refuses to let complexity be a burden while eliminating bureaucracy and inefficiencies internally and across the value chain.

‘Best Employers 2011’ list revealedConstruction product provider Hilti has been named the best employer in Australia and New Zealand in Aon Hewitt’s annual Best Employers survey.

The 2011 Best Employers survey saw 11 organisations receive the accreditation of ‘Best Employer’, with Hilti being named ‘Best of the Best’.

The other 10 organisations recognised were Aegis, Boehringer Ingelheim Australia and New Zealand, Federal Express (New Zealand), Flexirent Capital Pty Ltd, Frucor Beverages (Australia), Frucor Beverages (New Zealand), InterContinental Hotels Group, Johnson & Johnson Medical, Merck Serono Australia and Millward Brown Australia.

The study reflected the opinions of over 124,000 employees across 200 companies.

The study found that employees are finding it harder to engage and are expecting more from their employers.

Employees of ‘Best Employers’ believe their organisations deliver on their promises and are better at providing support and sharing financial success.

Woodside settles sexual discrimination claim A woman has agreed to a $170,000 settlement payout from her former employer, Woodside Petroleum, following a sexual discrimination claim.

The six-figure settlement plus $60,000 in costs for Jill Mustard was approved by the Federal Magistrates Court.

Mustard took legal action against the Perth-based company in 2009, claiming she was twice discriminated against after taking maternity leave.

Following legal proceedings in the Australian Human Rights Commission and the Federal Magistrates Court, Mustard accepted a payout in March, only for Woodside to then revoke it.

Woodside said the settlement was not an admission of liability on the company’s behalf but it believed it was in the best interests of both parties to have the case concluded.

Mustard said she was glad with the decision: “As a senior female employee who sat on the company’s diversity committee representing women, this was not an issue I could walk away from.”

Baby Boomers most disliked at work Baby Boomers are the most unpopular demographic in the workplace, according to the latest Leadership, Employment and Direction Survey.

The ‘Generations’ survey found that only 4% of Generation X and Y staff want to work with Boomers, both preferring their own group (57% and 53% respectively).

Generation X reportedly found their mature colleagues to be inflexible, while Generation Y can’t handle the Boomers’ ineptitude with technology.

Surprisingly, the survey also found that four out of five Baby Boomers do not want to work with other Boomers, saying their peers are self-obsessed and determined to do things their way.

Gen Y was found to be the generation that most groups wanted to work with. The research, commissioned by Leadership Management Australasia, surveyed 774 workers spread across the public, private and not-for-profit sectors.

However, Alison Monroe, managing director of specialist ageing workforce consultancy SageCo, said the small survey sample applied very broad generalisations to an age group that encompasses over a third of Australia’s workforce. “Certainly there are instances where mature workers can be inflexible and set in their ways, but equally there are mature workers who are highly engaged, dynamic, flexible and innovative,” she said.

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articles online at www.hcamag.com

IN BRIEF international news

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THE LAST WORD compiled by Suzanne Mercier

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Can you believe it?Billy Connolly takes a humorous look at what employees want in order to engage. Warning: a few bleeps. http://twurl.nl/m0wbk6.

Quote of the month“Life, like a mirror, never gives back more than we put into it”– Anonymous

n The challenge of cultural diversity is exacerbated when we consider that in Australia, 200 languages are spoken, only one of which is English. Source: Australian Government

n In its recent report of engagement levels tracked quarterly since 2008 in 900 global organisations, Hewitt reported a significant drop in engagement amongst 46% of the organisations measured. Source: Hewitt Associates

n Employee productivity contributes to bottom line. In a survey of 585 people, Hays found productivity is highest in the morning and begins to fall after seven hours. If working more than eight hours per day, 41% of employees say they start making errors. Source: Hays

What’s the greatest HR lesson you’ve learned so far? HR practitioners need to get to know the commercial side of the business so their HR strategies are aligned to the business needs and priorities.

What is your view on diversity, and specifically the current focus on gender diversity? Companies won’t be competitive if they don’t foster gender diversity in their workforce. Hilti is in mining and construction, two very blokey industries. The gender mix is shifting in the academic and commercial world. One-quarter of our executive team is female and we are developing a strong pipeline of women in middle management and our engineering team.

You won the Aon Hewitt Best of the Best Employers Award this year. Congratulations! How did that come about? Employee engagement is a key focus for Hilti. We are a family business and have been tracking employee engagement annually in an internal global staff survey. Our 2015 Vision included being awarded the Best of the Best so we are excited to have achieved 80% engagement and the award in 2011. Now the challenge is

to continue fostering strong engagement and strive to win the award again.

What are your favourite people-management tips? To be flexible in your approach with people. Leaders need to balance being firm and fair, depending on the situation. We also have to be willing to develop our people as the core element of our business growth.

What career advice would you give ambitious HR professionals? HR covers a broad spectrum of business-critical topics. Before moving into HR leadership, obtain solid operational experience in generalist HR. This allows you to add greater value to the business. Also, only work with business leaders who appreciate and invest in their people.

What is the main challenge facing the HR industry right now and how can they overcome it? Attracting talented candidates in a tight labour market is a challenge. HR practitioners need to think outside the square to source talent. HR practitioners in this market are under pressure to retain good talent. Retention strategies start with leadership focus and support to gain ownership and commitment.

5 minutes with... Kellie Warta Head of human resources, Hilti

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