Employee-centric = Better Business Results

The economy is bound to improve, and a variety of Atlanta companies are strategizing their HR approaches in preparation for that (hopefully, soon to come) day.

Allison Shirreffs

August 27, 2008

W hen Towers Perrin conducted interviews with a handful of Atlanta-area companies recently, the global professional services firm expected human resource (HR) leaders to identify management of their multi-generational workforces as their top human capital issue.

While this is a concern, the sluggish economy has amplified this and other HR issues around today's talent pool and who will be tomorrow's leaders. If organizations lose mature employees because of the impending Baby Boomer exodus, when the economy does rebound and employers are ready to close the talent gap with skilled workers, much of the talent available will have been born after 1980. Those employees, better known as "Millennials" or "Gen Y," belong to a demographic most companies don't yet understand. "Organizations haven't figured out what this segment really wants," says Eric McMurray, managing principal, Towers Perrin, emphasizing that companies can't tailor recruitment and retention programs around a group they don't understand.

The company that figures out what Millennials want first is going to have a significant competitive advantage. It's not only about what makes Millennials happy. Companies successful at what Towers Perrin dubs 'human capital optimization,' or ensuring that a company's employees are deployed, engaged, and managed in a way that maximizes the organization's long-term growth, are going to be better off than those that aren't.

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An essential step toward this optimization is having employers view their employees as "investors" who need to be engaged rather than assets that need to be measured for their return on investment. To discover what creates employee engagement, employers are asking their workforce what the organization is worth to them, rather than assessing what their employees are worth to the organization.

That difference is key. Towers Perrin's 2007-2008 Global Workforce Study found that engaged employees extend more discretionary effort toward supporting the company and such efforts correlate directly to company performance.

"We are working to move away from thinking about people as capital and toward thinking of our talent as our lifeblood," says Laura Reeves, chief talent officer for the American Cancer Society. "The core of our talent strategy is to attract talent that will grow the [organization], develop talent that will sustain, and retain talent that will enable, our mission."

At Southern Company, leadership constantly assesses its value proposition to employees in an effort to maximize engagement. "Is what attracted and retained the current workforce sufficient to attract and retain the workforce of the future? We know that is not the case," says Marsha Johnson, SVP of HR and chief diversity officer. "Our challenge is to strike the right balance and timing for change that engages a multi-generational workforce."

In its study, Towers Perrin identified the "Top 10 Drivers of Employee Engagement." No. 1? That employees feel senior management is sincerely interested in their wellbeing. To accomplish that, senior leadership must be visible, accessible, listen to and communicate openly and honestly with employees. Their actions need to be consistent with company values, and it's essential employees feel leadership cares about them as individuals.

With 50,000 employees, it's a challenge for leadership at Georgia-Pacific (G-P) to connect with employees on an individual level, but the paper and building products company is doing its best to create an environment where that's possible. G-P CEO and President James Hannan regularly conducts town hall and individual group meetings. There's even a section on the intranet site called "On the Road with Jim" to help employees feel connected with what upper management does and says.

What is G-P's senior leadership learning from its forays with employees?

"That money cures everything is a fallacy," explains Julie Brehm, SVP, HR. "It is important, but there are other ways to recognize and reward employees. It"s about the people they work with, integrity, growth opportunities, sustainability and the supervisor/employee relationship."

One of the world's largest cable and wire manufacturers, Southwire Company has more than 4,000 employees on staff. Company leadership realizes the economic slowdown creates anxiety among its workforce, and the company is doing what it can to alleviate that stress by communicating to its employees, along with other important information, such as how financially stable the company is.

Laura Reeves (left), Chief talent officer, American Cancer Society; and Marsha Johnson, Senior Vice President of HR and Chief diversity officer, Southern Company

Leadership also wants to hear from employees. Once a month, senior leadership (including the company's CEO) hosts "Sounding Board Meetings," a forum for sharing ideas, complaints and suggestions. "We tell employees, 'You are not a machine operator or a sales clerk, you are a business person'," says Michael Wiggins, executive VP, HR. "Don¹t check your brain at the gate."

Recently, Rollins, Inc., a premier North American consumer and commercial services company best known for its pest control subsidiary Orkin, acquired HomeTeam Pest Defense. To make the transition go smoothly, senior leadership facilitated town hall meetings and did so early in the acquisition process.

"The value in an acquisition is the employees and the customers," says Henry Anthony, VP, HR. "You can't just hire employees, you have to treat them right." Figuring out how to 'treat them right' requires communication between leadership and a company's workforce. Although Millennials and Baby Boomers do want some of the same things, successfully engaging a 25-year-old employee vs. someone 55 years old requires a different approach.

Julie Brehm, Senior vice president, human resources, Georgia-Pacific; and Michael Wiggins, Executive vice president, human resources, Southern Company

"One size doesn¹t fit all," remarks Eleanor Tarvin, VP, HR, Robert W. Woodruff Arts Center (WAC). In an effort to curb turnover of its younger employees, WAC conducted a demographic study by division to gain insight. What the organization discovered so far is that employees - especially Millennials - want and need feedback.

Tarvin believes it helps to take a coaching approach. "A coach doesn't wait until the end of the season to give feedback," Tarvin says. She's proposing WAC managers conduct smaller, more frequent performance reviews rather than have them once a year.

Emory University is asking employees what they want and in response, is developing products, services and tools to meet employee needs.

At U.S. Lumber Group, a distributor of building materials, leadership fosters a personal interest in forecasting an employee's potential career path and discusses the individual employee's development needs. They also ask employees what they need to do their jobs better.

Henry Anthony, Vice president, human resources, Rollins Inc.; and Eleanor Tarvin, Vice president, human resources, Robert W. Woodruff Arts Center

"Leadership listens and has a service mentality," notes Eric Brinson, HR services manager for U.S. Lumber Group. "The challenge is maintaining open communication."

In more and more organizations, leaders are foregoing 'C suites' to reside in cubicles alongside company employees. These leaders are more likely to be 35 to 45. They've worked with the Baby Boomers for 10 to 20 years and either have children or younger relatives who are Millennials. Familiar with each age group, they're more likely to relate to both groups.

"Among younger workers, expectations for how quickly I'm going to respond to them is very different," explains McMurray, who is in his early 40s. A recent college graduate is more likely to communicate via instant messaging or email and expects to get an immediate response. However, a 55-year-old office mate would most likely talk directly.

In an attempt to fill the gap between these two types of leaders, organizations are stepping up their leadership development programs. Southern Company worked with Duke University to develop a curriculum that aligned with its new set of leadership competencies, and hired a director of workforce and organization capability. "We're focusing on equipping our leadership to successfully engage a new and different workforce," says Johnson.

Eric Brinson, Human resources services manager, U.S. Lumber Group; and Jean Boland, Vice president, human resources and leadership development, FOCUS Brands

Multi-concept restaurant franchisor and operator FOCUS Brands is emphasizing leadership development that is analytical, but has engaging characteristics as well. According to Jean Boland, VP, HR and leadership development, the company looks for results oriented leaders who care about people, are open, honest, fun, flexible, take risks and have interests outside work. The company emphasizes a 'principal-based' leadership approach and FOCUS recognizes that "what makes associates feel fulfilled or happy is different for each person," adds Boland. To figure out what that is, the company fosters an environment where "everyone counts and is heard."

Turner Broadcasting System (TBS) established its "leadership model" for the VP level and above. According to Loretta Walker, SVP and chief HR officer, it's not just about strategic thinking, but the ability to execute that strategy and effectively communicate it to the leader's team. "Every vice president and above is rated on this, and it's tied to his or her bonus," notes Walker.

When rewarding employees, it's crucial, says McMurray, to link rewards to the efforts of individual business units and to individual employees as well as to company performance. At TBS, all employees are eligible for a bonus, with 50 percent of the bonus being tied to the overall financial success of the company and the other 50 percent tied to individual performance. "It's about the right level of engagement at all parts of the organization," McMurray stresses.

Loretta Walker (left), Senior vice president and chief HR officer, Turner Broadcasting System; and Phyllis Austin, Senior vice president, human resources, Crawford & Company

At Crawford & Company, the world's largest independent provider of claims management solutions, leadership is implementing a process where each business unit develops goals that support the company's overall business strategy. The business units identify what support they need and HR helps the various business units prioritize and develop workforce strategies to support the business.

Becoming an employer of choice is one of the company's top priorities, says Phyllis Austin, SVP, HR. "Once we acquire talent, we need to better engage/retain the right workers," notes Austin. Crawford has succession plans and educational services available to employees, and the company is exploring ways to better communicate these offerings to employees.

Several organizations are doing more to tailor their work environments to employee preferences. Emory University is focusing on what it calls, 'environmental attraction.' The university holds a series of faculty dialogues, and among the topics discussed was how to bridge the gap between faculty retirement and the recruitment of new faculty.

One solution? Hire more dual-career couples. There's also an effort to emphasize peer recognition, collegiality, and the prestige of the university. "It isn't always about monetary rewards," notes Peter Barnes, the university's VP of HR. "Other things matter - like more lab space, gaining another graduate student or a reduced teaching schedule."

James Worrell (left), Vice president, human resources, Georgia Gulf Corporation; and Peter Barnes, Vice president, human resources, Emory University

What retains people isn't necessarily pay or a rich benefits package. "Other aspects of the work experience are more important," says McMurray. The American Cancer Society realizes its rewards program may not be as robust as its for-profit counterparts, but the ACS mission - eradicating cancer - is a strong value proposition for potential staff and volunteers. "We have found employees to be more motivated by intrinsic job value than extrinsic," says Reeves. "Promotion, learning, personal development are more critical 'carrots' for our employees."

Children's Healthcare of Atlanta operates three pediatric hospitals and treats more than half a million patients annually and the organization's 6,700 employees know they're working toward a noble cause. "People are who we are. The theme is 'taking care of our employees so they can take care of the kids'," notes Linda Matzigkeit, SVP, HR. Many of Children's programs are tailored toward working mothers (63 percent of the company's employees are working moms), and the organization surveys its employees regularly. It supplements those surveys by "actively listening to employees," says Matzigkeit.

Children's staff is also young. The average age of its clinical workforce is 40. "The younger generation is challenging our thinking with some interesting suggestions," says Matzigkeit. Leaders even fielded a request from one of its younger workers to start a dating service. In response to what they're hearing, Children's now is promoting paperless technology and creating a more high-tech environment.

"The younger generations' tolerance for bad technology is really low," notes McMurray. "Does their iPhone sync with their work email program? Having an integrated workplace matters to them."

In the current economy, there is a great deal of pressure to cut costs, McMurray cautions against doing so without carefully analyzing the human capital implications. "Companies need to focus on cost and risk and on business performance," he says. "The only way to do that is to be smart about what you do with your workforce."

At U.S. Lumber, management correctly forecasted the economic downturn and constricted its growth plans. "By avoiding the need to make layoffs, we may have reduced employee stress levels," says Brinson. "Despite being in a industry (housing) that has been crushed during the economic downturn, we've been able to retain almost all our employees with minimal turnover." The company did so by aligning its HR strategy with its business strategy.

Another company affected by difficult market conditions is Georgia Gulf Corporation, which makes chlorovinyls and aromatics. The bulk of the company's sales come from the construction and housing industry. A less than stellar housing market coupled with an acquisition (Georgia Gulf recently acquired Royal Group, Inc.) created a great deal of anxiety among employees.

One of the company's key human capital goals is to "stabilize the workforce," says James Worrell, VP, HR.

To accomplish that, leadership has "consistently communicated" what the company's 5,200 employees can expect and the rationale behind the moves upper management makes. Currently, the company is working to streamline business operations and consolidate support functions so managers can focus on running their business units and managing their people. "Managers have to ask, 'How does this job support what we are trying to accomplish in our business'?" says Worrell.

Understanding the skill set required to maximize performance in specific jobs has led to more effective recruiting. Due to the high cost of gas, employees also are asking for more flexible working arrangements. Although many of the companies surveyed are granting employees their wish, others note that doing so has revealed weaknesses in their ability to manage and measure employee performance.

A few companies hoping to hold on to the knowledge of their aging workforce are experimenting with flextime. At Emory University, 55 percent of a staff of more than 21,000 employees, including 3,200 faculty members, is eligible for retirement by 2015. Rather than have these employees fully retire, they're giving them the opportunity "to stay engaged in Emory's scholarly community through creative programming and service opportunities ," explains Barnes, who adds that managing a bi-modal workforce is not without its challenges. "Older workers feel that younger workers are not held to the
same standards to receive tenure," says Barnes. "We recognize the need to 'build two worlds' and help the two groups understand each other."

More than 30 percent of Southern Company's workforce of 26,000 employees is over 50 years old, and the company is working diligently on its talent management strategy. "A key focus is on rebuilding talent segments that could be lost due to retirements," says Johnson. "The challenge is to have skilled workers available to fill critical positions whether craft labor or engineers." To help fill talent gaps, Southern Company and its operating companies partner with technical schools, colleges and universities, and education, industry, and government consortiums. Building the workforce of the future requires multiple partnerships.

In order to combat the shortage of health care professionals, Children's is doing outreach with high schools and a few middle schools to raise awareness of clinical professions. The organization's training and educational programs also help with retention and career advancement. "We¹re working toward establishing and feeding the talent pipeline," notes Matzigkeit. Children's keeps track of the nurses and physicians that will be retiring, and calibrates the number of clinical staff, nurses and professionals that will be available to them. The organization estimates that over the next decade, it will add 300 physicians to the 1,400 already in the system.

Successful companies are able to identify the skills and roles most critical to their businesses and are making their staffing decisions in more strategic ways than in the past. Ultimately, notes Reeves, it's leadership's responsibility to ensure the right people are in right place at the right time to deliver the company's mission.

To accomplish this, business leaders must communicate more openly, honestly and frequently with their employees. Internally, a detailed demographic analysis of an organization's workforce will determine skill gaps.

Externally, staying up to date on trends in the labor market will help a company plan for its future workforce needs, but at the end of the day, if employees don't feel senior management cares about them, they may under perform and not drive the results organizations need for competitive advantage.