Presentation on theme: "The View From the C-Suite: Aligning HR and Business Priorities Nick Wilcock COO Credit Suisse Russia/CIS Sep 21, 2007."— Presentation transcript:
The View From the C-Suite: Aligning HR and Business Priorities Nick Wilcock COO Credit Suisse Russia/CIS Sep 21, 2007
Credit Suisse in Russia Since 1991 we have been providing a full range of investment banking services to leading Russian and foreign corporate clients and institutions and in 1993 Bank Credit Suisse (Moscow) Ltd. was founded. Credit Suisse was the first Western financial firm to be granted a securities license by the government of the Russian Federation in January 1994. A Private Banking Representative Office was opened in Moscow in 2003 and one in St. Petersburg in 2005 In September 2006 Credit Suisse launched a new Private Banking onshore operations in Moscow Today we have over 200 employees and 5 offices across Russia/CIS
My Background Started my career as a Chemical Engineer in the mid-Eighties Trained as a Chartered Accountant with Price Waterhouse (later PWC) Joined CS in 1992 Worked for 3 companies in the CS Group 8 different Departments including Accounting, Operations, IT and Audit Country, Regional and Global responsibilities COO for Russia/CIS for 15 months. Please note that the views in this presentation are my views based upon my experiences both today and in the past and not those of Credit Suisse……
Current Labour Market Demand for skilled, technical and managerial resources outstrips demand in most areas. Consequently compensation levels are increasing particularly as a result of new entrants to the local market and as Russian companies expand elsewhere. Relatively new situation for Russia which in the recent past was seen as a deployment target for certain industries i.e. Information Technology. Not a unique position and lessons can be learned form elsewhere. The situation however demands a change of approach e.g.; – Your business strategy. – The way people are managed. – The way you Recruit. – Approach to staff retention. Investment in HR departments and additional management time is required upfront to address this. Human Resources remain one of the best operational aspects of doing business in Russia. – Quality and commitment of staff are higher than many other countries in Europe and elsewhere. The current situation is set to continue, as the economy and investment grows.
Business Strategy and Priorities Business strategies need to be integrated. Separate Business, Organisational and People strategies will not work due to cross dependencies. The People side of your strategy is important since it will inform you on ability to grow, the flexibility of your workforce and potential bottlenecks related to skill shortages. Business strategies need to be integrated not just functionally but also in terms of timing. There is a lead time in payback in investing in people that needs to be factored into all business plans. This investment could be through; Recruitment, Re-organisation, Training, Staff mobility. Business strategies and priorities need to be effectively cascaded to staff; Included in objectives. How it impacts the individual. Nearly all business managers believe growth to be a good thing but for lower paid employee it often means more work for little additional reward. It is these people that make business strategies work, not management ! The benefit to them needs to be articulated.
HR Department Direction Human Resource Management will be a key differentiator for companies over the next 5-10 years as the market place becomes increasingly competitive. All things being equal, then the main differentiator between companies are their staff and HR is the pivotal functional Nearly all companies will state that “people are their most important asset”, there is a “war for talent”, that they are “people companies”. But most companies still view and treat HR as a support department function and not at the heart of their business model. HR departments are seen as, Strategy implementers not drivers. Transaction based. Cost managers. Determiners and Guardians of company policies. Successful companies in the future will demand more of their HR departments, Will be part of the business strategy definition. Will be seen as a competitive advantage. Will be viewed as a business partner and not a business administrator People Strategy should not be driven by cost targets !
HR Operating Model To effectively address the challenges of the current market need to actively participate in business strategy setting and as stated before need to be viewed as a business partner. For global businesses the responsibilities between global vs regional vs local functions needs to be clearly defined. For Emerging Markets HR policy and strategy that is defined from head office outside of the country without local involvement will; – At best lead to an inefficient process. – At worst lead to you being at a competitive disadvantage. Effective communication to and support from the Head Office is a critical success factor. Specific inputs to your business strategy will/can include; – Business operating model – Rate of headcount growth based upon market – Marketing – Competitor analysis
Recruitment When defining a business strategy HR needs to guide management, as to the best approach to growing their headcount. Conscious decision upfront needs to be made around; – Buying talent. You will have to this if you are a late entrant to the market – Investing in talent over a longer time frame. – Sourcing locally or from elsewhere. – Flexibility that you have on terms. How empowered are you ? – Approach to hiring may have to change. Non-specific roles Other industries Too often these decisions are made by default after headcount targets have not been met. Speed and empowerment of decision making is critical and needs to be factored in. Without it recruitment success rate will be lower and lead time longer. Staff also need to be given the correct recruitment tools, this includes training. Recruitment Firms are your face to the market, use them effectively and to sell your firm.
Staff Retention As important (more important ?) than recruitment in a Hot Labour Market is staff retention. Built into business strategy and prioritisation needs to be activities that encourage retention and reduce flight risk in your company. Compensation is a hygiene factor it will not be sufficient to retain people in the medium term. Need to understand who are your critical staff – Have development plans and succession plans for them. – Grow your next generation of leaders or someone else will. Most people leave because of job opportunity – Be honest, can you grow staff or do you have to plan for turnover. – Encourage mobility. – Be transparent about job openings in your firm. – Lot of discussion about ex-pats returning to Russia but also a number of Russian managers now starting to manage functions overseas. – You may want to adjust your organisation model to create capacity to enable career growth e.g. use Russia as a regional hub, move regional functions to Russia.
Corporate Culture Corporate Culture is vitally important for executing on business plans. It is a key determinant for staff loyalty and if you get it right will ensure that staff put in the extra effort to get things done. Corporate Culture is not about what you say it is about what you do. Fundamentally it is about leadership and how you treat people. The first few months when you join a company defines your views on how it works and what it believes in and it is very difficult to change these views. It can take years to change a corporate culture since peoples beliefs are instilled early. Effective induction programmes are therefore key to explaining not just how a company works but also what it stands for and what it aspires to achieve. Without this view of the Company’s objectives and aims people start to work within their own teams, create their own cultures and their own objectives which can be odds with the business priorities that you have set.
Measurement and Feedback “If you can’t measure it you can’t track it” The impact of investment in HR initiatives needs to be measured to ensure what you set out to do actually works. Measures will include; – Staff Turnover. – Recruitment Costs. – Levels of Overtime. Need to understand the potential reasons for people to leave – Talk to leavers – Ask your employees Senior Managers are sometimes in the worst position to know what people want.
Training and Development All business strategies need to include a training and development stream to them but most don’t. Training is too often left to line managers or individuals to define their requirements and is not aligned to business priorities. To be able to grow your business you need to be able to give your staff the tools and coaching that they need to succeed. The approach to training needs to be agreed as part of your business priorities; In house Outsourcing Hybrid solution Your next generation of managers need to be differentiated to provide them with the tools to succeed and to help retain them. Strategy and soft skills need to be part of the package, not just technical training.
Conclusion Business and HR strategies/priorities have to be integrated. The HR function needs to be at the heart of the business operating model and requires investment. If HR is viewed as a back office function you will be at a competitive disadvantage. You need to measure the effectiveness of the initiatives that you undergo. You need to consciously decide what your approaches are to recruitment and retention are upfront, plan for the future do not react to today. Paying people above market may solve your problems in the short term but will not help in the medium term.