05 Jun Future of work causes headaches for ANZ, Crown, Tabcorp and Medibank
Peter works as a civil engineer at construction firm John Holland during the day but spends his mornings as a barista at a cafe.
Major companies say they are facing requests like this for the first time, from employees who are demanding more flexibility to write a book, travel or study, with such arrangements no longer limited to those seeking time to care for their children.
“He still wants to work in the cafe because he likes the team and the people but he also wants to develop as a civil engineer and we have never really seen those two notions challenge each other before,” says Luke Jones, manager of resourcing at John Holland.
The head of resourcing at ANZ, Helena Bugeja, admits a massive mind-shift is needed as flexible and “gig” workers – short-term workers including professionals who move from job to job – quickly become part of the core workforce: “We have always said, ‘Why would you want to do that? It doesn’t have the stability or perks that go along with being an employee’, and yet they are demanding it, so we are going to have to shift.”
Jones and Bugeja were among a group of human resources managers from leading companies, including ANZ, Crown, Tabcorp and Medibank, who recently met with BOSS in a roundtable discussion about the changing world of work.
The surprising but overwhelming consensus is that big business is yet to come to grips with the rapidly changing nature of the workforce. While gig workers are predicted to make up 40 per cent of the workforce by 2020, only 9 per cent of leaders are actively hiring short-term employees, according to a report by recruitment and engagement business FuturePeople.
The HR managers admit they continue to offer a “take it or leave it” approach to full-time work – but the game is changing.
“We still really haven’t grasped the ideas around flexibility,” says SAP Success Factors chief operating officer Marc Havercroft, who warns that major companies still take a short-term view based on budgets about their required full-time head count. “Only now are we starting to realise that’s impacting our business because we are not getting the skills that we need. It is now being driven by commercial necessity.”
The HR team at Computershare agrees the change has been employee driven: “We haven’t got the structured frameworks developed yet. The leadership group accept that we need flexible working arrangements and our people have told us what they want, so it has sort of evolved itself.”
Luke Falvey, chief executive of video interviewing platform Sonru, calls it a revolution. “People are deciding, ‘I’m only going to do what I’m passionate about – and if you want my services, these are the terms and conditions.’ It’s about what the candidates want, and recruiters are scrambling to keep up.”
‘Immovable’ IR laws
The HR managers conclude the tension is twofold – first, companies face a challenge to shake up their own internal structures which continues to be resisted by reluctant leaders and, second, the external industrial relations framework is holding progress back.
“We’ve got this immovable IR framework that looks after permanent, part-time, casual maybe dependent contractors – it is so far removed from how we could structure easily conditional employment for gig workers,” a people director at a major provider of government services warns.
Founder and CEO of FuturePeople Linda Simonsen agrees: “We are the biggest supplier of non-IT labour hire staff for the Australian Taxation Office, you would have seen the ads on television at the moment around labour hire staff. Our flexible workers are being attacked with posters on the wall by the union for being gig workers, so it is really challenging from an IR point of view.
“A part-time employee may want to work in the afternoons but yet they get paid 17 per cent more, so why should someone only available and wanting to work those shifts get paid more?”
A Senate inquiry is examining the gig economy, with online businesses, including Uber, Airbnb and Deliveroo, urging a shake-up of the laws and calling for the government to create a new class of employee.
Uber argues that workplace laws are discouraging platforms like itself from providing perks and benefits such as training to its drivers for fear they will be classified as employees. Food delivery service Foodora is facing a test case after firing one of its cyclists who refused to hand over control of an encrypted chat group its workers were using to talk about pay and conditions. The Fair Work Ombudsman and Productivity Commission are also looking at the issue.
The Labor-dominated Senate committee is facing pressure from unions and academics who want greater protections for this new breed of worker to “broaden the definition of ‘employer’ in labour law” so that digital intermediaries “cannot escape their normal responsibilities”.
As the IR debate plays out, the workforce continues to rapidly evolve and major companies are struggling to get their own house in order.
Companies also need to be less arrogant. It is not all about the employer any more. “We have to try to reconcile the idea that we want people to join us as a brand but workers are now chasing jobs; in construction, people chase the projects,” John Holland’s Luke Jones says.
“There is sort of an arrogance with big business to say we have got the work, so you come to us and we are not agile enough to say we have to pitch to get the talent in.
“We have to learn to constantly pitch to retain talent. At the moment, everyone assumes once you get it [talent], you just move on to the next thing.”
Difficult in practice
Jones says one of the major challenges is that flexibility is different for everyone, and this makes developing HR frameworks and policies hard. “For some it is coming in an hour late, for some it’s part-time or job share.”
Recruitment manager at Crown Resorts Kimberley Manning says a key challenge comes when you get down to a line manager who is administering a roster: what does flexibility mean for them? Crown is working to track people within their organisation to better understand the HR issues within the company.
“When you get to chefs at back of house and you say, ‘This person wants flexibility and this person wants this arrangement’, they say: ‘What? It’s a 70-hour working week and that’s the expectation.’ That’s the challenge,” she says.
“We’ve got a really robust selection process but we lose that [information about their situation and need for flexibility] when they are employed. We do have a talent matrix but one of the key focuses this year is to really understand that a lot better,” Manning says.
Jones adds that another key challenge about flexibility is moving to key performance indicators, which focus on outputs.
“If you are a high performer but only work 10 hours a week, how have you performed against someone who works 50 hours a week?”
The final word from the HR leaders is that the biggest challenge ultimately sits with leaders to let go and truly embrace flexibility.
“We have just merged with Tatts and we find it varies depending on the leader,” says general manager of capability at Tabcorp Michelle Power. “We perceived our workforce was quite flexible and valued output over presenteeism but the CEO of the company we have essentially acquired was very much about presenteeism.”
Power says managers agree with agility and flexibility in name but when it comes to the nitty-gritty of making it happen, many buckle. She recalls a manager who said, “I am all for flexibility except when it comes to stand-ups [meetings for agile working].”
SAP’s Havercroft agrees: “The challenge is leaders realising they have to let go and give those decisions to the talent they hire and in some cases that’s a contingent [gig] talent.”
Recruiting on the hoof
How do you fancy striding down Collins Street in Melbourne, trying to convince Medibank chief executive Craig Drummond he should give you a job?
The health insurer has introduced “walking” interviews and ANZ has moved to what it calls “showcase” interviews, as human resources managers search for new ways to find the best talent.
The Medibank human resources team says walking side by side disarms and reduces some of the power imbalance and the conversation flows more equally and freely.
The team admits there are many reasons it might not work, including Melbourne’s inclement weather. “But we thought that we would give it a go and give people the choice.”
ANZ also reveals it is using showcase interviews, which give candidates full ownership of the first half of the interview.
“You come in and talk about one or two really great examples from your career, then we start to see and hear some of the mindset, leadership behaviours and values, and really understand who they are in that present-to-me style,” says ANZ head of resourcing Helena Bugeja.
“We have only piloted it through our agile transformation but it is having amazing feedback because people are saying, ‘I am not scared and prepping for days’ but there is a more structured section at the back focused on job fit. We are now looking at it for external candidates,” Bugeja says.
A roundtable of leading HR executives tell BOSS they have been looking more at big data, artificial intelligence and video screening. CVs are out when HR sends their preferred candidates to the business and often a LinkedIn link is used. But the old-fashioned face-to-face interviews still seem to work best.
“We got terrible feedback on video interviews,” recruitment manager at Crown Resorts Kimberley Manning says.
Myer needs to employ 3000 people over eight weeks for Christmas but has ruled out artificial intelligence.
“We get experts in to help us: psychologists help build meaningful questions to tap into our values, our culture and using those questions as a tool for screening and weighting,” says Myer HR manager Astrid Mehrens.
FuturePeople CEO Linda Simonsen agrees that HR and business units need to work more closely to find the best fit.
“We do an exercise where we look at behaviour competencies, ability, personality, emotional intelligence and values,” she says.
The HR managers say while they are usually better trained than business managers to question and assess candidates, HR and business managers can have very different ideas about what is most important to do the job. HR needs to properly understand from the business unit what will make a good fit.
“We will work out the top six to eight [traits] but also ask the immediate manager what they think is most important. There is some crossover but often it is quite a different picture. So we are hiring people thinking x, y and z is important and wondering why they performed well in their interview but don’t go on to perform,” she says. “Equally, the immediate managers are not necessarily trained to do interviews.”
This article first appeared in AFR BOSS.