HR's Top Earners: Field Marshals in the Talent War
A quintet of 2006's highest-paid HR leaders discuss how they are confronting myriad talent management challenges as well as obstacles to being viewed by their organizations as strategic business partners.
By Jessica Marquez
Although they come from different industries, these five HR leaders, who also are among Workforce Management's 30 top-paid HR executives, agree on one thing: Their biggest challenge is finding and keeping good people. Many of the organizations on this year's list are feeling the long-anticipated "war for talent" as they try to expand globally and as baby boomers begin to retire. But how companies experience and confront this challenge depends on their business.
Phoenix-based Allied Waste Industries is focused on getting its truck drivers to see the value of their work and feel that they are an integral part of the company, says Ed Evans, executive vice president and chief personnel officer.
Meanwhile, Cigna, the Philadelphia-based health care benefits provider, is working to help hiring managers recruit prospects from different backgrounds and is thinking about diversity in a new light, says John Murabito, executive vice president of HR and services.
Luckily for these HR executives, the CEOs at their companies recognize the importance of investing in workforce management to address these challenges. It's no accident that these executives are among the most highly compensated people in the profession.
In interviews with New York bureau chief Jessica Marquez, these men discussed how their companies are addressing the talent management challenges they face, how these challenges are affecting the role of HR, and what obstacles prevent many in HR from being considered strategic business contributors.
Ed Evans, executive vice president and chief personnel officer, Allied Waste Industries
Talent management challenges: Getting truck drivers to feel enthusiastic about their jobs is no easy task for any HR manager, but Evans says that the company has launched a number of efforts in the past several months to do just that.
} Talent management initiative: To retain drivers, the company created a formal compensation program. Until recently, driver compensation was determined on a local basis. Now the company has a centralized approach to rewards and recognition. "But that's not a motivator; it's just a satisfier," Evans says, noting that in surveys of drivers who left the company, compensation was not an issue that came up.
In fact, the top reason that drivers said they left was the quality of their supervisors, Allied Waste found. To address this, the company recently introduced training for its 1,000 route supervisors.
In the training sessions, supervisors are taught basic management techniques, like how to conduct route audits, which are designed to make sure that the drivers are following regulations, but also ways to make their drivers feel they are part of a team. "We talk about small things, like bringing a bottle of cold water to the drivers during a route audit," Evans says.
} Goals: Allied Waste's driver turnover is 28 percent, down significantly from the 40 percent mark it was at when Evans started in his position in September 2005, and much lower than the industry average, which is in the high 30s. But that's not enough for Evans. "My goal is under 20 percent," he says. "It's unrealistic, but that's my goal." Timothy Sompolski, executive vice president, chief human resources officer, Interpublic Group
Talent management challenges: For New York-based Interpublic Group, which owns hundreds of communications and advertising agencies across the world, like New York-based ad agency McCann Erickson and Boston-based Hill Holiday, the main workforce management challenge is internal development, Sompolski says
Over the years, Interpublic, like many advertising agencies, moved away from a tradition of strong internal development. As revenue grew, many agencies became too shortsighted and focused more on just recruiting, he says.
Now that margins are tight again, Interpublic, like all agencies, has to focus on retaining and developing its best talent. "We have a lot of people who do recruiting, but I want to get the right balance where I retain, develop and then recruit people," he says.
} Talent management initiatives: To address this challenge, two years ago Sompolski helped establish a formal talent review process. The CEOs of each Interpublic company now meet with Sompolski and CEO Michael Roth to talk about the leaders within their organizations.
Since those first sessions, Interpublic has developed the talent reviews so they go beyond "just taking inventory," Sompolski says. For example, today's reviews involve more in-depth discussions about the talent within all of the international regions that a business covers. "More than half of our employees don't work in the U.S., so today we go further with our talent review," Sompolski says.
} Goals: As a next step, Sompolski wants to change the focus of employees' talent reviews to become discussions about talent development, he says.
"In the past, what I saw happen was that an employee would want to leave and then all of a sudden they hear about all of the career opportunities available to them," he says. "Now I want to make sure those discussions are happening before anyone talks about leaving."
} Challenges facing HR: As companies continue to grow globally and competition increases, HR must respond even faster to change, Sompolski says.
"I work for a company that is in every market, and so if I do a wonderful job in New York, that's great, but I also have to stay on top of changes in London and Kazakhstan," he says.
John Murabito, executive vice president of HR and services, Cigna
Talent management challenges: Like most service-oriented companies, Cigna's major challenge is continuing to improve the skills of its workforce as it grows, Murabito says.
The company also wants to make sure that it is hiring employees from different backgrounds and perspectives. While the traditional kinds of diversity training and hiring of minorities are longstanding practices at Cigna, Murabito is trying to get the company to focus more on "diversity from a sense of a more diverse mind-set," he says.
Historically, Cigna has focused on hiring employees from within the industry, but Murabito wants to change that. "Industry experience is not necessarily the thing that will drive the strongest results," he says.
} Talent management initiative: Over the past several months, Cigna has begun holding sessions in which diversity experts speak to senior leaders to raise awareness around the need to recruit a more diverse workforce, Murabito says. And each Cigna business head has put together a strategic plan to achieve that goal. "I'm not suggesting that for every position we need to look at different industries," he says. "It's about having a different approach and mind-set."
} Challenges facing HR: HR executives too often get wrapped up in their own initiatives without understanding how their role contributes to the business, Murabito says.
"Oftentimes HR people spend too much time doing HR for HR's sake and pushing something because it's the flavor of the month," he says. "To be taken seriously, HR executives need to learn the business first and then worry about providing the HR skills."
In the next 10 years the HR role within an organization will become "smaller and better," Murabito says. "Anything that is administrative or transactional is going to be outsourced, and self-service will become bigger."
Rick Stephens, senior vice president, human resources and administration, Boeing
} Major challenge today: On top of the talent management challenges that his peers cite, Stephens says Boeing's HR team is also wrestling with finding the right balance between automating HR processes and making sure that employees feel that they have support.
Boeing has made it possible for employees to make benefits changes online, for example. However, for more complex transactions, like major life events such as marriage or a birth, often employees want to speak to an HR professional, Stephens says.
Business leaders at Boeing have told Stephens and his team that they want more support in such instances.
So instead of just having a call center for employees to call with questions, Stephens is adding HR managers to support each of Boeing businesses.
} Challenges facing HR: Like Murabito, Stephens believes that the mistake HR professionals often make is pushing programs without being able to explain their value to the overall business. Boeing has attempted to address this issue by establishing a team of 13 HR managers whose job is to dissect HR programs under consideration and assure that there are business reasons behind them. For example, if someone suggests a change to how Boeing does salary planning, it goes "to the pit," Stephens says, and the team works out the potential business implications of the change before putting the plan in place.
"In some cases a process might take longer to implement, but we have learned that if there are shortcuts, we often have to backtrack," he says.
Larry Costello, senior vice president, human resources, American Standard Cos.
} Talent management challenges: Like many companies, American Standard Cos. (which soon will be renamed Trane to reflect its major product line) has aggressive growth plans in Europe and Asia. The Piscataway, New Jersey-based manufacturer of air conditioning and vehicle control systems is wrestling with how to make sure those regions are overseen by seasoned leaders at the company without putting a strain on other parts of the business, Costello says.
"As we all know, we never have enough of the best talent," Costello says. "We stretch them too thin over different projects, but now we need them in different locations."
} Talent management initiatives: Over the past several months, American Standard has been refining its talent management system to make sure that HR has a better understanding of where its talent is within the organization, Costello says.
The company also is doing more to encourage employees to move around the company, he says. "We are starting to encourage more employees in Europe and Asia to come here, as well as Europeans to go to Asia," Costello says. "We are helping employees to understand the opportunities to work globally."
} Challenges facing HR: Costello believes that to be seen as a strategic business partner, HR needs to accept accountability for their business results.
"I am not sure that the HR community is getting there as fast as the business leaders," he says. Too often today, business executives expect HR people to have the business acumen, but they don't, Costello explains.
"Business leaders are going to find a way to fill that void, and that might mean they go to other business executives to fill the HR role. They aren't going to wait for HR managers to catch up," he says.
Workforce Management, September 10, 2007, p. 1, 22-3023
A quintet of 2006's highest-paid HR leaders discuss how they are confronting myriad talent management challenges as well as obstacles to being viewed by their organizations as strategic business partners.
By Jessica Marquez
Although they come from different industries, these five HR leaders, who also are among Workforce Management's 30 top-paid HR executives, agree on one thing: Their biggest challenge is finding and keeping good people. Many of the organizations on this year's list are feeling the long-anticipated "war for talent" as they try to expand globally and as baby boomers begin to retire. But how companies experience and confront this challenge depends on their business.
Phoenix-based Allied Waste Industries is focused on getting its truck drivers to see the value of their work and feel that they are an integral part of the company, says Ed Evans, executive vice president and chief personnel officer.
Meanwhile, Cigna, the Philadelphia-based health care benefits provider, is working to help hiring managers recruit prospects from different backgrounds and is thinking about diversity in a new light, says John Murabito, executive vice president of HR and services.
Luckily for these HR executives, the CEOs at their companies recognize the importance of investing in workforce management to address these challenges. It's no accident that these executives are among the most highly compensated people in the profession.
In interviews with New York bureau chief Jessica Marquez, these men discussed how their companies are addressing the talent management challenges they face, how these challenges are affecting the role of HR, and what obstacles prevent many in HR from being considered strategic business contributors.
Ed Evans, executive vice president and chief personnel officer, Allied Waste Industries
Talent management challenges: Getting truck drivers to feel enthusiastic about their jobs is no easy task for any HR manager, but Evans says that the company has launched a number of efforts in the past several months to do just that.
} Talent management initiative: To retain drivers, the company created a formal compensation program. Until recently, driver compensation was determined on a local basis. Now the company has a centralized approach to rewards and recognition. "But that's not a motivator; it's just a satisfier," Evans says, noting that in surveys of drivers who left the company, compensation was not an issue that came up.
In fact, the top reason that drivers said they left was the quality of their supervisors, Allied Waste found. To address this, the company recently introduced training for its 1,000 route supervisors.
In the training sessions, supervisors are taught basic management techniques, like how to conduct route audits, which are designed to make sure that the drivers are following regulations, but also ways to make their drivers feel they are part of a team. "We talk about small things, like bringing a bottle of cold water to the drivers during a route audit," Evans says.
} Goals: Allied Waste's driver turnover is 28 percent, down significantly from the 40 percent mark it was at when Evans started in his position in September 2005, and much lower than the industry average, which is in the high 30s. But that's not enough for Evans. "My goal is under 20 percent," he says. "It's unrealistic, but that's my goal." Timothy Sompolski, executive vice president, chief human resources officer, Interpublic Group
Talent management challenges: For New York-based Interpublic Group, which owns hundreds of communications and advertising agencies across the world, like New York-based ad agency McCann Erickson and Boston-based Hill Holiday, the main workforce management challenge is internal development, Sompolski says
Over the years, Interpublic, like many advertising agencies, moved away from a tradition of strong internal development. As revenue grew, many agencies became too shortsighted and focused more on just recruiting, he says.
Now that margins are tight again, Interpublic, like all agencies, has to focus on retaining and developing its best talent. "We have a lot of people who do recruiting, but I want to get the right balance where I retain, develop and then recruit people," he says.
} Talent management initiatives: To address this challenge, two years ago Sompolski helped establish a formal talent review process. The CEOs of each Interpublic company now meet with Sompolski and CEO Michael Roth to talk about the leaders within their organizations.
Since those first sessions, Interpublic has developed the talent reviews so they go beyond "just taking inventory," Sompolski says. For example, today's reviews involve more in-depth discussions about the talent within all of the international regions that a business covers. "More than half of our employees don't work in the U.S., so today we go further with our talent review," Sompolski says.
} Goals: As a next step, Sompolski wants to change the focus of employees' talent reviews to become discussions about talent development, he says.
"In the past, what I saw happen was that an employee would want to leave and then all of a sudden they hear about all of the career opportunities available to them," he says. "Now I want to make sure those discussions are happening before anyone talks about leaving."
} Challenges facing HR: As companies continue to grow globally and competition increases, HR must respond even faster to change, Sompolski says.
"I work for a company that is in every market, and so if I do a wonderful job in New York, that's great, but I also have to stay on top of changes in London and Kazakhstan," he says.
John Murabito, executive vice president of HR and services, Cigna
Talent management challenges: Like most service-oriented companies, Cigna's major challenge is continuing to improve the skills of its workforce as it grows, Murabito says.
The company also wants to make sure that it is hiring employees from different backgrounds and perspectives. While the traditional kinds of diversity training and hiring of minorities are longstanding practices at Cigna, Murabito is trying to get the company to focus more on "diversity from a sense of a more diverse mind-set," he says.
Historically, Cigna has focused on hiring employees from within the industry, but Murabito wants to change that. "Industry experience is not necessarily the thing that will drive the strongest results," he says.
} Talent management initiative: Over the past several months, Cigna has begun holding sessions in which diversity experts speak to senior leaders to raise awareness around the need to recruit a more diverse workforce, Murabito says. And each Cigna business head has put together a strategic plan to achieve that goal. "I'm not suggesting that for every position we need to look at different industries," he says. "It's about having a different approach and mind-set."
} Challenges facing HR: HR executives too often get wrapped up in their own initiatives without understanding how their role contributes to the business, Murabito says.
"Oftentimes HR people spend too much time doing HR for HR's sake and pushing something because it's the flavor of the month," he says. "To be taken seriously, HR executives need to learn the business first and then worry about providing the HR skills."
In the next 10 years the HR role within an organization will become "smaller and better," Murabito says. "Anything that is administrative or transactional is going to be outsourced, and self-service will become bigger."
Rick Stephens, senior vice president, human resources and administration, Boeing
} Major challenge today: On top of the talent management challenges that his peers cite, Stephens says Boeing's HR team is also wrestling with finding the right balance between automating HR processes and making sure that employees feel that they have support.
Boeing has made it possible for employees to make benefits changes online, for example. However, for more complex transactions, like major life events such as marriage or a birth, often employees want to speak to an HR professional, Stephens says.
Business leaders at Boeing have told Stephens and his team that they want more support in such instances.
So instead of just having a call center for employees to call with questions, Stephens is adding HR managers to support each of Boeing businesses.
} Challenges facing HR: Like Murabito, Stephens believes that the mistake HR professionals often make is pushing programs without being able to explain their value to the overall business. Boeing has attempted to address this issue by establishing a team of 13 HR managers whose job is to dissect HR programs under consideration and assure that there are business reasons behind them. For example, if someone suggests a change to how Boeing does salary planning, it goes "to the pit," Stephens says, and the team works out the potential business implications of the change before putting the plan in place.
"In some cases a process might take longer to implement, but we have learned that if there are shortcuts, we often have to backtrack," he says.
Larry Costello, senior vice president, human resources, American Standard Cos.
} Talent management challenges: Like many companies, American Standard Cos. (which soon will be renamed Trane to reflect its major product line) has aggressive growth plans in Europe and Asia. The Piscataway, New Jersey-based manufacturer of air conditioning and vehicle control systems is wrestling with how to make sure those regions are overseen by seasoned leaders at the company without putting a strain on other parts of the business, Costello says.
"As we all know, we never have enough of the best talent," Costello says. "We stretch them too thin over different projects, but now we need them in different locations."
} Talent management initiatives: Over the past several months, American Standard has been refining its talent management system to make sure that HR has a better understanding of where its talent is within the organization, Costello says.
The company also is doing more to encourage employees to move around the company, he says. "We are starting to encourage more employees in Europe and Asia to come here, as well as Europeans to go to Asia," Costello says. "We are helping employees to understand the opportunities to work globally."
} Challenges facing HR: Costello believes that to be seen as a strategic business partner, HR needs to accept accountability for their business results.
"I am not sure that the HR community is getting there as fast as the business leaders," he says. Too often today, business executives expect HR people to have the business acumen, but they don't, Costello explains.
"Business leaders are going to find a way to fill that void, and that might mean they go to other business executives to fill the HR role. They aren't going to wait for HR managers to catch up," he says.
Workforce Management, September 10, 2007, p. 1, 22-3023