Giving the green light
Giving the green light
The pressure for companies to go green is growing, from both consumers and employees. Furthermore, they need to show authenticity when evolving. But how can organisations take steps to improve their green credentials, and can it benefit their business?
The drive towards a more sustainable, low-carbon way of life to tackle the threat of climate change continues to build momentum.
It’s something that’s underlined by green action at the highest level around the world – from the UK Government’s pledge that the country will achieve net zero greenhouse gas emissions to thousands of Chinese companies being fined for breaking strict pollution rules.
Meanwhile, the United Nations is calling on businesses – large and small – to help meet its Sustainable Development Goals by 2030.
Across all industries, companies are already responding by transforming workplaces into more sustainable environments. And while many are doing this for moral reasons, is there also a business advantage to going green?
A more compelling business case
The move towards sustainability is not just happening because it’s helping to stave off environmental catastrophe. There are sound commercial drivers too. To begin with, there’s the need every company has to avoid alienating its customers. A recent global survey by market research company Nielsen found that
81 per cent of global respondents feel strongly that companies should help improve the environment.
As well as avoiding penalties by complying with growing green legislation – the UN says there’s been a 38-fold increase in environmental laws worldwide in the past four decades – sustainability can have a real impact on a company’s bottom line by cutting costs in the workplace through different approaches to energy use, recycling and water and waste management.
The Carbon Trust points to energy in particular as one of the largest controllable overheads in any workplace. Less energy use means savings, and the environment will benefit from reductions in carbon emissions.
It’s a point demonstrated in Australia, where the government-mandated National Australian Built Environment Rating System works to encourage improvements to the sustainability credentials of businesses and workplaces. Since the programme’s inception 20 years ago, it has helped to save 826,578 tonnes of CO2 emissions – enough to power 75,200 homes for one year.
Will Richardson, MD of environmental management consultancy Green Element, cites an example of how improvements to one company’s energy use and waste processes led to cost savings of £50,000. A system of rolling targets has now been embedded to ensure the company “stays on track and maintains its sustainability as a business for years to come”.
Our surroundings can also have a big impact on the way we feel and the way we perform. Most of us spend a huge slice of our waking hours at our place of work – for the average American, it’s 90,000 hours over their lifetime. So, can sustainability at work improve staff performance?
Biophilic design – bringing greenery into the workplace to help people feel more connected with the natural environment – has been shown to improve employees’ wellbeing and productivity.
And using natural light in the office rather than relying too heavily on artificial lighting not only cuts power consumption but can also be beneficial to staff. A study carried out at Cornell University reported an 84 per cent drop in symptoms of eyestrain, headaches and blurred vision symptoms in daylit office environments. Report author Professor Alan Hedge believes optimising natural light in workplaces “significantly improves health and wellness among workers, leading to gains in productivity”.
While there are health benefits, potential employees also have moral concerns about how green an organisation is. According to the Deloitte Millennial Survey 2019, which questioned millennials around the world, climate change and protecting the environment is their top concern. Furthermore, 42 per cent of survey respondents say they have “begun or deepened” their consumer relationship with a company because they perceive a company’s products or services to have a positive impact on society and/or the environment.
With that being the case, pursuing eco-friendly policies is likely to become a must-have in a company’s recruitment pitch. Deloitte’s findings suggest younger workers are looking for more than just good pay, and “show deeper loyalty to employers who boldly tackle the issues that resonate with them most, such as protecting the environment”.
Evgenia Malakhova, Internal Communication Manager for pharmaceutical company Petrovax in Russia, agrees. “Going green can certainly attract talent, especially in younger generations,” she says. “When they compare a company that has a consistent concept of corporate social responsibility with one that doesn’t, choosing who to work for is an easy decision.”
The evidence, then, points to employers needing to make sure their company is moving with the times and accommodating the needs of the modern workforce. This can help them avoid missing out on recruiting key talent.
While attempts to implement sustainability in the workplace have many positives, companies must be careful not to leave themselves vulnerable to accusations of so-called greenwashing – where businesses are shown to have overstated their green credentials. Those that make false claims risk losing credibility with consumers, employees and investors. Authenticity is key when making changes.
Richardson says: “Carbon offsetting enables companies to buy carbon credits and be deemed ‘carbon neutral’ without having to actually stop emitting carbon dioxide, but does this make a company truly sustainable?
“If the company has worked hard to reduce carbon emissions, but needs help in becoming completely carbon neutral, then supporting reforestation and other carbon offsetting projects may be considered no bad thing.
“However, if the company simply throws money at carbon offsetting and doesn’t try to change its operations, then what is the use of that? Whatever sustainability initiatives a company implements, it should be authentic and not just a PR stunt.”
The most serious examples of greenwashing can do tremendous damage to a company’s reputation and even result in criminal charges: the fallout from the discovery that German car maker Volkswagen made false claims about some of its vehicles meeting pollution standards rumbles on, with former company boss Rupert Stadler being charged with fraud.
Malakhova says that being open about how much you can do is important. “In the pharmaceutical industry, being sustainable aligns with quality and responsibility standards needed in our production,” she explains.
“Our employees feel that they participate in the creation of valuable products, but at the same time they know that any type of production can have a bad effect on nature.”
Ever since the world’s largest conservation organisation, the WWF (the World Wide Fund
for Nature), committed to making its new UK headquarters as sustainable as possible, it has attracted interest from outside organisations wanting tips on how they can follow suit.
WWF’s Living Planet Centre serves as an open-plan workplace for some 300 staff, as well as hosting a 150-seat conference venue and education support facilities. The £13 million, 3,600 m2 building was awarded the Building Research
Establishment Environmental Assessment Method’s (BREEAM) Outstanding rating and includes a central atrium-like space that’s home to a number of trees. Carbon emissions have been cut by 25 per cent, compared with the WWF’s previous office building, and the centre produces 50 per cent of its water through rain harvesting and greywater recycling. Further sustainable initiatives include producing 20 per cent of its own electricity via solar panels and more electricity provided via ground source heat pumps.
Lauren Wiseman, WWF Environmental Manager, says: “We’ve had a lot of interest from external parties about how our sustainable technology works and if it’s commercially viable, especially as there’s now more awareness of the climate emergency and that companies need to act to tackle that. They want to know what they can put in place and we’re very happy to share details.”
She reveals the centre recycles “between 75 and 85 per cent of all waste produced in the building”. That includes paper, aluminium, card, some types of plastics, glass, textiles, electronic equipment – even sweet wrappers and crisp packets. In addition, an anaerobic digester recycles food waste and other organic matter. The roof is designed to let in as much natural light as possible, but the centre is also gradually adopting LEDs for supplemental lighting. “LEDs use 60 per cent less energy than a standard bulb,” adds Wiseman.
Besides all this, WWF has established an environmental procurement policy, expecting its suppliers to mirror its aims in pursuing eco-friendly policies, and promotes a sustainable travel policy, setting restrictions on how far staff can travel around the world.
Of course, most businesses don’t have the luxury of new, purpose-built premises and are renting their workplace. Alan Bailey of The Future Economy Group, which runs an online network for businesses to share news of eco-friendly practices and products, recommends companies engage with their landlord to take steps towards sustainability.
“Commercial property owners are expected to meet minimum environmental standards and are beginning to understand they’ll need to upgrade their buildings even more in the future,” he explains. “Property owners want to keep good tenants, so it’s often in their interest to work with you to make it more sustainable. If they won’t cooperate, when your lease is up, move to different premises or co-working spaces with better green credentials.”
Topping even the Living Planet Centre is a 40,000m2 office building in Amsterdam called The Edge. It can respond to data from 28,000 sensors that track movement, lighting levels, humidity and temperature by using resources more efficiently.
When areas are not being used, heating, air conditioning and lighting can be adjusted or switched off. The environmental ratings assessment BREEAM gave The Edge a score of 98.36 per cent – one of the highest-ever sustainability scores.
No less impressive, the 50-storey Bahrain World Trade Center is the first high-rise in the world to have wind turbines in its design. The 225kW turbines feed in 11–15 per cent of the total power consumption and the building has been awarded The Arab Construction World for Sustainable Design Award.
Support from all levels
Many of the small actions in creating a culture of sustainability in the workplace – like turning off lights and computers at the end of the day, or using recycling bins – come down to the behaviour of staff, so getting employee buy-in is crucial to the success of many eco-friendly schemes.
Wiseman says the aim at the Living Planet Centre is not just about minimising its environmental impact but also about encouraging staff to live those values as well. “If employees are engaged, you find people will take ownership of the process, so our staff induction includes an introduction to our environmental management system.
“They can really get involved through volunteering to do litter picking or looking after our allotment garden, and we’ll hold the odd event focused on our environmental impact, like a competition to see which department can reduce their printing the most.”
And while offering opportunities is important, Malakhova says that support must be gained at all levels: “The support of the top management can’t be an afterthought. In our case, our CEO’s supportive, non-sceptical attitude helps a lot.
“One of the most important factors is to have an initiative group and a leader who will promote the idea of creating a sustainable workplace. It is made up of colleagues from different departments who have their own ideas. Sustainability is done for our employees and by our employees.”
WWF’s Lauren Wiseman gives her top tips on how you can ensure your suppliers are sustainable too:
Search for suppliers who have sustainability embedded into their business
Look for external accreditations that businesses may hold such as ISO 14001 for environmental management. These demonstrate that they have systems in place to meet a minimum level of consideration for these areas.
Don’t just take an organisation’s word for it
We see a lot of greenwashing happening globally and it’s becoming more important than ever to ensure that products are as green as they say. Look for a logo or certificate to back it up, such as FSC® for paper and timber.
Look for evidence that they’re going above and beyond
It’s not just greenwashing products, many businesses greenwash themselves too. Claims that an organisation is “green” or “eco-friendly” mean nothing unless it’s demonstrating how it’s achieving this. Look for organisations that have taken steps to go above and beyond.
Do your due diligence
Research a company. Ethical Consumer Magazine is a great portal of information and rates companies – the results are sometimes surprising. Obviously do your own research as well but this is a great place to start.
Develop a sustainable procurement policy
This should be a comprehensive list of typical business purchases, divided by product categories (paper, textiles, food etc), clearly detailing what staff can and cannot purchase, and what they should look for when identifying the most sustainable option.
A road to opportunity
A road to opportunity
Investment in infrastructure and innovation is opening up new opportunities across the Guangdong-Hong Kong-Macau Greater Bay Area. But attracting talent is proving difficult
It has been a time of new beginnings for the Guangdong-Hong Kong-Macau Greater Bay Area (GBA) since 2018. Made up of nine cities and two special administrative regions across South China, the concept for the area was first mentioned in 2016 in the 13th Five-Year Plan for Economic and Social Development of the People’s Republic of China. Since then, steps have been taken to create stronger links across the region.
The opening of the state-of-the-art Hong Kong- Zhuhai-Macau Bridge last September has improved the flow of goods between all ports and increased the number of tourists crossing the border.
Shortly after the bridge’s opening, China unveiled the GBA development plan, which aims to build the region into a globally influential innovation and technology hub.
Dean Stallard, Managing Director for Hays Greater Bay Area, says that businesses in the area are preparing for the changes these developments will bring.
“Most multinational companies, particularly those who have a presence in Hong Kong SAR, have a GBA expansion plan strategy,” he explains. “They’re taking it seriously and are looking at opening offices that side of the border and exploring where they should invest to capitalise on the opportunities available to them.”
One industry taking particular interest in the region is banking, as many Chinese firms strengthen their presence in Hong Kong SAR. “Traditionally, candidates have always wanted to stick to the international banks as there has been glamour attached to them,” says Wisely Wong, Senior Manager, Hays Hong Kong SAR.
“However, with the investments China has put into their Hong Kong SAR branches, candidates are able to see a brighter future in Chinese banks, not only from a compensation perspective but also in terms of strategy.
“They are aware that Chinese banks will be the future and, in order to get ahead of the curve, they are making their move to these businesses now – or are at least more open to joining them.”
Sectors with challenges
While banks are certainly looking to take advantage of the investment in the region, the industry still faces challenges to recruit the talent it needs. And it’s a similar story for the supply chain and technology sectors.
For supply chain businesses, an ambitious scheme launched by China in 2015 has meant a new range of professionals are needed. The Made in China 2025 initiative aims to move production in the country away from traditional outputs such as fashion items and phones to new high-tech industries such as quantum computing and self-driving cars. Government subsidies have allowed organisations to make heavy investment in research and development.
“One result of this change is in how the roles within the supply chain have altered, creating a new demand for professionals in the industry who can guide this transformation,” says Cece Tang, Team Manager, Hays Guangzhou.
“Roles like demand planners, supply chain analysts and logistics analysts are sought as they can assist companies in moving businesses from heavily manual processes towards an increasingly automated process. They’re able to build businesses that can cater to larger scales with a lower cost of production.”
Tang says that while the change in the industry appears to be happening fast, pay levels are failing to keep pace with IT and e-commerce businesses that want similar talent. She suggests that offering a vision of the future for each individual is a better way of attracting applicants: “Instead of looking for an immediate jump in salary, candidates also value job stability. They want to work for organisations that can provide them with long-term career development. Showing that your company offers career progression and solid training programmes is a good way to attract candidates.”
In Hong Kong SAR, the banking industry is also facing a shift in its talent needs as more virtual banks and fintech firms look to hire. Firms in this space require a blend of traditional banking abilities and virtual and fintech skills.
But uncertainty surrounding virtual banks compared with established, stable organisations can put some candidates off, says Wong.
“On the other hand, for more traditional banking segments like corporate, investment banking, private banking and wealth management, the challenges appear to be finding the right match.
“This extends to the technical competencies as well as the cultural fit of the candidates. There are many cases where banks find someone to fit their technical requirements, but they have unrealistic expectations on compensation and development paths.”
To tackle these challenges, Wong suggests a two-pronged approach. First, he advises offering those coming into the organisation training and development to help them understand the culture. Second, he suggests that, in order to cope with the transition from a traditional banking environment to a fintech-driven sector, banks should consider expanding their change management teams. This may involve working with professional consultancy firms, helping them to make changes in culture and practices.
Virtual banks and fintech companies are also providing challenges for the technology industry, says Riley King, Senior Manager, Hays Hong Kong SAR, as many professionals are excited to join these organisations over established technology businesses.
He says that while businesses can attract candidates through improved compensation, looking internationally for talent and taking steps to widen candidate pools can also be effective.
“Organisations can address the supply problem by being more open to hiring staff from other countries. Companies that are not able to do so, due to language requirements, can increase the chance of being able to fill their vacancies by focusing on transferable skills rather than insisting on the perfect candidate.”
Ready for homecoming?
One pool of talent that many organisations in the region are open to is workers who were born locally but have since moved away. The 2019 Hays Asia Overseas Returnees Report indicates that 82 per cent of employers are willing to hire a returnee in the next year.
The research found that China’s overseas returnees, or those who had education or work experience abroad, are more likely to get a better salary than local candidates when compared with the regional average. In fact, 61 per cent of Chinese organisations said they would be willing to pay returnees a premium salary, compared with 57 per cent across Asia.
Known colloquially as ‘sea turtles’ (due to their migratory behaviour), the report states that “those who have had an education or experience working abroad are perceived as the answer to the modernisation of the Chinese economy and are highly regarded for being able to transfer knowledge from more mature markets, such as those of the West”.
However, overseas returnees do not have an optimistic outlook on their salaries for their first job back on the mainland. While 47 per cent expect a salary equivalent to their wages overseas, one-third (33 per cent) are willing to take or have taken a lower salary.
Meanwhile the reverse is true in Hong Kong SAR. The research found that 61 per cent of potential returnees said they would expect an increase. However, 58 per cent of employers were only willing to pay the same salary as they would for local talent.
Yet better income is not the key reason why talent is returning home. The report found that being close to family is of “paramount importance” to professionals.
Stallard says that building overseas strategies that link businesses to talent in other countries is key.
“Our GlobalLink team at Hays helps us find returnees working in the UK, for example, to bring back to the region,” he explains.
“A lot of companies are also working hard to find returnees and forming partnerships with overseas universities to pick up younger talent. Employer brand has never been more important and organisations must show prospective candidates why they’re unique compared to their competitors.”
Despite a growing need to find new talent, many employers are failing to match the expectations in some areas. While candidates and businesses were aligned for the most part on the platforms they use, 30 per cent of jobseekers search for jobs on search engines such as Google, Baidu and Yahoo. Just three per cent of businesses are posting on these platforms.
Stallard says that the companies having the most hiring success are doing so by connecting with partners outside their organisation.
“Furthermore, we’ve also seen an increase in companies asking us to recruit 40 or 50 roles for them versus using 40 to 50 agencies to find as many candidates as possible. The top companies are looking for strategic recruitment partners with a global reach, allowing them to tap into the very best talent globally.”
He concludes that, most importantly, organisations must remain prepared for future developments. “More opportunities will come to the GBA. Businesses must be ready to take full advantage of them.”
A wealth of opportunities
Our experts discuss what they think the biggest opportunity is for organisations in the Greater Bay Area that wish to attract new talent
“There’s a huge opportunity to showcase the economic stability of the area. Globally, there are many regions facing challenges, but GBA looks very good. In fact, GDP for the area grew by seven per cent in 2018, accounting for 13 per cent of China’s total economy. This allows people to excel in their career, earn well and fast-track their professional growth.”
Dean Stallard, Managing Director, Hays Greater Bay Area
“Organisations tend to be more open-minded to international candidates than before, as some companies are looking to transfer their manufacturing from South China to South East Asia. They can communicate that candidates with diverse and international backgrounds and multi-language skills have advantages in securing senior supply chain jobs.”
- Cece Tang, Team Manager, Hays Guangzhou
“The increased investment and attention given to the GBA can serve to attract the best talent and brightest minds, encouraging them to consider working in the region. The fact that the GBA is where a lot of future technological advancements will happen is a selling point in itself to convince people to consider relocating to or staying in the region.”
- Riley King, Senior Manager, Hays Hong Kong SAR
“We believe front office bankers, such as relationship managers, will have great opportunity across the GBA area due to the rapid expansion and demand in business. They are also the revenue centre and by hiring them, banks and institutions can bring in extra income.”
- Wisely Wong, Senior Manager, Hays Hong Kong SAR
What’s in a modern leader
What’s in a modern leader?
Modern business challenges can require new approaches. Successful leaders across many different levels of seniority will need to evolve their skills in order to guide organisations into the future. But what does a modern leader look like and how can organisations develop them?
Many studies draw parallels between strong leadership and solid organisational performance. But whether they’re a junior manager or a senior executive, the qualities that leaders need are changing. Traditional, coveted leadership skills must be coupled with new abilities in today’s rapidly evolving and unpredictable world. So, what does an effective modern leader look like?
A global study by McKinsey & Company found that more than 90 per cent of CEOs planned to boost their spend on leadership development, rating it as the most crucial human-capital issue their organisation faced. The report also found that leadership strength explains about 80 per cent of the variance in organisations’ ability to sustain long-term performance. Yet McKinsey also reports that more than half of companies are not confident their leadership development will yield positive results.
Before looking at what new skills leaders might need to take an organisation into the future, it is perhaps worth reflecting on what a leader actually is. Unfortunately, being put in charge of colleagues does not necessarily make you a ‘leader’.
In a speech at Harvard University, Facebook COO Sheryl Sandberg said, “Leadership is about making others better as a result of your presence and making sure that impact lasts in your absence.”
Meanwhile, retired astronaut Chris Hadfield (most famous for his rendition of David Bowie’s Space Odyssey recorded on the International Space Station) believes that leadership is “not about glorious crowning acts”.
“It’s about keeping your team focused on a goal and motivated to do their best to achieve it, especially when the stakes are high and the consequences really matter,” he said in his book An Astronaut’s Guide to Life on Earth.
While there are many other opinions out there, the common thread seems to be that a true leader allows other people to do their job better. But what traits are needed to achieve this in the modern workplace?
A change in style
Stacey Philpot, Human Capital Principal at Deloitte Consulting in the US, says the core skills that were historically most needed in leaders have not changed, based on psychological assessments of 23,000 senior leaders globally over the past 25 years.
These skills include pattern recognition, motivation, agility and emotional intelligence, or the ability to understand, control and express emotions.
“These skills allow someone to become a leader faster than their peers, even in today’s volatile, uncertain, complex and ambiguous (VUCA) environment,” she says.
However, leaders need new styles of leadership to deal with changing cultures, says John Rocco, Vice President of Marketing, Canadian Banking at Scotiabank in Toronto. “Being comfortable with not having the answer, owning failure and drawing lessons from it, can create an environment of trust and openness that creates innovation,” he says, adding that these behaviours may engage employees too.
Collectively, these behaviours form “servant leadership”, where leaders create the conditions for teams to excel by displaying empathy and vulnerability – traits that Rocco says were once perceived as weaknesses. This is a marked shift from the authoritative, ‘command-and-control’ leadership style that once prevailed, he says.
But given the stigma around servant leadership, how can it be encouraged in organisations? Alsu Polyakova, HR Leader for RCIS, GE Healthcare, says the key is frequent performance appraisals for leaders, where behaviours are decoded and encouraged. “We give leaders lots of opportunities for self-reflection, so they understand how they behave,” she says.
Benchmarking their behaviour with that of GE Healthcare’s most successful leaders helps to encourage behavioural change, Polyakova says. Success is measured by how well employees rate (in surveys) leaders on achieving GE Healthcare’s “cultural pillars” – inspiring trust and empowering employees, among others.
Once an organisation has a clear set of values that are understood by everyone (this can be made clear through 360-degree feedback assessments), leadership can be scaled. Rocco says this should be done from the top down. “The most senior leaders must demonstrate leadership behaviours that are aligned to those values. If leaders walk the talk and create the conditions for those leadership values to flourish, the propensity for others across all levels to model that behaviour increases dramatically.”
He adds that behaviours that are contrary to those leadership values become more visible and, ideally, are not tolerated. “This effectively snuffs out the oxygen that breeds bad leadership,” he says.
A culture of trust
Gaining workers’ trust is more important than ever, says Nadezhda Kokoliya, Bayer’s Head of Talent Acquisition for Russia and the Commonwealth of Independent States (CIS). That’s because employees increasingly expect leaders to take action on societal issues like climate change, she says, and doing that is one way to build trust. In fact, 71 per cent of employees believe it’s critically important for their CEOs to do this, according to the 2019 Edelman Trust Barometer.
Doing so may yield rich rewards. The Edelman poll shows that workers who trust their employers – a trust that is earned, in part, by leaders addressing societal challenges – are far more engaged and remain more loyal than their more sceptical peers. “If employees don’t trust you, they won’t follow you,” agrees Kokoliya, who measures trust through regional workforce surveys. “But employees are questioning management decisions more so than in the past because they are more informed by the proliferation of information online.”
While leadership styles are clearly changing, the most effective leaders tailor their styles to suit different scenarios, says Professor Sattar Bawany, CEO of the Centre for Executive Education in Singapore. “Leaders need a broad repertoire of management styles and the wisdom to know when each style should be used,” he says. “In crisis scenarios like cybersecurity breaches, for example, leadership should be authoritarian because the scenario is unstructured.”
Regeneration for new generations
Managers must also balance leadership styles to suit different generations. Modern workplaces will soon house up to five generations under one roof – Baby Boomers, Gen X, Millennials, Gen Z and Gen I – many with differing preferences for how they wish to be led, according to Lindsey Pollak, author of The Remix: How to lead and succeed in the multigenerational workplace.
She believes modern leaders must mix old and new leadership styles that better suit younger generations. That’s because millennials (20-somethings), for example, are forecast to account for three-quarters of all workers in the US by 2030.
Therefore, engaging them is crucial to good organisational performance, but leaders will need to tweak their styles to do that. For instance, Pollak says millennials want more transparency in how leaders communicate with them than older workers because they have grown up with social media.
Twenty years ago, everything in organisations was on a ‘need-to-know’ basis,” she says. “With millennials, you need to be more explicit in giving instruction and explaining why, to keep them engaged.”
Appetite for education
With the workplace evolving so rapidly, leaders cannot rely on past experience alone to get by, says Norm Smallwood, who co-founded The RBL Group, a leadership consultancy. “Being exposed to many situations means you may be able to deal with future uncertainty, because you have developed resilience,” he acknowledges. “But many leaders are siloed, running one function.”
Ben Farmer, Head of HR, UK Corporate at Amazon UK concurs: “Experience is not always synonymous with wisdom and judgement. And naivety doesn’t always engender novel thinking and openness to change.”
For this reason, he says organisations should look for leaders who understand the future better, as well as those with a wealth of experience. “Success comes from the ability to combine understanding of exciting, new trends with the experience required to put that knowledge into action,” says Farmer.
But what is the right balance of prescience and retrospection? Farmer says: “Ultimately, there’s no one-size-fits-all approach
when balancing experience with adaptability, which depends on the organisation and the sector it operates in.”
For example, experience is less important in rapidly evolving industries such as manufacturing (because of robotics), as prior knowledge may quickly become stale, says Bawany.
Organisational culture is an important factor too, he says. Risk-averse firms, for instance, may prefer experience over novel thinking, fearful of a backlash from stakeholders should the latter fail.
To mitigate this risk, companies should look for leaders who also make decisions based on scientific evidence as well as gut feeling. That’s according to Omid Shiraji, a Consultant Chief Information Officer for a London council.
“Leaders need to use increasingly available data to inform their decisions, but they should always use intuition to augment the data,” he says. This can mean certifying the evidence based on decisions they’ve previously made, Shiraji says.
“We still need human leaders in a technology-driven world.”
Ultimately, there’s no single blueprint for an effective modern leader, says Anuj Kumar, UK Financial Services Lead on Banking Industry Strategy at SAP. Each organisation must take a tailored approach to leadership development, he says, focusing on organisational culture, industry nuances, and employee mix.
But above all, says Kumar, leaders should recognise that today’s reality may be old news tomorrow. “The winners will be leaders who are proactively shaping things while also quickly adapting to doing things differently,” he concludes.
Deloitte’s six top traits for leaders of the future
A 2018 study of 5,075 workers aged 21–64 by Deloitte identified six top traits that leaders of the future will need in a VUCA environment:
- Commitment: Leaders must treat everyone with fairness and respect, foster environments where team members can be themselves by modelling authenticity and empower each other’s wellbeing.
- Courage: Leaders need to engage in tough conversations when necessary, identify opportunities to be more inclusive, take ownership and engage others.
- Cognisance of bias: Leaders have to be aware of unconscious biases so decisions can be made in a transparent, consistent and informed manner.
- Curiosity: Leaders should listen attentively and value the viewpoints of others.
- Cultural intelligence: Leaders need to seek out opportunities to experience and learn about different cultures and be aware of other cultural contexts.
- Collaboration: Finally, leaders need to create teams that are diverse in thinking.
A different way
A different way
As productivity levels stagnate to below pre-financial crisis levels, is time running out for traditional measures, such as output? Will businesses need to focus on new areas to see improvements?
It feels like a week cannot pass without seeing a new story on the productivity crisis faced by many organisations. And the headlines are not unfounded. Deloitte analysis of International Labour Organization data shows productivity growth has failed to beat the 3.9 per cent peak it reached in 2006, before falling off sharply after the 2008 financial crisis. In 2016, global productivity grew just 1.8 per cent and Dr Rumki Majumdar, a manager and economist for Deloitte Services in Bengaluru, India, who conducted the analysis, says little has changed since then.
Furthermore, a June 2019 survey of 400 business leaders in the UK and US with more than 1,000 employees, commissioned by Concentra Analytics, revealed that 86 per cent of Britain’s largest businesses are worried about their ability to raise their productivity levels, with 39 per cent describing their productivity as “very concerning”.
Why does this matter? Because, says Majumdar, productivity is one of the two main drivers of business and economic growth – the other being increases in the number of people working. While ageing populations are presenting opportunities in this area for many employers (see page 10 for further details), the importance organisations place on improving productivity remains. The persistence of low productivity is leading many to question the current globally accepted ways of measuring productivity, which focus more on output, meaning many organisations are simply trying to squeeze more out of their existing operations. Some argue that there is much more at play here, including organisational and people factors.
Is it time for businesses and policymakers to refocus their attention on a broader range of drivers to not only get a more balanced picture of productivity performance, but also to have a better chance of improving it?
A new yardstick
Global learning company Pearson has seen its productivity levels improve since the business moved away from the traditional focus of output per hour, says Kevin Lyons, its Senior HR Manager in London.
Pearson’s heritage is as a publisher of printed educational materials, but as customers focus less on print and more on digital, less on ownership and more on access, the company has undergone a corresponding digital transformation.
As part of that customer-led change, Pearson now focuses on the quality of customer service as a driver of productivity.
“Measuring yourself against quality of customer service keeps you nimble, reviewing your processes and looking at your culture and, therefore, you’re less likely to lapse into lower productivity,” says Lyons.
Reviewing processes and linking to outcomes has led Pearson to outsource a number of activities in pursuit of delivering better customer service, which has already led to higher productivity levels. One example is the offshore outsourcing of the help desk for the 30,000 assessment associates Pearson employs each year, who assess examinations set by Pearson.
The move has transformed the service the business is able to offer to its associates, Lyons says. First-line support has improved significantly, with 90 per cent of calls now being resolved at first stage, compared with a much lower percentage when the help desk was in-house.
The business is also able to better manage peaks in demand for the service. And, while there are now fewer employees in the UK, they are able to focus on higher-skilled work such as helping associates with queries about exam performance and management, boosting productivity in house. The outsourced operation is also excelling in customer service, which is its core competence. “Productivity is key to what we’re talking about here,” says Lyons. “It runs right through the outsourcing approaches that we’ve undertaken.”
While outsourcing is one way of reorganising processes to boost productivity, pharmaceutical giant Pfizer has tried a different tack. When new CEO Albert Bourla joined, he tasked managers with finding a way to simplify processes, structures and governance to create a more productive organisation that empowered colleagues and drove faster decision-making.
A leadership team launched a corporate-wide online platform project which crowdsourced colleagues’ experiences of overly complicated processes that were taking up time and energy. Meetings and emails emerged as the biggest drains on productivity. A team of volunteers was engaged to help come up with practical and quickly implementable solutions.
“The key to this initiative was the involvement of colleagues in the assessment and solution finding,” says Yulia Novoderezhkina, HR Business Partner of Pfizer in Russia. “This boosts the level of engagement as we feel that we are all part of the process. The changes have helped to free up capacity for growth and liberate our time to focus on what really matters – delivering value to patients and people who need us.”
Revising roles and responsibilities
Freeing employees up to focus on higher-value work is an example of another technique many companies are using to boost productivity – reassessing roles and responsibilities.
Research from Bain & Company reveals compelling links between this type of talent management and productivity. It finds that the best companies are more than 25 per cent more productive than the rest, thanks to the way they manage their best talent, including the roles and responsibilities they assign to them. This involves identifying and tracking the progress of star talent, assembling all-star teams and putting them to work on mission-critical initiatives, removing obstacles to the team working effectively together, and controlling team member egos.
The Concentra Analytics research also finds a clear correlation between organisations that are most productive and that have macro and micro insight into profit per worker. It calculates that if large companies in the UK were to improve their insight into their human capital in this way, UK productivity could witness a 0.5 per cent or £10.4 billion boost.
Rupert Morrison, CEO of Concentra Analytics, explains: “The reality is that most large companies don’t know enough about their employees or what they do, so it’s hardly surprising that there’s this much potential upside in getting a greater insight into what’s going on with your human capital.
“For organisations that are investing in their future, getting better information on people and what they’re working on improves productivity by making sure the right people are in the right place at the right time to deliver the operating plan.
“It’s making sure people are clear about their roles, have the competencies for the job and can make a difference that inspires them, not a Friday beer fridge and a pool table.”
In their book Now, Discover Your Strengths, US management gurus Marcus Buckingham and Donald Clifton analyse a Gallup study of 2 million people and argue that by identifying the strengths of individual employees – rather than trying to fix their weaknesses – organisations can place them in the most suitable roles allowing them to flourish. This reduces turnover and boosts morale and business performance.
At Pearson, Lyons says employees are really benefiting from the motivation gained from doing higher-value work in the wake of the company’s outsourcing exercise. It’s a result that’s been achieved by reviewing work processes, setting clear goals for people and having a clear performance management framework in place. This means that employees know what’s expected of them and their roles are intrinsically rewarding and interesting because the effort has been made to make them so.
Lyons urges organisations to strike a balance between performance management and people development, which means investing across the talent agenda in areas such as learning and development, diversity and inclusion, wellbeing and mentoring.
If you can get these things right, employees are less likely to experience the job insecurity that productivity-gain initiatives can sometimes engender.
Identifying workforce needs
Looking beyond organisational roles and responsibilities to the personal needs of employees can also help to boost productivity.
Juliet Turnbull is Founder and CEO of 2to3days, a start-up whose purpose is to advance women’s equality in the workplace through the power of flexible working. It connects progressive companies with highly capable women who want to pursue their careers on a flexible basis. Set up four years ago, the company now has a community of more than 30,000 candidates.
Turnbull says that companies that are willing to adapt to accommodate flexible workers – through, for example, a change in working hours or the provision of technology to accommodate remote working – are much more likely to have happy workers who are more productive and loyal. This, in turn, pushes down recruitment costs, immediately impacting on the cost side of the productivity calculation.
Meeting the personal needs of employees isn’t something that organisations necessarily need to take sole responsibility for. Dorset, a region located on England’s south coast, has been experiencing falling productivity levels in recent years.
One major obstacle to boosting productivity is an ageing population.
The Dorset Local Enterprise Partnership (LEP) is responsible for coordinating a local industrial strategy for the region that will help to boost productivity. It is currently working with local stakeholders, including employers, to devise this strategy.
As part of this work, it will be looking at how the region measures ‘productivity’ – a point raised by many respondents to a public consultation, who want to see Dorset’s natural and cultural capital considered.
LEP Director Lorna Carver explains: “We’re not saying that economic methodology around productivity is going to fall away – productivity is still about value – but how do you balance that with some of these things that are increasingly important to people around health, wellbeing, social value and cultural capital?
“How you measure those wider factors is the tricky thing and that’s something we’re looking at currently,” Carver says.
In its 2017 report – A future that works: automation, employment and productivity – the McKinsey Global Institute highlights automation as a way of offsetting the impact of a declining share of working age population. According to its scenario modelling, automation could raise productivity levels by 0.8 to 1.4 per cent annually.
Pearson’s Lyons describes automation as a great way to remove mundane processes and increase quality with error-free results. He sees it providing a future boost to productivity as outsourcing providers embrace sophisticated chatbots to provide first-line support, for example. But, he warns, organisations should follow a strict process when deciding what to automate: review the activity; re-engineer it if you can; and only then automate it. If you automate rubbish, you’ll produce rubbish, so it’s important to get it right, Lyons says.
“Technology can transform the working environment because it can allow you to lift yourself from that mundane, process stuff that technology does much better anyway and allow you to do the strategic and more emotional work that technology can’t cover,” says Lyons. “That blend of humans and technology working together is how the future is likely to evolve.”
At Pfizer, automation is part of a transition to becoming a growth company. The Pfizer Digital project is designed to identify the technological capabilities needed to operate more efficiently internally, among other things. As part of this, the company has automated HR processes via Workday HMRS.
How can companies deal with the unsettling effect that automation might have on employees? “You need to allow colleagues time to adapt to new technology and see its advantages,” says Novoderezhkina. “Once they understand the gains, they will use it effectively. The simpler and more intuitive your technology solution is, the better effect you will see in its implementation and further use.”
Whether they’re thinking about automation, outsourcing, revising roles and responsibilities or adapting workplaces to the changing needs of employees, employers need to flex their old ways of boosting productivity to include a much wider range of drivers.
What’s clear is that people are a major influencer on productivity and so it will be important to get their buy-in to any productivity gain activities. Novoderezhkina offers some valuable advice: “Provide as much information as possible about any changes, concentrate on the good things, treat colleagues with respect and support them on their change journey.”
Understanding and measuring productivity
As a term, productivity is thrown around a lot. But what does it actually mean, and how can it be measured?
Put simply, productivity measures how efficiently production inputs, such as labour and capital, are being used in an economy to produce a given level of output.
The most common measure of productivity is Gross Value Added (GVA), which is used to measure the contribution a company or municipality makes to an economy.
GVA offers a monetary value for the amount of goods or services that have been produced in a country, minus the cost of any inputs and raw materials that are directly attributable to that production.
In a business context, GVA can tell you what value a product, service or corporate unit brings to an organisation’s bottom line.
How to create a productivity-boosting culture
As Virgin Founder Richard Branson once said: “If you treat your staff well, they will be happy. Happy staff are proud staff, and proud staff deliver excellent customer service, which drives business success.”
Creating a happy workforce needs commitment from the top and a culture of open communication in which people can express their creativity, use their own initiative and be encouraged to innovate, says Juliet Turnbull, Founder and CEO of 2to3days, a recruitment platform specialising in flexible working.
Collaboration is also crucial. If you can get people to work together to come up with their own solutions to boosting productivity, all the better. Finally, you have to trust people to do their job and give them the tools and technology to deliver in a way that suits them. Lack of trust impacts productivity because it disables people from using their initiative to get things done, says Turnbull.
Trust is a key factor in realising the link between flexible working and productivity. Turnbull has found that while recruitment managers understand the link, they often struggle to bring line managers on side. These managers either don’t believe in the value of flexible working or don’t feel supported by their executive teams to deliver it. “Either way, it boils down to the fact that flexible working is not valued as a business imperative to increase productivity,” Turnbull says.
She calls for leadership teams to be more supportive of line managers, training them in how to manage a flexible team and giving them the tools and technology to allow their teams to work away from the office.
Adjusting to this mindset is a business imperative, says Turnbull. Millennials have seen their parents’ generation burn out and they want to work differently. As digital natives, they know what an enabler of flexible working technology is.
“I think it’s a very exciting period that we’re in; companies have got to make this shift if they’re going to survive and stay competitive,” says Turnbull.
Why diversity drives productivity
Diversity is about creating a level playing field to allow all employees to be productive, says Kate Nash, Founder of PurpleSpace, a professional development organisation for people who run disabled employee networks within their organisations.
She explains: “For a disabled person – for example, somebody who has acquired rheumatoid arthritis that affects them primarily in their hands – that can be as simple as providing an easy-grip pen. At the price of £1.74, you have not only retained a very talented individual but you have then made it easier for them to not just deliver but to deliver well so their productivity will go up.”
Nash created PurpleSpace in 2015 and, since then, it has grown into a global organisation with 500 members in countries including Canada, the US and Australia.
While Nash sees no shortage of employers who want to ensure their talent pipeline includes individuals with disabilities, she says there is often a perception that this will be costly and burdensome. In reality, the average workplace adjustment to accommodate an employee with a disability is between £400 and £700 and, often, it is nothing at all.
Employers need to train managers and recruiters to be aware of the wide range of workplace adjustments that can be made and appoint a steering committee to ensure the needs of disabled employees are considered across the business,
Nash advises. They should also make use of disability networks as vehicles of support.
Employers are likely to see their investment feed through to productivity as disabled employees bring a number of qualities to the table, including greater problem-solving skills, better time keeping and more loyalty.
“Disabled people will recognise that sometimes their lives do require a physical workplace adjustment or a change of policy or practice or it simply means you need a few colleagues around you to do things a little bit differently; that therefore delivers a deeper loyalty and a huge respect for the employer,” says Nash.
Age of opportunity
Age of opportunity
Many countries will soon be faced with an ageing workforce, but too many organisations view this as challenge. It’s time for businesses to see a growing proportion of older workers as an opportunity, not a burden
Today, Japan is the only country in the world where those aged 60 and over represent more than 30 per cent of the population. By 2050, 62 countries will reach that percentage.
In the US, Americans of retirement age will eclipse the number of people aged 18 and under for the first time in the country’s history by 2035, government figures show. And globally, the number of people aged 60 and over is projected to double to more than 2 billion by 2050, according to the World Health Organization (WHO), with those 60 and over outnumbering children under the age of five. Yet, in Europe only a third of people between the ages of 60 and 64 are in employment, according to the International Longevity Centre (ILC).
While the proportion of older employees is growing across many workforces, a significant percentage of these workers do not feel their employer is helping them reach their full potential.
Research from Aviva found that 44 per cent of older workers in full- and part-time roles in the UK felt unsupported by their employer when it comes to their career ambitions.
So how can organisations support older workers more effectively and enable them to give their best at work?
One of the first steps in bridging this generational gap is addressing and overcoming age bias, which is all too prevalent when it comes to retention efforts, with a number of employers targeting younger talent while making assumptions about older workers.
Paul Irving, Chairman of the Center for the Future of Aging in California, says that, while the prevailing narrative suggests that the ageing workforce might impede the progress of younger workers, there is little evidence to support that concern.
“Economies and opportunities are elastic. Older and younger workers bring different talents and perspectives to workplaces and there’s increasing evidence that intergenerational teams outperform single generation teams of any age,” he notes.
The statistics back up Irving’s comments too. A Boston Consulting Group study of 1,700 companies in eight countries found that businesses with above-average total diversity (in terms of migration, industry, career path, gender, education and age) on average scored 19 percentage points higher in innovation revenues and nine higher in earnings before tax margins.
And while older workers are more prone to feeling fearful of artificial intelligence (AI), they typically bring a host of other skills such as mentorship, judgement and experience, while their younger colleagues bring fresh thinking, creativity, and technological capabilities that complement their experienced counterparts. And as AI, robotics, autonomous transportation and other new technologies are set to change the world of work dramatically, Irving says reassuring workers across all demographics is vital.
“Both young and old share concerns about the future of work and solutions must address the needs and aspirations of workers of every age.”
Time to develop
Many of today’s older workers are of the ‘sandwich generation’ – those who may be both financially responsible for children and caring for elderly parents. This, says Donna Miller, European HR director at car rental firm Enterprise Holdings, may be a contributing factor when it comes to having to work longer and keep reskilling. “There are overarching and often economic factors that mean a person isn’t able to retire at a specific age,” she notes. “This could be because they haven’t put in place the financial plans, might have caring responsibilities or because their financial plans have not worked out as expected.”
This can, however, be advantageous for businesses, says Miller. While they may take a more ‘junior’ role than that of their last job, they can still bring a depth and breadth of knowledge that their younger colleagues may lack. “They are often looking for flexibility and ideally for a regular commitment.”
If employers are unsure how to support older employees, they should, says Irving, simply ask them. “Invite dialogue with experienced staff to seek their advice and input on a wide range of challenges and possibilities. Then listen to what they have to say,” he notes. “Consider age-friendly approaches such as flexible work hours, job sharing, part-time opportunities, transitional retirements and workplaces designed for a changing demography.”
Irving says diversity and inclusion policies should also be broadened to ensure they encompass age. “Age diversity is a strength, and the inevitability of population ageing means that every enlightened company must think now about new ways to retain experienced talent, integrate the old and young, and adopt policies and practices that maximise the loyalty and productivity of workers of every age,” he notes.
Learn from experience
Ed Johnson, CEO and founder of global mentoring network PushFar, says mentoring can also be a very effective way for organisations to leverage the knowledge, skills and experience of an ageing workforce. “We are finding time and time again that those individuals coming to retirement or who have recently retired make highly effective mentors,” he says.
Encouraging intergenerational mentoring, with both younger and older mentors, can have a huge positive impact on employee engagement, a sense of empowerment and cross-organisational success, says Johnson.
However, Jon Boys, labour market economist at the CIPD, the professional body for HR and people development, says that there is still a significant variation between sectors when it comes to employing older workers.
“For example, the hospitality sector is mainly made up of younger workers while the health and social work sector has a large number of older workers,” he notes.
There may also be a misconception by some employers that if people are working for longer and later, they will inevitably be taking employment opportunities away from young people, which could be more prevalent in certain sectors, says Boys. “There are not a fixed number of jobs in the economy; more people in work creates more demand and more economic growth, which in turn leads to more jobs.”
Some countries may also be managing the ageing population more effectively than others, says Dr Brian Beach, Senior Research Fellow at the International Longevity Centre. “The realities are very different from country to country. In Western countries, where retirement traditions and policies are more established and where early retirement was encouraged in the late 1970s and 1980s, ageing populations create a challenge for national economies to balance their public pension expenditure with revenue from income and employment taxes,” he notes. “Some non-Western countries have seen stronger trends in semi- or partial retirement among people in later life, some of which will be driven by a relative lack of formal pension systems or lack of security in retirement income.”
There are, however, several initiatives seeking to support older workers and give them fuller working lives across Europe. For example, Deutsche Bahn, the train operator in Germany, has recently helped shift their older employees from more physically demanding positions to customer-facing roles, which is, says Beach, partly inspired by the recognition that people feel more comfortable approaching older staff to request assistance or advice. “And Finland has been a world leader in the concept of age management and the concept of work ability,” he notes.
In fact, the Finnish National Programme on Ageing Workers, which was launched all the way back in 1996 and ran until 2002, encouraged older workers to participate in the workforce for longer, while providing training and upskilling to help them stay up to date with technological advances.
Keeping opportunities equal
Arwen Makin, a senior solicitor at ESPHR, says employing older workers may be a sensitive area for employers to navigate, especially when it comes to retirement. “Organisations cannot request that an employee retires or be seen to try to plant the seed without getting into risky territory and risking age discrimination and constructive dismissal claims,” she notes.
While there are some very fit and competent people over the age of 65, there may come a time, says Makin, when there is a natural decline in a worker’s capabilities. “This is where things can become tricky and there is a need to adopt a sensible yet sensitive approach. If someone has been employed for a particular role – which they might have been doing perfectly well for years – you cannot discriminate against them as they get older,” she says. “You can however look to performance-manage any issues which arise in a fair way.”
Fostering a culture of inclusivity, open communication and mutual respect is the best way of addressing this, says Makin. “The moment you start treating older workers differently, you stop engaging them and run the risk of damaging company culture,” she notes.
Given the differences between generations, and the upcoming seismic demographic changes we are witnessing, HR directors should be putting the topic of an ageing workforce at the top of their agenda.
The benefits of embracing a multigenerational workforce have been demonstrated, and employers who actively embrace age diversity will be able to open their doors to a huge incremental talent pool of older workers that may have previously been ignored.
Ultimately, says Angela O’Connor, CEO of the HR Lounge consultancy, it’s about realising that older workers want the same sort of things younger workers want: “Quality jobs, good relationships with their colleagues, meaningful work that links to their values and the ability to make a difference – the same thing we all want, regardless of age.”
Ageing in numbers
Between 2015 and 2050, the proportion of the world’s population over 60 will nearly double from 12 per cent to 22 per cent, WHO figures show.
The global spending power of people over the age of 60 will reach $15 trillion annually by 2020, according to the Bank of America Merrill Lynch.
In Japan, they have what is classified as a ‘super-ageing’ society, where a third of citizens are over the age of 60, 26 per cent are aged 65 or above and 12.5 per cent are over 75, according to government estimates.
The total population in the EU is projected to increase from 511 million in 2016 to 520 million in 2070 (2018 Ageing Report).
Overall in the EU, the total cost of ageing (public spending on pensions, health care, long-term care, education and unemployment benefits) is expected to increase by 1.7 per cent to 26.7 per cent of GDP between 2016 and 2070 (2018 Ageing Report).
How DHL is changing the conversation
DHL Supply Chain is one of the four divisions of Deutsche Post DHL (DPDHL). Its company headquarters are in Bonn, Germany. In 2018, the DPDHL generated a revenue of €61 billion, with DHL Supply Chain employing more than 150,000 employees globally. The supply chain part of the business provides contract logistics solutions for customers from a range of sectors.
“The ageing workforce is often portrayed negatively, with claims of productivity dips, expense to hire, inadaptability to change and working with new technology and low motivation levels without the data to qualify them,” notes Lindsay Bridges,
Senior Vice President of HR, UK&I. “Phrases such as ‘workforce crisis’, ‘talent gap’ and ‘skills shortages’ are often used. However, I think the conversation needs to be about how to take advantage of the experience and knowledge that older workers can offer businesses.”
DHL, for example, has a number of measures in place to support older workers. “In terms of flexibility, we offer part-time, seasonal work, phased retirements, job share and compressed hours,” says Bridges. “For ongoing career development, we extend all our career models to all ages, creating new development paths and roles for workers at every stage of their career.”
It also tries to showcase a number of ‘age-positive’ role-models throughout its recruitment marketing and has multiple entry points into the organisation that are age positive.
“We make it obvious in job adverts which kind of fluid work arrangements are available, enabling candidates to have a conversation about the flexibility they need,” Bridges explains. “As a business, we have broadened the range of adjustments on offer in terms of hours, schedule and location to adapt to the needs of our workforce and we try and reflect this.”
It also has a re-entry programme for military leavers, who tend to be of a slightly older age. “We work with the Career Transition Partnership to enable people who are leaving the armed forces to successfully transition into a new career,” says Bridges.
In order to ensure younger workers don’t miss out, it run an emerging talent programme too, which focuses on first-time entrants into the logistics profession. “We offer a competitive ‘Future Leaders’ graduate scheme and apprenticeships aimed directly at school leavers,” Bridges explains.
In fact, 2019 saw the biggest intake of graduates and apprentices for DHL, with 105 new candidates joining schemes including the graduate programme in September.
Bridges believes that companies that invest in understanding the changing trends within the workforce will thrive. “Companies who plan, design and experiment with workforce strategies, policies and management approaches for longer working lives will reap the rewards in the long term, and those that lag behind could likely face that talent gap and skills shortage.”