Making work 'work'
In this podcast, Mercer thought leaders, industry experts and business visionaries share big ideas and best practices to help you transform your organisation, build great workplaces and shape a more equitable and sustainable future – a future where work ‘works’ for everyone.
Making work ‘work’ is a podcast from Mercer Workforce Solutions.
Episode 10: From tech trends to HR transformation: HR in the age of AI
Leader for Digital HR and Technology Advisory practice, Mercer Pacific
In this interview, Cynthia Cottrell welcomes David Guazzarotto, Leader for our Digital HR and Technology Advisory practice, and an authority on digital transformation for the workforce and reimagining HR for the digital age. They discuss the landscape of HR transformation, particularly in the context of generative AI and technology advancements. The conversation centres on the impact and immense potential that technology offers HR and the workforce.
Five key takeaways from the interview:
- Opportunities and challenges for HR in the age on generative AI: Nearly 75% of surveyed companies by the World Economic Forum are expected to adopt generative AI. Mercer's global Talent Trend study also highlights that executives' top priorities include redesigning work for agility which will require them to re-design their HR function.
- Human-centric approach: David emphasises the importance of being "digital" rather than just "doing digital." HR should focus on understanding the needs of employees and aligning technology to enhance their experience and productivity.
- Redefining work: Around 60% of current jobs didn't exist in the 1940s, showcasing the need for reskilling and adaptation to new roles. HR's role is to lead organisations through this change and identify critical future skills for the digital age.
- Transformation challenges: Around 80% of HR tech projects fail to achieve intended ROI or solve business problems. David emphasises that organisations should focus on problem-solving rather than adopting technology for its own sake.
- Strategic intent: David's recommendations for organisations include starting with a people-centric approach, embracing digital transformation as a cultural shift, and taking intentional steps toward technology adoption aligned with the organisation's strategic agenda.
“You can't just do digital, you can't just have technology be an adjunct to what we do, we shouldn't throw it over the fence to our IT folks, we should really own it and understand how we can use the technology to drive and help us be a great strategic function that HR could and should be.”- David Guazzarotto, Leader for Digital HR and Technology Advisory practice, Mercer Pacific
"80% of projects in the HR Tech space fail. We need to get better at that. And the only way we're going to do that is to stop pushing the technology at everything. I think the opportunity for us and what I like personally working with clients is to help them really understand what is their strategic agenda?"- David Guazzarotto, Leader for Digital HR and Technology Advisory practice, Mercer Pacific
"This is an amazing opportunity for HR to help the organisation think about work differently and bridge that gap between what it means to do work in this new era of AI."- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
Women continue to be underrepresented in STEM fields. Learn how Techgirls is nurturing your talent and helping bridge the gender gap.
Did you know that in Australia, the number of software engineers outnumbers plumbers, hairdressers, or baristas1? Despite this, only 15% of Australia's STEM skilled workforce are women2, a stark contrast to the nearly 50% female participation in the broader workforce.
Today, we delve into the efforts to bridge this gender gap in STEM fields. Our host, Cynthia Cottrell, shares her experiences as a woman in STEM, reflecting on the challenges she faced as one of the few females in her systems engineering major over 25 years ago. To shed light on empowering the next generation of girls in STEM, Cynthia sits down with Jenine Beekhuyzen, the visionary founder of Tech Girls Foundation. This remarkable organisation is on a mission to inspire young girls to pursue STEM careers through innovative initiatives and programs.
In this captivating conversation, Cynthia and Jenine underscore the importance of female role models and how witnessing successful women solving significant problems in STEM can ignite a spark of inspiration in young girls. They emphasise the need to create a supportive community that nurtures young talent and explore the role organisations play in promoting diversity and inclusion in their workforces so that everyone can achieve their potential, or as Jenine says, bring their 'awesomeness' to work.
Here is a condensed version of the conversation – it’s been edited for clarity and concision.
Cynthia Cottrell: Today we're going to explore a workforce challenge that is near and dear to my heart, and it represents the life’s work of my guests today. The topic is women in STEM.
Australia's STEM skilled workforce significantly lacks female representation, with only 15% of women compared to nearly 50% in other industries. This underrepresentation is concerning, especially as tech jobs have grown at a rapid rate since the mid-1980s, comprising a significant portion of the workforce.
On a positive note, there has been a 24% increase in the number of women enrolling in STEM courses at universities between 2015 and 2020, outpacing the 9% increase among men. We are seeing the right trajectory of building the pipeline of females who could go on to take STEM qualified jobs.
But we must ask if this progress will be sufficient to bring about a significant change. As a mother of two girls, I'm particularly invested in seeing more females taking on STEM roles. I am aware that my daughters are fortunate to have both parents with engineering degrees, making STEM discussions normal in our household. Yet, I know this is not the case for many girls, who may find themselves in the minority when it comes to their studies, interests, or hobbies in STEM.
To address this issue, Mercer is working with the Tech Girls Movement Foundation, supporting initiatives and programs that aim to cultivate future female STEM leaders. The Techgirls envisions a society where girls confidently lead in STEM entrepreneurship and contribute to their communities and the economy. Today, we have the privilege of speaking with the founder of the Tech Girls Movement Foundation, Jenine Backhausen. Welcome to the podcast, Jenine.
Jenine Beekhuyzen: Thank you, Cynthia. I love the story about your family, and I'm putting your girls on the list of our recruits for next year.
Cynthia Cottrell: Please do. I'll let them know.
Jenine, tell us a bit more about your background. You know what attracted you to the field of STEM careers and what drove you to create the Techgirls Movement 10 years ago?
Jenine Beekhuyzen: Thanks, Cynthia. You are an incredible role model for your girls. Your girls are fortunate, they can see you doing these incredible things, solving problems that are important. Role models are critical, if you can't see it, you can't be it.
In my experience, having those role models, having mentors, having people to show pathways that we may not have seen otherwise, is really important. I've had many role models and mentors who paved the way for me to be here, and I wouldn't be here without them. Certainly, I have technical skills, I have abilities to solve problems in our communities and I encourage the community of young people to do the same. But I’m building on the back of other people in front of me who have shaped the world with technology.
There are so many interesting technologies in the world today, how can we use them for good? That's really what Techgirls is about, using technology for good and finding problems in our community and encouraging young people to be empowered and courageous and solve problems where others haven't done before them.
Cynthia Cottrell: That's awesome, Jenine, and I love that saying “you can't be what you can't see.” I'm going to reveal my age a little bit, but when I was going through my engineering degree more than 25 years ago, I was one of only three in my graduating class in my major in systems engineering. I do remember feeling isolated at times and, certainly not amongst a lot of other females that I could confide in and or discuss how I was feeling as I was going through my studies. But I was able to push on and I did have a wonderful network of family and friends who supported me.
As you talk about the vision of Techgirls and its mission to provide support, encouragement, and confidence, I believe there's a significant emphasis on building confidence, particularly in fields where females are a minority. Jenine, could you elaborate on the specific activities and support that Techgirls offers and share some insights into its impact?.
Jenine Beekhuyzen: Thanks, Cynthia. I think confidence comes from a number of sources, not just awareness of technology and its problem-solving potential, but also having hands-on digital skills. According to the UN, women and girls are lagging behind in terms of digital skills. We urgently need them to be part of shaping future solutions, but for various reasons, they are just not there.
Techgirls aims to tackle this issue by offering girls choices in life and equipping them with digital skills. These skills are as essential as English and math literacy in our daily lives, and we all need them to thrive. Through Techgirls we foster hands-on learning and building confidence. Our goal is to empower everyone, not just girls, to utilise technology in a way that benefits us all.
Cynthia Cottrell: Let's step back a little and just think about why this is so important now? I just talked about what it was like 25 years or so ago and you've talked a bit about your early career in STEM and here we are still talking about this today as an urgent need for the future of the workforce.
I was reading about a study that suggests that if AI was behind a lot of the hiring today, AI, would actually hire more women than if humans were doing the recruitment. A statement like that sounds great but is AI really helping us create a more diverse workforce? What are your thoughts on how this world of AI and those behind building these very powerful platforms will shape the future of the workforce and society?
Jenine Beekhuyzen: Let's break this down into two parts. For the past 24 years, I have been researching and exploring the underrepresentation of women in technology and STEM fields. In 1997, I was fortunate enough to have a few role models who were academics investigating the gender gap in tech. They were pioneers in this field and identified a lack of women graduating with information technology degrees at Griffith University. Joining their research team allowed me to study this issue ever since. This brings us to today, and surprisingly, not much has changed in almost 25 years in terms of the purpose of why I do what I do and why this is important.
Back in 1998, as part of my undergraduate degree, I was already studying AI. In some ways, the subject isn't entirely new. Even at that time, there were concerns about the groups being left behind and questions surrounding AI's role in both advancement and marginalisation.
In the AI space, marginalised voices are often further marginalised. I love the study that you mentioned because it challenges the prevailing narrative that algorithms used in human resources systems are based on historical data and perpetuate biases against women. There are studies suggesting that AI has excluded women from recruitment processes. I'd love to explore that further because the evidence so far doesn't fully support that possibility. I think if that's possible, that’s excellent. But that's not what we've seen so far and that’s certainly prompted me to do what I do, because I believe that these technologies can inadvertently exclude certain populations, and that and this lack of diversity hinders the development of genuinely useful digital futures.
Cynthia Cottrell: When we consider how technology and platforms are developed without enough diversity behind the process, I'm reminded of my phone's design. Even today, I can't comfortably hold it in one hand and swipe from left to right, as my finger can't reach across the screen's width. This suggests that the phone's designer likely had much bigger hands than me, and probably bigger than most women who use this device. It makes me wonder how different the world would be if we had more diversity and diverse perspectives involved in designing these platforms, whether it's a phone or the powerful systems responsible for hiring, selecting, and inferring knowledge. The reasons behind the need for diversity seem apparent in our daily experiences, don't they?"
Jenine Beekhuyzen: I love that example and I have another telling instance. When we started using our phones to make videos, the videos would always default to a certain orientation. And that was because it didn't actually cater for left-handed people. This highlights the importance of embracing diversity in so many different levels, not just around gender. There are so many ways that we can tap into all types of diversity.
Cynthia Cottrell: Coming back to the impact of Techgirls, this is the 10th anniversary of the foundation, so lots of girls have passed through the program. They become they can start the program as early as age six. Is that right?
Jenine Beekhuyzen: Typically, our program caters to eight-year-olds, but we've even had seven-year-olds asking to join the program. Research tells us that girls opt out of STEM as young as six. To counteract this trend, we conduct workshops targeted at girls from a very young age, aiming to introduce them to the world of technology and its vast potential. By doing so, we hope to open up a world of possibilities for these young minds and inspire their curiosity and interest in technology.
Cynthia Cottrell: Let's talk a little bit about your impact over the years. You have an incredible job, being able to wake up every morning, knowing that you have played a role in shaping how countless young minds perceive STEM and careers. I'm eager to learn more about the programs you run and the impact they have had on individuals and communities alike.
Jenine Beekhuyzen: Our journey started 10 years ago on International Women’s Day. For me, it meant turning research into practice, understanding the problem, and working towards solutions. We know why we don't have enough women in the technology space and more broadly in STEM. The challenge lies in finding practical ways to change that.
So I designed a program called Techgirls aimed at tackling the lack of visible female role models in technology and demystifying technology-related professions. Unlike careers like doctors or lawyers, the role of a technologist may not be as widely understood. Even in the tech industry, there's often a lack of awareness about what we do. To bridge this gap, we introduced a campaign called Techgirls Superheroes. It comprises a series of books that portray women in technology as superhero characters who are changing the world. These stories aim to inspire and illustrate the incredible impact women can have in the field of technology.
The challenge for me in STEM and in technology, is about how to engage young people in a place where they don't feel welcome or comfortable. So let's bring your superpower to STEM when you might not feel 100% worthy of being there and let’s use your superpower and give it a try.
When I talk to young people and I ask if they could you do “x” technically, they go, ‘no, no, no, I couldn't do that,’ and I say ‘well if you could do it as a superhero, how would you do it?’ Then they give me 10 ways they could do it. This is what Techgirls is about, engaging young people to find their best selves and realising that STEM is an option for them.
That's what we do in our program. We've done it through our books and we've done that through our competitions. The competitions encourage the girls to find a problem in the community and solve it. We have mentors working with the girls and helping them understand how they can contribute to the world through STEM.
Cynthia Cottrell: I really enjoyed our work with Techgirls in one of the competitions. What a neat way to bring out the innovation and the ideas and the solving of problems through STEM techniques that these young girls pursue as part of the program.
I know that when we had a chance to host nearly 100 school age girls in our offices here at Mercer, where we talked about problems from right across the industry, I was absolutely knocked off my feet by the practical, innovative, creative ways that these girls approach the problems that my business thinks about all the time. Sometimes we need to give confidence to these girls so that they can approach these problems in a way that may be very different from the way that we look at them in the corporate sense, or even from the adults’ perspective. I think that those competitions that you run are a really neat way to apply STEM and in a fun way. I mean, who doesn't like to win an award?
Jenine Beekhuyzen: I love the concept of competing and I think in Australia in particular, we like competing, and there's something about when the girls get in the room together at the end for the showcase and they realize there are a whole bunch of other girls like them that are giving STEM a go. I think the competition is a great motivator. It's not about giving awards to everyone, but it's about recognising the most innovative ideas.
Cynthia Cottrell: Speaking of the impact this program has had on girls, I've got a story from one of your Techgirls alumni that I would like to play for you. So let's roll tape.
I competed in the Techgirls Competition when I was in year nine. The app I created was Vocabulary Voyages - a gamified studying for the NAPLAN testing. I had absolutely no knowledge of coding or the technology world before the competition. After I did the competition I decided to study computer science at university and probably without the competition I would not have gone that path.
Today I’m software engineer at Atlassian. I also run a business on the side with my partner. We create custom websites and technology as well as apps. So I’m still continuing on with my app development journey.
Jenine Beekhuyzen: Kira is one of our many alumni who have shown that, again, if you can't see it, you can’t be it. STEM wasn't a pathway she had considered but the program inspired her to pursue a career as a computer scientist. What didn't come out in the story that she shared was the many awards that she has won as part of her studies and how she's contributed to breast cancer technology and detection and made incredible advances for how we use technology in a place where it's important for women. I think we can all learn so much from Kira.
Cynthia Cottrell: I expect that we'll be seeing a lot of Kira for years to come. What would be your recommendations to organisations who want to try and hire a Kira or even nurture that spirit of innovation that she exhibited in her time at Techgirls.
Jenine Beekhuyzen: It's a great question, Cynthia, and I think it comes back to what you were talking about before. It's crucial to empower young people by giving them a voice and recognizing the value of their ideas in shaping our products and services. The misconception that young people, particularly those always on their phones, don't have anything useful to contribute is indeed shortsighted.
Now, when it comes to attracting more women to STEM, the first and essential step for organisa tions is to address the gender pay gap. They have to rectify any disparities and level the playing field. This is an achievable and straightforward measure that can create a more inclusive environment and encourage women to engage more confidently in STEM-related fields.
Another critical aspect is having an open mind about the opportunities where women can contribute. It's common to fall into the trap of stereotypes, assuming that women should primarily be in administrative roles or are not capable of taking on management positions. The key lies in recognising and appreciating the talent and potential that women possess and providing opportunities for growth and advancement.
Cynthia Cottrell: You shared a highly practical tip with me last week that I've already begun implementing at Mercer. It's about 'inviting the opportunity,' and I believe many of today's listeners will find it incredibly useful for their organisations. Could you please elaborate on this concept?
Jenine Beekhuyzen: I attended a conference in China where I had an interesting encounter with a computer science professor from the US. She shared an enlightening observation about her students' motivations for studying computer science. When she asked male students why they chose this field, 80% replied that it was because they were good at it. However, the female students gave a different response - they said they were studying computer science because they were invited to do so. Essentially, they were told they would be good at it, even if it wasn't something they initially considered. And they succeeded. This insight struck me as powerful. Many times women, even today, will have a go at doing things because they were invited or encouraged, not because they thought they were inherently good at them.
As leaders, we should actively seek out individuals in our organisation and provide them with opportunities to shine. Let's give them speaking roles in meetings, invite them to lunches, and explore ways to include them that we may not have considered before. It's crucial to identify those who may have been left behind and give them the spotlight they deserve.
Cynthia Cottrell: It sounds so simple, but there is a psychology behind inviting someone as opposed to nominating or recommending them. An invitation, just like to a wedding or a birthday party or to a career, represents a deliberate choice. It means that someone has recognized you, somebody wants you there. So to all women out there, we're eagerly waiting for your response. We want to see more of you in STEM and we can't wait to have you join.
Jenine, thank you though for joining us today. Your experience and insights will surely help many of our listeners today as they work towards making their workforces more diverse, more equitable and certainly more inclusive for the next generation.
Jenine Beekhuyzen: Thank you so much for the great work you're doing in this space at Mercer and beyond in your family and in your community, and I invite everyone to join the Techgirls community and make a difference.
Cynthia Cottrell: Thanks, Jenine.
“The hyper digitalisation of everyday life, along with the increasing prevalence of low code or no code tools, indicate that STEM skills will be essential for most individuals, regardless of their roles.”- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“Digital skills are as essential as English and math literacy in our daily lives, and we all need them to thrive.”- Jenine Beekhuyzen, Founder and CEO, Tech Girls Movement Foundation
“Many times women, even today, will have a go at doing things because they were invited or encouraged, not because they thought they were inherently good at them.”- Jenine Beekhuyzen, Founder and CEO, Tech Girls Movement Foundation
“Unlike careers like doctors or lawyers, the role of a technologist may not be as widely understood.”- Jenine Beekhuyzen, Founder and CEO, Tech Girls Movement Foundation
Episode 8: The impact of generative AI on HR and the workforce
President, Career, Mercer
In this captivating episode, our host Cynthia Cottrell asks Ilya Bonic, the President of Mercer's Workforce Solutions business and Head of Mercer Strategy globally, a thought-provoking question: "Do you think AI will ever replace your job?" This question sets the stage for the conversation as they delve into the challenges and opportunities presented by AI, exploring its impact on the present and future of work.
Their conversation covers:
- HR’s crucial role in integrating AI into business and culture
- Reshaping work to leverage AI for the benefit of organisations and their workforce
- Bringing fairness and minimising bias in decision-making with AI
- Embrace the cultural shift in the way we work, as AI complements and enhances our capabilities
This is an insightful conversation about the incredible potential that AI holds for our future. Tune in now and be part of the transformation.
“It’s about the people, not the technology. Redesign work so AI can be applied to benefit the workforce.”- Ilya Bonic, President, Career, Mercer
“Organisations need to orient themselves to the human experience that they're trying to drive with the help of technology.”- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“Be digital, don't do technology. Technology is the tool to get things done. The being digital is everything that goes around it.”- Ilya Bonic, President, Career, Mercer
“We have to think of how work is designed and make room for augmentation and new ways of working with generative AI.”- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“One of the roles of HR is to constantly fine tune the AI to make sure that it minimises bias.”- Ilya Bonic, President, Career, Mercer
Episode 7: What makes a great place to work?
Chief People Officer, Mercer Pacific
Step into Mercer’s world of work and discover the secrets behind creating a truly great place to work. In this captivating episode, our host Cynthia Cottrell engages in a thought-provoking conversation with Gaye Morris, Chief People Officer at Mercer Pacific. They delve into the dynamic landscape of modern workplaces and explore the initiatives spearheaded by Gaye, resulting in Mercer's coveted nomination for the prestigious 2023 AFR BOSS Best Places to Work list.
You will discover how Gaye and her team cultivated an exceptional culture of collaboration during the acquisition of BT Super Fund and gain insights into the transformative power of distributed leadership, learning and development, and the importance of creating a relatable organisation.
Are you ready to unlock the secrets of what makes a remarkable workplace? Tune into a stimulating discussion that tackles the pivotal role of Chief Human Resources Officers (CHROs) in today's challenging times.
“It’s a responsibility of all leaders to create healthy and resilient cultures that attracts great talent.”- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“If you create a really inclusive environment, diverse people will come and they will stay and thrive.”- Gaye Morris, Chief People Officer, Mercer Pacific
"I think this is the era of the CHROs. They are at the forefront, shaping the way organisations operate. But with great opportunity comes great pressure."- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“People are spending a lot of time at work, either on video call or in the office. They want to feel that they can bring their whole self to work.”- Gaye Morris, Chief People Officer, Mercer Pacific
“Chief People Officers cannot do it all themselves, distributed leadership throughout the business is really key for CPOs to make a difference.”- Gaye Morris, Chief People Officer, Mercer Pacific
Episode 6: Why it's time to join the skills-powered movement
Global Transformation Leader at Mercer
One of the biggest challenges for organisations has always been how to monitor the skills they have and the skills they will need in the future. But as Cynthia Cottrell, Partner and Workforce Solutions Leader at Mercer Pacific, and Ravin Jesuthasan, Global Transformation Leader for Mercer, discuss in this episode, a new way of looking at work is emerging, one that takes a different approach at building capacity, unlocking potential and managing careers. They describe this new approach as a movement called “skills-powered” and explain that when skills (not jobs) become the currency of work, this not only helps organisations become more agile and resilient in the face of constant change and uncertainty, but helps secure futures – for workers and societies.
Tune in to listen to Mercer’s thought leaders discuss the evolution of work, how companies are using Talent Marketplaces to power their skills journeys, the role of AI and tools like ChatGPT in monitoring and matching supply and demand of skills, and advice for companies considering or starting their shift towards a skills-powered enterprise.
Learn more about this movement, listen to the podcast now.
“It's been fantastic to be in Australia and seeing so many Australian companies at the forefront of this movement towards becoming skills-based enterprises.”- Ravin Jesuthasan, Global Transformation Leader, Mercer
“There's a great opportunity to help our people discover skills that they didn't know they had, those skills that are important and are worthy of being surfaced so that they can be used elsewhere.”- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“This thing called a job often obscures the true skills of the individual because the job doesn't tap into all the unique capabilities that employees might bring.” Ravin Jesuthasan, Global Transformation Leader, Mercer- Ravin Jesuthasan, Global Transformation Leader, Mercer
“Technologies will continue to get better, but the skills-movement is not about the technology. It’s about a cultural shift—the rewiring of leaders, team members, employees, to take the reins of this journey and own it and make the most of this moment.”- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“Organisations who have insight into their skills are better able to reward talent based on the skills they bring, are better able to deploy talent to new opportunities, they're better able to upskill and reskill talent.”- Ravin Jesuthasan, Global Transformation Leader, Mercer
Episode 5: Becoming a skills-powered organisation: Arcadis' journey
Global Capability & Workforce Readiness Director, Arcadis
As businesses grapple with the challenge of ongoing labour and skills shortages, a growing number are adopting a skills-based approach to define the skills they will need in the future, flex their workforce, and purposely drive career development.
In this episode, our host Cynthia Cottrell, Partner and Workforce Solutions Leader at Mercer Pacific, speaks with Amy Baxendale, Global Capability & Workforce Readiness Director at Arcadis, about their journey towards becoming a Skills-Powered Organisation (SPO).
Their conversation covers: The business case for change and why now is the time for Arcadis to shift to a skills-based model, why Talent Marketplace technology is critical to enable the transition but culture change is at the heart of this human-centric transformation, HR’s role in this business-led change program, and how to get started with moving from jobs to skills.
Tune in to learn how an SPO talent model can help your business and hear practical steps to get started.
"Shifting to a Skills-Powered Organisation is ultimately a human-centred change program - it’s dedicated to helping your people be the best they can possibly be."- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“There will never be the right time to start this journey. You’ve just got to start. If you don’t start now you are impacting business readiness for the future.”- Amy Baxendale, Global Capability & Workforce Readiness Director, Arcadis
“This is about future-proofing the business; addressing today’s needs while designing the workforce for roles and jobs that may not exist today.”- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“This is a huge cultural shift for a 135-year-old business that will change the way we work and learn at Arcadis.”- Amy Baxendale, Global Capability & Workforce Readiness Director, Arcadis
“Start with the immediate pain points impacting your business, but to truly transform into a Skills-Powered Organisation you need to have a vision where skills will become the currency of the business.”- Amy Baxendale, Global Capability & Workforce Readiness Director, Arcadis
“As a People First business, we have always believed at Arcadis that our people are our most important asset. Now is the time to shift to a Skills-Powered Organisation to empower our people to take control of their careers.”- Amy Baxendale, Global Capability & Workforce Readiness Director, Arcadis
Cynthia Cottrell: Is work working for your people and organisation? In this podcast, Mercer thought leaders, industry experts, and business visionaries share big ideas and best practices to help you build great workplaces, and a future where work ‘works’ for everyone. Making Work ‘Work’ is a podcast from Mercer Workforce Solutions.
Welcome to Making Work ‘Work’. I'm Cynthia Cottrell. According to the recent Mercer Executive Outlook study, 50% of the nearly 400 CEOs and CFOs that responded stated that they anticipate their organisations will struggle to meet demand with their current talent models as they face into persistent labour, skill shortages, inflation, the prospect of global recession, quiet quitting, and a new one for me, “resenteeism”, which is a buzzword now to describe individuals who are unhappy with their jobs, but can't find alternative work, so they are openly now unhappy at their jobs, and the list goes on.
The industries that will struggle most, according to our study, include construction, energy, automotive, and manufacturing. The pace of change in the new world of work seems to be moving at breakneck speed. And scary enough, it will never be this slow again. According to LinkedIn's 2023 Workplace Learning Report, skillsets for jobs have changed by around 25% since 2015. By 2027, this number is expected to double. So how should leaders evolve or rethink their talent models in this VUCA (Volatile Uncertain Complex Ambiguous) world that we live in? Today, I'm joined by Amy Baxendale, Global Capability and Workforce Readiness director at Arcadis. Arcadis is a global organisation with 36,000 people in over 70 countries, delivering sustainable design, engineering, digital and consultancy solutions for natural and built assets. Amy and the team at Arcadis have embarked on the journey towards becoming a skills-powered organisation, an important cultural shift for the 135-year-old company. And it is a major reboot for talent models across that industry. Amy, welcome to the podcast.
Amy Baxendale: It's great to be here, Cynthia. Thanks so much for having me.
Cynthia Cottrell: Amy, you use a really neat term in the conversations we've had in the past that I think you've coined, and it's a way that you've described your career at Arcadis. The term is “squiggly.” Tell us more about what squiggly means to you, and what you're up to and your current role at Arcadis.
Amy Baxendale: Sure, Cynthia. Thank you. So I first joined Arcadis 18 and a half years ago. And during that time, I've lived and worked in five different cities, in four different countries, and this is now my 14th role, all broadly within the specialisms of people and culture, but also in business transformation as well. I'm also a boomerang employee, so I left for 18 months and came back. But I guess for me, the squiggly career piece is I feel really fortunate that I've had the privilege as a career that's been really personalised and aligned to work that I'm passionate about. And my current role really brings together a number of different experiences and opportunities I've had over that time, and really brings together talent acquisition and capability development very purposefully at global levels, so that as we, as a business, understand more about the skills we need now and in the future, we can make more- informed decisions about whether we build, buy or borrow that talent that we need now and in the future.
Cynthia Cottrell: That is certainly a “squiggly” career path. And I think it sets us up nicely to talk about this journey that you and Arcadians everywhere are just embarking on. So, before we get into more about that journey, let's just sort of step back and zoom out for a little bit. Why is this shift to skills powered for Arcadis so critical at this time? Why now?
Amy Baxendale: I think for us at Arcadis, the journey towards becoming a skills-powered organisation really is genuinely considered by the business to be central to our business strategy because we really see it as an enabler to build a workforce that's ready for the future, within the context of what we all know is an ever-evolving world of work. But in order for us to continue to grow and scale globally as a business, it's really critical that we have better insights into the skills that we need now and the skills that we need in the future. So, I guess to bring an example to this, Cynthia, during 2022, we've acquired four organisations. So, we've welcomed 6,000 new Arcadians into the business. If we had been further on our skills transformation journey, then we would've been able to further accelerate our integrations by really quickly understanding more about the talent that's joined our business, and then better identifying opportunities to connect those new skills to immediate or emerging client needs.
Cynthia Cottrell: It is all in the timing, isn't it? Everyone is talking about skills shortages. We opened with that today, and it is absolutely top of mind for executives everywhere. With that in mind, Amy, it does sound like the time is now, isn't it, for this very critical shift to skills powered? Tell us more.
Amy Baxendale: Yeah, I mean, you've mentioned a number of the things that keep us as HR professionals up at night, but at Arcadis, we've always believed that our people are our most important asset. So, we think now is the time to shift to a skills-powered organisation for multiple reasons. And I could go on all day, but I guess if I think about the top three, the first one is really around transforming access for our people to enable much more diverse career-pathing. So, moving from majority of people thinking about a really structured, usually quite hierarchical, probably promotion-based roots to development, to really thinking much more about how do we give them access to more career-enhancing experience, and as I discussed earlier, what I fondly call squiggly careers, but really to enable much more personalised development planning and growth paths? So that people can have better growth conversations and access more opportunities and information to better take control of their own careers.
As a business a really important one for us is as part of our ongoing evolution and growth, we are going through digital transformation. And as part of this, we've launched the standardised and automate program. So, this is all about identifying, developing and reaping the benefits from having globally aligned processes, definition and much more harmonised ways of working. So as part of this, we'll start to identify opportunities to substitute, to augment and to reinvent work, which will naturally release our people to then be able to maximise their skills in different ways. Also, for our clients, they really benefit, as we are able to more proactively change the way that work can be delivered for our clients.
So, by having the skills- powered organisation program run alongside this, as we increase the knowledge of our people and their skills, we can then provide opportunities for Arcadians to move their skills to where they're needed, both as a business, but also align to their personalised career ambitions as well. So, for us, part of this journey really importantly is we are also looking to support our people to be able to stay relevant for the long term by re-skilling, upskilling and cross-skilling in line with the in-demand skills. So, I suppose the third one for me is this really does allow us to adopt what we are coining an internal-first approach to talent discovery. So, to truly enable us to leverage our global connectivity and have genuine conversations with our clients about skills they need, and the skills that we have in the business, and then being able to identify and mobilize the right talent to help solve those client problems and deliver on those client commitments.
So really, for us, it's about our people, it's about the business and it's about our clients. And I guess just as a business, we're really excited about the opportunity to potentially democratise learning and access to role opportunities across the whole business. To quote Jacqueline, our Chief People Officer, we really see this as an equaliser for all of our people globally because it will help us to have more objective, transparent, and bias-free internal talent processes across the board.
Cynthia Cottrell: Amy, that is so exciting. It is very clear to me, based on the way that you and the organisation have thought about skills, that you have a strong strategic vision for the future of skills, not jobs, as you embark on this journey. Can you just tell us a bit more about how you are thinking about this journey? I mean, how do you get started on something like this?
Amy Baxendale: Yeah, so as we evolved our understanding of the opportunities and the possibilities of a skills-powered organisation and we work with the business to better understand the potential impact, we started to recognise that it was really important to start with our immediate pain points that are impacting our business right now. But to truly become a skills-powered organisation over time, we needed to start the journey with an ultimate vision. And you've just said it there, Cynthia, that vision first skills, not jobs, to underpin all talent processes around the employee lifecycle. So to really make sure that skills become the currency of the business. I think I probably stole that from Mercer, actually. I think that's one of the things you said to me in the past.
But really, how we make sure skills around the whole lifecycle of the employee experience, so that ultimately we attract, grow, and connect talent globally. So, we've really purposefully designed this as a multi- year, multi-horizon strategy, and that's so we can truly embed that skills philosophy in all we do in the business, but really importantly by ensuring we do it in a timely and manageable way in terms of business impact. This is a huge cultural shift for, as you said earlier, a 135-year-old business, that we really will change the way we work and the way we learn at Arcadis. So, it's enabled by the implementation of talent intelligence and talent marketplace technology, but fundamentally it's a cultural shift to our business.
Cynthia Cottrell: You've really hit on an important point I think for everyone listening, and certainly for me, which is treating this journey towards becoming skills-powered as a cultural shift more than anything else, more than the technology implementation and all of the process and things that will have to go into this. You've mentioned as well and recognise that this is a multi- year journey. And I think like all good journeys, it'd be fascinating for us to fast-forward into what does that feel like and what comprises this journey for Arcadis? Can you tell us a little bit about this approach you're taking? Because it feels a bit like a test-and-learn approach as you go through these next few years with the organisation.
Amy Baxendale: Yeah, absolutely. And I'm very conscious of where we're starting now and what we think now will no doubt evolve as we go through this as well. But at this stage, we've set out a five- horizon strategy. So, we're starting with horizon zero, during which we will co-create this full skills transformation roadmap and strategy with the business. And we really want to take that opportunity to establish a clear Arcadis-specific proof of concept. There's lots in the market about people further on the journey. We've got to make it really specific to us at Arcadis. And therefore, the business case with the benefits and the ROI across all the horizons is really a central part of horizon zero, and critical to the point we've talked about, in terms of the focus of change is that our change management strategy and plan is really central to this first phase as we really start to think about the cultural change needed to support the implementation of the full strategy. Each then horizon as we move forward then focuses on the evolution of different talent processes around the employee life cycle. So we go through each one at different horizon points. But really importantly, at each horizon we'll have what we're calling pause, or reflect, or move moments, to really test assumptions on the priorities and ensure that as a business we are still ready to take that next stage.
I think for me, one of the things we've talked about a lot, Cynthia, is that a massive driver for us that I've not mentioned already, I'm going to steal a bit of Deloitte's Human Capital Trends Report here because they articulate it so well. Employees now really want, need, and expect increased agency, choice and influence over the way they work, and also over the organisation for which they work. So therefore, really central to our strategy and approach will be making sure that we've continuously got opportunities for Arcadians to contribute and be part of the design and the evolution of what the future of work at Arcadis will look like.
So really critical for us therefore is conducting pilots, so that we're getting those proof points specific to our business and really utilising those to test and learn as you say and adjust our approach as needed. And also bring success stories that we can then take for a wider global rollout. I think one thing for me that's been really, really critical is saying from the start and being really committed to the start about having a cross-business steering committee. So, this is really central and really critical because we've got what we call business change sponsors. They're representatives of the global business areas, the leadership teams in our business, and so they're part of the skills- powered organisation team and responsible for really designing, building, and implementing the change needed in the business.
Cynthia Cottrell: I think what is clear to me is that the integration with the business and co-creating with the business is essential to the transformation and the roadmap that you've laid out. But as you mentioned as well, there are numerous talent processes that are impacted by this new way of thinking. Skills, not jobs, right? And so what is the role that HR plays in all of this from a transformation perspective?
Amy Baxendale: Yeah, great question, Cynthia. And it's something we've been very purposefully thinking about from the start. I mean, members of the people team are involved throughout the skills-powered organisation structure, but I will say it's very purposefully a business-led change program, to which the expertise of the people team play a critical role, but alongside and with colleagues from the business. So to bring it to life for you in terms of how this plays out for us at Arcadis, so Jacqueline, I mentioned earlier, our Chief People Officer, she's a joint executive sponsor of the program, along with our Chief Operating Officer. I'm then the senior responsible owner of the project overall, and the program manager also sits in the people function.
However, the steering committee, as I just mentioned, is made up of cross-business representation. We also have change in communications professionals from those specialised functions, and SMEs from all parts of the business. Some of them, as you absolutely say, from the people function, but also from other parts of the business as well. And they're all involved at different stages depending on the focus of the horizon.
Cynthia Cottrell: That sounds fantastic. And I think again, that wonderful joined-up view between business, people and culture, but most importantly, as you've mentioned, from Jacqueline through to your COO being the executive sponsors co-leading this is I think it's truly something that many organisations will tune into and look to try and find a way to replicate in their journeys as well. I'd like to take us in a different direction for just a moment. Because you're living this experience, there are a number of listeners who are thinking about starting a journey similar to this. And as they're thinking through this with their own organisations, it'd be interesting to hear your perspective, based on what you've learned, how this journey could get started. Skills-powered is not a new concept per se in terms of... If anything, I can tell you based on the number of organisations I speak to on any given week, this is certainly one topic that comes up quite often. But getting started is certainly new for many organisations. Could you just tell us a little bit about how you guys got started at Arcadis, and any tips and tricks for the organisations listening?
Amy Baxendale: Yeah, definitely. And as you say, Cynthia, there's a number of organisations already on the journey. And I think for any organisation, and I've spoken to many of them, for everybody, this is a multi-year whole-business change program. But every organisation approaches it, and I'm sure you hear this from your clients, everyone approaches it in a different way, and therefore at a different pace. I think for me, the advice would be to start by determining the immediate pain points relevant to your specific business and build further from there. Because what's right for us at Arcadis, won't be right for another organisation.
But I guess where we started was really understanding the art of the possible. So really starting to understand what an earth all of this stuff means. So I listen to podcasts all the time, listen about skills, and talent intelligence, and talent marketplaces, and deconstructing jobs. And a year ago it all made logical sense to me, but I couldn't work out how to piece it all together to be able to talk to the business about it. So, to be honest, to start off with it was really about educating myself for me then to bring others in the business on that journey. And there's so much thought leadership, as you say, Cynthia, around this. So I devoured a lot of that.
But also, really importantly, and the big advice I'd say is there's so many providers and companies in the market either who have supported organisations in the implementation and change journey, or those that offer the technology that enables those transitions, but also clients of both of those types of organisations who've embarked on the journey. And I spoke to lots and lots of them. And that really helped us to understand more about what it really means to transition to a skills-powered organisation.
And then from there, we started to work with the business to think about, okay, if this is the art of the possible, how could those opportunities support and respond to real challenges relevant to us, to our people and to our clients? The added complexity for us at Arcadis is we are approaching this from the start globally. Many organisations have done it in parts of their business or are only based in one particular region. We really are looking at this holistically as a business.
So, I think I've probably mentioned this a couple of times, but it's probably the key point for me to reinforce that from the start, this has been a co-creation. So this isn't just the People function. We've had our global transformation engine, we've had our global operations and project services, we've had the technology function. And really critical, as I mentioned earlier, the global business areas. So they're the people who support our clients with our services and solutions delivery. So as a People function, we've got a critical role to play, but as part of a really collaborative business-wide team.
And I suppose as part of your question around how'd you get started, very early because of all I've talked about so far, it became really clear that because this is a cultural change program and one that we need to take a human-centred change approach around, we have to have implementation partners to support us with that. But also, to scale this globally and be future-proofed, it also needs to be technology-enabled as well. So, we purposefully from the start looked separately at an implementation partner and a technology partner to enable us to evolve our ways of working and support Arcadians globally to change.
Cynthia Cottrell: Sure. And I think with any change of this nature, and as you point out, it's not just a technology implementation, but more importantly a cultural shift. All of this takes a lot of energy, a lot of resources. This is not something ChatGPT can solve for anybody overnight. In fact, it'd be really great to hear a little bit about how did you get that business case across the line? There's going to be resources, investment, time over multiple years by the organisation to be all in on this, to lean in. Could you tell us a little bit about what that business case process was like, and how did you get it across the line?
Amy Baxendale: Yeah, we started with what I called, a pitch. It really was just describing the art of the possible and the opportunities as we saw it to our executive leadership team. And that was really to get approval and buy-in to just take our thinking further. So, it was very much a kind of pitch at the start. But from there, as we started to work through, we created a business case ‘light’, purposefully named ‘light’. Because for a fully- costed business case, with all of the benefits realisation and ROI fully articulated, we needed to identify who our delivery partners would be because obviously, the commercials differed in different organisations. So, we started with that business case ‘light’, that really thought of all of the different various stakeholders, and articulated the potential benefits from different perspectives that we can understand from speaking to others in the market.
And then it was an approver of that business case light that enabled us to go out to the market for a request for proposals process. And as I mentioned, we did two in parallel, one for the implementation partner and one for the technology partner. And as part of that as well, we had multiple discussions to explore potential funding options, which could be finalised once we knew the commercial impact following the RFP process. I think important for us was during that whole RFP process, we had people from across the business engaged at every stage, so that we really made sure we had diversity of thought, perspectives, and questions that informed the exploration with potential partners. Because again, what we might be looking for from a People team perspective might be different to what different functions or the business are looking for.
And I suppose some of the bits that when I reflect back, what's been really powerful over the last year, because this is such a complex program and it is a long- term commercial investment for any business, your procurement teams, your legal teams, your privacy teams, for those who have got operations in Europe, your works council specialists, they're going to be on your speed dial and they're going to be important to guide you through every single process. Because naturally, the technology to support such a broad range of functionality to enable skills to underpin all talent processes needs to be appropriately understood and implemented and managed, to ensure the highest levels of data privacy.
Cynthia Cottrell: Yeah. Just speaking of the business case, I understand that there was also a unique stakeholder in this from an Arcadis perspective. Can you just tell us a little bit about that stakeholder and how important they factored into this decision to proceed?
Amy Baxendale: Yeah, absolutely. So, as I said, embarking on this journey is a significant multi-year investment, no matter where you decide to start. And there obviously are both internal and external costs to the business, both in terms of the partners that you need to work with and the change load in the business and people in the business to be involved. And it's really hard, actually, to fully grasp what they might be, and a challenge to really consider and help the business think about how best to prioritise investment. But as you say, Cynthia, at Arcadis, we're in a really unique and privileged position to have a foundation called Lovinklaan Foundation. So it's a foundation that's led and managed by employees, and it's the largest shareholder in Arcadis. And Lovinklaan's mission is to ensure the continuity of Arcadis, and to provide Arcadians the opportunity to reach their full potential.
Cynthia Cottrell: I just love that.
Amy Baxendale: I know it's the best, isn't it?
Cynthia Cottrell: I think it's the best thing. I could just see organisations wanting to adopt something like that into their primary shareholder group to be the employee. So sorry to interrupt. I just think that is so awesome.
Amy Baxendale: Yeah, it is really unique. And I guess the clear alignment between Lovinklaan's mission to ensure that continuity of the business and Arcadians and the vision of a skills-powered organisation, when we engaged with Lovinklaan early on, those two things really came together really naturally. And we were extremely grateful that they have co- invested with Arcadis in order to act as an incubator during the horizon-based implementation. So yeah, it's really unique to Arcadis, but it's also a really great position to be in to support us with being able to move forward with skills- powered organisation.
Cynthia Cottrell: Well, Amy, we are so excited about the start of this journey and hearing it from you as you start. Clearly, the energy and excitement is there. And just when I try and sum up what we've heard today and what you've armed yourself with and the organisation as you embark on this journey, I think of three key points for our listeners in particular.
You and the team at Arcadis have recognised that shifting to a skills-powered organisation at the end of the day is a human-centred change program. And at the end of the day, it's dedicated and committed to helping humans, Arcadians everywhere, helping them be the best they can possibly be at Arcadis. So, I think that is a neat takeaway from all of this, that sometimes we can get caught up in the technology or in the processes and in the governance and things like that. But I like that you've anchored into the human-centred piece around this as it relates to change.
I think the other piece you were really clear about that I think many organisations can take away from is that this is a business-led change. Yes, it has a lot of impact on talent processes and the way in which people and culture and HR organisations will navigate, but at the end of the day, it's business-led. And I think that's really an important nuance to this shift. And I think the third thing I heard from you is that we're recognising that this is about future- proofing the business. So you talked a lot about the vision for skills. And that yes, you are addressing current business needs, but ultimately you are designing a workforce for roles and jobs that may not actually be in place today. And so you are indeed focusing on the future-proofing aspect of what skills-powered means today.
Amy Baxendale: Yeah, and I think that last point you say there, I think you're absolutely right, and that's been really central to our thinking throughout. There's a really important point around this, around business readiness and the right time. Because ultimately, to future-proof yourself for the yet unknown than never before, if you don't start now, then you won't be ready in five years’ time. And I got a piece of advice really early on that there will never be the right time to start this journey, you've just got to start. And I think that's what we've talked about as a business going through that if we don't start now, we are impacting our readiness for the future.
Cynthia Cottrell: I couldn't have said it better. In fact, we might have to end on that note. We want to leave it on a cliff-hanger for today, everyone, because we can't wait to have Amy back on the show in a little bit of time in the future, just to see and check in on this journey. If that's okay with you, Amy?
Look, I just want to thank you for joining us today, your experience, your insights. This is happening in real time, and we're just so glad you took some time out today to share that with our listeners as they are considering their next steps to becoming a skills-powered organisation.
Amy Baxendale: My pleasure. Thanks so much for having me, Cynthia. And as you say, we're the start of the journey, so there's still a lot of learning to go. But yeah, great to have talked it through with you today. Thank you.
Cynthia Cottrell: Great. Well, I'm Cynthia Cottrell, thanks for listening to Making Work ‘Work’ from Mercer Workforce Solutions. See you next time.
I hope you enjoyed today's podcast and thank you for listening. Please subscribe to keep up to date with our latest episodes. And if you have any questions, get in touch with us via our website at mercer.com.au.
Episode 4: Attracting and motivating talent in inflationary times
Head of Market Insights and Data, Mercer Workforce Solutions, Pacific
Head of Mercer Workforce Solutions, NZ
Whether you're in the boardroom or living room, inflation and the rising cost of living continue to dominate the conversations in 2023. Employees are worried about their finances and the prospect of limited pay increases. Executives are concerned with the impact of inflation on both their businesses and talent management decisions. Where does this leave workers and their employers?
In this episode, our host Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific, and guests, talk about how organisations can respond to the crisis by centring their value proposition and business model on the needs of their workforce and what support they should provide to promote higher engagement and retention. They also cover key trends from Mercer’s latest salary and benefits surveys, the role of purpose, culture and the EVP, and practical steps that organisations can take today to navigate the current environment.
"The onus should be on organisations to really think about improving work and how it’s designed by placing the employee at the centre of the experience."- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“If an employee is unhappy with their compensation, they generally won't raise it and will walk away in search of higher paid opportunities.”- Andrew McKechnie, Head of Workforce Solutions, Mercer NZ
“There're jobs out there getting really nice increases. Jobs in IT, sales & marketing and engineering are getting pay premiums up to 22% higher than the norm.”- Chi Tran, Head of Market Insights and Data, Workforce Solutions, Mercer Pacific
“Organisations thinking about personalising their benefits are thinking about how life fits into work and not the other way around.”- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“The gift of time is the fundamental trend that is above the rest.”- Andrew McKechnie, Head of Workforce Solutions, Mercer NZ
“You need to understand the demographics in your organisations, the different personas, and create an EVP that meets the needs of all your employees and not just certain groups.”- Chi Tran, Head of Market Insights and Data, Workforce Solutions, Mercer Pacific
Cynthia Cottrell: Is work, working for your people and organisation? In this podcast, Mercer, thought leaders, industry experts, and business visionaries share big ideas and best practices to help you build great workplaces and a future where work, works for everyone. Making Work, Work is a podcast for Mercer Workforce Solutions.
Cynthia Cottrell: Welcome to Making Work, Work. I am Cynthia Cottrell. Inflation and the rising cost of living. It's something everyone has been talking about and it's likely to continue to dominate conversations whether you're in the boardroom or you're in your living room. Let's be honest, AMPs 2022 Financial Wellness Research1 shows that a growing number of workers right across Australia and New Zealand are worried about their finances and stressed about the cost-of-living pressures and the prospect of limited pay increases. So, where does that leave workers as we face into the prospect of another few years of inflation and cost of living pressures?
This is what we know. Talent shortages, labour market tensions and ramping inflation across all industry sectors have highlighted this shift in the social contract between employers and employees. We know that from the Mercer's 2023 Global Talent Trends2 report that it's indicated 50% of C-suite executives are saying that they're going to focus on enabling new ways of working that will restore the balance between management and labour.
We also know that at this year's annual meeting at Davos, which is the meeting of the World Economic Forum, that our very own Ravin Jesuthasan, who is Mercer's global transformation leader, presented on the topic of good work goals. And as he points out, organisations need to reinvent their proposition and business model and it needs to be centred on creating a workforce-centric enterprise. And that is actually what's going to become economically viable for all organisations and economies worldwide. And the way to do this is to do it through focusing on what's attractive and what's important to employees.
So, in today's episode, we will talk about how companies are responding to inflation and what are they doing right now and in the future to attract and retain talent during these inflationary times.
Today, I'm joined by Chi Tran, partner at Mercer Workforce Solutions and Head of our data and insights business. She recently spoke with the Australian Financial Review3 about the results of our most recent Total Remuneration Survey, which painted a picture of an Australian jobs market defined by severe labour shortages, large pay rises in some sectors, high rates of staff turnover, and a growing emphasis on non-financial benefits to attract and retain talent. Hi Chi.
Chi Tran: Hi Cynthia. Thanks for the warm welcome. Thrilled to be here.
Cynthia Cottrell: And we have Andrew McKechnie, who heads our workforce solutions business in New Zealand. He's joining the conversation to explore the impact of the current economic landscape on attraction and retention and what organisations can do to ease the financial pressure on employees and make work, work even in inflationary times. Welcome, Andrew.
Andrew McKechnie: Hi Cynthia. Thanks for the welcome and great to be here.
Cynthia Cottrell: It's great to have you both. Why don't we get started when we kind of step back, let's just sort of look at this from a big-picture perspective. What is the total rem survey telling us about what's happening right across Australian and New Zealand, Andrew?
Andrew McKechnie: Thanks, Cynthia. Our New Zealand and Australian Total Remuneration Survey4 shows a median remuneration increase of 3%, that's for the year ahead 2023. And this is across general market. Surprisingly, this is unchanged from the increase from 2022 and what will come as a hard truth for many employees is the significant gap between the median rate and the rate of inflation given rising cost of living and increased mortgage.
Cynthia Cottrell: Effectively Andrew, it feels like we're going backwards, right?
Andrew McKechnie: Well, look, in some respects we are, but the challenge for organisations is really closing that gap because there's only 26% of organisations that are factoring the cost of inflation into their budgets for 2023. So, what that means is there is a considerable gap there for the workforce. And what's interesting is, conversations and approaching an employer around compensation increases is a really tricky thing to navigate. And even for the best of us, it can be an uncomfortable conversation to have. So I kind of liken it to the analogy of the unhappy customer. An unhappy customer very rarely complains, they just don't come back. So if you are an organisation listening to this, the risk is, if an employee is unhappy with their compensation, they generally won't raise it and they'll walk in search of higher paid opportunities.
Cynthia Cottrell: Now that is a wake-up call, isn't it, if there was one for organisations to do more than they are at the minute around understanding employee needs and how they can do more than increased wages if that is one of their levers they pull? But before we move further into that topic, I do have to say that that felt slightly gloomy, Andrew. And I just wanted to ask, Chi, I mean, is it really gloom and doom across all sectors as it relates to wage increases and how organisations are providing financial benefits in their plans this year?
Chi Tran: Definitely not, Cynthia there's definitely industries leading the pack and it's not 3% in the 2022 Total Remuneration Survey. We definitely saw 3.5% for industries like technology, life sciences and mining and metals leading the way. But if you peel back the onion even more and dive deeper, there's definitely jobs out there getting paid really nice and getting really, really nice increases. And we're seeing these jobs in IT, sales and marketing and engineering as well, getting big pay premiums as high as 22% higher than the norm. And we're seeing it's definitely much richer than remuneration. We're seeing voluntary attrition rising to the highest point ever in five years in Australia. And that's just compounding the issue of attraction and retention. We also found in our survey results is that 64% of organisations are reporting a difficulty in hiring and retaining their employees. And we know it's a tough market out there right now. It is an employee's market and attraction and retaining the best people will be even more important in 2023.
Cynthia Cottrell: Thanks, Chi and again, I think we can safely say that there's more to the story than pay. And you mentioned things like voluntary attrition being at its highest point in five years, and as Andrew said, employees are not likely to raise their concerns about pay to their managers. So, the first time a manager might hear about this level of unhappiness leading to a regretful resignation is when that person submits their notice. With all that said, I'd be interested in what you're hearing from organisations about what else they're doing maybe in regards to their benefits and other forms of addressing the needs of their employees.
Chi Tran: Sure. Cynthia, you hit the now on the head. We know pays just really one part of the equation and benefits is where we're seeing organisations make up that difference or the differentiator in the market to attract and retain because it's not always about the money and inflation can impact employees differently. What we're seeing clients do and what we're hearing from them is that there are reviewing their flexible benefits to cover more range or extend more coverage. And it's not just about offering employees a chance to work from home. We know that with COVID that's now a given, it's non-negotiable, but it's about offering differences in that coverage. And what I mean by that is offering your employees different choices when it comes to flexibility. For example, it could be allowing them to work condensed four days a week. And we know Atlassian5 is doing it right now. In fact, Unilever6 recently announced after trialling it successfully in New Zealand that they're going to introduce it now to Australia also. So, very exciting. And then there's having the options for employees to start earlier, finish earlier, it's really about catering to all the different employee demographics within your organisations and the different personal aspects of their life and work-life balance. That's one area. Another area we're seeing companies do is review their leave policies. And it's not just about giving more paid leave time, but it's about areas such as increasing paid parental leave so that they stick out in terms of what they're offering there as a key differentiator, extending their coverage to include IVF leave, allowing their employees to take off time to do that. There's paid transgender leave and increasing days for that type of surgery and recovery, and it's leave not just for carers looking after sick children, but extending that to help elderly and aging parents and giving them leave to take parents to doctor appointments and sick pets as well is also something that's new that's coming through. So, really catering for all aspects of their life and extending that courage and option so that you're meeting all the needs of your employees and it's going to be a real differentiator out there.
Cynthia Cottrell: I agree. And I certainly look forward to this innovation. I'm already thinking through the various ways that personalising these benefits. We talk a lot about making work lovable and really placing that as the centre of how the employee experience should be thought of and designed and the onus being on organisations and employers to really think about how do we improve work. And I think, really thinking about how life fits into work and not the other way around is a really neat perspective that all these organisations are thinking about in regards to personalising their benefits. I might just turn to Andrew, you're in New Zealand and as Chi mentioned, a very important set of experiments happen there around the four-day work week with Unilever successfully passing right through that experiment and wanting to scale that out. But from your perspective, just in general, Andrew, what are you seeing in New Zealand, and how are organisations really stepping up to help their employees feel a lot more comfortable and safe where they're at?
Andrew McKechnie: What is really clear over the past two years is organisations are facing the most incredibly challenging times that they ever have. And locally in New Zealand, New Zealand's not immune to that. I just want to recap on the very fundamental point that compensation clearly isn't everything, it's a ticket to the party. And what excites me is you look at how far organisations have come, where they're starting to become more relatable with their workforce. They're really starting to have open, transparent, authentic conversations to really tap into what's important, what motivates them. Because it can't, when you're looking at a benefits platform above and beyond compensation, it can't be a one-size-fits-all solution. To Chi’s point, it's around really lifting the lid, talking to your workforce. And by doing that in an authentic transparent way, it's creating a psychological safety platform where you can really start to get to the nitty-gritty of what's important to your people and then shaping a suite of offerings or a menu based on what you have sought to understand on what's important to your team.
But some notable trends I'm seeing here in the New Zealand landscape is, yes, we've got our compressed weeks, we've got our staggered hours, but really that gift of time is the fundamental trend that sort of head and shoulders above the rest. And that's again, tailoring the gift of time to suit your workforce. So that may be, as Chi mentioned, dependence, children, elderly parents we're even seeing the gift of time being offered for pets. Now the amount of people that went through the pet purchasing process over COVID lockdown, so they're now ingrained members of the family. You may not have children, but to have that gift of time to walk pets, to take them to doggy daycare, that's an important benefit as well. And also, wellness, that personal team wellness and health and wellbeing. I know an organisation that on the last Friday of every month they give a, what they call a wellness afternoon off. Now this is a great initiative to a kind of reward your team but also put that health and wellness at the forefront of the company's sort of values. And another growing trend again is just the different types of leave and more. We're seeing more and more now that organisations are more cognizant of gender equity. So as Chi mentioned, extended parental leave top-ups and essentially making it easy for mums or returning-to-work parents to be able to integrate back into the workforce. So that's just an example of a platform that can be built that doesn't necessarily have to be attached to a kind of monetary incremental increase, but it's thinking about outside the square. But the messages, it's about being relatable with your workforce, it's really running a health check on understanding what's important to your people, to your team.
Cynthia Cottrell: Yeah, it's so important. And I think again, listening to our employees, listening to the needs and marrying that up with how work gets done and making that a two-way street is such an important theme I think for this year. And with that said, we recently spoke with Katherine Glynn who is the director of People Services at Treasury Wine Estates. And this is what she had to say about the employees and what they are saying about what their needs are.
Katherine Glynn: The expectations of what employees are looking for, what they want in terms of work-life balance, the hybrid working, all of that actually has faced further into those workforce challenges that we're already emerging through COVID. So, that still is top of mind, finding the right people, the right roles, the right way, a constant battle for us as an organisation.
Cynthia Cottrell: I thought that was super interesting to hear from Katherine who is doing all the right things to check in with her employees and really understand how they want to work, where they want to work. And doing that in the name of creating an environment that helps them find the right people, retain them and certainly create that healthy culture. And I think both Andrew and Chi you've talked quite a lot about the myriad of ways that this can be done through benefits and through tailoring programs that are supportive of both the work and the lifestyles of employees. And I think that brings us to this, I think really important point about where workers are in the way they think about work. With all of the change that's happened over the last few years throughout the pandemic, which is really ushered in, let's be honest, this new way of working that is not likely to snap back to something pre-pandemic.
And I think one way I've thought about this quite a bit over the last few weeks, even from a personal standpoint, which is, there's got to be more to life than work. I spend a lot of time at work, so do all of you, I'm looking for more fulfilment. I'm looking for ways to enjoy and feel passionate about my work and I want it to mean something. And in order for those things to happen, I know that it's important to work in partnership with the managers, with the leaders that I work with. And I think that what I'm feeling is probably not too far away from how a lot of people are feeling right now. And so when we think about working in partnership, almost, not so much a one-way street of I employee you and therefore you must do what these things are in your job description, but rather how do we have and use all of these tools that are ready, benefits, pay, hybrid working flexibility and so forth, how can we really, as organisations and employers, how can we really take a different sort of position on these items to really bring that level of fulfilment and passion back to work. So Andrew, I'm going to turn that question to you. It's a deep one, but also I'd be interested in your own personal view on this. What are some examples of how companies are embracing this new way of thinking, this new employee contract?
Andrew McKechnie: Cynthia, that's a great question and you've really hit a very passionate point with me because we talk about compensation, we talk about benefits, and I see it time and time again a compensation increase very quickly normalizes. So a five, $10, $15K increase, it normalizes so it becomes the given. I love the analogy that your compensation, your benefits, yes is the ticket to the party, but if the music isn't happening, what's going to keep your people at the party? And so then we talk about culture and culturing is the music at the party. You've got to have all your ducks in a row, you've got to be making sure that you're competitively in line with market dynamics and the competitive landscape, but you've really got to dig deep on the culture aspect and that's make or break for a lot of organisations. Organisations that are winning in this area are creating a culture of high performance. And again, it's working in partnership with your people, your workforce. And we know because we see it and we hear it all the time, employees don't want to work for an organisation anymore. They want to work with an organisation. So again, it just speaks to the culture that you embed and create in a team environment. And when we talk about a culture of high performance that's not necessarily about winning and achieving, although winning and achieving is a good thing, but it's more around a culture of high performance in ways of working, trusted ways of working, how management will communicate and liaise with their people, how open and freely can feedback be given and received that is all about high performance.
The winning organisations are really doubling down on culturing and creating that environment, which again is the music at the party. If organisations listening to this, that would be some of the key is to really sort of hone in on and focus in on culturing high performance.
Cynthia Cottrell: I love that analogy and I'll have to ask Chi, just riffing off your analogy there. Chi, what are organisations needing to do to pump up that music? What are they potentially got it there ready to help them strengthen culture and make it a great place to work?
Chi Tran: Yeah, it's definitely about amping up that music where I can. Finding that song sheet, that song that's going to resonate to all your employees and really the key is unlocking what energizes your people, what's going to keep them happy, what's that glue? So my take is, besides communication, transparency and taking your employees on that journey with you is look at the whole employee value proposition as well, and really look at that.
So it's not just about, we mentioned already benchmarking the financials, the non-financial, but it's really about the vision, the purpose, the whole spectrum of it, looking at it from all your employees lens because we know that certain things will resonate to certain employees and certain things may not. It's really breaking it down, understanding the demographics within your organisations, the different personas within your organisation and putting together a sheet of music that's really going to bring the whole employee experience come to life, that whole employee experience that's going to meet the needs of all your employees and not just certain groups.
That's going to be really key because I totally agree with everything that Andrew said there. Culture’s the glue, and we know for a fact from our latest survey results is that employees no longer want to work for a company, they want to work with the company in partnership and with purpose. So, getting the numbers right is important, but definitely relook at your whole employee value proposition and what's to come and really getting that right as well.
Cynthia Cottrell: Thanks, Chi. I think that as we get into some practical steps organisations can take. We've talked a lot today about financial and non-financial benefits and programs and ways to weave that into work today. At the end of the day, it is about listening and it is about being responsive to needs, not a one-size-fits-all version of creating an experience for your employees that marries life and work. And I think on that note, it would be interesting from your standpoint, how do organisations know what good looks like in this space with such a myriad of ways that they can view the employee value proposition and package things up. What would you name as one of your top practical steps organisations can take to get started, and how should they approach it?
Chi Tran: Employee listening tools is going to be key. So, definitely survey your employees, understand what they're passionate about, what ticks the boxes, what energises them. For me, and I think Ravin also said at Davos this year, is people is the centre of all this, and for me that's the value proposition. A good way to start is pulsing your employees and doing it more regularly. Check in with them and really crafting it based on what it is that they need, their wants, what it is they feel passionate about and not just on the business requirements, the revenue, the targets. They really need to blend together, but I would say is: start with listening to your people.
Cynthia Cottrell: Good advice Chi. And same question to you Andrew. If you could give some practical sage advice to all our listeners, to all the organisations out there, what would you say are a couple of important, doable next steps?
Andrew McKechnie: Absolutely, Cynthia. Look, the organisation's working with essentially taking a three-pronged approach. So one is compensation and benefits benchmarking as we've spoken about. It's just a ticket to the party, but your benchmarking has to be done. You need to know what the competitive line in the sand is and you need to be know what your competitors are doing. If you're not within yelling distance of that, then there's a risk. The important part with that is to make sure that you use incredible, robust data. That's absolutely essential. The second part, Chi mentioned this is engaging in meaningful conversations with your people. Seek to understand, provide that or create that platform for psychological safety where your workforce can speak and can provide feedback on what's important to them. And then that gives you the opportunity to really tailor a solution to fit the needs of your specific workforce or various teams across the workforce. Then, the last piece, which is absolutely important as well, is really understanding what your workforce heartbeat is. Now, by that, I mean pressure testing, engagement and sentiment. That can be done in various ways. It doesn't have to be overcomplicated, but it's actually again, engaging in meaningful conversations with your people to understand how they're feeling. And the key here is a happy, engaged, prosperous team will always thrive. So do a health check, do a heartbeat, pulse check.
Cynthia Cottrell: Great. Thanks, Andrew. And thanks, Chi. Look, I think that if organisations are pursuing any number of these recommendations that you've shared, I think workers everywhere should feel really optimistic about the future. I know that I would, I'd feel extremely excited if I knew that my managers were thinking about these things and pursuing these actions. So not to belabour the analogy earlier, I'm really quite pumped. I'm pumped about the prospects of improving the music everywhere because that would only mean things like the quality of work will improve, the way in which great work is accessible to more workers who want that opportunity, to make that more available would be awesome. And of course, creating just an enjoyable place to be, certainly a place to weather this storm of inflation, is not a bad proposition, is it for workers today? So, Chi thanks for all of your insights today.
Chi Tran: My pleasure, Cynthia, anytime.
Cynthia Cottrell: And Andrew, thanks for letting me steal your music metaphor and of course for all of the insights and wonderful advice for our listeners today.
Andrew McKechnie: My pleasure, Cynthia. Look, it's been a great conversation and it's just been thrilled to be part of this. Thanks very much.
Cynthia Cottrell: I'm Cynthia Cottrell. Thanks for listening to Making Work, Work from Mercer Workforce Solutions. See you next time.
Cynthia Cottrell: I hope you enjoyed today's podcast, and thank you for listening. Please subscribe to keep up to date with our latest episodes. And if you have any questions, get in touch with us via our website at mercer.com.au
Episode 3: Designing world-class early talent programs
Senior Manager of Graduate Programs, Commonwealth Bank
ANZ Practice Lead, Mercer Talent Assessments
Is your graduate or early talent program delivering long-term value? In this episode, Laura Manescu, Senior Talent Strategy Consultant at Mercer Workforce Solutions, Fiona Herron, Senior Manager of Graduate Programs at Commonwealth Bank, and Phil Harrington, Leader of Mercer’s Talent Assessment Business, talk about trends and best practices that will help you bring talent in early and develop and nurture them through your organisation.
In this conversation, they talk about the challenges and opportunities for hybrid work in recruiting and developing early talent, the evolution of assessment practices, assessing for skills, aligning graduate programs with broader HR strategy, using the recruitment process to make strides in DEI, personalizing the candidate experience, using data beyond the point of hire, getting candidates excited about your offer, and more.
“We’re not recognising talent if we lean too heavily on the way we’ve always assessed and recognised talent.”- Laura Manescu, Senior Talent Strategy Consultant at Mercer Workforce Solutions
“Are you assessing for now or for the behaviours, skills and competencies you’re going to need in the future?”- Phil Harrington, ANZ Practice Lead, Mercer Talent Assessments
“Talk to some grads, put them at the heart of the experience"- Fiona Herron, Senior Manager of Graduate Programs, Commonwealth Bank
“The holistic use of the recruitment data is really powerful and should support the hiring manager and the ongoing development conversation into the future.”- Phil Harrington, ANZ Practice Lead, Mercer Talent Assessments
"Be prepared to think about at least four calendar years at any given time. In 2023, you need to think about your headcount that's in FY26, FY27 and beyond.”- Fiona Herron, Senior Manager of Graduate Programs, Commonwealth Bank
Episode 2: Creating a culture of skills
Senior Principal, Workforce Solutions, Mercer Pacific
Do jobs really define what we do? In this episode, Cynthia Cottrell, Partner and Workforce Solutions Leader at Mercer Pacific and her colleague Anne Leblanc, talk about the evolution of work: the journey from job descriptions, capability and competencies to units of skills and the cultural shift required to unleash the value that all employees can bring to their organisations.
In this conversation, they discuss the circular economy of talent development, the pressing need to close talent gaps by quickly moving skills to where they are needed most, the benefits of building a skills-powered organisation, and the role of technology and talent marketplaces. They also share three actionable tips for employees, HR and organisations to start their own skills revolution today.
“At the individual level, the more skills you have, the more attractive you are to help your team, your organisation and your own career.”- Anne Le Blanc, Senior Principal, Mercer Workforce Solutions
“Today we find ourselves constantly learning in order to continue to be valuable and fulfil our need to be good at something, to hone our craft. This is an important shift, maybe ushered in more quickly than most thought, because of the pandemic.”- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“In a tight labour market, it's extremely difficult for businesses to fill jobs. But what if filling jobs was the wrong way to think about it? What if there's a better way to plug the skills gap in your organisation?”- Anne Le Blanc, Senior Principal, Mercer Workforce Solutions
“Everyone is searching for the best inflation busting strategies; it's hard not to go past reskilling and upskilling to build a better future not only for our organisations but for our workforces.”- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“One of the things that we are seeing emerge is the concept of a talent marketplace. At the heart of a talent marketplace is the use of AI to match people to work.”- Anne Le Blanc, Senior Principal, Mercer Workforce Solutions
Anne Le Blanc: Cynthia, three things that can be done: as an employee, make a list of your skills, what you're good at, and what you want to be good at, and go for it.
As a leader, try and actually hire not for a direct job description match, but for the skills and experiences, and they might be adjacent, that really complement your team. And then the last one, from an HR perspective, is: ask the question, where's my skills data? And maybe think about developing those use cases, as a great way to see the possibilities of what you could do with that data.
Episode 1: How to make work lovable
Partner, Strategy & Growth, Workforce Solutions, Mercer Pacific
“To create a happier workplace, organisations have to think of work design and how it fits into the more flexible lifestyle that everyone is craving for.”- Andrew Lafontaine, Partner, Strategy & Growth, Workforce Solutions, Mercer Pacific
“Having people happy with their work has a lot to do with the company culture and the way in which employees and employers work in partnership with each other.”- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“Chief Happiness Officers are rising to prominence but can they really drive the happiness and engagement of the workforce?”- Cynthia Cottrell, Partner and Workforce Solutions Leader, Mercer Pacific
“Some roles have a lot of flexibility while others require people to be full-time at work. Organisations have to think beyond the parameters of the 5-day week to bring equity to all roles.”- Andrew Lafontaine, Partner, Strategy & Growth, Workforce Solutions, Mercer Pacific
Anonymous speakers: “Red tape, inefficient processes, and where it takes the firm a long time to make a decision. I think sometimes we can be a little bit slow.”
“The thing that annoys me the most about my role is when people make assumptions about what you should be doing as a comms professional, and I think that means you end up spending time on the wrong things instead of what you should be doing to add value at work.”
“What really annoys me about my job is the lack of information that they need to make an informed decision, but sometimes, also the abundance of information that is not relevant or reliable, and we have to make sense of what we have.”
“I’m a teacher and what I don’t like about my work is the overcrowded curriculum which leads to too much paperwork and too little time to complete that.”
“Forget about digital communication, teams zoom email, text message. Telephones work great. They did for how many 100 years? Just use them guys. It makes life easier.”