Jas Chong

Talking about HR in Agile Meetup

It was 29°C outside, 7pm in the evening and one of the 2 days in between the world cup matches. I thought everyone would be off somewhere in a bar, movie theatre or somewhere cool. But it was a full turn out. And it was in front of some very lovely and patient french people that I presented a case study on Agile in HR and HR in Agile.

To begin with, it was based on an project I was involved in. And to be honest, before this project, agile was really just an adjective. It still is but there is so much more depth to the agility used in software development. And this group of people I was standing in front of were all practitioners of agile methods for many years.

Agile, whether referring to being flexible and adopting to circumstances or tied to a whole library of terminologies like scrum!, kanban!, XP programming!, burndown! or for that matter burnup! (all terms that made me stopped in my track at one point or another to say huh?!), is irrevocably, undeniably, incontestably about people.

So it was to great wonder why there haven’t been much talk about HR in agile. And even more curious is how the basic principles of agility can be applied to HR? Because, how can an arm in the company (usually IT department) be agile whilst the rest of the company be fat and heavy?

And so it was, after reflections on that project, the hits, misses and the “je ne sais pas quoi” that I attempted to be honest in this sharing about my involvement, my learning and most of all, why if we want to talk agile, we should talk people and if we talk people, we can be agile too.

With or without the library of terminology tied to agile, most business leaders today have to battle with rapidly changing consumer behaviours, disruptors from non-traditional competition, globalisation and accelerating innovation. Thus, being adaptability as Darwin first proposed is really the only contant and means of survival. And so agile or capital A-gile is a logical response.

This is the case for the example I provided. The company had to be quick in time to market, they had to deploy digitally sound solutions across various parts of the customer journey. And they had to use a combination of acquired expertise and in-house capabilities simultaneously across various markets covering different technology platforms.

The example I presented was on a part of the project where adapting agile methods cannot be independent of helping people adopt the change. And where adopting to this change cannot be done through traditional HR means.

The challenge was to condensed it to 1hr 30mins and respond to any questions from the floor. I think we did well as a group, 29°C and hungry to share on a hot July evening.

The english version of the slides are now available on: http://www.slideshare.net/JasChong/agility-in-hr-hr-in-agility-july-2014

Oh did I mention that it was in French, a first for me in terms of public french presentation.

Agile in Organisation Transformation

Recently I was involved in a project that uses agile methodologies and gave me the opportunity to deepen my understanding and see agile in action. Agile methods originated in software development.

“It promotes adaptive planning, evolutionary development and delivery, a time-boxed iterative approach, and encourages rapid and flexible response to change.”

In agile, I found a practical companion to change management.

In the organisation transformation and change management, I had often advocated for the importance of step-change to increase adoption and to ingrain change. In many instances however, I had seen organisations embarked on change programs with lofty ambitions only to let it frizzle out or stopped midway due to lack of funding, buy-in and/or change in focus, typically after spending a lot of money with no real evidence of benefits. And this is largely due to a lack of detail application of step change.

Take for example, implementing a personal development program. An organisation had decided to overhaul the people management program through its HR department. Once the team set out to shop for toolsets, it encountered a large variety of choices and methodologies. In an effort to create a holistic approach, the team worked on a blueprint of requirements that may include competency framework, balance scorecard, 360 feedback, review process and etc. Typically, it is followed by numerous RFP process to select the right vendors and consultants. Before long, it had become a huge project with large financial investments implications that would require further board and management approval who would raise concerns on benefits versus cost, investment timing, impact to share holder value. While the efforts were plagued with indecision and continual budget revisions, the next economic cycle would have hit and a new recession in sight., thus further pushing out the decision to more “suitable” times. Sounds familiar?

Perhaps the story is too simplified and a stretch from reality. Reality may not be far behind. In the best of instances, an organisation came out of a transformation process full of fatigue and unable to leverage on the changes for positive impact. In others, an organisation is so scarred by the process that any future change efforts is viewed with cynicism and resistance where necessary change do not happen until too late while more adaptable competitors change and overtake in market position.

It is easy to understand that step change is important, it is quite another to build out the details behind it. This is where I borrow some key terminologies in agile to lend some insights into the practicalities of step change.

Commander’s Intent – The objective of the organisation is expressed as its vision. This vision does not include details in “how”, it is only a view of the future state. In the example of a people development program, the intent should be what the company is trying to achieve and not the specific toolset. And perhaps, the program is only a building block and not the intent itself.

Minimum viable product – MVP is about creating the smallest product that is operable to test a hypothesis and learn from it. In the same example, it is important to define a problem statement that is top priority in achieving the vision. Then create the smallest potential solution that can either prove it is the right solution or if the problem statement is the accurate. There are 3 key steps in the process: build-measure-learn. It is important to decide early the KPIs and the intended learning.

Pilot or Prove of Concept – Both are ways to implement the MVP. In a pilot situation, the solution is deployed in a real scenario with a small set of users and prove of concept is where no real users are involved. Let’s say a competency framework is identified as key solution to assess accurately and create focus in personal development. An MVP is a small set of core competences and it can be piloted with a selected team or a specific group to test out usability. Alternatively, a proof of concept can be used to compare the competences with vendor options prior to purchase committments.

Short release and frequent release cycles – Shorter release cycles meant that the scope is reduced to MVP from idea creation to initial release. Small frequent releases follow for continuous build on the MVP or create other MVPs so that multiple products are released to complement each other. In the same example, the next release could be an extension of the framework to the pilot team and the MVP to other teams and continue simultaneously until the framework is being rolled out.

Feedback loops & Retrospective – Learning from the process is important for adaptive planning and evolving solutions to fulfil the vision. In some instances, the feedback is also used to converge initial ideas. Feedback loops complete a release cycle prior to the next release where KPIs are measured and applied. Retrospective refers to a critique on the process of roll out and people involved. It is key to ensure all environmental factors like buy in, communication, business readiness are reviewed and to provide learning required for continual process improvement.

Fair process – All change efforts have a people impact for success. Fair process ensures that all parties involved have a chance to learn about the intent, provide input and ask questions. Whilst the solution is not a patchwork of individual intents, the process allows for communication, creates understanding and encourages innovation in solution creation. It gives appropriate time for people to debate, question, consider and ultimately accept the changes to come.

Most recently, I had used the above in creating a new team including job profiles and competences necessary to build in-house capabilities to delivery a solution. It helped me frame the process to create a small enough team and feedback loop to add resources as required. The organisation chart was reviewed and built out through feedback and provided me with opportunity and time to coach and integrate new additions to the team.

A suitable consideration in using agile in organisation design is that whilst building a software where codes can be erased and redone, hiring and firing is not as easy. Thus, it is even more important to ensure the right team is created and built on without unnecessary expansion. Using options such as contracting, 3rd party becomes important, a topic I will discuss in the next post on Total Talent Management.

Human Capital vs. Human Resources – A word and a world of difference

Often when I introduce my company, I’ve been asked, “Do you mean human resources?”

Actually. Not. Fundamentally, there is a philosophical difference in the 2 concepts, thus a huge difference in the type of services and solutions. Without getting too technical, conceptually, the difference lies in the word “capital” and “resources”. While we may think it is just semantics, after all, a rose by any other name smell as sweet, we forget the psychological impact of what a good name conjures. And in this case, the association and attitude can be very different by just 1 word.

Here are some fundamental differences.

Capital can be grown, resources deplete
An organization is made up of a workforce and the resulting output with or without the help of machines. When this workforce is treated like a form a resource, the organization finds the best way to exploit it and use it for its purposes. These resources are used and depleted so more are acquired and use. And since it is a form of resource, when they are no longer useful, the remuneration stops and they are replaced.

When a workforce is looked upon as a form of capital the company is acquired, the incentive is the get the best return from investment. An organization will regard a capital as down payment to work towards future returns. A capital also grows over time with productive use. In human capital, competences, knowledge and creativity grow over time and multiply in value.

Capital is invested, resources are maintained
When an organization looked upon the workforce as a form of resource or worse a “seat warmer” and other derogatory terms such as “bodies”, then the attitude is just the function they provide. Like any machines we buy for a purpose, it is maintained at best for the purpose they serve.

When a workforce is treated as a form of capital, then people are looked upon as an acquisition for the value it can bring if properly invested. Each person’s value is based on the potential of the investment that requires sound judgment on placement and development potential. If we extract the most from the workforce, the return is no longer linear such as machines. In this case, output when well invested can bring forth multiple times the initial capital purchase.

Different psychology, Different policies
With the fundamental departure on psychology, it will also be reflected in the policies. While there are many ways to breakdown human resource management, broadly, it consists of 5 key areas: Recruitment & Retention, Compensation & Benefits, Training & Development, Sustainability & Mobility and Employee Relationship & Compliance.

From a resource point of view, the key focus is making sure employees are paid and employment laws are complied including health and safety and relationships with unions. Often it is also the 2 key areas retained by a company in the HR department while all other areas suffer due to cost cutting measures or lack of vision. After all, if there are lack of jobs and plenty of candidates, when a “resource” is unhappy or unsuitable, they can be replaced by another. HR departments tend to degenerate to payroll administration and point of contact for labour unions and compliance.

Whilst the above is an extreme view of situation, it is not uncommon where HR is dysfunctional. If we insist that workforce is a form of capital, then the key focus of management may well be very different.

The relevance of high potential?
When the workforce is considered a form of capital, then the view is everyone has potential for a return. But the level of investment will depend on the level of return and impact to organization. Often this can be governed by the role and function in the organization.

The main pitfall of a high potential program is the tendency for an organization to focus large amounts of energy and efforts in a small group of identified talents while ignoring the rest. It’s like betting on a racehorse, you win big if the horse is the first to cross the line, if it comes even a second behind, the investment is lost. That happens when high potential leaves before realizing their potential or fails in their development.

It is much more logical and motivational to consider that everyone has access to development opportunities relevant to their role and earned based on performance (the return).

The idea of “right fit” in recruitment
If we think about work as a production line, with an empty seat, the best thing is to find someone who already knows the work to fill the seat. With lower propensity to risk, most companies have behaved as such in hiring. The person they seek is someone who fits perfectly and thus presents no obvious risk in bad hiring. It also means paying the same or higher salary to attract someone to leave the existing position to fill the new role.

From a long term planning perspective when a resource is looked upon as a form of capital, then recruitment criteria will change. The focus will be the potential of the candidate and the return he or she will bring. The “right fit” is someone who will grow in the role.

The outcome is greater incentive for someone to move. The compensation will be lower than trying to attract someone who already fulfills the same role somewhere. And in effect, a cheaper option than a seemingly low risk hire. The truth is performance on the job and the future is just as unpredictable in either cases since no 2 companies are exactly the same.

The true purpose of human resource management?
Whilst we cannot do away with compensation & benefits or employee relationship & compliance, it cannot be the only focus. In effect, these areas are probably better suited in finance and legal departments.

Then people management can focus on 1 or 2 key areas while engaging suitable partners and supplies to complement the others. As businesses change, the human capital in the company needs correspond to these changes.

Human resource management will then act as the protector of the human capital and investments of the company. Their role will include finding and maintaining the right vendors to acquire, manage and develop the human capital in the company.

Should we start changing all HR titles to HC?
Human resources is still the global function that looks after the well being of the workforce in the organization. The dysfunction today is due to a narrow vision of the workforce as a form of resource. For a forward moving company, treating their employees as a form of capital changes the resulting HR policies and attitudes both at management and HR level. That is an important shift in mindset.

To do this, many companies have started using terminologies such as “People Officer”, “Talent Management” etc. Regardless, a complete view of HR is important and neither can we ignore compensation, legal and compliance. But HR can do better to focus on the other aspects either by in-house capabilities or external service providers. And companies can benefit from a workforce that is motivated and energized.

Being an entrepreneur in a foreign country – France

My journey to start my own company in France is an incredible adventure. Though it’s not directly related to recruitment matters dedicated for this blog, I hope it can help to provide a perspective for companies aiming to start operations in another country.

As a non-european foreigner in France, it took me 18 months before I can even start operating. There were times when I just lost the will to continue and this is when strong partners such as lawyers, accountants and friends got me through. Below is a month-by-month account.

March 2011 – My immigration lawyer has failed to obtain for me a long-term residency card. Without this card, it means I’m still on work permit and will have to get a commercial permit to own a company.

April 2011 – Armed with a business plan and offering, I found a lawyer to start work on administration.

May 2011 – A decisive time. Nicolas Sarkozy amended the immigration law to win votes for election in 2012. The quota for student visas to be converted to work visa is reduced and very limited. However, this office also deals with work visas to commercial visa.

I translated my life into French including: birth certificate, passport, diplomas and professional resume.

Other documents to prepare in French: Business Statute, Business plan, budget for 3 years, forecast for 3 years including treasury, business bank account with funds deposited, proof of work in France, salary slips for 12 months, proof of health insurance, proof of domicile, approval from my apartment syndicate, proof of insurance for my apartment and tax filings.

*If you are a local or European citizen, you don’t need any of these other than a business statute.

June 2011 – We had approval from EU commission to operate in France as a foreigner. My lawyer applied for company registration with above documents. We were informed that our application would only be looked at in August with the immigration office.

July 2011 – I wait.

August 2011 – Meeting with the immigration office. They require more recent documents than June documents. This means all proof of domicile and insurance has to be resent dated August 2011. I completed their request.

September 2011 – I wait

October 2011 – Immigration office asked for more detail business plan and budget. We supplied.

December 2011 – They officially rejected my request on 2 reasons: My business plan is unclear and my budget is unclear and not conformed to the French format.

I was told we can appeal and the office has 3 months to review. If the response is positive, I will receive a confirmation, otherwise we can assume refusal.

*My business plan is similar to all consulting services, there are no products and the service is simple. The budget was an internal format with indication on capital to operate for more than 6 months without income and a further injection should that be the case.

January 2012 – I worked with the lawyer to appeal against the decision. We appealed to the foreign ministry with the following arguments:
– I am not competing with a French national for job. I am creating jobs for future employment.
– I am not competing with French companies for business. My business is international. And since I’ll be paying taxes in France, it is a form of investment into France.
– I have been living here for 7 years.

My ex-colleague in Finance helped me put the budget in the French format.

February 2012 – We sent the appeal letter with a renewed version of all the documents stated above.

March 2012 – I wait.

April 2012 – I wait and getting desperate since our 3 months to appeal is up.

May 2012 – Francois Hollande was elected and one of the first things he did was to repeal the law by Nicolas Sarkozy in 2011. I received news that my appeal is considered.

June 2012 – I received a letter to present all documents to the immigration office in July.

July 24th 2012 – I went to the immigration office. I almost vomited into the bin with the stress of the meeting. The lady at the immigration office could decide if my case is approved or not. She said I had to provide more documents on proof of previous work, unemployment status and tax payments.

I ran home and got the documents and submitted.

My temporary commercial visa is granted but I had to return in September with proof of registration of my company.

*At this point, you’d think it is homerun! Actually not. Because I now have to make sure the company is registered within a month and it was summer holidays in France.

August 2012 – My lawyers and bankers took turns to go on summer holidays. My bank had misspelt my company name and thus had to reissue proof of funds. Without this, we cannot register the company.

Meantime, I’ve decided to provide free coaching services to launch business activity.

September 11th 2012:

– 1015am, my company is finally registered. The confirmation is available online and I request for email download of proof.
– 11am, I met with the immigration office. I’m still missing a document for insurance. I explained that the office takes 3 weeks to confirm insurance after registration of the company. It was too impossible in summer.

*This would be probably the first time I missed an important deadline. Even when my ex-boss had asked me to conduct a European wide client survey in over 12 countries in August (summer month), I had managed to produce 2300 completed responses from all countries without exception. That is a different story to tell.

Finally, after 2 hours of waiting, the lady told me that it has been approved and I can collect the final permit in a month.

The Starting Line
Often I was asked why I had persisted even after months of waiting. Aside from the incredible amount of respect I get from French people when I say I’m starting my business here, the biggest reason is a personal decision to not quit.

Having said that, at many different points in the 18 months, I had given up, laid in bed and decided to have my own hunger strike against life and bureaucracy. Each time, a well-meaning phone call or coffee from friends and business associates helped me through.

Because going back home is far too easy. (Although I had mentally packed and unpacked my bags umpteen times.)

And despite reports on a weak Europe and a rising Asia, I still believe it makes business sense to have a people business in Europe. Asian employment market is still immature to coaching and development needs albeit growing.

And finally, I do plan to establish in Asia but having my feet planted in Europe will mean I have both markets open to me.

After more than 18 months, I am only at the starting line. As any Olympian can attest, years of training are only a ticket to be at the starting line of the race. So I’ve arrived. This is just the beginning of a marathon. There are miles ahead and mountains to climb but at least I can say, I’m on the line, competing.

And I’ve learnt a great deal. The most important lesson is to find the right people to work with you such as lawyers, accountants, bankers etc.

Post Note:
Since starting, I had encountered more administration that had been overcome 1 by 1.
– I’ve since found a good accountant.
– It’s also my accountant who informed me that I had been scammed. It’s a famous scam in Europe targeting new companies. I count several hundred euros of loss.
– I’ve been insured.
– I’ve set up postal services.

The list is long. I can only deal with each one step at a time. In the meantime, I remind myself of this word everyday: breathe.

Multi Business Lines = Multi Conflicts?

As companies grow, a natural evolution is expansion in different geographies and/or business lines. For recruitment companies, this can also be governed with changes in the way people work and how companies engage people. In the 50s, we see a build up of temporary work, in the 80s, outsourcing became a new cost reduction trend and that also included recruitment services. While a company like Nestle can differentiate their products by packaging. Differentiation in a service industry is subtle and lack of it has more detrimental impacts on conflicts of interest.

Consider a common example and a true story. A company is confronted with 2 separate businesses of the same company, one in providing recruitment services, another in providing recruitment process outsourcing (RPO) services. The first team offered recruitment services at X% of salary with potential volume discounts. The second, not knowing their colleagues had pitched recruitment, now offers on-site recruitment services charged with a margin and salary of recruiters on board.

As the company considers both offers, they are left with wondering: if 2 on-site recruiters can handle the recruitment, why bother using recruitment services from team 1? And why is the same company offering me completely different services? At some point, the company will also wonder: if I need 2 on-site recruiters over a period of time, why not just hire them?

The example is simplified but the reality is not far. This happens when there are no clear rules of engagement and differentiation. While the dynamics of a services work best at being flexible, differentiation will be important to give room for each business line to grow without them choking each other’s growth. Sending a clear message also allows the sales team to better communicate the services.

Create differences by considering the following for each business lines. Ideally, when there is no cross over, it will be able to stand on its own and even create hybrid partnerships for their client.

Defining rules of engagement

The business rules should be clear for each business. This will allow them to pursue business within the areas where they should engage and avoid potential conflict with another team. The following can be considered when defining the rules:

• What is the level and type of candidates recruited by the team? This can mean level of experience, seniority, functional levels, salary ranges, contract or permanent hires.
• What is the service delivery model? This can mean individual delivery, volume, and geographical coverage.
• What is the pricing model? Is this by margin, salary of candidates, one-time fees?

Defining rewards and penalties system

Once the rules are defined, it needs to be followed. And each team will need to know the rewards and penalties for following or working outside the rules. They should be aware of:

• When should a business opportunity be passed over to the other team?
• What is the reward for passing on an opportunity and/or helping the other team to follow through for win?
• Who are the authorities to arbitrage a conflict?
• What kind of penalties are involved for working against the rules?
• When are these penalties waved or exceptions?

Building a business sharing environment

While rules are established to avoid misbehavior, a positive growth environment is important to create a counter balance to the restrictive nature of rules. This can also be a platform to create hybrids and partnerships. Business sharing is about communication. And communication can be encouraged but without a structured approach, daily activities will choke agendas and communication will be left till the last moment and often too late for any collaborative work.

• Organize periodic cross team meetings for business sharing of latest wins and losses. This can be organized at the highest level as management meetings and at lower levels with subject matter experts.
• Make use of intranet to post wins and loses. This can be a form add on to in-house CRM or an extract of CRM information. It can include key accounts, contracts, and potential leads.

Celebrate success and publish case studies

Celebrate cases where teamwork from various teams contributed to success. Creating case studies of hybrid models that worked for clients will also be a form example for future cases. Some times, studying losses are just as important to understand what worked and what does not. This may also provide information for changes in rules where it has not worked.

The above are process changes. In almost all situations, the people aspect is key and needs to be the first to be addressed. An analysis of the different business and existing situation and creating open communication with management to create the desire for change will build strong foundations for future changes.

Coding Information For Knowledge – Does it work?

Talk about coding and it provokes all kinds of emotions from recruitment consultants to knowledge professionals. The purist will argue that knowledge cannot be coded. On the other hand, coding is the only way to find things in a database.

Let’s consider the most important asset other than the consultants themselves in the recruitment industry – candidates and clients. Information will result in better sales approach with potential clients and selection of potential candidates. Where there is not enough information, it means lack of knowledge to advance. Where there is too much information, it means spending time picking through data.

I propose that while coding cannot be the only way to create knowledge, it is an integral part and cannot be ignored.

Coding the right information about candidates helps consultants to know better.

Consider Candidate Coding:

Basic segmentation
A candidate resume database is like a huge library of documents. Basic segmentation will help to group candidates together for easier searching. These include past experience in sector, function, current level of seniority and geography. Keep it simple and basic for initial filtering.

Like books that can be filed under more than 1 genre, a candidate can have experiences in different areas. In today’s digital world, a candidate cv can appear in different groups, there is no need to hard code only 1 type.

Interview notes
A consultant’s interview notes provide important qualitative information on a candidate. Their experience in evaluating candidates will provide precious insight for other consultants who may want to contact the same candidate. While the interview is difficult to document, there are key information that can be coded for reference. These can include basic skills and competencies such as language skills, communication, teamwork, autonomy etc.

For notes specific to the job the candidate is applying for, this can be summarized and added for reference.

Candidate Intimacy
Candidate intimacy is created with increasing number of touchpoints. Some toucpoints have high value than others. Recording these touchpoints will provide a view of historic activities. High value candidates can often be turned in high value clients. The different type of touchpoints can be coded by their value and then assigned to candidates.

For example, email alerts, mailshots are low value touchpoints and can be coded in the same group. Assigning this code to candidates who had received email alerts may not provide much information and can be coded automatically. Others such as participation to round table discussions, events and satisfaction survey feedback provide more value and can be tracked differently.

Consider Client Coding:

Basic segmentation
Similar to candidate coding, a client contact can also be coded against basic information on sector, function, level of seniority and geography. Here there are 2 sets of information, basic information about a client company and basic information about the client contacts within the company.

Most companies fall into the trap of selling to only 1 line of business in a company when there are potentially other lines of businesses. Where ring fencing is important, having as many client contacts in a company will help to avert risks and improve chances of cross selling.

Client Meeting Notes
Meeting a client contact will provide an accurate temperature read on their attitude to your services and company. These can be coded based on key information such as attitude to recruitment firms, openness in discussion, willingness to provide information.

Information relating to the particular opportunity can be recorded as qualitative notes just like a candidate interview.

Client Intimacy
Like candidate intimacy, client intimacy is created with as many touchpoints as possible. Successes on each of the touchpoint will help to improve relationship and create intimacy. There are 2 levels of intimacy: with the company and with the client contact. Here, high value touchpoints or successes include successful placements, satisfaction, recommendations and referrals to business.

Keeping a record of past successes and proof of satisfaction will help in convincing new contacts in the company to kick start in relationship building.

Other than coding
Outside of coding, there are also other methods available to make information easier to find. These include:

Tagging
Tagging is a good way for consultants to include information that is not part of the coding list. With cloud-computing and smart design, tags previously used can appear as suggestions. This helps to reduce the number of tags and highlight often used tags for potential inclusion in standard codes.

Search boxes
Both Yahoo and Google have invested in providing searching services to companies. It comes as a form of search box that means you can perform “google search” on the database.

Finally, does information really mean knowledge? It’s been said that information is power. This power is useless if it is not put to good use – that is knowledge. Isn’t it?

Expanding in Asia – People Matter

Coming from Asia and working in Europe, I’ve had the occasional discussions where companies look to expand in the east. Most of them are companies doing well in UK with a portfolio of international clients also looking to expand in Asia. Some are opportunistic especially when the recruitment market in Europe has slowed and others find it necessary to retain an international brand.

Whatever the reasons, the growth of China is a great carrot stick even at a slower annual GDP growth of 8.2%. Other than that, there is ease of doing business in Singapore and Hong Kong, English as a widely spoken 1st or 2nd language and relaxed labour laws that promotes mobility and thus recruitment. Other positive indicators include the persistent trend of offshoring and outsourcing to Asia.

The basic questions of expansion are “where” and “how”? Yet the answers are not so straightforward. After much analysis (see below for additional considerations), I am still convinced that finding the right person comes first before any other considerations.

Finding the right person is difficult
While globalisation is a continuous trend, recruitment is largely local with senior level recruitment less sensitive to geography. The fact remains that you serve a local market in recruitment and thus local knowledge and network is important.

In a service industry where profits rise and fall is tied entirely to the productivity of the people, finding the right person to launch your business in Asia is key. With the right person, he/she can also bring in a team that can start up quickly.

Pairing Sales & Operations
If you try to find someone who is strong in business development and tenacious in setting up a new business, you’ll hit a brick wall very quickly and setting yourself up for disappointment while time flies past. It is rare to find a good operator who is also a good sales person and vice versa. Working on combinations can be a workable solution.

With a strong base of clients who have operations in Asia, you can prepare an existing hire to relocate to Asia. Pair this person with a local person who is familiar with set up to split up the work. Typically, a finance or legal person is a great choice although not evident. A finance manager with business acumen will have the tenacity to work with administration not to mention the knowledge in keeping finances in check and prudence in risk taking.

Alternatively, a local strong sales person with established clients can be paired with an operator who is already familiar with your system and processes. A good consultant with desire to move can be a good choice.

Buying may not be the best option
For companies with cash (a rarity in this economy), buying may be on the table. The logic is, a profitable company will bring immediate returns while keeping the efforts of starting in a new market minimal. It may be true for other industries; this is a potential trap for service industries where human capital is key. Most boutique firms up for sale are made up of free agents. A cultural change mismanaged can mean huge turnover and worse, people leaving to set up on their own with the client base you had bought.

Unless there is strong legal binding and strong leadership and conviction to the new management and parent company, you can see your investment walk straight out the door before your logo is on the wall.

To pick the right place to start looking for the right person, a quick list of considerations.

Work from strengths
Without over simplifying the matter with generalisation, there are key characteristics in each market. For example, Hong Kong is a big financial center while Philippines is home to contract manufacturing; Singapore is an international hub with a small local market while Malaysia has a large local market next door.

If you already have strong expertise in a sector or function, you can choose the geographies to enter based on your expertise and potential for knowledge transfer and clients cross selling.

Each market can also be rated based on the following:
• Ease of entry – cost of entering and administration required.
• Licensing – complexity of labour laws and the types of licences required.
• Strength of currency – while cost of hire is low in some geography, it also meant that their profits when converted are lower. Contrary to product industry, in service industry there is no cost advantage.
• Availability of talents – in tight talent markets, training and mentoring will be required.
• Professionalism – there is a wide range in the level of professional ethics in Asia.
• Saturation of market – eg. In Hong Kong, while financial services is dominant, there is also highly competitive.

Sometimes, the most obvious choice may not be the best choice. To avoid entering into a red sea of competition, pair your top strength with secondary markets and your secondary strength in primary markets for example.

Build on your leverage
If you are already in business, you have leverage – your clients. While your clients may or may not have strong influence or ties with their Asian operations, they are still connected. They can point you to the right person and make introductions.

Your clients’ presence in Asia also meant that they had already tested the market. Based on their industries, their presence can also give you immediate business intelligence on the viability of a certain market based on your own expertise. Note: It will not however, tell you the saturation of the market in terms of competitors.

Partnering with a client
Some of your clients may also be considering entering into a new market. You can sound out your clients with your intentions and smoke out potential partners. A large recruitment project is the best way to enter a market with some assurance while allowing you to build up a database of candidates.

For an analysis of the criteria by country, write to me.

The People in Recruitment

It is incredible how quickly a company can fall. Currently, I am reading “Too big to fail” by Andrew Ross Sorkin. As I flip through the pages that document the incredible downfall of big financial institutions, the stories of such downfall is not limited to the financial industry.

For a recruitment company, the rise and fall can be just as quick and sometimes many times more brutal. A recruitment company is a house of cards built by all the different individuals. It does not have products that can be produced by machines or inventory of assets. In a service industry, lean manufacturing has no sense, 6 sigma is not practiced. In effect, sometimes efficiency through people can be seen as inefficiency in a products company. This is why running a recruitment company or a service company is a unique management study in itself.

Where people run the show, it is a common paradox that the people industry has the worst human resources practices if they even exist in the organization. It is not common that a recruitment firm has more than a payroll executive and even rarer to find a human resources department that looks at training and development of staff. The quality of human resources department (if in existence) is questionable.

Recruiters belong to a very unique camp of people driven by passion in the business and money. As long as their interests are served, the machine stays powered. And when motivation is low, yesterday’s profits will be wiped out by today’s inactivity.

Here’s a story of an incredible downfall.

– Bad top level management that drove away good managers due to disrespect, harassment, pressure.
– Good managers left with their clients to a new company or set up their own.
– The team without a good manager now struggles to find new clients and assignments.
– Good team members are attracted to join their managers in another company or set up and leave with their clients.
– Without new assignments or clients, there is less income and thus profits.
– The company starts cutting back staff to stay afloat.
– The staff in the company starts to shake in confidence of the stability of the company and impacts their performance.
– The company had to continue to cut back staff due to lack in productivity to stay afloat.
– Bad top level management is removed with payout without new replacements.
– The company continues to cut back staff to pay for payouts of departed managers.
– Staff confidence drops to new low and began looking for jobs. Thus further impacting productivity.
– And layoffs continues as a vicious cycle.

This is a common story in service industry where people matters. Let this be a cautionary tale.

Suggested Remedies (before it is too late)

Regain Confidence
Confidence is a very volatile element. In a service industry, confidence within the company will affect every day performance and motivation. If cutbacks continue to try to protect profits, losses are imminent.
Explore the option where layoffs are systematically stopped except for bad behavior or performance. When there is a greater sense in job security, there is also less need to spend time looking outside and thus more time in focusing on business development and delivery.

Admit the misbehavior of past management without conceding defeat. Be honest in the situation and then persuade the staff to look forward to work together.

Creating confidence internally can also help to regain confidence in investors and draw cash to sustain short term liquidity. A more confident workforce will also be apparent to clients to win sales and build top line.

Participate not support
Under normal circumstances, management has the responsibility to manage teams and “clear the path” for success. However, in dire times, leadership is often seen as rolling up the sleeves and work along side the people.

The time of an executive is expensive and thus, their participation or action has to matter in the best way possible. Here, the best impact is to meet with key clients or potential clients, using their position as leverage in creating opportunities for sales meetings and winning deals.

Being active in professional networks and associations are also important contributions to drive leads and raise visibility of the company. Every executive should participate including the CFO, CCO, COO etc. C-level executives have their own professional network where they can bring a difference.

For executives, they should remember that it is not enough to state what you want, it is just as important to show what you mean.

Start Measuring and Announcing Success
Executives are used to measuring and reporting on results. This often means profits and bottom-line, return to share holder value etc. Under tough conditions reporting on continuous negative profits can only serve to shaken confidence and raise doubts on job security. Whiles these should be measured, reporting on wins, success are more important.

Measuring increase in sales is also important in measuring success of teams. Here, a team manager cannot hide bad performance by cutting cost or use other ways to hide cost to show an inflated profit. This may also mean % increase in sales and measuring absolute profits and not in %.

Such measurements will direct focus on sales and increase in top line. When top line is secured, bottom line will be managed.

Mark The Turnaround
Extreme measures are used in extreme situations. Finally, building a strong DNA of a company will be important in attracting good people and keep sustainable growth. And this needs to be communicated and the targets once set and achieved, should be celebrated.

The people in recruitment is all a company has. Management will be well served to remember this.

Catch 22 – specialization in the recruitment practice

I’ve been asked several times, “how can we specialize when we are (5, 10, 15) people in the company?” It’s a catch 22 situation.

In recent days, specialization is no longer an accessory in marketing communication of recruitment firms. It has become a harsh reality. Let’s face it, if a company is willing to pay anything from 10k – 30k to recruit a talent, what would make them choose a generalist recruiter over a specialist recruiter? The answer is probably only price and even that price advantage is eroding as the market readjusts in the crisis.

On the other hand, the risks of sustainability is a real concern for small to medium size recruitment firms. If the company has 10 people, that just about covers all the different sectors and/or functions to specialize in. A sudden change in demand or loss of a key recruiter could mean its death.

That is not to mean that big companies have profit with their size too. Many are unable to make a psychological leap of “one-stop shop” to “multi-specialization under 1 roof”. Large companies are hampered by internal politics, fear of change and commitment to change, while small companies are paralyzed by fear. Having said that, there are successful cases and proof that it can be done, to the profit of those who dared.

Some considerations I had shared:

It doesn’t have to be a case of either or
Many companies think that to specialize means they have to name and cover all the different areas from a-z. Unless the company employs 500 employees, it can hardly cover all the different sectors and functions in recruitment. It doesn’t have to be this or a generalist.

If we compare the financial times, the european listings of sectors / functions and any other listings, we can quickly observe that there is no 1 standard list. The lack of common standards in this case is a clear advantage. A company can draw on its strength and find large groupings beneficial to them.

Eg, IT&T is largely accepted as a common grouping for information technology and telecommunications. Healthcare & Pharmaceutics is another broad group that can include hospital care, medical devices, biotechnology, medical drugs development and sales.

Keep it broad, keep it separated
The reality of small businesses is that they cannot afford to turn down good business just because they have committed to specialization and they don’t have too.

Choosing to specialize has 2 obvious benefits: marketing on strengths and building internal strength. For a small to medium size company, it is important to name the specializations so broad that it can just about cover everything. A paradox? No, a clever mask perhaps.

Eg: Technical and Non-technical skills. This works for small firms of 3-5 consultants. It doesn’t have to be publicized widely on the website or company collaterals but can be used for client presentations and during sales pitch. The 2 teams should be separated and built for further specialization as the company grows.

Evolve and multiply
Like cells, a growing team often need division to create further growth in their own right. In today’s market, more and more companies are focusing on short to mid-term planning as long term planning can quickly be obsolete. Equally for recruitment firms, specialization can evolve over time.

While the core marketing, communication and external materials can retain general information, companies can make use of easy to produce 1 page appendixes or add-ons for their specialization. This can be replace quickly when the teams evolve. For a small company, size and agility is a competitive edge.

Eg: In the above example, when the team reaches a size of 5 members per team, it can be split. In the “Technical” group, this can be split into broad base of “Engineering & Technical” and “IT & digital”. Core marketing materials can still say “Technical” with an additional paragraph for each.

Commercial positioning need not mean organizational structure
For many companies, there is a confusion of external and internal view. External communication and representation of the company is usually used to speak to clients and potential stakeholders. Internal structures relates to management and operational effectiveness. Potentially, it is beneficial to mirror each other but it is not a necessity.

Advocating a company’s strengths in specialization is a strategic sales decision. This does not have to be mirrored if it does not serve operational strengths. Where teams are small, it can continue to operate as a single team with the same manager.

Eg: A large size recruitment firm may have varying strengths in the different teams of specialization. They could group a small team of recruiters in digital marketing under a broad group of marketing, communications & public relations for ease of management and cross over business. Externally, they list the specializations separately to create an impression of strength.

Specialization does not have to be a catch 22 situation if it is managed thoughtfully. Internally, it is a core benefit for people development. When a recruiter starts to focus, their knowledge base for a particular area and their contact base is built up. Not only does it sell easier, it will also help in operational efficiency in delivery. I’d say, it is a “catch all” situation, no pun intended.

Labour reforms in Europe, more sound than substance?

On Friday, 10/2/2012, Spain has announced several labour reforms approved by the cabinet. Spain’s unemployment stands at 23% and 50% for those under 25 year olds. The policies were mainly targeted to make firing cheaper for companies.

In an attempt to reduce cost of firing, these include:
Reducing from 45 days per year of work entitlement to 33 days.
Capping the maximum firing payout to be 24 months rather than 42 months

In an attempt to create jobs, employers will get €3000 tax breaks if a company hire less than 50 people and hires a new worker under 30 years old seeking the 1st job.

As expected, some people came out to protest the changes. Among the 500 people in Madrid protesting, it turned from a peaceful protest into violence.

In terms of job creations, these measures are targeted to reduce cost of firing that may not affect hiring. Having said that, many have said that these are long overdue changes.

In contrast, France has announced end of January 2012 that it planned to cut cost of hiring that will save enterprises €1b3n. And to fund these, they will increase VAT or known in France as TVA from 19.6% to 21.2%.

While reducing cost of hiring that is at a staggering 55% will encourage hiring, according to a report by Morgan Stanley, this impact will be reduced by inflation.

In both Spain and France, these changes will not be effective until after November 2012. In Spain’s case, it has to pass through parliament and in France, it will depend on the presidential elections in April this year.

What I don’t understand is that while politics is relatively short-term at 4 or 5 years, they attempt to make policies that are long term. There is nothing wrong with long term policies but the market has moved swiftly and short term measures will be required.

In a bid to relax labour laws to encourage hiring, have there been considerations for laws that will be in place for 2 years while the economic crisis is still in placed?

In a recent report by Financial Times, youth unemployment has more than doubled in many countries since 2008. Some of the measures could have been in place to encourage youth hiring or open up the job market at a time when companies are exercising constraints.

For example, reduction in social charges can be applied only to companies who qualify such as proving net hiring to be above rate of natural turn over, e.g. 5%. And reduction in social charges can be staggered and encourages companies to reduce work hours, apply for reduction in social charges before finally conducting redundancy firing.

I’m no politician or pretend to know what is best in a very complex region. In the private sector, there are round tables for exchanges of ideas. In politics, are leaders talking to each other for ideas? And do we really have to wait for election to be over for changes? If that’s the case, many will have to wait till 2013 or 2014 because this year, countries expecting a change in power include United States, France, China, Taiwan, Russia among others.