I recently spoke to Stephen R. Fussell, who is the Executive Vice President of Human Resources at Abbott. Fussell talks about why his team is focused on developing in-market talent in places like China and Brazil, how they manage talent during periods of great change, strategies for retaining employees, some innovative recruiting strategies and the top three workplace trends he's paying attention to right now. He's speaking on the topic of managing a global workforce in times of change on June 29th at 10:45 AM at the 2015 SHRM Annual Conference held in Las Vegas.
Fussell joined Abbott in 1996, as Divisional Vice President, Compensation and Benefits. He was promoted to Vice President, Compensation and Development in 1999, and to Senior Vice President, Human Resources in 2005. Prior to Abbott, he held human resources leadership positions at Nestle and Shell. Steve believes that human resources professionals are stewards of a company's most valuable resource, its people.
Dan Schawbel: What leadership development programs do you have in place to ensure that your leadership gap is filled as millions of Baby Boomers retire annually? Do you have any success metrics so far from these programs?
Stephen R. Fussell: The coming retirement of Baby Boomers is largely a developed markets phenomenon, which affects Abbott less than you might imagine. Though we’re headquartered in the US, 70 percent of our revenue and employees come from overseas – and of that mix, about 50 percent of our sales come from the world’s fastest growing economies. From a leadership and development (L&D) perspective, we’re more focused on developing in-market talent in places such as China, India, and Brazil than we are about retiring Baby Boomers. Moreover, the back swell of baby boomers is retiring later than the first of their generation. Our average retirement age in the US is up almost five years from a decade ago and up to 60 percent of boomers are actively working somewhere else after “retiring.” So, we’re not in a hurry to hasten their departure and lose their valuable experience and expertise.
To keep pace in these key overseas markets, our in-market HR teams are empowered to customize L&D programs based on distinct business and cultural needs. The idea is to give our young leaders strong, referential points for decision-making based on scenarios we’ve dealt with in the past and are likely to happen again – for example, a break in the supply chain or a regulatory hurdle. Where we can’t replicate with on-the-job experience and coaching, we can substitute with simulations. To us, the most important L&D metric is our ability to keep employees with us and growing in their careers: our employee turnover is below the industry average in both developing and developed markets.
In addition to tailored development programs, we have also retooled our talent assessment processes and programs to ensure a stronger pipeline of talent to fill vacating baby boomer roles.
Schawbel: How does Abbott manage talent during periods of great change, including M&A's and expansion?
Fussell: Good question – this is actually the topic of my presentation at the Society for Human Resources Management (SHRM) convention later this month. To begin, we don’t have a one-size-fits-all approach. Every merger, acquisition, or spinoff is different, as is our organic growth in the countries where we do business. The common thread, however, is that HR should always be supporting how the company intends to grow in the next three years. To do that, HR must understand the longer term strategy of the business, and proactively address the talent impact of that strategy well enough in advance to ensure business success.
Each merger or expansion opportunity presents decisions around how best to handle HR services in support of the business strategy. If an acquired company is to be fully integrated, for example, we have to decide what HR services are “core” - those that span the globe consistently, regardless of market; “critical” - those must-win strategies within the market that HR must prioritize and resource differently in order to meet the business’ needs, and “unique” - those services that, because of specific characteristics, require a completely different approach to HR solutions. Getting this mix right, up front, allows for proactive stakeholder management, transparent expectations and proper resource alignment.
The other principle to keep in mind is talent development. To my previous answer, you can’t ever develop too much talent – because you never know when you’re going to be without it. When we spun off our proprietary pharmaceutical division into a stand-alone company called AbbVie in 2013, we were able to fill the vast majority of senior leadership positions at AbbVie with talent from Abbott – and still have leaders ready to step up at Abbott to replenish our own ranks.
When we’re working on a deal, HR embeds with our business development team before the acquisition is even announced to understand how the new workforce will blend, where there are synergies, overlap, and so forth. Your HR teams, working hand-in-glove with the business, need to be nimble to meet the unique requirements of each deal, and not be overly-committed to one method of workforce integration. Flexibility is key.
For example, when Abbott acquired CFR, a leading branded generics pharmaceutical company based in Latin America, our analysis suggested that our existing Abbott pharmaceutical business operations in the region should be integrated into the CFR organization instead of going the other way. Their operations, business model and people are so strong in the region that it only makes sense to leverage them, not force them to change to an Abbott model. This will enable us to reap the benefits of the acquisition much more quickly.
Regardless of the approach taken, our goal is to ensure regular, transparent communication with all employees affected by the change – and to be sure everyone understands Abbott’s brand promise of helping people live fuller lives through better health.
Schawbel: What are some of your strategies for retaining employees, especially millennials who tend to job hop every two years?
Fussell: First, workplaces don’t revolve around one subgroup of employees – Millennials or otherwise – despite what the headlines suggest. Companies that prosper are made up of individuals, of various ages and backgrounds, working closely together as teams.
At Abbott, we focus on what unites our entire workforce, such as having a common sense of purpose, providing the right mix of pay and benefits, and offering the opportunity to have multiple careers within the same company. Through this approach, approximately 75 percent of our Millennial employees stay with us for at least three years – which is 15 points above the average – and many are staying longer. But the most effective strategy to retain employees starts with a profitable growth strategy that allows employees to grow, develop and succeed as the company succeeds. Because we are a sustainably profitable and growing company, all ages have greater opportunity here. And the only real security we can provide comes from a sustainably growing company.
This is all not to say that we don’t adapt to the times. But the companies I see struggling with Millennial retention typically lack a strong employee value proposition common to all the workforce generations. To keep Millennials engaged, my advice is to focus on how your work serves your customers and makes the world a better place; communicate a shared goal to see the company thrive and prosper; and, treat all employees as fully-contributing adults who you intend to keep around for a long time.
Schawbel: Can you share some innovative recruiting strategies that allow you to compete for talent in America and abroad?
Fussell: I think it’s important not lose track of the basics when it comes to competing for talent in today’s market. People want to work for a company that’s performing well, offers generous benefits, and is engaged in noble work that makes a positive impact on the world. That last part is especially true of the Millennial generation.
That said, we’re focused on leveraging mobile recruiting efforts – especially in emerging markets where a job candidate’s mobile phone is often their primary means of communication and portal to the internet. In this environment – where things move fast and speed is a competitive advantage – we have to reach candidates on their mobile and be able to sustain contact all the way through hiring.
Through our mobile hiring efforts, such as mobile search and apply, digital interviewing, and pipeline management apps, we’ve recruited 75 percent of our executive hires via direct sourcing and reduced time to fill by 30-50 percent in key markets. This is a significant productivity gain and saves the company money.
We have built a highly competitive executive search function, with a team of Talent Scouts, who proactively build our critical talent pipeline and manage relationships with key external talent with a CRM tool. As a result, for our critical roles, such as GMs, we have direct access to high performing external talent. In addition to our strong internal succession, we have 300 ready-now GM potentials in that external pipeline.
In addition, we haven’t walked away from professional development plans while many others have. That gives us a competitive edge with prospective talent, in the US and abroad.
Schawbel: What are the top three workplace trends that you're currently paying attention to?
Fussell: I’m not sure I would rank my answers in order of importance, but I’ll start with the topic of workplace satisfaction. I’ve seen many HR leaders focus on the emotional well-being of employees, and hence, create programs that address the individual, not the work itself and its impact. I believe it’s not HR’s job to micromanage employee morale. It’s HR’s job to expand and grow the performance and potential of the company first and then individuals. Focus on creating a sustainably growing company with opportunities for employees to grow in their careers, have personal and professional support systems in place, achieve financial security, and do meaningful work. That’s the secret to emotional happiness on the job and an aligned and engaged workforce.
Second, I take great interest in labor arbitrage – determining where companies locate their employees and build capacity. Obviously, we have to be close to our customers, which is why we’ve opened large manufacturing facilities in the past year in India, China, and the US. But irrespective of which market we’re serving, our calculus doesn’t change: we look for proximity to large talent pools – be it skilled labor or STEM talent; quality of infrastructure; an advantageous business environment; political stability; and the clustering of top-tier universities and R&D facilities. More and more, HR is taking the lead in evaluating market expansion recommendations, through the lens of labor, to help shape these expansion decisions.
Lastly, I come from a Compensation and Benefits background, so I’m always watching how companies incentivize their employees. To my earlier point about competing for talent, too many companies are caught up in frivolous perks or lose track of the bigger picture, which is that employees want to be financially secure today and in retirement; and, be able to take care of their families or invest in their communities.
In the US, Bloomberg has recognized Abbott for having one of the best 401(k) programs in the country. Our average balance is almost four times industry averages and it’s no accident. We teach the importance of saving and back it up with matching that encourages everyone, especially those with lower incomes, to participate. Further, we’re one of very few companies that also offers our employees an active pension that vests after five years of service. Our people save more, retire earlier, and have more savings than the employees of our competitors. Overseas, we rank highly in terms of best companies to work for and offer industry-leading benefits and compensation packages that keep our employees motivated and retained.
It continually puzzles me that so many companies are abandoning their role in helping their employees secure their future while at the same time complaining that their talent doesn’t stick around. There’s a reason our turnover is low and our engagement is high. And in our view, the cost of lost talent and lost productivity is greater than the cost of these programs.
