Most people have heard a version of the saying ‘good leaders ask good questions’. It’s less common, however, to think about asking a good mix of different types of questions.

“When you read about this in management literature, you get insights like, ‘Good questions are follow-up questions or open-questions, but [leaders need] a little more guidance than that,”  says Arnaud Chevallier, strategy professor at IMD Business School in Switzerland.

Particularly for first-time leaders, the tendency to jump into solution mode before letting curiosity play out can put many organisational elements at risk, such as innovation (if we don’t ask questions to surface everyone’s ideas), psychological safety (if people don’t feel they can push back on an idea) and wasting time or resources (if we put all our energy into solving the wrong challenge).

That’s why Chevallier has spent years determining five types of questions that he and his co-researchers believe will help leaders and organisations to operate on a deeper, more strategic level.

“I think all executives and professionals should develop a mindful set of questions that they’re constantly updating to serve them better in the decisions they’re making,” says Chevallier.

5 types of questions

Over three years, Chevallier and his co-authors Frédéric Dalsace and Jean-Louis Barsoux, also professors at IMD, conducted interviews with hundreds of top-performing executives to learn about their favourite types of questions.

“Then we refined them using the Delphi method and organised the questions into general buckets.”

They also conducted a robust literature review.

“Management executives aren’t trained to ask questions, but other professions are – physicians, psychologists, journalists, lawyers. We wanted to learn as much as we could from those other fields [whose workforces] have thought long and hard about the meaning of questions.”

From this research, they first determined four types of question, which are as follows:

1. Investigative questions

These types of questions follow a similar line of thinking to Toyota’s ‘five whys’, says Chevallier.

“This is epitomised by the ‘what’s known?’ type of question. Investigative questions help you probe the root causes of the problem, and help you to go deeper into the decision you need to make.”

Examples:

• What is and isn’t working?
• What are the causes of the problem?
• How feasible and desirable is each option?
• What evidence supports our proposed plan?

2. Speculative questions

Going deep with investigative questions is important, but not sufficient, says Chevallier. 

It’s also useful to go broader with your line of questioning. This is where speculative questioning comes into play.

“We epitomised speculative questions within ‘what if?’ For example, ‘What if we didn’t care about costs?’ or ‘What if we could relax these other constraints?’

“[These questions] foster innovation by challenging the implicit or the explicit assumptions we come to in our decisions.

“For HR professionals, who are addressing the human component of [work], you really need to develop your subjective question mix so you’re always asking yourself ‘what’s the actual meaning that’s going on behind the words?’”

Examples:

• What other scenarios might exist?
• Could we approach this differently?
• What else might we propose?
• What can we simplify, modify, combine or eliminate?
• What potential solutions have we not considered?

“All executives and professionals should develop a mindful set of questions that they’re constantly updating to serve them better in the decisions they’re making.” – Arnaud Chevallier, strategy professor, IMD Business School

3. Productive questions

It’s also important to have a set of questions that are designed to move processes along, says Chevallier. He refers to these as the ‘Now what?’ questions.

“They’re here to help us adjust the pace of the decision making – sometimes accelerating it because the deadline is coming, or sometimes slowing down because we’ve come to a decision with a preconceived mindset or there might be cognitive biases that are crowding our judgement.”

Examples:

• What do we need to achieve before we advance to the next stage?
• Do we know enough to move forward?
• Do we have the resources to move forward?
• Are we ready to make a decision?
  

4. Interpretative questions

Interpretative, or sense-making, questions help us take what we’ve learned from our investigative, speculative and productive questions and turn them into insights.

“[These questions] are epitomised by the ‘So what?’ Okay, we’ve figured out this one thing, what is that telling us about our overarching goal?'”

Examples:

• What did we learn from this new information?
• What could this mean for our present and future actions?
• How does this fit in with our overarching goal?
• What are we trying to achieve?

Chevallier and his colleagues were originally happy with these four types of questions, but after analysing the insights gleaned from their discovery sessions with the executives, they realised something was missing. 

They needed a question type that surfaced the many things that are often left unsaid, which led to the addition of a fifth type of question.

5. Subjective questions

“We’re not dealing with robots. We’re dealing with people. In every conversation, there are hidden emotional or possibly political sets of insights. [In these cases], it’s [important] to figure out the meaning behind the words,” says Chevallier.

For people managers, this is where you might uncover people’s frustrations, tensions or hidden agendas. People’s answers to these types of questions can often lead you down a completely unexpected (and often critical) pathway.

From an organisational perspective, subjective questions can protect a business from risks such as wasted budgets, reputational damage and causing dissent or disengagement to brew in teams.

Examples:

• How do you feel about this decision?
• What aspect of this most concerns you?
• Are there any differences between what was said, what was heard and what was meant?
• Are all stakeholders genuinely aligned?
• Have we consulted all the right people?

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Curious cultures

While Chevallier and his colleague’s research didn’t go into detail about the cultural environments that are required to allow for these types of questions, his opinion is that trust and psychological safety are key to making these types of questions effective.

In an article for Harvard Business Review, they wrote: “Team members may be reluctant to explore emotional issues unless the leader provides encouragement and a safe space for discussion. 

“They may fail to share misgivings simply because no one else is doing so – a social dynamic known as pluralistic ignorance. Leaders must invite dissenting views and encourage doubters to share their concerns.”

You also need to choose your timing wisely when asking certain questions, says Chevallier.

“If you come into a new position and start asking a bunch of speculative questions, it might be too early. You might first need to establish those relationships with people.”

Read HRM’s article about how to build social capital in the workplace.

Auditing your question default

Chevallier and his colleagues have created an interactive tool – which will launch later this year – to help leaders assess which type of questions they default to. For example, you might complete the assessment and discover you have very few points allocated to speculative questions.

“[In that case], you could make a list of 10 speculative questions and, ahead of a meeting, highlight a couple that you’d like to ask,” he says.

There’s no specific mix of questions to ask, he adds. The research isn’t suggesting every situation calls for one of each type of question.

“You might ask five different investigative questions. It depends on the specific situation. 

“The five types of questions, hopefully, help people realise that there are various ways to look at a problem or a decision. Before we follow our muscle memory into one direction or another, we should periodically step back and ask, ‘Are we still going in a productive direction?’

“The world of today is not like the world of yesterday. We absolutely need to update the way we make sense of it or we’re at risk of not being able to decipher it.”

Example questions listed in this article sourced from Dalsace, Barsoux and Chevallier’s article on their research in Harvard Business Review print edition (May-June 2024). You can read the online version here.

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Working in HR has always demanded adept multitasking, but the disruptions of the pandemic and the numerous changes to our work dynamics have necessitated expanding HR skill sets even further.

“During COVID, HR got called into really high-level, strategic conversations that they didn’t always get brought into previously,” says Tani Jacobi, HR Standards & Capability Development Manager at AHRI.

“No one else had the skills; no one else had the reach and the capability to be able to navigate these situations because it was so heavily focused on the impact on people. It accelerated the path that HR was already on – that we’re not just focused on policy and compliance, or the ‘fluffy’ stuff. We are business contributors and leaders that enable business performance and growth.”

Since then, HR has become increasingly integral to decision-making conversations, which Jacobi asserts is “exactly what businesses need”. However, this shift has revealed that some HR practitioners were not fully prepared to assume these new responsibilities.

A byproduct of the rapid business changes from the past five years is that the HR practice has changed, says Beth Hall CPHR, General Manager of HR, Standards and Capability at AHRI.

“To stay commercially viable and support business growth goals, there is an increased expectation for sophistication in HR capabilities.” – Beth Hall CPHR,  General Manager of HR, Standards and Capability, AHRI

“HR has had to think differently about how to attract, engage and retain people, and how to navigate employee relations in a landscape that’s become even more complex. 

“When you think about the increase in criminalisation and individual decision-makers being held personally liable for some of the decisions they’re making at work, that’s a lot for HR to manage.”

As the professional body for HR in Australia, AHRI was determined to support its members and the broader HR profession to manage these challenges head-on and to grow their capability and influence.

“To stay commercially viable and support business growth goals, there is an increased expectation for sophistication in HR capabilities,” says Hall. 

The Australian HR Capability Framework

AHRI’s refreshed Australian HR Capability Framework (AHRCF) has been created with this increased sophistication in mind.

Designed to promote universal standards of HR best practice, the AHRCF defines the essential capabilities, skills, knowledge and behaviours required of HR practitioners, enabling career progression and empowering organisations to achieve their goals by nurturing the capabilities of their HR teams. 

It also acts as a clear roadmap for becoming a well-rounded HR practitioner, which requires a big-picture mindset, says Hall.

“For example, if you’re an IR/ER specialist, you can’t think about the legislation criminalising underpayments or the right to disconnect without considering your wellbeing skills, payroll, or your HR generalist skills. Nothing should happen in isolation.”

The new design of the AHRCF (see below) purposefully focuses on capabilities rather than specific roles, says Jacobi.

“We’ve been clear in saying, ‘This isn’t a job description.’ It’s about encompassing the broad practice of HR. 

“We’ve also quite deliberately designed the capabilities to flow from the big-picture, strategic level, then work around in a logical sequence of capabilities,” says Jacobi.

The framework begins at business strategy, says Hall.

“That’s about considering, ‘What’s happening from a business perspective, and what impact does it have on the HR strategy?’ 

“Then you go on to organisational enablement. Consider: how am I enabling the organisation to look after themselves and not be constantly relying on HR – because we’re a cost centre; we don’t generate income. We enable the organisation through data, insights and technology.”

Next, you layer in the foundational elements, such as the wellbeing perspective, to make sure you’re looking after the physical, emotional and mental wellbeing of your people.

“Then it’s about getting us to a culture that we can be proud of. We can look at ethical practices and DEI to make sure it’s aligned with the business strategy,” says Hall.

Workforce effectiveness speaks to the critical industrial relations skills required of the modern HR practitioner, as well as ensuring that you’re “being strategic in the chess moves of your people, structures and your succession planning to enable a future effective workforce”.

Talent management and trusted partnership runs across all elements of the framework.

“Your talent management and trusted partnership is keeping the lights on,” says Hall. “But if you don’t couple them with organisational enablement and workforce effectiveness, you’re going to come unstuck.

“If you think about old HR versus new HR, old HR was all about trusted partnership and talent management – we found people, we hired them, we gave them the skills and knowledge they needed, we managed their performance and then we moved them into their new role. We did that through employee relations, influence and impact.”

That work is still incredibly important, of course, but there is now so much more nuance and complexity to add on top of this foundational HR work.

“The employee experience is now uber-personalised. It’s not one-size-fits-all; sheep-dipping won’t work. Therefore, how do you use your organisational enablement and workforce effectiveness to start building the personalised, curated employee experience of the future?”

Using the AHRCF and Capability Analysis tool

AHRI’s HR Capability Framework is designed to uplift both individual capabilities and that of your entire HR team.

“We are, by nature, a giving group of practitioners, but we sometimes do that at the expense of ourselves,” says Jacobi. “Our performance as HR practitioners is measured on how we can impact business outcomes, not by our own growth. So we tend to neglect investing in our own capability because we’re so busy doing it for everyone else.”

The intent of the AHRCF and the capability assessment tool (exclusive to AHRI members), is that you can build it into your already established talent management cycles (see below).

“We’re also giving you access to development opportunities so you don’t have to go and create your own HR Bootcamp for your HR team. We have a range of options available that are specifically linked back to this framework,” says Jacobi.

The AHRCF is freely available for any HR practitioner to view. However, AHRI members can also access a career-stage breakdown of each capability, as well as the accompanying Capability Analysis Tool, which helps map and benchmark their skills over time.

Here’s how it works:

1. Assess your skills: AHRI members can log in to their membership dashboard and click on ‘Australian HR Capability Framework self-assessment tool’. Next, answer a few short questions to help AHRI benchmark your skills against the AHRCF. This should only take up to 30 minutes to complete.

2. Design your learning journey: You will receive a personalised PDF report of your results in your inbox. This will include specific recommendations for your learning and development from AHRI’s range of capability development programs.

3. Track your progress over time: Your personalised report will include a set of graphics to help you benchmark your results over time, should you choose to use the Capability Assessment Tool again in the future.

“Being able to benchmark capabilities allows us to see where our capabilities are compared to our peers,” says Jacobi. “Tracking growth over time helps to demonstrate return on investment and celebrate the progress we’ve made.”

Sign up for a webinar on 18 July, 12-1pm, to learn more about the revamped AHRCF and how it will benefit you. AHRI members can register for free.

The post Setting the standard for HR capabilities now and into the future appeared first on HRM online.

Getting a new business initiative approved can feel like pulling teeth. HR practitioners often hit a wall in the form of budget restraints, unrelenting leadership or a workplace culture averse to change.

In the current economic environment, this can turn into a Catch-22. In times of skills shortages, technological disruption and shifting regulatory landscapes, large-scale people initiatives are often necessary for survival, but these same issues are driving many executives to tighten their purse strings.

As a result, HR practitioners without the necessary influencing skills risk letting their best strategies remain forever as ideas on a page.

To avoid this, HR practitioners can develop the skills to speak executives’ language, cultivate advocates and develop a deep understanding of a business’s needs and pain points.

A research-backed approach to executive buy-in

When pitching for executive buy-in, an approach that combines human skills with business acumen is key. 

In an article for Harvard Business Review, professors Susan J. Ashford and James R. Detert provide a detailed breakdown of how to gain executive buy-in based on their research. 

In their research, Ashford and Detert identified the tactics of a successful “issue seller” (their name for a person seeking buy-in).

“Issue sellers who accomplish their goals, we found, look for the best ways, venues, and times to voice their ideas and concerns – using rhetorical skill, political sensitivity, and interpersonal connections to move the right leaders to action,” they write.

They break this down into seven key tactics:

1. Tailoring your pitch – this was the key success factor. They say it’s critical to become familiar with your executive’s “unique blend of goals, values and knowledge” and use these insights to customise your pitch according to who you’re speaking with.

2. Strategically frame the issue – this is the stage most HR professionals would be familiar with: building a business case. Not surprisingly, the researchers found this was more effective than moral framing (e.g. trying to convince people to ‘do the right thing’).

3. Manage your emotions – passion, they said, was proven to help in achieving buy-in, but passion can easily spill into anger and this inevitably works against issue sellers. Emotional regulation is key.

4. Choose your timing wisely – pitch ideas when there’s a groundswell from employees, when a business’ priorities are shifting (we’re in such a time right now) or when a new leader is at the helm.

5. Don’t do it alone – the researchers found having a group of people involved in seeking buy-in made it happen a lot faster, as each individual brought their own experience, relationships and social pull.

6. Tailor your approach– understand how various executives like to receive information. Do they prefer formal presentations to a casual coffee catch-up, for example? Or, does anecdotal data sourced from employees have more impact than referring to external statistics?

7. Have a solution – it seems obvious, but don’t suggest changing a process without providing what the researchers call “thoughtful fixes”. Come prepared with a well-researched solution, but be willing to make changes and seek feedback from others to ensure diversity of thought.

Read the full HBR article for further explanation, advice and examples backing up the tactics.

HR influence in action

Gaining executive buy-in requires HR to strike the right balance between human skills such as emotional intelligence with technical skills such as business acumen, says Shirley Vella CPHR, Executive Director of HR at SPV Consulting.

Based on her experiences getting HR strategies over the line, Vella offers three key tips for HR practitioners hoping to boost their influence among the executive team.

1. Speak executives’ language

For HR practitioners, the engagement, wellbeing and/or capabilities of the workforce tend to be the number-one goals of any new initiative. So, when pitching to executives, it’s often HR’s first instinct to lead with workforce benefits. 

However, it’s important for HR to put themselves in executives’ shoes and demonstrate that costs and business context have been prioritised in the strategy, says Vella.

“In my experience, executives really want to do good things for the employees, but, at the end of the day, the business needs to be sustained,” she says. 

“You need to understand your audience. If they’re looking at the bottom line, then you talk about the bottom line. Look at the ROI and what’s in it for the business.”

To get this right, it’s essential for HR to upskill themselves in the fundamentals of finance, she says, such as the right way to do a cost-benefit analysis or return on investment forecast.

“HR is fundamentally about people, but it also requires a strong focus on the profitability of the business. So you need to have that business acumen.”

“In my experience, executives really want to do good things for the staff, but, at the end of the day, the business needs to be sustained.” – Shirley Vella, Executive Director of Human Resources, SPV Consulting

Vella recalls an instance where she put these skills into practice to get executives at a previous organisation on board with a new HR information system (HRIS). 

“The company had never done it before. And they [looked at] the subscription fees and implementation fees first and asked, ‘What’s good about it?’

“The first thing I did was [demonstrate] the ROI of having the system – for example, [pointing out that] leave management and performance management could all be done through the system, so it’s saving a lot of HR time [to be reinvested into more high-value work]. Also, regulatory compliance is all set up in the system, so, for example, if an employee had an expired or invalid license, the system comes up with an alert, which reduces the risk to them. So we’re using those points and converting them into dollar signs.”

2. Divide and conquer

When cultivating the ability to influence executives, it’s important for HR to remember that each executive will have their own unique language and priorities.

“When you’re trying to get executive buy-in, use a divide and conquer [model],” says Vella. “Try to map your stakeholders first.”

For example, when she pitched the HRIS mentioned above to her company’s executive team, she first made a list of the leadership team members and determined who was the most computer-savvy and systems-focused, and approached them first to demonstrate the benefits.

“If you get their buy-in first, then they will become your advocates, and they will spread the word.”

Once initial advocates are onboard, leverage their support to influence other executives, she says. Many executives will be more convinced of an initiative’s benefits if they hear about them from more than one source, and this can create a positive knock-on effect that lends momentum to your proposal.

3. Start small

As well as building advocates within the executive team, Vella says that the greatest advocates for launching or sustaining HR initiatives are often the employees participating in them. 

Similarly to executives, employees are often more swayed by word of mouth than by formal presentations from the HR team.

For this reason, Vella suggests launching every important initiative through a pilot program in an area of the organisation where it’s likely to have the most impact.

“Whoever you pilot with will become your advocates too,” she says.

She offers the example of a lunch and learn initiative she recently launched in her current role.

“Everyone was fairly sceptical at first,” she says. “First of all, I [convinced] the executives to buy in, but they couldn’t force staff to go. So the next step was [convincing] the frontline managers, who are always busy. I personally went to them and said, ‘Come for five minutes, and if you don’t like it, you can leave.’

“Some of them who never wanted to join [in the first place] just came in to have a look, and  ended up  staying for the entire hour. The positive feedback was enormous and, slowly, they started to talk about [rolling] this out to other teams as well.”

By using these strategies to cultivate advocates among both the executive team and the broader workforce, HR can ensure their ideas translate into meaningful change.

A version of this article was originally published in June 2020, and has been updated with fresh insights from Shirley Vella CPHR.

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When compensation is introduced for actions we consider altruistic, it alters our perception of these acts – they no longer align with the original intent of selfless contribution.

For example, research indicates that offering financial incentives for blood donations can actually decrease participation rates. Acts like blood donation engage our intrinsic motivators, which are our internal drivers.

Leaders and managers who can harness their team’s intrinsic motivators can achieve significant performance outcomes. Unfortunately, many organisational reward and recognition strategies focus on extrinsic motivators, such as bonuses, promotions and power. Consequently, the motivational impact of these strategies is often short-lived.

“The feeling I get is that a lot of organisations use incentives without really understanding the  impact they can have,” says Marylene Gagne, John Curtin Distinguished Professor at Curtin University’s Future of Work Institute.

In collaboration with her co-author Rebecca Hewett, Gagne published a paper in the Journal of Management Studies which explores and contrasts motivational assumptions from agency theory and self-determination theory, concluding that the former is leading to suboptimal ways of managing employee motivation.

Agency theory versus self-determination theory

“Agency theory dominates management practices and education, [and is] built on the assumption that humans are self-interested, rational beings who need to be controlled and motivated through external mechanisms such as rules, monitoring and rewards,” says Gagne.

Consider a leader hiring a manager to oversee a division of the company. The business owner will aim to align the manager’s goals with those of the company, typically to increase profitability.

“The assumption is that if you reward that manager in a contingent manner – based on the firm’s performance – you’re more likely to encourage them to work harder and enhance the firm’s capital worth.”

In theory, this approach makes sense, as people generally seek rewards for their efforts. Gagne is not dismissing the role of financial incentives in the workplace, but suggests that our emphasis on these incentives as the primary motivating force is overstated.

On the other hand, self-determination theory assumes that individuals are naturally intrinsically motivated and thrive when their basic psychological needs for autonomy, competence and relatedness are satisfied. 

When this happens, employees will internalise organisational goals and therefore work towards them because they want to, rather than because they feel like they have to.

“Pay people well enough so they feel like the work they do is valuable, but limit the pay-for-performance approach because it can take away some of the meaning for people.”

How does this impact businesses?

Focusing on agency theory alone can have all kinds of commercial and cultural ramifications for a business.

“It tends to amount to managers monitoring employees more because they don’t trust that they’ll do the right thing, and they’ll impose more rules,” says Gagne. 

We know from previous HRM content that trust accounts for about 30 per cent of variation in performance. Various experts suggest that innovation and creativity are often killed in a culture of high employee surveillance and that it can also lead to unethical behaviours from employees.

“Underlying that is the idea that if my employees are extrinsically motivated, their goal is just to serve their own interests – they’re not going to be motivated to serve the interests of the organisation,” says Gagne.

“We often hear this narrative that HR executives need to learn to speak the language of other executives… but what about teaching executives whose expertise are in other fields to speak and think like HR?”  Marylene Gagne, John Curtin Distinguished Professor at Curtin University’s Future of Work Institute.

This can lead to a dip in discretionary efforts across the business, which can weaken or halt productivity levels. 

When employees don’t feel trusted, it can also lead to a range of non-productive behaviours, such as moral disengagement, individualistic mindsets, gaming the system and focusing on short-term gains over long-term sustainable performance, says Gagne.

“[Extrinsically motivated employees] might be more interested in what’s in it for them, such as pleasing the boss, getting a promotion or receiving a bonus. How might they then behave if they’re thinking like that? There’s more impression management, so less genuine behaviours. For example, if they’re helping a co-worker, they might just be doing that to look good to their boss, so that help is pretty surface level.

“Essentially, they’ll think like this: ‘I’ll only do what’s necessary to look good or to get to the outcome I want. I’m not going to be genuinely interested in whether my behaviour or work has a real impact on my colleagues, clients, beneficiaries or the organisation as a whole.”

Putting self-determination theory into action

Gagne and Hewett’s research shows that employers would benefit from building employee motivation strategies that centre on self-determination theory (SDT).

“When employees are intrinsically motivated, they care about the outcomes of the organisation,” she says.

A byproduct of this is that managers tend to avoid punitive measures and relinquish control, allowing for employees to internalise their organisation’s values and goals.

The first step, says Gagne, is to help employees feel capable by ensuring they have all the information, tools and capabilities necessary to engage with a more intrinsic approach to motivation. 

For example, in a marketing team, this might involve providing comprehensive training on the latest digital marketing platforms, ensuring team members have access to the best analytical tools and creating a supportive environment where they can freely discuss strategies and ideas. 

Next, you want to give them a sense of the ‘why’. 

“Help employees to see the practical applications of this value in their real life to make it more meaningful,” says Gagne.

For example, you could draw a link between how developing a commercial mindset as part of your organisational goals could support an employee to better manage their personal finances or to set themselves up for a senior-level role in the future.

You could also draw a link between the goal and how it contributes to bettering society, says Gagne.

For example, instead of an accountant seeing their job as simply crunching numbers and producing reports, HR and managers can coach them to see their role as contributing to the financial wellbeing of their community and enabling people to make more strategic decisions with their money.

Finally – and this is a key component of SDT – ensure employees feel a sense of autonomy.

“You need to make people feel like they have some kind of choice – that they can participate in designing organisational goals, for example, or shape how you might accomplish those goals. Participative management is very powerful for that reason.

“That’s what leads to internalisation [of organisational goals]. You’re much more likely to get someone who’s going to be self-regulating and managing their own behaviour as opposed to having a manager who needs to monitor them.

“They’re going to do it wholeheartedly. They’re going to do it well, not just surface level to please the boss. They’ll do the work in a way that will lead to the results the organisation is looking for… because they care about the results.”

Organisational structures and processes should be designed with “need satisfaction” in mind, she adds. 

“This would imply organising work in a way that gives employees access to information and decision-making power, supporting employees with feedback and learning opportunities… and promoting cooperation and teamwork.”

To achieve this, HR practitioners should consider how they divide and coordinate work.

“Does it promote information exchange and cooperation? Does it allow employees to make decisions individually or in teams? Are the resulting ‘jobs’ stimulating and do they provide people with clear information about the impact they have through their work? Are leaders trained to support employees or evaluate and sanction them? What behaviours do remuneration systems reward?”

HR as champions for change

While more research is needed before systemic changes are made to reward and recognition strategies, Gagne believes HR practitioners play a central role in moving the needle on new and improved employee motivation tactics.

“It should start with the relationship between executives and the board. [Help them] see how you could instil those principles of self determination theory, and focus them on how their decisions affect autonomy, competence and relatedness.

“We often hear this narrative that HR executives need to learn to speak the language of other executives, like operations and finance. But how about thinking about it the other way? How about teaching executives whose expertise are in other fields to speak and think like HR? I think we need to work on that.”

Learn how to approach talent management as a dynamic and holistic process in your organisation to reap the benefits of skilled employees who help the organisation achieve its strategic objectives with AHRI’s talent management short course.

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“Good luck with the culture change.”

The Chief Financial Officer of an infrastructure company said this to Siobhan McHale when she had been with the company for less than a week and was given the task of ‘fixing’ its broken culture. 

It was the sentence that made McHale realise that many organisations have a flawed understanding of what it takes to bring about cultural change. 

“Project managers weren’t managing their budgets, shareholders were furious and the organisation urgently needed to develop a high-performing culture to survive in a more competitive world,” says McHale, who is now the Executive General Manager of People, Culture and Change at Dulux.

While the leaders and managers of the company “sat on the sidelines”, the HR team who had preceded her desperately tried to solve the company’s culture issues. But without widespread support, it was a classic high-effort, low-return exercise that left HR going around in circles.

The CFO’s words rang in McHale’s head. 

It was clear that this organisation (and many others) saw culture as something to handball to HR. While the executives knew it was important, they struggled to see how they all could play a part in its success.

“I knew my efforts would also fail if the business placed total responsibility for change on HR’s shoulders,” says McHale.

To help the business achieve its desired results, she had to roll up her sleeves and do the hard work of helping people truly understand what culture means and reframe their role within it.

The first hurdle McHale had to overcome at the infrastructure company was repositioning HR’s role in the culture journey, she says. “Every part of the organisational ecosystem needs to take up a different role when it comes to culture change, and HR needs to examine its part in that.”

McHale says some HR practitioners default to the role of ‘order taker’, but in a culture transformation project, HR’s overarching role might instead be as ‘lead enabler’.

“That lead enabler role may come in the form of being a diagnostician at the beginning, revealing the patterns in the culture. At another point, it might mean being a designer, building the interventions that allow the system to start or shift. Or it may come in the form of being an interventionist, standing side by side with leaders and making change happen.”

“The famous quote attributed to Peter Drucker is: ‘Culture eats strategy for breakfast.’ I would contend that culture and strategy are not competitors, but rather, culture enables strategy.” – Siobhan McHale, Executive General Manager of People, Culture and Change, Dulux

Reframing HR’s role in culture transformation

To effectively engage in this kind of role shifting, HR professionals first need to have accumulated a significant level of trust, influence and social capital with key decision-makers in the business. Part of that comes from how they position the HR function not only in a culture transformation, but in the entire business operation.

“Sometimes HR is positioned as the ‘business partner,’” says McHale. “This positioning may have served us well in the past and allowed HR to get a seat at the table, but the role of ‘business partner’ places HR on the sidelines, rather than as a business leader with specific people, culture and change expertise. 

“As a business leader, you behave in a very different way than you would if you were a partner. You’re not an external consultant; you’re sitting within the business with your functional colleagues, leveraging your expertise to help the business adapt and grow.”

Reframing culture itself

Once HR’s role in a culture transformation is clear, the next step is to ensure everyone involved is 100 per cent clear on what they are trying to achieve, because, although culture is one of the most talked-about aspects of work, it’s also one of the least understood, she says.

“For some time now, culture has been positioned in many parts purely as employee engagement. Of course, engagement is a very important aspect of culture, but HR professionals need to have commercial conversations around culture.

“Culture is an enabler of strategy. It impacts every aspect of your business, from how you develop ideas to how you make your product or sell your services.”

There’s also a variety of cultures you can build in your organisation.

“Depending on your strategy, you may need a culture that’s customer-focused, quality-driven, high-performing, safety-conscious, agile, collaborative, growth-oriented, entrepreneurial – the list goes on.”

Culture is more than skin-deep, and in order to comprehend it in its entirety, you need to understand it in its parts. To help HR and leaders do this, McHale created the Culture MAPP, which breaks culture down into four key elements: mental maps, actions, patterns and processes.

“Mental maps are like the GPS in your car in that they help you navigate your way in the world. They contain information about the roles you step into throughout the day. 

“The mental maps people hold may not be visible to anyone else, but they strongly influence how people think and feel about their work. During culture change, help people redraw the mental maps that shape their role, so they can navigate the change.”

The actions section speaks to employees’ behaviours and conduct.

“These are the important behaviours, decisions and stories that are told within the organisation,” says McHale.

You also need tangible elements to help a culture come to life. That’s where processes come in.

“These are your reinforcing mechanisms. They might be your training courses or your remuneration or performance management systems. They reinforce or strengthen the culture that’s in place.”

Patterns, the final element of the MAPP, is when culture becomes more systemic and collectively held. 

“People can come and go from your business, but the patterns tend to remain.”

To demonstrate a seemingly innocent yet impactful pattern in action, she refers to the infrastructure company she used to work for.

“The CEO was fed up because the Head of Marketing promised to organise a billboard advertisement for months and still hadn’t done it. I asked, ‘Have you talked to him about it?’ It turned out he’d talked to everyone except the Head of Marketing. The pattern in that system was avoiding tough conversations because people would rather be liked.

“The CEO was co-creating the pattern by stepping into the role of ‘nice guy’, and marketing were the ‘non-delivers’. As soon as the CEO saw his role in the pattern, he had the hard conversation, and, by the end of the week, the billboard was installed.”

Culture transformation in action

Once the relevant reframing work has been done, it’s time to jump into the doing.

The culture change program McHale is most known for is the seven-year radical transformation she co-led at the Australia and New Zealand Banking Group (ANZ) in the early 2000s, which saw it go from the worst-performing financial institution in Australia to the number-one bank globally on the Dow Jones Sustainability Index. 

“When I came aboard, ANZ’s culture was in disarray. Its customers were dissatisfied, employees dreaded coming to work, and sagging revenues and profits had demoralised leaders. While ANZ’s executives knew they needed to instigate a turnaround, everything they tried seemed to make matters worse.”

McHale and her team worked with business leaders to identify and shift the hidden patterns that were blocking progress.

“Head office had stepped into the role of order giver – they were handing down orders to the branches and telling them what to do. The branch staff had stepped into the role of order taker. They were in a victim role and were feeling demoralised.

“This pattern of being told what to do was essentially leaking the organisational energy.”

The development of a new operating model called ‘Restoring Customer Faith’ reframed people’s roles, putting the head office into the role of ‘supporters’ and the branches into the role of ‘business leaders’.

“The role of ‘business partner’ places HR on the sidelines, rather than as a business leader with specific people, culture and change expertise.” – Siobhan McHale, Executive General Manager of People, Culture and Change, Dulux

It was such a massive undertaking that the executives decided to start with a pilot program aimed at the bank branches in the Dandenong region in Victoria.

“Beginning with a pilot is almost essential when working on complex adaptive change. I often call these ‘lighthouse projects’ because when they work, they shine a light for others to follow.”

A local CEO was appointed in the region, rather than having leadership directives stem from HQ.

“We said, ‘All the decisions in relation to how you serve your customers, manage your people and manage the branches within this area are yours.’ Then we stepped back and allowed the reframe to take hold. Over a four-month period we saw customer satisfaction increase by 30 per cent, we gained 30 per cent more customers, we saw a 40 per cent drop in defections and we saw a spike in employee engagement. 

“Once we saw the impact on that region, we rolled out the initiative across ANZ.”

Within seven years of change at ANZ, the executives were happy to report that profits had more than doubled and the share price had nearly tripled, she says.

“ANZ was winning awards for leadership, employee engagement and customer service. The firm had also become a magnet for talent, receiving more than 10,000 applications annually for its 250 graduate positions.”

It’s projects like this that prove culture has little to do with pizza parties, ping-pong tables and game rooms. Viewing it this way is the reason so many HR leaders lament the fact that their culture strategies often don’t get the executive support required, or fall flat when rolled out to a cohort that’s less than excited to embrace them.

Culture always needs to be viewed through a commercial lens, which is why McHale’s ANZ project was a wild success, going on to form the basis of her best-selling book, The Insider’s Guide to Culture Change, and be used as a Harvard Business School case study. 

Not only did McHale and her team remove the kinks from a poorly performing culture, they also delivered tremendous results. 

In other words, culture transformation is not just about creating a new system or process to correct the issues, but leaving the culture better than you found it.

A longer version of this article was first published in the June edition of HRM Magazine.

Siobhan McHale will be speaking on culture transformation and group intelligence at AHRI’s National Convention and Exhibition in August. Sign up today to hear from Siobhan and other experts, including Seth Godin, Dr Pippa Grange and more.

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The clichés about young workers’ demands are familiar: better pay, lighter workloads, and a preference for avoiding phone calls. But much of this is just hearsay that has snowballed out of control.

The actual needs and desires of young workers don’t differ that much from other generations; the emphasis is just perhaps a little different in some instances.

Research suggests that Generation Z (born 1997-2012) want meaningful careers and to have their voices heard. 

“The next generation of workers also brings a blend of technological fluency, entrepreneurial spirit, and a passion for making a positive impact in the world,” says upcoming AHRI Convention and Exhibition speaker, Brie Mason, Principal Strategist & Director, Employer Brand Mason.

Too often, we make broad brush assumptions about generations of employees. We assume that attracting younger employees requires a blanket approach, but that might be oversimplifying matters.

“A 20-year-old worker in Western Perth who is on a path toward working in aged care is very different from a 20-year-old worker in CBD Sydney who wants to work in PR. Beyond that, our mindsets and upbringings also shape our needs,” says Mark Puncher, CEO of Employer Branding Australia, who will also be speaking at AHRI’s Convention in August.

Instead of trying to think of what all young workers want from work, he suggests considering who you’re trying to attract and what they care about. 

“The value of having benefits goes way beyond the actual benefit that’s offered. It’s about how it’s offered. By designing [benefits] with your team… that creates accountability and ownership,” he says.

Action point: Consider creating an employee persona (use this template to get you started) to better understand what employees and potential recruits are seeking from their employer. 

Promote stability and purpose

“People say things like Gen Z aren’t loyal, they want to progress really quickly, but I’d argue that one of the biggest things that matters to young people is job security, given the cost-of-living [crisis]. Not only are they experiencing it themselves, but they’re seeing their parents, or other older role models, struggling.”

This is why he thinks job security and stability are important factors to highlight when trying to attract talent. This could look like communicating your company’s current and future growth plans, low turnover rates, or career progression pathways. 

For example, your job advertisement might read:

“Join our growing team at [Company Name], where we offer permanent positions and robust career development programs. With a strong financial foundation and a commitment to your professional advancement, you’ll find stability and security in every step of your journey with us.”

Another common assumption made about younger employees is that they want pay raises, promotions, and extra responsibilities straight away.

“[People think that] because that’s because they’ve been raised in a world where they get instant gratification on Instagram and TikTok, but, from my point of view, what they actually crave is to belong and find meaning in their work.“

This narrative is nothing new. We’ve known for a long time now that younger workers are motivated by purposeful work, but the trick is tying that back to impact, says Puncher.

“It’s not enough to say, ‘I work for an organisation that makes a difference.’ It’s got to be, ‘I make a difference in this organisation,'” says Puncher.

Mason agrees, saying: “We need to work harder at connecting everyone, in every role, to the purpose of the organisation. They need to know and see their personal impact, and we need to ensure values are not just posters on a wall, but are lived every day.”

Action point: Individuals’ purpose doesn’t always need to be attached to grand “noble purposes” like saving the planet, says Puncher. Demonstrating impact can be as simple as aligning employees’ personal growth goals to the business’s overall goals.

For example, here’s how you might align employees’ goals with company goals:

When employees complete their goals, make sure to reiterate how they are contributing to the overall success of the organisation.

Meeting young employees’ expectations

Technology

Younger workers will have high expectations when it comes to technology, says Mason, as they are “the first truly digital-native generation.”

“Their expectations of technology are that everything should be simple, efficient and seamless,” she says.

Action point: Talk about how your organisation is utilising technology such as AI in your job description. In fact, recent research from LinkedIn and Microsoft found that LinkedIn job posts that mention AI or generative AI have seen 17 per cent greater application growth over the past two years compared to job posts that don’t mention them.

Beyond flexibility

A lot of what would have previously been considered ‘perks’ can quickly be considered basic hygiene factors by some employees, says Mason.

“To [young workers], flexibility and work-life balance are not benefits; they’re expectations of how we work. We need to design roles and work differently, giving everyone greater opportunities for autonomy, creativity, and innovation,” she says.

Action point: Refer back to Puncher’s point about co-designing benefits with employees, so you know what would be considered ‘above and beyond’ basic expectations for young workers. For example, remote work might not be considered a benefit anymore, but perhaps getting to choose start or finish times might be.

“It’s not enough to say, ‘I work for an organisation that makes a difference.’ It’s got to be, ‘I make a difference in this organisation.'” – Mark Puncher, CEO, Employer Branding Australia

Turn employees into storytellers

If you want to attract more young employees, get their peers (your current workforce) to share authentic stories about their experience of working for the company, says Mason.

“I’m a firm believer that employee advocacy is the number one way of building a strong employer brand,” she says. “Authentic storytelling adds credibility and believability to your messages too.

“When your employees share their genuine excitement about what it’s like to be part of the team, it speaks volumes to potential candidates. It’s like getting a recommendation from a friend – it’s way more convincing than any marketing campaign or ad.”

Action point: Tell stories in an authentic way, says Puncher.

“Often when marketing and brand folk get involved, they’ll say, ‘Let’s get employees to do a video about why it’s great to work here, but we’ll give them a script because that way we can control what they say,’ but that misses the point entirely.”

Overly scripted or contrived videos often do more harm than good, he says.

“People often say, ‘But what if they’re nervous or they say the wrong thing?’ But if you ask the right questions, make sure they feel comfortable, and give them a look at it before it goes out, that’s when you find gold.”

Use social media channels wisely

Using social media for talent attraction hinges on truly understanding your target audience and tailoring your strategies to align with their habits, says Mason.

“Certain organisations, such as NSW Police, have excelled in crafting witty, trendy content that resonates with younger generations on TikTok. This approach to content generation differs significantly from platforms like LinkedIn,” she says.

“The key to success lies in simplicity; authenticity prevails. People want genuine insights into what it’s truly like to work at your company. Who are the individuals? What are the company values? What experiences are being lived? What is the office like?”

“The next generation of workers also brings a blend of technological fluency, entrepreneurial spirit, and a passion for making a positive impact in the world.” – Brie Mason, Principal Strategist & Director, Employer Brand Mason.

Puncher agrees, saying if you only focus on the “glossy” stuff, you might inadvertently set yourself up to fail.

“You’re creating a false expectation. People might say, ‘Oh, that’s not what I saw on Instagram’ then they’ll rarely perform to the same degree – or they’ll [quit].”

Action point: Look for the rituals and rhythms in your workforce, not just the special moments, and promote those on social channels.

“Also, don’t just put the same content on each channel in the same way,” adds Puncher.

For example, say you’ve created a video of your young employees talking about what they love about working at your company, here’s how you might use that video in different ways, on different channels:

• On your company website, include the full 2-minute video that gives deep insight into the experiences of 2-3 of your employees based on testimonials they share with you.
• On YouTube, have those same employees giving viewers a tour of your office space.
• On TikTok, find a 15 or 30-second cut from the original video that highlights a fun or engaging aspect of your culture (e.g., employees talking about social aspects of work).
• On LinkedIn, cut your original video into three separate 30-second cuts, focusing on a different employee in each video, then post each video over a few weeks. It could be part of a video series, ‘Why I love working at [company name].’

Consider intrinsic motivators

Extrinsic benefits can be useful, says Puncher (who doesn’t like a free lunch?), but they only go so far.

“So much of the reason people stay with you and choose to perform instead of tapping out is about intrinsic benefits: good leadership, relationships, benefits, trust, and loyalty. If you focus solely on extrinsic benefits, you run the risk of creating a transactional employment relationship.”

Intrinsic motivating factors include problem-solving, recognition, belonging, and feeling stretched (in a healthy way).

Read HRM’s article ‘How to push employees out of their comfort zone (without pushing them too far)’.

An example of an intrinsic motivator is learning something new at work. People might gain a strong sense of satisfaction from mastering a new skill or adding another accreditation to their LinkedIn profile, so consider how you build opportunities like this into the employee experience.

“A classic example might be a [young] employee coming to you and saying, ‘I want a promotion because I’ve been here for six months, so what’s the next thing for me?'” says Puncher. “A lot of people assume that’s about them wanting a pay rise, but that’s not necessarily true. It’s about them needing to know where they’re going [and what they’re going to learn].”

Action point: Benefits shouldn’t be treated as a lure or bait to reel people in, they should be things that are co-designed with employees with the aim of helping them to perform, says Puncher.

Consider how you can enhance these factors, such as via management training, creating effective recognition programs or giving an employee visibility over how they could progress in your organisation.

Puncher and Mason will be speaking on a panel about crafting a compelling EVP for talent today and tomorrow at AHRI’s National Convention and Exhibition in August. Sign up today to hear from them and other experts, including Seth Godin, Dr Pippa Grange and more!

The post What’s the secret to attracting Gen Z employees? appeared first on HRM online.

In a bid to relieve the financial pressures that Australian households and businesses have been experiencing of late, Treasurer Jim Chalmers forefronted cost-of-living relief in last night’s budget, which included a $3.5 billion energy relief bill, which would deliver $300 worth of energy rebates for all Australian households, and the return of stage 3 tax cuts from 1 July (see tax cuts by pay bracket here).

However, these cost-reduction measures have faced criticism from influential independent senator Jacqui Lambie, who criticised the government for not means testing the energy rebates, and from Greens Leader Adam Brandt, who says the measures don’t go far enough to support “people who are doing it tough”.

“This budget is framed in fraught and fragile global conditions,” said Chalmers in his Budget speech. “[Global] uncertainty, combined with cost-of-living pressures and higher interest rates will slow [down] our economy, with growth forecast to be just 1.75 per cent this financial year, and 2 per cent next [year]. Slower growth means a softer labour market, with unemployment expected to rise slightly to four and a half per cent next year.”

Despite this, he indicated that the Australian economy is well placed to tackle these challenges, and pledged that the “responsible relief” introduced by this year’s budget will help build a stronger and more resilient economy.

Beyond the cost-reduction measures, relevant Budget insights for businesses include a significant investment to deliver a skilled workforce for the future, further measures to end violence against women, a proposed wage boost for Australia’s aged care and childcare sector, and support for small businesses struggling to navigate Australia’s new industrial relations landscape.

Below, HRM takes a deeper dive into what else HR needs to know.

Skills, jobs and wages

Skills
Nearly $600 million has been set aside to bolster skills and training in Australia, with a focus on the construction, clean energy and manufacturing sectors.

This will include a $50 million injection into training people to work in clean energy across wind, solar, pumped hydro, grid battery storage, electricity networks and hydrogen, as well as relevant electrical and construction trades. It will add another $30 million to increase teacher, assessor and trainer roles in the clean energy sector.

There was also a strong focus on apprenticeships, with $1500 in reimbursements for small-to-medium sized businesses who engage clean energy, construction and manufacturing  apprentices through a group training organisation. The government will also fund 20,000 new fee-free TAFE, VET and ‘pre-apprentice’ courses for the housing and construction workforce, from January 2025.

Jobs

Vulnerable and marginalised Australians will benefit from the creation of two new paid work placement programs, designed to support job seekers who’ve previously faced barriers to enter the workforce by connecting them with new opportunities in businesses and social enterprises. 

Remote Australian communities are also set to receive a cash injection. Over the next five years, $2.4 billion will be used to create new opportunities for First Nations people in these regions, namely via jobs creation. The new ‘Remote Jobs and Economic Development Program‘ is set to create up to 3000 jobs in remote Australian regions in the second half of the year. Created in consultation with First Nation Australians, the program will focus on young people to help improve their employment opportunities once they’ve finished school.

The government is also looking to support women to enter traditionally male-dominated industries via the Building Women’s Careers program, which is backed by a $55.6 million government investment. This will focus on the construction, clean energy, advanced manufacturing and digital technology sectors.

Wages

Following the last budget’s historic interim 15 per cent wage increase for the Aged Care sector, the government has announced its intention to fund a further increase to award wages for this cohort, along with childcare workers. The exact amount is yet to be determined/announced.

The government also plans to attract more nurses and aged care workers to this critical sector via a $87.2 million workforce initiative.

Chief Executive Women (CEW) CEO, Susan Lloyd-Hurwitz, says these measures will “go some way to improving economic security for women”.

“We know that working women are significantly overrepresented in the care sector, and we also know there are skills shortages in many areas like aged care and early childhood education.”

However, she says CEW was disappointed that the budget did not comprehensively address women living in poverty.

“JobSeeker payments sit below the poverty line at around just 43 per cent of minimum wage, trapping the most vulnerable Australians in poverty instead of enabling them into work.”

Superannuation payments paid on parental leave

To continue closing Australia’s gender pay gap, which currently sits at 12 per cent (ranking the country 26th in the world for gender equality), $1.1 billion will go towards paying superannuation on top of government-funded parental leave for parents of babies born or adopted after 1 July 2025.

This was a key recommendation from the Women’s Economic Equality Taskforce, headed up by soon-to-be Governor-General Sam Mostyn AO, and is expected to help 180,000 families each year.

This will be further enhanced by upcoming increases to employers’ compulsory superannuation payments, which will increase from 11 to 11.5 per cent in June and, by July 2025, will sit at 12 per cent. 

These changes build off previous enhancements to Australia’s paid parental leave scheme, which will add an extra two weeks’ paid leave from July this year, eventually taking the scheme from 20 to 26 weeks in total by July 2026.

Funding towards family and domestic violence prevention

Earlier this month, we saw nation-wide protests demanding more government action towards women’s safety, following the murder of 27 women in Australia this year.

Rather than establishing a royal commission into domestic violence, as many Australians called for, the government has announced a $925-million package to end violence against women and children, with the aim of contributing to women’s safety and economic security, and facilitating independence for victim-survivors of family and domestic violence.

Chalmers notes that more needs to be done to curb the worrying rates of violence and abuse towards women, a sentiment that many agree with.

“Women’s safety and ability to escape gendered violence is intertwined with their economic security, and we also know that more needs to be done to fund the services supporting women escaping violence,” says Lloyd-Hurwitz.

HECS debts wiped

More than three million Australian students are set to benefit from the government wiping $3 billion worth of student HECS debts. Chalmers announced that the government will cap indexation of student loans to either match the consumer price index or the wage price index, whichever is lower. This will be backdated to mid-2023 and is set to deliver $1200 to the average student.

Under a separate initiative, teaching, nursing, midwifery and social work students undertaking practical work placements as part of their studies will now be paid $319.50 per week, following a $1.6 billion commitment from the government.

Mental health

Recognising the prevalence of mental health concerns among Australians, the Budget has pledged $888.1 million to help people get the mental health care they need.

This investment will span eight years, and includes the introduction of a free, low-intensity digital service for people with mild mental health concerns. Through this service, every Australian will be able to access timely mental health support without a GP referral. Approximately 150,000 people are expected to make use of this service each year.

Significantly, $10.8 million has also been set aside to support the mental and financial wellbeing of small business owners, recognising the significant challenges faced by this cohort in recent years. This provision will give small business owners access to tailored, free and confidential support. 

Small business support with industrial relations reforms

As well as supporting SME owners’ mental health, the government has pledged to offer further support to businesses to understand and maintain compliance with the swathe of industrial relations (IR) reform that have recently been announced.

The government announced over $20 million to support small business owners to navigate the new IR landscape. The Fair Work Ombudsman is set to receive the funds over the next four years, with a large portion funding the Employment Advisory Service, which provides assistance to both employees and employers regarding workplace rights and obligations in the form of educational resources, dispute resolutions and information about maintaining compliance with workplace laws.

The funds will also be used to help small businesses navigate the recently passed Right to Disconnect legislation, which is set to come into effect in August 2025 for small businesses (all other businesses will need to comply from August this year).

Small businesses, who are perhaps feeling the brunt of Australia’s cost-of-living crisis, will also receive tax relief with the extension of the instant asset write-off scheme.

This means that organisations with less than $10 million annual turnover can claim an immediate tax deduction for any eligible business assets up to $20,000 – be that a new computer, operational machinery or office equipment. This measure is yet to be passed in law.

Future Made in Australia and our net zero goals

In a bid to position Australia as an “indispensable” part of the global net zero economy, Chalmers announced the 10-year $22.7 billion Future Made in Australia package to help facilitate the private sector investment required for Australia to move towards a net zero future. 

This includes $17.3 million to mobilise private sector investment in sustainable activities, and $399 million to establish the Net Zero Economy Authority and support the economy-wide net zero transformation.

The Net Zero Economy Authority will promote orderly and positive net zero economic transformation. Its functions will include catalysing investments in new industries and jobs, supporting workers impacted by the net zero transition, coordinating policy design and building community engagement.

The package also includes $8 billion over the decade to accelerate investment in renewable hydrogen.

“Australia’s biggest opportunity for growth and prosperity is the global shift to clean energy,” said Chalmers.  “By acting now, our resources, our researchers and our regions can help power the world.”

To learn more about how the budget might affect you, read the full budget papers here.

The post What HR needs to know about the 2024 Federal Budget appeared first on HRM online.

Amid our nationwide skills shortage, new research from the Australian HR Institute (AHRI) has revealed the scale of this issue at an organisational level.

Employers report almost one in five workers are not proficient in their roles, and a majority (57 per cent) believe skills gaps are having a negative impact on their organisation’s productivity, according to AHRI’s June 2024 Quarterly Australian Work Outlook report.

The report, based on insights from 607 senior HR professionals and decision makers, found that 32 per cent of respondents are experiencing annual turnover of over 20 per cent. This has increased from 25 per cent of respondents in the previous quarter. 

This is likely contributing to productivity challenges, due to high vacancy rates and the time needed to train new hires and support them to be fully proficient in their roles.

Skills deficiencies were a greater issue in the public sector, with nearly a quarter (24 per cent) of respondents citing this as a challenge, compared to 18 per cent in the private sector.

“We see these insights as a call to action to invest in skills development as a top priority to avoid sluggish productivity levels having long-term impacts on our economy,” says AHRI’s CEO Sarah McCann-Bartlett. “We will be watching tonight’s budget closely to see how the government plans to help boost skills development in Australia.”

Addressing skills challenges

Despite the worrying headline statistic in this report, it was encouraging to see that 37 per cent of organisations plan to increase training investment in their organisation in the next 12 months, and that only six per cent intend to cut training budgets.

“We saw a significant difference in this intention when cutting the data by sector,” says McCann-Bartlett. 

Over half (53 per cent) of public sector employers intend to increase skills investment, compared to just 34 per cent of private sector firms.

“It may be that the public sector has decided this type of investment is necessary to improve productivity. It will be interesting to see the outcomes over time.”

Beyond investing in traditional upskilling and training initiatives, employers can facilitate skills building initiatives through strategies such as:

• Setting up internal secondments, allowing employees to spend a few weeks/months working in a different unit of the business to develop new and transferable skills that they can use in their primary role.
• Facilitating skip-level meetings that allow junior employees to connect with someone two levels above them. The junior employee can shadow the senior and learn what their future progression pathway could look like.
• Setting up reverse mentoring programs where younger employees share knowledge with their more experienced colleagues, as a way to inject diverse perspectives and skills into your organisation.
• Using AI to develop customised learning programs for each employee. AI can assess skills, learning pace and preferences to suggest personalised training modules, optimising learning efficiency and engagement.
  
  This doesn’t even have to be a costly exercise; utilising something like ChatGPT can be a great starting point. Entering the prompt: ‘I am a content coordinator and one day want to be an editor. Write me a career profession plan, including the skills that I will need to develop over the next few years,’ resulted in this relatively comprehensive development plan.

On top of facilitating specific skills-boosting initiatives, employers could also look to streamline recruitment processes.

“Our data underscores the importance of speed to competency as part of the induction and onboarding process to help support productivity, employee engagement and retention,” says McCann-Bartlett.

This could look like introducing new technology or using AI to accelerate recruitment or onboarding efforts.

For example, KPMG – a 2023 AHRI Award finalist – reduced its time to hire by 20 per cent by layering AI into its onboarding process.

Prior to implementing an AI solution, KPMG had 19 disparate recruitment systems and a 47-step onboarding process, and just five per cent of the process was automated. Onboarding took between 89 and 156 days to complete. 

“[We had an] opportunity to take stock of a process that had organically grown over decades into something that was really uncontrollable, and wasn’t focused on the candidate,” Rob Dunderdale, Head of Talent Attraction at KPMG Australia told HRM in a previous article.

“Our vision was to deliver talent to the business faster, easier and with purpose.”

Read more about KPMG’s approach to using AI at work here.

McCann-Bartlett stresses the importance of investing in effective line management capability as part of solving this skills challenge.

“This is especially true given that evidence shows that a poor employee-line manager relationship can drive job dissatisfaction. It is well-known that high-quality leadership and management results in higher productivity.”

In fact, research suggests that approximately a third of the world’s productivity gaps could be attributed to poor management, so manager capability uplift should form a key part of lagging organisations’ solutions.

Pay expectations 

As well as grappling with a skills shortage, employers are also feeling the pressures of a cost-of-living crisis; businesses are managing a reduction in consumer spending, an increase in operational costs and, in some instances, supply chain challenges.

All of this is impacting employee wages. AHRI’s report found a fall in pay expectations, showing that employers expect mean basic pay increase (excluding bonuses) to be 3.0 per cent in the 12 months to April 2025, down from the 3.7 per cent previously predicted for the 12 months to January 2025.

“Our data underscores the importance of speed to competency as part of the induction and onboarding process to help support productivity, employee engagement and retention.” – Sarah McCann Bartlett, CEO, AHRI

Wage expectations were higher in the public sector (4.5 per cent) than in the private sector (2.6 per cent). 

“The findings from this quarter’s outlook align with the Reserve Bank of Australia’s view that while the labour market has eased, it remains tight, with wages growth higher than is sustainable at current levels of productivity growth,” says McCann-Bartlett.

Recruitment and redundancy insights

AHRI has reported strong demand for labour in the June 2024 quarter, with net employment intentions of +36, up from +33 in the March quarter.

However, recruitment difficulties continue to plague employers, with 40 per cent of those who are recruiting reporting trouble doing so (up from 38 per cent last quarter).

Redundancy intentions have remained at similar levels to the previous quarter, currently sitting at 23 per cent for the upcoming quarter.

McCann-Bartlett advised organisations wanting to boost productivity to ask themselves what changes need to be made to retain talented employees and attract the best new talent.

“They may need to consider if their offering is sufficient, and whether they need to offer better pay, increased training or greater flexible working opportunities. Each workplace is unique, which is why a nuanced, considered approach is important.

“AHRI’s findings reflect ongoing tightness in the Australian labour market, despite some modest loosening over the past year. They reinforce the imperative for HR professionals and employers to engage, reward and retain employees, with employee retention remaining a key focus for HR professionals.”

For more detailed insights, download the full AHRI report here.

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What does it take to run an effective coaching session? Does the coach need to have undergone a comprehensive training program in order to provide value to their mentee? Do they need to develop a 12-step action plan following the session to help put their mentee on the right path?

According to coaching expert Michael Bungay Stanier, often it’s just about learning how to ask better questions.

“If you can coach somebody in five minutes or less, everybody wins. And sometimes that’s having the discipline to ask them good questions, and then [staying quiet] and listening to their answer,” he said in a recent episode of AHRI’s podcast Let’s Take This Offline.

His book The Coaching Habit has sold over a million copies worldwide because, in his words, it “unweirds coaching”.

“I didn’t write the book for coaches because they already love coaching. What I was trying to do was [write something] for all the people who are like, ‘My organisation is making the coach. I don’t really want to do it, but I have to. Where do I start?'”

He wanted to help them see that coaching can be baked into your everyday interactions without a huge amount of extra effort and time, which is exactly what time-poor managers need.

7 questions for an effective coaching session

Often, what trips managers up when running a coaching session with their team members is adding structure to their line of questioning. They might go into the conversation with the goal of learning about the employee’s learning and development ambitions or to understand more about how they want to progress in the organisation.

However, Bungay Stanier thinks it’s often best to just let the conversation unfold naturally and learn what’s on their mind.

Following decades’ worth of experimenting, he landed on what he believes are the seven most important questions to ask in a coaching session:

1. “What’s on your mind?”
2. “And what else?”
3. “What’s the real challenge here for you?”
4. “What do you need?”
5. “How can I help?”
6. “If you’re saying yes to this, what are you saying no to?”
7. “What was most useful for you?”

They might seem overly simple, but that’s the point. And he says that, time and time again, they prove to be fruitful questions.

One that he often gets positive feedback on is: ‘What’s the real challenge for you here?’. Because we’re prone to trying to solve other people’s problems, we often jump at the opportunity to impart our hard-earned wisdom and advice, but that’s not always useful.

“We’re all so wired to get on with stuff. Our advice monster shows up and we start trying to solve the first thing that has come up,” he says. “But the first thing that shows up is never the real challenge. It’s just the first challenge.”

“If you can coach somebody in five minutes or less, everybody wins. And sometimes that’s having the discipline to ask them good questions.” – Michael Bungay Stanier, author and coaching expert.

People are testing the waters, assessing how safe it might be to disclose the actual challenge they are facing, he explains. 

For example, they might mask their deep dissatisfaction with their manager by instead talking about frustrations they’ve experienced during a recent project.

“Curiosity takes you closer to figuring out what’s really [concerning] the person that you’re working with. So it works both at a strategy and a cultural level.”

For HR professionals, being the person who can figure out the root of an issue will make you “immensely more valuable to your organisation”, he says.

“And you have far more impact because you’re willing to say, ‘My job is to figure out what the real challenges are.’ That is a strategic act.”

The way the question is structured also helps, he adds.

“It’s not just, ‘What’s the challenge?’. Because, if you ask somebody [that], you’re going to get a bit of a restatement from what you’ve already heard, when you asked them, ‘What’s on your mind?’. When you add the word ‘real’, what you’re saying is, the first thing you told me isn’t the real challenge. So immediately, you’ve got them thinking. 

“You can feel the difference. What’s the challenge, what’s the real challenge? It’s like a different question, even though there’s only one word added. 

“But then I think the magic happens when you add ‘for you’ at the end of that question: What’s the real challenge here for you? Now they’re not talking about the problem out there. They’re talking about, ‘Here’s why I am wrestling with this. This is what’s hard for me around this.'”

Download a one-page guide to Bungay Stanier’s 7 questions for an effective coaching session.

Coaching the coaches

A lot of what Bungay Stanier talks about will relate directly to HR practitioners, who themselves need to be effective coaches to leaders, managers and employees. However, often they’ll be the ones teaching managers to level up their approach to coaching employees.

Sometimes that means being willing to tell managers that they’re prone to giving too much advice, rather than listening deeply to what their mentee is saying to them (or what they’re not saying).

 “You could say, ‘There’s a really important place for advice, just not as fast or as omnipresent as you’re currently delivering it. So let me introduce curiosity as an element of leadership that is underdeveloped in you right now,”’ he says.

But what about those leaders who don’t want to be coached?

“For most leaders, if you come up to them and say, ‘Hey, I’m from HR. I’m here to coach you.’ The typical reaction is [to resist that]. So I usually don’t make a grand announcement that the coaching has begun. 

“When you push into a system, it pushes back. It’s a survival mechanism driven by your lizard brain – your amygdala. So don’t make a big deal about it. Just be curious.

“So if I’m starting to work with a leader, I’ll go, ‘How can I help? So what’s the challenge here for you? And then I go, what else? So what’s the real challenge? So what do you need?’.

“You can call that coaching, or you can call it having a conversation where you’re trying to be as helpful as possible.” 

This is an excerpt of a conversation from AHRI’s new podcast, ‘Let’s Take This Offline‘. Listen to the full episode here.

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Picture this: you’re the Chief Learning Officer for a large organisation and have been tasked with addressing a range of critical skill gaps in your workforce. You find a seemingly suitable learning platform and invest thousands of dollars in it, spend hours preparing an internal marketing campaign, and then, when it comes to the roll-out period, no one signs up. What went wrong?

“Investing in a platform is not investing in your people,” says Rod Farmer, Expert Associate Partner at McKinsey & Company. “You’ve thought about the tool before thinking about the desired outcome or impact.”

Before diving into your platform of choice, you first need to ensure you’re designing learning experiences that align with employees’ context of use, he says.

In a recent episode of AHRI’s new podcast, Let’s Take This Offline, Farmer outlined how HR and L&D professionals can do this. Here’s an excerpt of his advice.

1. Contextualise your learning

HR needs to move towards contextualised upskilling and reskilling instead of always defaulting to self-paced learning, says Farmer.

“The global average for self-directed digital learning, from opting in to completing the program, is 13 per cent. That’s a huge amount of wasted capital and emotional energy.”

When learning feels independent from the job at hand, and when it’s not curated for the individual employee’s needs, it’s often deprioritised or, worse, ignored.

“Also, upon completion, there’s very little recognition or reward. We can talk about things like micro-credentials and badges, but, at the end of the day, people just want to apply something in their day-to-day job and be recognised by their managers for it.”

To get on-the-job learning right, it’s critical to first understand the individual employee’s context of use.

“Who are they interacting with? What are the actual set of activities and steps they need to perform to do that job? When you tailor learning to that, that’s when you get a lot more cut-through.”

“The global average for self-directed digital learning, from opting in to completing the program, is 13 per cent. That’s a huge amount of wasted capital and emotional energy.” – Rod Farmer, Expert Associate Partner, McKinsey & Company

2. Three kinds of learning 

The holy trinity of learning, in Farmer’s view, is formal, social and on-the-job learning. 

“We’re very good at formal, but the problem is that we went from face-to-face, classroom-based learning to saying, ‘Let’s just go digital.’ We didn’t consider the social, peer-to-peer and on-the-job element.”

In Farmer’s view, apprenticeships are a fantastic way to capture the peer-to-peer and social elements of learning.

“You want to give somebody something that’s just a little bit harder than what they’re currently able to do, supported by the right structures, people, enablers, content and technology, to enable them to get to that next level of performance.”

3. Demonstrate ROI on learning and development

To show a return on investment in L&D, demonstrate impact and scale, says Farmer. 

“To do this, start small. Be very clear on the outcomes you’re achieving. Have people celebrate their learning outcomes and learning activities. That will build belief that these new ways of working are worth further investing in.

“I go from company to company… and they talk about L&D cost-cutting, and they’re very real concerns. But when I ask if they’re able to equate the learning outcomes to commercial performance and organisational benefits… the answer is typically ‘no’. 

“If you can’t track it, if you can’t measure it, if you can’t link it to benefits, if you can’t show how you’re going to scale it up systematically, it might be challenging to warrant additional funding or to safeguard your existing funding.”

Present this investment in language that budget holders will resonate with, he adds.

“Organisations that invest in upskilling and reskilling see a 2X improvement in retention rates. So if [an organisation] improved retention rates by just two to three per cent, it would save more from implementing upskilling than it would from dealing with churn, with a 30 per cent margin.

“In other words, the cost of churn – the productivity lost, rehiring an employee, recruitment costs, products coming to a halt, cultural issues – is far greater than implementing an upskilling program.

“You have to demonstrate the benefits and then use the maths to say, ‘This is mission critical. It’s not a nice-to-have. It’s fundamental to driving our triple dividend: social benefits, cost-efficiencies and growth.’”

Want to hear how Rod Farmer puts these insights into action? Listen to his podcast episode below, where he shares a practical case study.

A version of this article was originally published in the April/May 2024 edition of HRM Magazine.

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