From free M&M’s 26 years ago to a world-renowned employee benefits system – SAS has pipped Google as the World’s Best Employer in Fortune magazine. Tom Washington speaks to ANZ managing director Gordon Clubb and HR director Brendan Gregor about how the region’s company values and employment practices have transformed the business
Business analytics software firm SAS has pedigree when it comes to keeping its workforce happy. Earlier this year, it was named number one in Fortune magazine’s annual ‘100 Best Companies to Work For’ list, the seventh time SAS has been in the top 10 and its fifth appearance in the top five.
On these shores, SAS Institute Australia made BRW’s top 50 Best Places to Work list for the second year running in June, coming in at 39.
People come high on SAS’s agenda. Back in January 2009, as the business world was crumbling in the wake of an economic downturn, CEO Jim Goodnight told employees “there would be no layoffs” during the GFC; a move designed to help workers stay focused on customer needs and not be “distracted by issues related to corporate viability”.
Yet the company has experienced some of the same post-GFC difficulties as many firms. Rather than financial worries, however, Gordon Clubb, managing director of SAS ANZ, cites a genuine shortage of talent is the most pressing business issue.
“There is a finite market in Australia for the skills we need. A big issue is attracting the right people in a very competitive environment, and then retaining those people,” he explains. “We’re not the biggest player but there is something different and unique about us as an employer, and I believe we’ve got the best people in the business. Everybody else has been acquiring and patching companies together to get what we’ve got.”
Despite poor economic conditions, SAS maintained its unbroken chain of growth and profitability for 34 years since the company was founded. It achieved global revenue of US$2.31 billion in 2009, up 2.2 per cent over 2008 results. SAS ANZ saw a market share gain of four per cent and has won high profile customers such as BUPA, Coles, South Australia Health and Telstra in the past year.
Its success is based on business’ need to make sense of all the data they obtain. “Businesses have huge amounts of data, both structured and unstructured. People have been collecting data and now they’re starting to realise, they can use it for business strategy. That’s where analytics comes in,” explains Clubb.
“What SAS is delivering might be referred to as business analytics, but how it translates in the boardroom is about how businesses and governments get more insights out of the information they hold to make critical decisions.”
The company operates in a very busy market, and one that has seen substantial growth over the past decade. Competitors include IBM, Oracle, SAP and Microsoft, while many niche players in the field have been absorbed by these bigger names, changing the competitive landscape and impacting in the war for talent.
Solving the talent puzzle
To help keep a flow of talent coming in, SAS ANZ is planning to create a graduate program, but utilising global mobility is currently providing a quicker solution to the problem. For employees, global mobility is appealing, and as SAS develops new products expertise can be brought into Australia from other markets to compliment existing experience.
“[The talent shortage] is a worldwide phenomenon, it’s not just Australia, so we’re looking at common programmes between our countries – how we link into other countries that have the same issues. By giving people experience across geographical boundaries we are creating an environment of shared resources,” says Clubb.
“There are people that see Australia us as a good place to work as part of their career, so we source those people from the US, from Canada, EMEA and South Africa. Those people might stay two year, five years. Others just come for a 12 month cycle,” says Clubb.
“We bring people in from markets of different maturity and that maturity rubs off on people here. It all adds value to the local people’s development so it’s not just about filling a whole it’s about building a community within our organisation. The numbers are actually fairly equal coming in and out of Australia.”
The skills shortage may provide problems in terms of technical ability, but what really matters to SAS management is bringing in the right type of person; someone who fits in with the SAS values. The firm received 1,300 job applications last year alone, and SAS ANZ HR director, Brendan Gregor says that developing a close relationship with external recruiters has been essential.
“The technical part is important, but it’s actually more important to find the type of person that will fit best within SAS. We do have our preferred suppliers from a recruitment point of view, and they’re the ones who have invested the time in us and understood the SAS story. They really understand the type of person not just the technical side but the behavioural side, and the right fit in the organisation. We want the recruiters to know what makes us tick.”
“Technical people don’t tend to be long-termers,” adds Clubb. “So we do have to look for something that is unique in people that align to us as an organisation. We’re not the biggest brand so we rely on our people.”
And once people are in SAS, they tend to stay put. Annual turnover was two per cent in 2009, compared with the average in the software industry of about 22 per cent. In the software business, this loyalty translates into long-term customer relationships and better product knowledge.
Gregor says that the SAS global values and guiding principles plays a major part in attracting the kind of people who can continue the company’s current success. But he adds that the Australia and New Zealand division operates with enough independence to offer a unique employee value proposition.
“We look at the global value set and ask what it means for SAS ANZ,” he explains.
“I think [independence] is key to the people interventions that we have. We can react and do something that is pretty neat, pretty quickly. We create the unique SAS ANZ culture but don’t for a moment forget what has been put in place by SAS in [the head office] and Jim Goodknight.”
The culture is designed to encourage innovation and creativity; a must to stay ahead in the industry. A key part of this is having independence from head office, which in turn allows flexibility and employee involvement in business decision making. The value set may be strong, but it is by no means dictated.
Clubb argues that it is this point that differentiates SAS from its larger competitors
“We operate very independently to the group company so we can be a lot more entrepreneurial. What people don’t like about bigger organisations is the rigidity of the structure and culture. We try to create an environment of openness and empowerment. Some people like that and some people don’t.”
“We can’t compete with HQ where they employ 5,000 people and have the critical mass to do certain things, but what we do is take the essence of what SAS is doing and we provide it within the SAS ANZ environment. Do we do a good job? I know we do, because we’ve had anecdotal evidence from employees who used to work in the US who say they are really impressed with what we’re doing here.”
Emphasis on engagement
The Australia and New Zealand arm of SAS has received global recognition for some of its people strategies, and those strategies have been implemented worldwide. Indeed, such is the success of the region’s people strategies, Gregor and his HR team were invited to be part of the global HR council that meet on a regular basis via phone hook-ups. “People want to listen to the things that we’re doing because it is seen as best practise,” he says.
“SAS is the one place I have worked in where we talk about innovation as one our key values, and we absolutely live by that. We allow people to be creative in the way that they deliver on their work and the ideas they have. You really can think about how it can be different and then actually set about implementing that change”
The firm invests a lot of resources in boosting employee engagement, with particular attention paid to employees’ initial induction process.
“We put a lot into [induction]. Sometimes I question where we put too much into it,” says Clubb. “When a person comes into SAS they think it’s the best induction they’ve ever been on.”
Part of new sales people’s induction, for example, is to visit SAS headquarters in North Carolina for two weeks. They are placed on a six month development plan, tracking their progress in all areas and ensuring the right training and development is being offered. Internal research has proved that these sales staff are much faster at generating revenue than prior to the implementation of the program.
Moreover, SAS’s long list of benefits include complimentary snacks and drinks, vaccinations, exercise classes, massages, financial planning advice, top- up superannuation contributions and extended period of leave for staff suffering serious illness. For high performers, five-day all expenses paid holidays act as a pretty impressive incentive.
“We make a big thing about recognition,” adds Clubb. “I give out spot awards all the time – it might be monetary, or it might just shake of the hand. Everyone seems to adopt those sorts of activities – and it’s genuine. It’s not something that works in a fabricated environment.”
Working with HR
Clubb acknowledges that without a specialist in managing talent on board SAS ANZ could easily go off course. It is clearly a co-dependent relationship.
“There are two areas that I rely heavily on as major contributors in terms of understanding how the organisation develops: HR and finance,” Clubb says.
“The protection of our most important asset, our people, was a charter given to Brendan because of his experience, to start to steer us down a particular course.”
And it seems that these two passionate people don’t hold back when exchanging ideas.
“Some of my best discussions with Brendan have been recently when we’ve wanted a major organisation realignment. We are very candid, very open and we’ve questioned one another’s views,” says Clubb.
Gregor says that none of SAS ANZ’s success as an employer of choice would have happened without Clubb’s support and understanding of what his HR team is trying to achieve.
As part of this journey, rather than employing an external consultant to examine the business, Gregor set up an internal panel to help him understand the key issues for employees. Through ‘Team SAS’ he has been able to determine how the organisation conducts itself.
“The whole cultural change with the business has been facilitated at the senior level but has been driven through the participation of everyone. The real drive is from the people who are dealing in the business everyday and can see the business differently from the managers and make very valid suggestions to the senior team,” explains Gregor.
Such is the effort put into people strategies at SAS, it is not hard to see how its recognition as an employer of choice has come about. By ensuring productive, satisfied and dedicated employees is a top priority it is able to remain at the cutting edge of the industry. And you don’t need much analysis to see that.
The best in the world?
SAS is number one Fortune magazine's annual 100 Best Companies to Work For list; the seventh time SAS has been in the top 10 and the fifth time in the top five. It also continues to achieve higher placement on the list of the 50 Best Large Workplaces in Europe, coming in at number seven, two places above last year. More than 1,300 companies, representing 1.6 million European employees, vied for inclusion in the list. CEO of SAS, Jim Goodnight, says: "Innovation is the key to success in this business, and creativity fuels innovation. Creativity is especially important to SAS because software is a product of the mind. As such, 95 per cent of my assets drive out the gate every evening. It's my job to maintain a work environment that keeps those people coming back every morning. The creativity they bring to SAS is a competitive advantage for us." The company's commitment to work/life balance has manifested itself in an exceptional list of amenities at the company's headquarters campus in the US, including on-site day care, a health care centre providing primary care for employees and their covered dependents, a fully equipped recreation and fitness centre, walking trails and athletic fields, massage therapy and three subsidised company cafes.
SAS at a glance
Business analytics software and services provider SAS once stood for "statistical analysis system," and began at North Carolina State University as a project to analyse agricultural research. As demand for such software grew, SAS was founded in 1976 to help all sorts of customers - from pharmaceutical companies and banks to academic and governmental entities.
SAS is currently the world's largest privately held software company. As of the end of 2009, SAS employed 11,055 people worldwide in more than 400 offices spanning the globe.
It offers many business solutions that enable large- scale software solutions for areas such as IT management, human resource management, financial management, business intelligence, customer relationship management and more.
Its Australia and New Zealand arm has been operating for 25 years.
In this region it has eight offices, employing over 200 people. The regional head office is in Sydney with other offices in Adelaide, Auckland, Brisbane, Canberra, Melbourne, Perth and Wellington.
SAS ANZ increased operating profit in excess of 20 per cent for 2009 and that while the year started slowly, business picked up strongly thereafter with year-on-year local growth of 24 per cent in the second half and 33 per cent in the fourth quarter.
Gregor has been in his current role as HR director at SAS Australia and New Zealand for just over six years.
He now manages a department for four HR professionals and says his greatest personal achievement at SAS is the team he has built around him and its success and recognition on a global level.
Before joining SAS Gregor was head of HR for the Australian Rugby Union during the 2003 World Cup, time he refers to as “a great learning experience.”
He has also previously worked for PepsiCo for six years, and Green Foods.
Gordon Clubb, managing director of SAS Australia and New Zealand, joined the company in July 2001.
Prior to joining SAS, Gordon gained his wealth of business development experience working on a range of start up projects, business turnarounds, mergers and acquisitions in high growth and highly competitive industries.
Over the nine years of his managing directorship, Gordon's leadership and initiatives have resulted in SAS Australia and New Zealand achieving double-digit yearly growth, a four-fold sales force increase, a 90 per cent decline in customer cancellations and three SAS Outstanding Country Awards (2002, 2004 and 2006).