Leadership Special Report: A perfect partnership

by Iain Hopkins01 Sep 2016
“THE PEOPLE strategy needs to respond to the business strategy. Some of that is shortterm, and very much in the here and now, the day-to-day performance of the company – but the HR function and people strategy absolutely has a strategic element to it as the business grows.”

So says Lara Poloni, CEO of engineering firm AECOM Australia/New Zealand. AECOM is listed on the Fortune 500 as one of America’s largest companies, and its employees – including engineers, planners, scientists and management professionals – now serve clients in more than 150 countries around the world.

It’s significant that the people within AECOM form one of three ‘enablers of success’ for the firm, with the other two being clients and general business excellence. “Obviously the priority changes at any point in time, but people are critical to our success every day. That’s our biggest priority really because without great people we can’t achieve many of our operational and strategic objectives,” Poloni tells HRD.

It stands to reason that Poloni has an extremely close working relationship with her HR director, Helen Fraser. The two talk almost every day, and Poloni calls Fraser a “trusted adviser”. When asked what she expects Fraser to deliver, Poloni says she has two expectations. Firstly, that the day-to-day systemic elements of HR are taken care of. And secondly, that HR contributes to the strategic direction of the firm.

“The more significant part of our dayto- day conversation covers concerns about the future, concerns about any change the business is going through and how we’re responding to that. We need to reflect internally and externally and take on best practice locally and globally. We need to look at the market and undertake benchmarking. That takes time, but I think it’s a very important part of Helen’s role,” Poloni says.

“I’d say the role is more business adviser than anything. We have a vision for where we want the business to go, so I rely on Helen’s advice and her team to help us achieve a lot of those business objectives, and provide clarity and an action plan.”


More than just HR
With that level of CEO support, it’s no surprise to hear that Fraser is called on to provide insight and input into matters that traditionally would not have been within HR’s mandate. “I’m involved in all those conversations around our three enablers – people, clients and business excellence,” Fraser says. “If we’re looking at clients, for example, it’s how HR can create a client-driven culture. HR has to be key to that because a big part of change management is about changing people’s behaviour.”

Fraser stresses that HR is involved in business issues, not just people-related issues. “It’s about any sort of change occurring in the business. It’s about business performance and it’s about how we’re delivering on projects as a business. It’s often not about recruitment or recognition or reward, which might be traditional HR discussions.”

She adds that Poloni doesn’t need to hear daily updates about the operational elements of running an HR function. While these are important, Poloni just needs to know it’s working well and efficiently.


Future challenges
Poloni doesn’t hesitate when she’s asked about the biggest business challenge facing AECOM. “It’s market volatility,” she says. “We’ve accepted that’s the new norm in terms of the business cycle. We have the benefit of having a very diverse business that can withstand ongoing volatility. One part will be up when the other part might not be, but I’ve been impressed with the resilience of the HR function. They continue to bring to the table ideas about how we can be even more agile as an organisation– whether that’s more contingent workers or the ease with which we can move people to where the work is.”

Fraser adds that while AECOM has always had contingent workers, it’s never been to the extent it does now. “We’ve gotten better at setting expectations around what a particular role is. It may be that we have to engage someone short-term for their services rather than full-time employment.”

An agile workforce also requires a change in culture. With staff no longer all in the office working Monday to Friday, Fraser says HR’s role is about teaching managers how to manage people on their outputs, not necessarily on their inputs. “It’s not where or when they work – it’s more about what are they delivering to the client. That’s where we want to be moving to with our assessment and management of people.”

AECOM has also embraced inclusive leadership training in order to get leaders to think more broadly about how work must be done. ”We’re so used to seeing our team members sitting at a desk in front of the manager. But our offices are moving to a much more agile working environment with a lot more flexibility for the place and time of work,” Fraser says.

Taking action on gender inequality
AECOM faces one other daunting challenge: closing the gender pay gap. Driven by Poloni’s passion, the firm has already made significant inroads to improve the situation. As an ambassador for the Workplace Gender Equality Agency’s ‘In Your Hands’ program, which is about encouraging business leaders to recognise pay equity as a key business imperative, Poloni and her HR team set about undertaking a comprehensive gender pay analysis – a first in the engineering and construction sector.

“Not surprisingly we found we’ve got a gender pay gap,” says Fraser. “The difference is now we have a much better understanding of where it is, and that’s helped us target some of our actions.”

Doing more than just talk, AECOM has indeed taken action. Last year, 5% of additional salary budget was put aside to target women who were not being paid competitively in the market. The firm also assessed how to handle out-of-cycle increases. “Throughout the year when we’re negotiating an increase with someone, we want to make sure we’re thinking broadly about whether we’re paying the person competitively,” Fraser says. “We’re also looking at gender pay at the point of hire – because that’s the point where you have the opportunity to address what might be 10 years of inequity in pay.”

A 2016 gender pay analysis has just been completed and AECOM has seen a reduction in the gender pay gap. For some levels of seniority Fraser says this has been quite a large reduction; in other roles it’s been less significant.

“We still have plenty of work to do,” Fraser says. “On one hand it’s been a big challenge. On the other hand, you can talk about it as much as you want, but unless you’re prepared to put some money up to actually address the gap we’re not going to change it. We’ve been very transparent with our people, and they’ve been very positive and very pleased to see we’ve taken this on in such a committed way.”

Poloni has been pleasantly surprised at how well this action has been received by the wider business community. It has even strengthened some of AECOM’s client relationships. “We’ve had clients say ‘this is fantastic; can you come into our organisation and tell us how you started your journey, how you created the culture from the top down, what the challenges have been, and what lessons were learned’. It’s had an amazingly galvanising impact,” she says.

If ever there’s been a case for leaders making change for the better, this is it – and Fraser acknowledges it has only been possible due to her CEO’s passion for change. “We wouldn’t be doing this if we didn’t have a CEO who genuinely believed we could make change. It’s not just the pay area; it’s as much about female participation in leadership. It’s a whole range of changes we’re embarking on. But if we didn’t have Lara pushing this, we could easily just be talking about it.”