HR can make a valuable contribution if it focuses on the business strategy. Craig Donaldson speaks with Eric Drok, CEO of ING Direct Australia about the importance of HR and why it must understand a business and its goals
What are your impressions about the business effectiveness of HR?
As a CEO, I have contact with HR on a daily basis. In our business model as a direct bank, every contact with our customers is crucial. And we don’t have branches, we only have the phone and internet for communication, so customer service and our culture is very important. We don’t outsource anything, so I work closely with HR in helping to support a strong culture of customer service across all departments.
Can you give me a specific example of this?
We measure every individual for culture fit on a half-yearly basis. If you want to work with ING Direct you have to be simple and straightforward, you have to be bold and different. You have to show passion and energy, and you have to deliver. Performance takes into account how you fit in with the culture. In other companies culture is just a word, but here we take it seriously and if you don’t fit the culture, then you have a problem.
We also measure every department on their culture every couple of months. HR is involved heavily with this and looks at which parts of the business are doing well and which parts need improvement. HR then sets up programs for those parts of the business which need improvement.
HR also works closely with the business in keeping the right people. This is especially important with our call centre. You have to keep the quality up and have the right people there, and this is very difficult in Australia. You’re always looking for cost savings and how to maximise these, so HR is very good at balancing cost savings around labour and still getting and keeping the right people within the business.
HR works with all departments. I think we have a very simple and straightforward HR department that works well with our different departments in helping them achieve their targets.
How well do you think HR works with other businesses in general?
I have worked in a couple of companies other than ING Direct. HR has traditionally focused on the people coming in, and they do the payroll and other basics. This is great and you have to do this, but in a fast growth company, this is not enough.
If you’re a strong growth company with high customer service levels, HR needs to be close to you. All issues start and end with HR. I cannot have growth without the right people within the right culture.
For example, I have seven executives who report to me, and my head of HR is one of those executives. So our HR executive is as important as our executive director of savings or executive of mortgages in this company. HR in this company is at the same level as my six other executive directors, and that makes it clear how important HR is in our company.
We are a very fast growth company, so we have to focus on the development of leaders as well. Leaders here have a lot of variety in their roles. They have to deliver courses, deal with a lot of change and support strong growth of the business. So supporting leaders in achieving our growth strategy is a very important task for HR.
What steps does HR generally need to take in order to become a better business partner?
HR needs to think about supporting the business strategy. It needs to think about future possibilities for the coming years and how it can contribute to the business. We not only manage and support people who are coming in today, but HR needs to think outside of the box. It needs to think about the business structure in two to three years time and what kind of leaders the business will need to support this structure.
In a growth company, HR needs to know what kind of leaders it has in place to go to the market today and in the future. The day-to-day running of the business is important, but I want to have an HR department who will partner with me for growing the business in the future.
For example, HR needs to understand future workforce needs and how technology will change this. If we have a call centre, what will happen with internet calls? What impact will this have on our workforce? What kind of people do we need in three to four years as a result? So HR is more of a strategic partner in helping the business meet future demands.