Deloitte: putting the people in performance

A strong relationship between HR and executives is important if business is to gain a competitive advantage in today’s tight labour market. Melissa Yen speaks with Deloitte’s Giam Swiegers, CEO and Alec Bashinsky, head of people and performance, about the business of people management in professional services

As one of Australia’s largest professional services firms, with 3,200 staff providing audit, tax, consulting, and financial advisory services. Deloitte has undergone significant change on the people management front over the past few years.

In recognition of the firm’s innovative approach to HR, Deloitte won The HR Partners Award for Best HR Director and The ipac HR Champion – CEO Award at the 2006 Australian HR Awards.

Building the foundations

After his appointment in 2003 as CEO of Deloitte Australia, Giam Swiegers assessed the firm’s performance and set a new strategy. The firm had been through a challenging period, and business performance was not creating the growth and revenue Swiegersbelieved the firm was capable of. Nine months after his appointment, he recruited a new head of people and performance, Alec Bashinsky, to partner him in improving the firm’s performance and people capabilities.

Swiegers says professional services firms must focus on people to compete, “This is not something you can decide to have and it will be there forever. It is something you have to work on every single day to make sure that the people strategy is the number one thing on everybody’s mind in the organisation.”

Swiegers’ focus on the HR function was supported by Bashinsky’s promotion to partner in 2005. This marked the first time in Deloitte's history for an HR director to be admitted to the Australian partnership, a significant and unusual move as it recognised the strategic and operational ability of HR to add to the bottom line.

Swiegers has supported Bashinsky in building strong relationships with the Deloitte board, executive and senior leadership teams. Bashinsky is regularly engaged in these forums, working closely with the top leaders in the development, deployment and reporting of high profile initiatives such as leadership, succession planning, remuneration and bonus strategies as well as employee engagement.

Bashinsky began with transformation of the HR function. Prior to his appointment, the firm focussed on the transactional end of HR and had no HR strategy linked to the firm’s business plan. The organisation had a high turnover rate (36 per cent against the industry standard of 30 per cent) and suffered from low levels of employee engagement.

“Many of the HR managers were administrative orientated and there was very little focus around development, HR scorecards/metrics and the value add that HR was contributing was extremely questionable,” he says. He conducted a review of the HR team itself, which resulted in a significant restructure with the appointment of a number of new team members with specialist skills. The team then refocused its agenda to align closely with the business plan.

Through headcount reduction, the centralisation of transactional functions (HR shared services) and the successful deployment of technology, Bashinsky has enabled growth and development across his team by providing opportunities for HR professionals to move from support functions to line roles as well as laterally o gain more business and HR experience.

Coming into a professional services firm run by partners was also one of the most difficult adjustments for Bashinsky. “The challenge in a professional services firm, as opposed to a traditional corporate structure, is that there are many more stakeholders outside of the executive group, all of whom need to be consulted and influenced, a process that takes infinitely more time and energy.”

Sharing culture and responsibility

In 2003, Swiegers and the Deloitte executive team developed and championed the ‘Deloitte Greek temple’. The temple outlines the firm’s value system, business goals and overall corporate vision. The roof of the temple aims to articulate the organisation’s ongoing aspiration to become ‘the most inspiring professional firm to work with’. This is supported by the five pillars of talent, culture, leadership, clients and growth.

Essentially, the temple underpins Deloitte’s business strategy, as each strategic objective is clearly supported by people initiatives. The people and performance team closely supports each pillar of the temple through strategic and operational input.

Under Bashinsky’s leadership, the mission of the people and performance function at Deloitte is essentially to provide direction, training and support, but ensure the line professionals are responsible for their people. “It’s really about taking that broader vision and looking at helping the partners execute in terms of people. The last thing I want an HR function in any organisation to do is to take ownership of the people, whether it’s regarding their performance, coaching or feedback, and so on,” Bashinsky says.

Swiegers also believes in the value of HR as a strategic support function. “Everyone in the firm is responsible for the people strategy, it is not something you simply outsource to the people and performance team,” he says.

This is a reflection of the management style at the firm, he adds. “We measure in terms of inspirational behaviour. On a regular basis, we survey and measure people’s view of the inspirational power of our leaders.”

The innovative angle

In aligning HR and business strategy, Bashinsky implemented ‘Tiger Teams’, which are strategic cross-sectional teams of people and performance managers, who are appointed to project manage specific HR strategies and programs that require either implementation or initiation.

For example, cultural diversity is an important issue for Swiegers. Both he and Bashinsky have worked closely on understanding the impact of cultural diversity on the organisation. In late 2005, Swiegers personally developed and conducted a series of workshops and focus groups across Australia, designed to tap into the ideas and challenges of the culturally diverse employees at Deloitte.

Using the data gained from these workshops, a cultural diversity initiative was launched in order to attract and retain key talent by understanding the issues surrounding the firm’s increasingly diverse workforce. This was done by providing role models, mentors and opportunities for career progression, and ensuring that leaders were aware of, and encouraged diverse cultures and opinions. This three-tiered strategy concentrates on three main areas of leadership, firm-wide engagement as well as people and performance policies and procedures.

“Cultural diversity is about the hard facts,” Swiegers says. “Deloitte is changing. The market is changing. And all of Australia is changing. We have to understand these changes, set procedures in place and where necessary, alter perceptions and behaviours within the firm in order to have a strong organisation that understands and nurtures all of its talented people.”

Every little helps

There has been a significant bottom line impact as a result of the changes. One of the main achievements has been in eliminating the use of multiple external executive coaches for partners, saving the firm $1 million a year.

Use of external recruitment agencies has also been reduced (many of which were based on individual partner relationships). Fee structures have reduced as a result, while an employee referral program for recruitment also saw a decrease in agency dependency, saving $1.4 million in the first year.

Meanwhile, the three year D.Academy program for graduates (which took in 280 new graduates in 2005, 340 in 2006 and now more than 400 in 2007), resulted in a saving of more than $400,000, as graduates were no longer sent to the Gold Coast for a unstructured, informal three-day induction.

Further, Bashinsky says HR metrics which focus on turnover by role and gender as well as exit interviews, tenure reports, promotions metrics, inspiring women profiling and top talent assessment have allowed the firm to assess its people capability in a much better way.

Keys to success

For Swiegers, trust and honesty is vital in the change process. “It would never work if we weren’t straight with each other,” he says. “Secondly, it was important for me to have somebody in charge of people that had a real interest in the business. Having the head of HR as a partner makes them one of the co-owners, meaning they have just as much interest in the financial result of the firm as I have, which is vital.”

Bashinsky has also learned a number of lessons in the process. “Chunk the changes down into small projects and communicate, communicate and educate. My biggest challenge was to bring the partners of the business with us as we made changes to a more strategic people agenda. Ensure that you have HR practitioners on board who know how to behave like a strategic business partner and work with the leaders to make change happen through influencing, coaching and facilitating.”

Leadership, engagement, talent and signals

Deloitte’s strategy is based upon four key elements, called L.E.T.S (leadership, engagement, talent and signals) make it happen.

• Leadership encompasses defining and building the firm’s leadership brand, implementing a performance culture, developing and executing on leadership assessment along with other projects such as partner soft skills development.

• Engagement focuses on introducing a clear employee value proposition, soft skills development programs for all employees, called career roadmaps and excellence centres, a new remuneration model and strategy, new HR metrics and scorecard measures as well as reward and recognition mechanisms.

• Talent covers off initiatives such as succession and workforce planning, a stacked ranking methodology, a graduate development strategy called D.Academy and the partner development pathway, which incorporates 360 degree leadership effectiveness analysis feedback).

• Signals focuses on the kind of culture the firm aspires to create. Deloitte’s seven signals culture also forms the basis of the firm’s diversity initiatives, including cultural diversity and inspiring women strategy.