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A Milestone

My “little” freelance firm has just reached S$1 million in revenue since I began early 2013. Feeling just a little proud, and encouraged.

At first my goal was just to keep moving forward after my firm retrenched me. I thought I would put myself on the market as a freelancer to let my network know I was available at a fraction of the rates they would have paid before. I was job hunting but wanted to keep working as well. With 7 years consulting experience, I knew what to do.

Same me, at about a fifth the cost.

A hundred and seventy invoices later, ‘I’ has become ‘we.’

A hundred and seventy invoices later (and still a fraction of big firm cost), ‘I’ has become ‘we’. With the help of my Director and Advisors and Associates—including consulting partners, training/event partners, registered freelancers, informal freelancers, in-betweeners, career breakers, and a few moonlighters—I have been able to pull together teams ranging from 2 to 6 people to deliver great work for my clients, addressing rewards issues in more than 20 countries.

In addition to consulting, training is about one-third of my revenue, and I’ve had the privilege to train over 1,000 HR professionals and about 500 line managers on pay topics. I’ve created MOM-approved, funded courses and done custom in-house programmes for many organisations. I have great training partners, such as SNEF, HRMBSi, Beyond360, WorldatWork, Lighthouse, HRMAsia and others. I’ve even collaborated with HayGroup (now KornFerry HayGroup).

With help from an Associate in Indonesia, I’ve conducted two studies on “Ending the Use of Ratings in Asia”, now incorporated into my class on Managing Performance Without Ratings.

The average associate on my client teams has more than 15 years real-world experience, mostly corporate, in multiple industries. I gladly pay my associates well for their great contributions, whether they are client-facing or behind the scenes. (Hey, let me know if you’d like to do some consulting!)

Who knows what tomorrow will bring? No one really knows for sure. Peter Drucker said the best way to predict the future is to create it. For me, I only want to create a good income for my family doing what I’m best at and enjoy doing, in a place where I am happy to be, which today is Singapore.

Come meet me and my key associates and partners at our Open House event on Thursday, 25 May, after work from 6:30 to 9:30 p.m. at Royal Plaza on Scotts. It’s free, and you will be fed! Find out more about Freelance Total Rewards, a smart alternative to the big firms. Meet Fermin A. Diez, CCP, SPHR (my Director and advisor) and Dr. Mark Bussin, Chairman of 21st Century Rewards, who is my partner for compensation data and technology tools. They will be signing (and selling for $40) copies of their new book, Remuneration Handbook–International Edition. Click here for more information or to register to attend our Open House.

Well, time to get back to work!

Thank you, Singapore. A million thank you’s.

Tom

 

How to be a Comp & Ben Partner

I had coffee with a client recently, who is being challenged by her boss to make the comp and benefits function more impactful. She asked how her C&B function could be a more effective partner to the business, more consultative. I gave her some on-the-spot tips, then said I would think about it and write a blog so others could benefit as well. There is so much more that can be said, but here goes.

In summary,

Be everything your boss assumes, and more, and less.

Let me break this down.

Assumed:

Your boss assumes you are technically competent and know how to deliver C&B according to global, regional and local norms and regulations, etc. Your boss assumes you have strong analytical, communication and policy-writing skills. Your boss assumes you can handle managers and employees who are unhappy about pay matters. He assumes you can run a salary review, develop salary ranges, recommend budgets, align pay to performance in traditional ways and manage the bonus plans, maybe even LTI plans. The list goes on. Everything in your JD you should be able to do.

More:

You should also be able to:

  • take a firm stand against something that is not right, that is contrary to good and fair pay principles, that undermines your company’s values or work ethic/expectations or violates the company culture—this may not be “your job” but it is your boss’s job, trust me. Seeing you step up will blow his socks off and prove you are way more than a technical expert. C&B must be the gold standard for what’s fair, even more so than others in HR at times. (I say this because HR business partners sometimes feel compelled to please their customers in ways that would be viewed as unfair to others. Really. It happens.) Here’s a great story to illustrate this point.
  • facilitate “community” problem-solving, going beyond your own expertise and tapping the thoughts of others, engaging key influencers or stakeholders to focus on an issue and share the problem solving process with you. You can invite others with knowledge of the situation even when it is clearly “not their job” to solve it. These people will gladly offer useful thoughts you would not find among those who own the problem. Sometimes a single word spoken by someone in marketing will get you thinking and BAM you have the solution. I approached an SVP expat for help with my rollout of a new (cheaper) expat policy. He openly opposed the policy in management meetings. I took the risk and said to him “I need your help”. We had a short chat about staggering costs of expat housing. I shared a little information with him. From then on, he stopped sabotaging my efforts.
  • explain the business clearly to others. “Our business proposition is to leverage our global supply chain and operating efficiencies to meet the needs of global customers better than anyone else on the planet, in terms of quality, delivery and cost.” Such statements are expected from HR business partners, but not C&B people. Albert Einstein said “if you can’t explain it clearly, you don’t understand it well enough.”
  • align rewards to the business strategy. If your business is about efficiency and low cost for customers, don’t worry about low salaries. Use productivity-based incentives or profit sharing. Maximise flexibility in your policies where possible to deliver value at low cost. Create a culture of recognition and caring. Good people will work for less in return for respect and acknowledgement. If your strategy is to have the best digital solutions, then don’t sweat it when you have to pay market P90 for developers. It’s money well spent.
  • seek value for money like you own the business. If you pay $1,500 to everyone upon their 10-/15-/20-year anniversaries, and your average length of service is 16.4 years, think about it.. What value are you getting for the jubilee/long-service bonuses? What is your overall comparatio? Do you think in terms of fixed costs structure, or do you boast that you pay “above market”. If you pay below market but have no attrition problem, do you see that as a problem? Have lunch with a finance leader and ask her how she views C&B costs in terms of business value. In the HR context, we need to help the business retain key talents and high-potentials. Make sure they are paid well and don’t trust the annual review to make that happen. I once flew to China to retain our top sales executive who had an offer for twice what we were paying him. He was already well paid, but I thought we could keep him if we gave him other things of great value to him, such as mentoring and CEO support. I called the CEO and asked him to call this guy to personally tell him how critical he was to our success in China and to offer his support. It worked. We did not have to match his offer.

Less:

  • don’t ask for money. Learn to be resourceful (meet your consultant for coffee!) If you want to introduce a new benefit, find the money from another C&B practice. If your bonus targets are low, don’t ask for approval to raise bonuses from one month to 10% of salary just because the survey says that’s the market number. Your proposal should include a funding solution. In this case, my normal source of funds for a bonus increase is salaries. If I want to add 1.67% to bonus targets (one month = 8.33% of a 12-month salary) to have a 10% target, I might propose a 3.0% salary increment budget for the following year instead of 4.0%. There is no law against a lower salary budget in any country I know of. As far as I can remember, all my proposals for C&B enhancements (higher life insurance, bonus increases, flexible benefits, better hospitalisation benefits, etc.) were self-funded through a specific change in another area. You should assume any change you propose must be cost-neutral. Say that out loud: “cost neutral”. Again: “cost neutral”. Good. Asking for money? Not approved. Cost-neutral. Approved. That’s how it works, folks.
  • negotiate like a salesperson. If someone wants something from you, get something from them. What can HR bargain with? Our currency is support. Do your job as a manager and we will remember you in HR as a good manager. Fail to do your job as a manager and we will remember it in HR. Managers have little idea how much power we actually have in HR. We know who the dumb managers are, and who the good ones are. We can recite on demand who the assholes are in the company. No problem. I think people know this, they just won’t admit it. Do not be afraid to tell managers what they need to do as a manager. I can still name the worst managers, and the best, at the companies I have worked for. If a manager says “that’s HR’s job” or “I don’t care what grade that job is in other departments,” do not be afraid to say “actually it is your job” or “when all the grade 10 product managers learn that your product manager is a grade 11, you will be answerable to the global head of marketing, not to me. Will you be ready for that conversation?” Get comfortable speaking with power, C&B. Being right is a commodity, spend it wisely.
  • don’t say no. In the above example, I did not suggest you tell the manager “no, you can’t make your product manager a grade 11.” I have learned not to say “no” to managers or employees. Here’s a challenge: the next time you have the urge to say (or type in an email) “No..” instead say “if we do that, most likely __ will happen.” Just spell out the likely result. People do not like being told no. Our brains are hard-wired from the age of about 3 months to dislike that word. Decision makers should never ever be told no. They want their C&B partner to give them choices. In any situation there are usually three choices: do nothing (status quo), do what the manager wants to do (they usually propose a solution we see problems with), and a third option (think of something that optimises the pros and minimises the cons.) For each option spell out the pros, the cons and the risks. Decision makers will LOVE you if you can present options to them for every situation. The next time you have an issue, break it down into these three options. Make it a habit.

Finally, one piece of advice given to me in my first international C&B role in 1992, by a great boss by the name of Gary Chicoine: “Be politically astute without being political.”

Basically, be nice to others, even if they are idiots.

I’m not promising it will happen to you, but doing the above helped me become a VP of Comp & Ben for the world’s largest hotel company, save millions in costs, attract and retain key talent, and drive better company growth for five years. These habits helped me build consulting relationships with Coca-Cola, Toyota, and other great clients.

C&B partnering is possible, and it’s way more fun than being just an expert. Good luck, my friend. I hope this was helpful. You can do it!

“Most Expensive?” Who cares?

A recent BBC article on Singapore Cost of Living raises a really good point about the cost of living in Singapore. The point is, it depends on whether you need to buy a car and consume “like an expat.”

This article exposes the irrelevance of the “most expensive” lists.

If your MNC’s regional HQ is in Singapore, you will not send your expats to another city, say, Hong Kong or Shanghai, because you read that Singapore is ranked the most expensive. You send them to Singapore since that is where your office is, probably due to low taxes, high quality of living and rule of law. Location of your offices or your customers drives where you send your managers, not news about cost of living rankings.

For your foreign talent on local contracts (locally hired foreigners, international hires, permanent transfers or localised expats), “real” cost of living matters. But the people who create COL indexes (and generate these lists 2x/year) are generally in the business of selling this information (COL indices or per diem numbers) to companies that are sending true expats on Long term assignments (LTAs) or short term assignments (STAs), respectively. But to the growing number of foreigners on local contracts, the cost of housing near Orchard Road, or the cost of cars is irrelevant, since anyone seriously looking at living in Singapore (or anywhere) would have researched the “real” cost of living locally, using PropertyGuru and by exploring the various food centres. Sure, they will use the data on “most expensive” to negotiate, but they have already discovered secretly that it is quite affordable.

Adam Food CentreI have lived in Singapore nearly 10 years, after living in the U.S. most of my life. I find Singapore to be very affordable. I can walk to Adam Food Centre and have dinner with my wife for less than $20 (about $14 USD), including the large bottle of Tiger beer. I have a credit card that includes EZ-Link auto-top up so I have nearly free transportation using train, bus and taxi.

I don’t really take these articles seriously anymore. Corporate HR depts do not pay any attention to them, in my experience. Only the expats, or those wanting to be paid like an expat, use these articles for leverage.

If you are in HR, ignore the “most expensive city” lists – they are not about every day local costs, but focus on expat-related costs, for the shrinking number of expats whose companies still believe the expat is worth 2-3 times local talent, since that is the cost ratio, typically.

Here’s a Study by NUS that is more helpful, as it exposes the huge difference between expat and local costs of living. Singapore is ranked #48 for ordinary people.

Ignore the “most expensive” articles. They answer a question no real person is asking. Instead, go have dinner at your local food centre, raise a Tiger and enjoy complaining about the best place you’ll ever find to live.

(special thanks to my friend Mack Moey of SNEF for inspiring this blog!)

AI, MBSO, Reward Cycle… whatever you call it, it’s Salary Review time!

It’s late March, and every C&B manager is performing their sacred duty right now: making sure hundreds, thousands, maybe tens of thousands of employees are considered for a raise, and hopefully a bonus.

So busy lah!

Yes, but I don’t want to talk about us. I want to focus on the one with the most difficult job in all of this: the manager.

Now this might seem counter-intuitive to my fellow C&B friends who have devoted anywhere from 200-500 hours in recent months verifying data, conducting market analysis, updating ranges, calculating compa-ratios, developing manager worksheets (or online systems), chasing PM ratings, and revising salary increase guidelines to align with salary budgets. But the job of a manager–telling their subordinate what their pay increment will be, based on their performance, salary inflation or other considerations–is, in my opinion, the harder job.

Consider…

  • In a matter of minutes, a pay conversation can tell an employee whether they are really valued by the company, or simply “meets expectations” which may not inspire future effort
  • An employee who has read in the local paper that the government is giving 4.1% raises and is told by her manager that she is a valued employee and getting a 3.8% increase because of the curve… is likely to drop about 10 points in terms of her engagement
  • A manager who had to give one key team member extra money, skimming dollars from other team members, has to have several very difficult conversations in order to deliver enough of an increase to send a “please stay with us” message to the key member

Hats off to the C&B professionals who make every possible effort to provide line managers great tools for reviewing and planning salaries and bonuses. Double hats off and highest regard to the line managers who must deliver pay-related news to their staff and keep them engaged.

 

We are Getting Better

In my recent reflection on 2016, the first good sign I listed was our ongoing development as a profession, referring to those of us in the global total rewards (comp & benefits or global mobility) profession. We are advancing in our credentials, our practices, and most of all, the way we think. Let me elaborate.

Better Credentials

Our credentials are improving. Currently, WorldatWork–the gold standard in rewards certification–lists 291 Singaporeans among the exclusive ranks of Global Rewards Professional (GRP) certification holders. Of these, 31 also hold the Certified Compensation Professional (CCP) designation, which means they are qualified to manage compensation in the United States, with highly complex laws and regulations surrounding non-discrimination, overtime pay, etc. Outside of Singapore, certification is gaining increased recognition with 235 certified rewards professionals in China, 195 in Hong Kong and many others in Indonesia, India and Malaysia (although the certification price tag is somewhat prohibitive in these and other locations.) Check the SNEF schedule for GRP and CCP courses for 2017.

Rewards professionals are attending my Comp 101 and Comp 102 classes in large numbers. Offered in partnership with SNEF (Singapore National Employers Federation), these courses cover the principles and practices (Comp 101) and essential hands-on skills (Comp 102) needed by todays C&B specialists. We’ve had about 100 participants since introducing these professional-level courses about a year ago.  We are excited to announce Comp 103–Annual Incentives will be introduced 20/21 April 2017 through SNEF.

I should mention corporate in-house training here as well. A large pharmaceutical company is investing in their regional rewards and HR business partners by engaging Freelance Total Rewards to deliver both certification and non-certification rewards training. Professional associations in Singapore and Indonesia have also engaged us for custom professional development programmes.

Another area of increased capability is flexible work arrangements, or FWA. Ministry of Manpower statistics now indicate more than half of Singapore employers offer FWAs to meet business needs for talent, with workers expecting and demanding more flexibility, and employers focusing more on outcomes than “face time” at the office. I will be teaching Implement Flexible Work Arrangements through SNEF 16/17 February. Come find out how Singapore employers are meeting business and staffing needs by taking a more flexible approach and managing it effectively. The course includes five real case studies and open discussion, to help you define an approach for your organisation. Here’s more information on the FWA Courses from FTR and SNEF. FWA course subsidy may be available…

Finally, with increased attention on the use, or non-use, of performance ratings, I’ve had full classrooms for Managing Performance Without Ratings, a course that looks closely at the companies that have decided to drop the use of ratings to understand why and examine their new practices, and to equip participants to approach this topic for their own companies intelligently, rather than simply follow the herd.

In some Asian countries, rewards professionals cannot afford existing global certification offerings. Therefore, I am forming an industry panel of senior Asian total rewards leaders, to help me develop and introduce a new certification in total rewards, to be introduced in July 2017. The Total Rewards Professional (TRP) certification will be offered at three levels: professional, managerial and strategic. It will include standard material, but will be contextualized for each country where it is offered. We will start in the Philippines. More to come on this!

Better Practices

We are getting better in our company practices, as well. Credentials have great value, but what’s the point of being certified or trained if you go back and change nothing? Sayang! Wasted! The good news is we are seeing a lot of rewards leaders driving change in their practices. My own clients are:

  • challenging the assumption that you need expensive, big firm job evaluation systems that no one can explain;
  • simplifying and realigning pay for performance practices, including both merit pay and incentives;
  • realigning senior management pay to support greater accountability for results;
  • giving line managers more flexibility and related training to enable better pay decisions and more effective communication of those decisions by the managers who must own them

It is very encouraging to see traditional practices and attitudes being questioned, challenged and left behind if better ways are available. The smart companies care less about “best practices” and prevalence and more about business and talent outcomes.

The smart companies care less about “best practices” and prevalence and more about business and talent outcomes.

Better Thinking

The most encouraging sign is seeing HR and rewards leaders thinking more critically, challenging assumptions and acting as catalysts in the senior management ranks for greater accountability, managerial competence and greater focus on value creation. Whether it takes the form of healthcare and wellness innovation, flexible work arrangements–use of smart office centres, flexi-time, work at home, part time work–or removal of performance ratings and manager training; we are seeing more companies taking bold and innovative steps to create greater value through people. Companies like ConnexionsAsia (CXA) are more than disruptive to traditional employer healthcare marketplace practices, creating greater value for money normally spent on traditional brokers and premiums. CIGNA turned to neuroscience to better understand how people actually think and form attitudes about performance management.

Greater value is expected from mobility leaders as well. Sean Collins, Managing Partner at Talent Mobility Search has noted that in order to stand out from the crowd, mobility professionals “need to equip themselves with new skill sets that will support the business and increased complexity in the role in the future. Being able to master the latest technologies, including data analytics and reporting tools, as well as developing broader business competencies such as business acumen, finance, negotiation and presentation skills will be key to adding value to the role.”

The rewards profession is moving forward, and after 30 years, I’m still excited to be a comp & ben guy.

Tom

Comp 102 Today!

ROL Screenshot

Teaching Comp 102 with SNEF today! Using fake data, we will grade a job using an online system (Paterson method), market price jobs using an online survey tool (RewardOnline) , build salary ranges 5 different ways, determine compa-ratios and recommend a salary increase budget. Tomorrow we will build a merit matrix and develop suggested increases for each employee based on rating and compa-ratio, plus learn to do Excel formulas, charting, pivot tables, conditional formatting and naming ranges. (For C&B people this is like eating dark chocolate for two days.)

Just ran Comp 101 last week covering basic theories and group exercises on total rewards, job evaluation and a promotion inbox exercise.

I’ve decided to introduce Comp 103 on Annual Incentives. Mark your calendar for 20/21 April.  Learn to develop a corporate incentive plan (variable bonus scheme.) On day 1 we will learn to design a performance-sharing plan (corp/unit/individual), profit-sharing and gainsharing plans. On day 2 we will learn sales compensation, covering commissions and target-based approaches. If your 2017 KPIs include incentive review or design, you should attend Comp 103-Annual Incentives.

Have a great week!

Global Total Rewards—2016 Review

Global Total Rewards—2016 Review

The mission of Freelance Total Rewards is to advance effective total rewards and mobility practices in Asia. Let me share how we, as a profession, have advanced in 2016, from my direct observation. Based on hundreds of interactions with clients, consultants, students and various HR and rewards practitioners, I have seen the following developments in 2016. For now, I will only list them. Watch future blogs for more commentary on each.

Total Rewards Advancements in 2016

  1. We continue to develop professionally through continuous education.
  2. We are reevaluating “pay for performance” from the Asian perspective.
  3. We are taking flexible work arrangements more seriously.
  4. We are starting to show HR is about good management, not about HR.
  5. Big HR firms are more focused on expensive products than ever.
  6. Mobility expertise is more about getting value for money
  7. Job evaluation is coming in-house as big firm solutions are unsustainable.
  8. HR is under increasing pressure from CEOs to source good talent.
  9. DB is as good as dead. Everything is now DC except healthcare.
  10. Seniority based grading and promotion is fighting for survival.

Have a great 2017!

We at Freelance Total Rewards thank you for the privilege of contributing to your success, as we begin our 5th year. We are trusted to help manage the biggest and most important single expense in most of our organisations, and I believe the best is still ahead for our profession. Here’s to a new year and to exceeding all your KPIs!!!

Tom Farmer
Managing Director, Freelance Total Rewards Pte Ltd.

Quotes by Daniel T. Carroll

December 1986. I attended the Awards banquet for the Eastern Michigan University’s Business School. I received the Outstanding Management Student Award that night. It was a nice moment. But what stuck in my memory were the words of Daniel T. Carroll, a noted management consultant and guest speaker for the evening. Strangely, little information is available on Google regarding Mr. Carroll. Yet there are three quotes I scribbled in my program that evening that have had lasting impact on my career and my work. I’d like to share them with you, in dedication to the man who inspired me to seek the path of a consultant.

“The people who know how work for the people who know why.”

Simple, and profoundly true. Isn’t it?

“How do you keep your ‘stars?’ Put away the rule book and get out the checkbook.”

We in HR love consistency, policies, rules. We want to avoid setting precedents, so we insist that no one exceed the pay range maximum. Guess what? We are all guilty of breaking our own rules. Know when to put away the rule book and get out the checkbook. (But get value for money! If you must “overpay” someone, then load them up with additional duties to justify the cost!

And finally,

“When you are given more responsibility, you immediately say you need more authority. I say, when you are given more responsibility, you need more knowledge.”

These statements taught me important attitudes about my work:

  1. Seek always to understand the why.
  2. Think like a business manager, not an HR manager.
  3. Seek knowledge, grow, build your capability. Don’t seek power or authority.

Thank you, Mr. Carroll.

What does Collaboration Look Like?

This topic—collaboration—has come up lately in client discussions and it’s a very important element of effective performance. Here are my quick thoughts…

Collaboration is different from teamwork. Teamwork is a very broad term and can refer to two people or two thousand people where roles are generally well defined and people do their part as a team member. When everyone does their job, you have teamwork. A rowing team demonstrates teamwork. Collaboration, on the other hand, normally comes up when something must be done which is not clearly part of anyone’s job. “That conference was the result of many collaborators.” “No one was doing it, so we decided to collaborate on it.” Crew members on a rowing team rarely talk about collaborating to win a race. But if something went wrong and it was unclear who was supposed to do something, it becomes an opportunity for collaboration if two or more step forward to address it.

I know of a company in start-up phase and growing fast. They need to maintain the start-up culture where people wear multiple hats and do whatever it takes to deliver quality to customers. At the same time, they seek efficiency to avoid overlapping roles, duplicate efforts or turf wars. The company is evolving rapidly, so roles are not static. Therefore, job descriptions make no sense—they are too static and could create silos for people. The only alternative I see is to define “roles” stating each person’s general area and the level of accountability they have for decisions or output or outcomes.

Apart from role profiles, collaboration is needed. Without collaboration, even broad role profiles will become well-defined “jobs”, whether written or unwritten. In the absence of collaboration, a person could take a stand that something is, or is not, their job. And when they must work with someone having the same “job description mentality” there is an increased risk that vital work will fall through the cracks, or for duplicate effort, turf wars or simply confusion. It starts to feel political and the customer can become the real loser. But if two people who are collaborative by nature are given a task, they will get it done without duplicate effort or things falling through the cracks. They will each take ownership and work out specific roles and actions to achieve the business result. 

I have now—after 30 years of working with job descriptions—come to the conviction that job descriptions make most sense for mature organisations that are no longer growing or evolving significantly. They are inherently static (point in time) and difficult to maintain. They should be brief and fluid, if they are used at all. (If an organisation maintains job descriptions for disciplinary purposes, you are perhaps doomed to their use, but better to maintain job standards along with your SOPs and KPI’s, not in the job description. Those countries or companies that ask employees to sign their job description when they are hired, are limiting managers from freely assigning work and deploying resources in response to changing business needs.)

So back to collaboration. Collaboration is a behavioral competency demonstrated when a person takes accountability for their own work AND related upstream and downstream work. Collaborators say “let’s get this done.” They do not say “that’s not my job.” Maybe all our job descriptions should include “collaborates with others when necessary to ensure customer requirements are met, willingly performing work that may not be included in this job description.”

Now if everyone had the inclination to jump in and get things done that are not part of their job description, why not keep roles ambiguous? The problem here is accountability and performance management. I find that people are generally happy to step in and assist others when they feel secure that they are performing their core duties well. But if people lack the certainty that they are doing their “main job” well, they will hesitate to step outside their main role. For this reason, I believe roles must be clear enough, and feedback must be frequent and specific enough, to enable this level of emotional security. Only then will people collaborate freely and heroically.

Your thoughts?