Today’s guest is Shane Duffy, the CEO of Employment Innovations, one of Australia’s leading HR payroll companies.
Shane joined Employment Innovations in 2008 as an HR consultant. He then moved to become the head of HR practice and was later appointed as CEO in 2016. He now works remotely most of the time, which has given him more time with his family!
Connect with Khai on LinkedIn:
YouTube Channel: HR Think Tank
00:00:00 – Intro
00:01:36 – The Value of Having a Remote-First Approach
00:02:04 – The New Workforce Reality
00:02:58 – Why EI Stuck with the Remote-First Approach
00:04:06 – How a Remote-First Approach has helped Staff Retention
00:04:55 – Building a Strong, Effective Team with a Remote-First Approach
00:06:16 – The Role of Trust Within a Hybrid & Remote-First Approach
00:07:06 – How to Create Trust Between Staff Members
00:08:24 – Building Trust Through Compliance
00:09:00 – The Risk of Only Building Trust Through Compliance
00:09:51 – Challenges as a CEO
00:11:49 – The Role of Leadership in Cultivating Work Culture
00:13:09 – The Tours of Duty Concept
00:15:48 – Concepts that Startups can Apply
00:17:07 – EI’s Strategy for Higher Engagement
00:18:16 – EI’s Approach to Staying Connected with their Team
00:19:29 – The Future of Remote-First Approach
00:20:31 – How To Encourage Your Leader to Keep the Remote-First Approach
00:21:40 – EI’s Partnerships with Sweetest Gift and Black Dog Institute
00:24:51 – Managing Redundancies and Terminations with Dignity
00:27:02 – Fast Five Questions
00:30:38 – Outro
Q: Many companies have started getting their teams back into the physical office environment - why is it that you decided to keep the remote-first approach?
Like many companies, Employment Innovations rapidly moved into the remote (or flexible) approach when COVID started around this time last year.
In the first month of the arrangement, we started looking at the benefits and the positives of this type of arrangement, and we decided to properly research whether this could be a permanent solution or not.
Within two months, we decided that, although there were some negatives, the positives certainly outweighed them, and we could work around the negatives. So that’s when we decided that it was an arrangement that we could make a permanent move towards.
We were actually hit with a double whammy before the pandemic forced us into adapting our workspace because we had just taken on a whole new floor in our office space in Sydney, half of which we were subletting to another business.
And unfortunately, they didn’t last long – they went into administration in the first two months of COVID. So we were left carrying the whole floor’s rent.
Look, we still use the space, and many of our employees go back there regularly. But now it’s about rethinking and using it in a manner to benefit where we’re currently.
The first place to start was getting feedback from our employees. Most of them were enjoying that way of working, but they were still a bit apprehensive. I think the difference back then was that we were permanently remote – we didn’t have the opportunity to get together for one day a week.
So there were many people still feeling a bit apprehensive about the fact that they were permanently working from home. But, for the majority of our staff, as long as we had some form of localised interaction that balanced with working from home, then they were happy.
On the other hand, we had to make sure that we could move to a remote-first approach in a productive way that wouldn’t adversely impact our customers. Once we went through the various bottlenecks, we realised that there were solutions to all the things.
For example, we could still effectively onboard and train new staff members, communicate, and effectively meet together.
So, we just thought to give it a go.
Q: From the work culture perspective, has the flexibility and understanding of where you’re going helped with staff retention?
It’s difficult to gauge staff retention at this early stage because I think throughout the last 12 months, many people weren’t moving in their roles as much as they probably would have in previous years.
But I think now we measure employee happiness regularly. We gauge it, collect feedback from staff using tools that we have, and our happiness score has never been higher, so that’s one thing.
We also have implemented a few initiatives around having virtual social events and things like that, just to make sure that there is enough personal connection outside of work as well.
Q: How do you build a strong, effective team with a Remote-First Approach, particularly for new employees?
I’d probably flip the question around and say that I don’t think you can successfully work with a Remote-First Approach without having a strong, effective team in place to start with.
So, I think that’s the first thing to have in place before you’re going to embark upon something like this.
And I think the foundations of a strong, effective team are really the right people, right seats and accountability. So, in simple terms, that means hiring people with the right values and behaviours and matching them with roles that are aligned with their strengths.
There’s a concept in one of my favourite books called Traction, where Gino Wickman talks about three things you’ll want to tick off for every employee:
- Do they get the role and understand what’s required of them?
- Do they want the role?
- And do they have the capacity to do it? In other words, do they have the skills and the time to be able to perform in those roles?
Once you’ve checked off those things, then you know that you’ve got the right person in the right role.
And lastly, having a really good accountability chart or structure in the business that allows for individuals to elevate themselves and delegate work. Those are the essential foundations that you have to have in place before you build an effective team.
There’s no question- we have to trust each other to work out productively in a remote-first environment. We trust our people to use all the benefits and flexibility that our remote-first approach offers to deliver the best possible work for the business.
It’s also worth noting that we don’t judge productivity based on the hours spent “online” or in the office, but rather on their performance on attitude, aptitude and results.
Q: What are some initiatives that Employment Innovations takes to help foster that trust between the team members?
I think trust is definitely built on open and honest communication. So, as I mentioned before, we do collect a lot of confidential virtual suggestions. And through the happiness survey, we get a lot of feedback from staff about what we could do better. We then openly discuss that feedback to the company and then action those initiatives where possible.
Trust also be fostered through living and breathing your core values and purpose. If you don’t see that on a day-to-day basis, what is the purpose of having those values and behaviours in the business in the first place? So living and breathing them means that you’re authentic – you do what you say you’re going to do. And I think they’re essential ingredients.
You’ll lose trust very quickly if you fail to take compliance seriously across all of HR, including payroll and safety compliance.
These really form a part of the foundations of trust in any business – if you’re not upholding any of those areas of compliance, then trust will be tough to build.
There are so many other ways of how trust can be built beyond just the core compliance areas. For example, as I mentioned earlier – your leaders and employees need to live and breathe the business’s core values and purpose.
There’s also an element of authentic leadership, which plays a significant role, and comes down to being respectful, being open to diversity, inclusion and having strong emotional intelligence as a leader – they’re all important skills of an authentic leader.
And when they’re properly realised, you’ll automatically build upon that level of trust that your workforce will have.
Q: Can you talk us through some of the significant challenges that you had in your first 12 months as CEO stepping up to this role?
I had a really challenging time in my first 12 months of being CEO, to be honest.
At the time, the business was broken up into different areas – 80% to 85% was geared towards being a labour-hire outsourced employment business, that’s where all of our revenue is coming from, and 10 to 15% was HR payroll services.
We ended up losing several key contracts under the labour business in the space of six months (for various reasons), and the business was under a lot of stress, profitability-wise.
At the same time, we had a lot of employee turnover. Our marketing budget was probably next to zero because of the pressures we were under. Due to the high turnover of staff, we were having a lot of issues with the customer experience and dealing with many problems with customers.
So, in that period, I went back to what I knew – and that was the HR side of things. And looking back now, that’s probably what made all the difference.
We started getting better at recruiting the right people. We put in a stronger organisational structure that allowed people to take on more ownership of their own work portfolios. We got better at training and coaching, and we started working better across the whole business. And as a result, employee happiness had improved.
And once we retained those employees and got them working well, that just flowed through the customer experience.
I honestly believe that the challenging period we went through just makes where we are now all the more satisfying.
Q: So, this is a quote from the former CEO and chairman of Southwest Airlines. He says, "The customer is not number one, the employees' number one, get it right with the employee, and they will get it right with the customer." What's the role of leadership in cultivating this work culture and value?
I’m such a firm believer in that quote and the theory behind employee experience influencing customer experience – so much so that I’ve worked towards having a combined employee experience customer experience function at Employment Innovations.
There’s a lot of similarities between the two disciplines as well. So, for example, we create an employee charter and a customer charter, which identifies our promises to both and how we’ll live up to that daily.
Employees and customers then have the opportunity to question when we’ve failed to live up to the charters, and we continue to try and make suggested incremental improvements all the time.
One of our core values is to create raving fans, extending to both our customers and employees. So having them function together makes a lot of sense for us.
Q: Can you tell us more about the “tours of duty” concept and how it applies to Employment Innovations?
I’ve been a big fan of actively promoting ideas from a book called The Alliance: Managing Talent in the Networked Age. Reid Hoffman wrote it – the co-founder of LinkedIn.
When he speaks about an alliance, he, in straightforward terms, breaks it down from an employer’s perspective and teaches you how to say to your employees, “if you can help make our company more value, we’ll help make you more valuable.” And from an employee’s perspective, it’s about “help me grow and flourish, and I’ll help the company grow and flourish.”
In terms of the tours of duty concept, we recognise the following few concepts:
- Rotational tours of duty: this is where you create an environment where graduates can enter into your business and prepare them for progression into expert areas. We bring many HR graduates through, and we have clear HR pathways for them to develop.
They spend some time in our high labour business. They then move into an advisor role where they learn more about the technical areas of the law, and then they can move into the HR partnering role, which is where they ultimately do want to end up.
- Transformation tour of duty: is where you get people involved in, say, cross-functional projects and on their CV, instead of saying progressing through to specific roles that they can say they’ve been involved in particular projects and what the results of that are. And they’re just as powerful being involved in those as it is getting a traditional vertical progression promotion to a specific role.
- Foundational tour of duty: which is the loyal employees whose personal brand is so aligned with the companies that are almost the same that they’re in eclipse. And that’s typically your leadership team.
I think it can work. Many of the concepts that came from the book came out of Silicon Valley – the home of tech startups.
When you dig deeper into some of the concepts beyond tours of duty, it also talks about network intelligence and alumni. And I think those concepts are super crucial for startups because you do have limited resources available to you. So you need to be leaning on your networks to help you.
Network intelligence is all about giving your employees time to build their own networks so they can use those networks to better the organisation.
And the other part is, by having people on tours of duty, if that next progression in their career doesn’t exist in your business and they leave on good terms, then you’ve got alumni. So you and your employees can always lean back on that alumni for support because they know your business.
So it’s all about the connections you build, utilising those personal relationships and not burning bridges.
When you’re being reviewed as a place to work, it’s all about the credibility you’ve established with the people who’ve worked for you and people who have been connected with your business.
It’s also not just how you treat your clients, that’s certainly one of them, but it’s also about how you treat the people who have been through the recruitment process but were unsuccessful and the people who’ve exited the business a reflection on you.
How you treat these groups of people speaks volumes of how you are looked upon by your group of employees and the trust they have in you.
Q: Now that you’re operating from a remote-first approach, how does Employment Innovation implement “staying connected” with the team?
It’s a little bit harder – once you’ve gone full time with only seeing each other’s faces on zoom, it’s not the connection isn’t the same. So, for my leadership team, in particular, organise to get together, face-to-face, at least every quarter as a group.
What’s interesting, though, I find that the quality of my direct one-on-one meetings has actually improved through being remote. When I was in the office, there were too many distractions. I’ve now got more time, and then the quality of those one-on-ones has undoubtedly improved.
So, from our perspective, we stay connected through physical get-togethers and make sure those virtual or one-on-one meetings are of better quality.
I can only see it going more and more in this direction. I think it’ll probably go beyond the borders of just Australia. We might, as we grow, start opening up our talent pool to other parts of the world so that we can have more distributed teams that are working in all parts of the world.
I certainly can’t see going back in any way; it’s only going to go forward more. The more that technology improves some of the things we find challenging, the more we can improve and make things better.
So, I think once those things start happening, there’s no reason why we shouldn’t see more of it.
I would hope that those organisations give their employees an opportunity, giving them the ability to put forward these ideas.
My advice would be that if you’re given any kind of opportunity to work remotely, even if it’s only minimal, then use that time to practice the remote-first habits. And if you’re practising those yourself as an individual and you’re at least putting yourself in the best position that even if you’re doing it for a small amount of time, you can be included as much as you can. And then you’re being seen and heard as much as you can.
So, there are certainly benefits in sharing the remote-first principles with your business if you are getting the ability to work from home and even a small amount of time.
Q: Employment Innovation recently set up two core CSR partners: The Sweetest Gift and Black Dog Institute. Why did you choose these CSR partners?
The Sweetest Gift supports transplant recipients and people living with chronic illnesses by providing a stable, flexible, and inclusive workplace. In addition, the Black Dog Institute provides vital mental health research and services to Australian businesses and their employees.
Partnering with these CSR companies is one of the things that we’re really proud of, and it instils a lot of pride in the team.
The key for us was finding partners that did align with our purpose of making employment easy. And I think we did that with these two.
The Sweetest Gift is a fantastic charity for creating employment opportunities for people who would otherwise be disadvantaged and not have had those opportunities due to their conditions. We want to make employment easy, and we want to make it more accessible to people. That’s one thing about remote work – it’s creating employment opportunities for people who might have difficulty getting into the physical workspace.
So it’s a great charity, and they’re super close to our hearts. So we’re right behind them to help them build their first restaurant. And I will help them as much as we can in the areas of HR payroll.
And then with the Black Dog Institute – we did some work with them last year, and we were impressed by the quality of their research and programs that are put into the workplace, and we wanted to make sure that more businesses in Australia had access to those same resources.
So, we’re getting behind that because we want to make sure that employment is more accessible for those with mental health challenges. We’re getting as much funds as we can through ourselves or through our partners to help fund those in vital programs, which kicks off with the CEO skydiving for their mental health.
Q: Can we talk about how businesses can manage employee redundancies in terminations with dignity. What does this look like when it's done well?
It goes to the heart of what you’re like as a business.
Situations of redundancy are never great, and you’ve got a lot of things to manage, such as your legal obligations. But sometimes, it’s about the little touches like providing some ex-gratia payment to see the person through a little bit longer. Or giving them access to use your computers or equipment to find a new job and access to references and opening up your networks for them to find employment.
So, we try to do everything we can for them beyond just the minimum requirements. You never know when that individual might come back as an employee or might be a client one day. They’re all advocates, they’ve all touched your business, so you want to make sure that they’re looked after.
We just talked about mental health, and that’s another area of managing redundancies and terminations well. If your employees have access to employee system programs, try and make sure that they’re available to the employee post-employment as well, for example.
- What was your first job? I was 15 years old, and I was the LJ Hooker mascot bear at the Helensburgh Fair – where I grew up. I got paid $50
- What’s something interesting that is not on your CV? About seven or eight years ago, I did an Agile IT project management course at Charles Sturt University because I wanted to see how those concepts would apply to HR.
- What advice would you give your eighteen-year-old self? Take time to travel. My biggest regret from growing up was that I graduated, and I went straight into a work role. I didn’t take time off to travel.
- What book is a must-read? So we’ve spoken about The Alliance and Traction – the third book I would recommend is Best Kept HR Secrets.
- What’s a job for the future that doesn’t exist today? There’s two I can think of: an innovation manager (someone who fosters the ability for individuals in the business to come up with new ways of doing things) and data scientists (in the area of HR, we’ll see much more use of predictive analytics around behavioural traits and who’s going to be successful in different roles).