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HR Effectiveness and Productivity in Japan: The HR Leaders' Perspective

Hosted by: Amazon.com Goldman Sachs Hilti Intel SAP

The Chapman Consulting Group co-hosted another series of HR roundtable discussions for select HR Heads over the last week. Japan HR leaders from high-profile multinationals in the Financial Services, Consumer Goods, Hospitality, Retail, Industrial, Technology, Media, and Life Sciences sectors met over a series of breakfasts, lunches and afternoon teas at the Japan headquarters of Amazon.com, SAP, Goldman Sachs, Intel and Hilti to discuss HR leadership strategies.

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The conversations were themed along the subject of HR productivity in Japan, and the ways in which HR teams can continue to be effective with limited in-country resources, while work seamlessly within a complex blend of off-shored, regionalised and outsourced HR structures.

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1) Productivity as a Result of HR Team Structure

One key to HR productivity is in the way that HR teams are set up in Japan. In a few lucky examples, the Japan HR Head had a generous headcount allowance for their team, and had the flexibility to assign HR tasks as they saw fit. However in the large majority of cases, there are very tight restrictions on in-country HR resources. Many companies are ‘at the mercy’ of the demands of the business, and can only approve new HR headcount if the business is the one pushing the agenda. In another example, extra headcount approval only comes when the HR leader can prove that all members of the existing HR team is working at maximum capacity and are themselves of the highest standard of quality and performance available in the market. And in another example, the best way to get extra HR headcount to be approved was if the current situation was presented as a potential business or compliance risk unless dealt with by increasing staff members.

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In each of the examples above, the pressure remains on the HR leader to continue to offer more value with fewer resources. So wherever possible, HR leaders should try to eke out as much leverage from the company’s international HR team structure as possible. In one case, the company experimented by de-layering the hierarchical structure of the HR team. This allowed for improved communication between team members, reducing the number of miscommunication and improving the whole HR teams’ overall understanding of the business as a whole. The only downside was that it limited the opportunity of the HR team to have team leadership responsibilities, which may have a negative impact on the HR leader’s long-term succession planning.

In another case, the company experimented with a system of double-hatting, whereby an HR team member was given overall countrywide responsibility for a certain function (such as Compensation & Benefits) while also have a generalist HR business partnering role for a particular unit. This allowed the HR employees to gain deeper knowledge and personal ‘ownership’ of a specific expertise, while at the same time offered them a more macro-view of how each constituent part of the HR service needs to be utilised when working with a business leader. The only challenge was in carefully communicating this as a talent improvement exercise, since some HR team members might suspect that the primary focus of this exercise is cost reduction rather than skills development.

In another example, one company had invested resources in relocating important members of the HR team to regional or global Headquarters for 4 week trips, so that they have the chance to build personal relationships with the company’s global HR specialist team. In the long run, this tactic helped to improve the communication between parties and helped to ensure a smooth running of the global matrix reporting relationships. With communication and inter-personal relationships often the key to whether an HR team structure ‘on paper’ actually works in practice, we’re seeing more companies put time and investment in these important team-building exercises, since they’re otherwise often fraught with frustrations and miscommunications.

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2) Productivity as a Result of HR Team Motivation

Put simply, a happy and energised HR team is a more productive HR team. So the discussions also included the more intangible aspects of HR team motivation strategies that have been put into effect in Japan to help improve HR productivity. A number of HR Heads revealed that their Diversity policies were finally having a measurable effect on overall HR team morale and productivity in Japan. A diverse team was shown to improve the communication of new ideas between team members and allow for improved internal sharing of best practices. In particular, a few HR Directors commented on how they had successfully used disabled hiring to their advantage. With a legal requirement of setting disabled hiring quotas in Japan, some companies still view this merely as a business ‘necessity’ which needs to be done in order to avoid paying onerous fines. However, more progressive companies are using this law to their advantage, and are seeing highly motivated disabled individuals join their teams and perform valuable tasks, while at the same time uplifting morale and positivity among co-workers.

Motivation can also be improved by changing the way that HR team members are remunerated. In one very interesting example, the HR Director had re-engineered an HR business partner’s bonus potential by linking their personal bonus very closely with the business performance of the particular Business Unit that they represent. The result of this has been that the HR Business Partner no longer focuses on the ‘necessary evil‘ of the operational parts of the role, but is naturally more inclined to put more effort on those HR tasks that have a greater impact on the financial performance of the business unit. This was a highly unique approach to HR team motivation, and we will be following closely the extent to which this trend is possibly replicated among other firms in the future.

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3) Productivity as a Result of the Japan HR Leader Setting a Personal Example

The common theme among all ‘solutions’ to the issue of HR productivity in Japan was the affect of the HR leader themselves in personally setting an example to their team about how to remain more focused on what truly matters. In many cases, it was a simple case of working in a smart and sustainable way, so that the HR team can operate at the peak of performance at all times, avoiding the danger of professional or personal ‘burn-out’. This is a particular problem in Japan, where service expectations can be very high, and there’s a greater cultural leaning towards p
erfectionism. Many HR Directors had been helping their teams with personal time management advice. In one example, the HR leader has worked hard in setting the expectation to the business that they can only be reached between 9am and 6pm on a daily basis. Of course, meetings and discussions can take place outside those hours if there’s something urgent to discuss, but this should always been seen by both sides as an ‘exception’ rather than the ‘rule’.

Another HR leader had banned the use of the Smartphone within their team, so that no individual can be tempted to fire off too many emails. Rather, they needed to coordinate group actions either during face time at the office or directly over the phone.

Another HR Director mentioned that they try to coach their team to only ever read an email once, and try to action that email as soon as they have received it. This is not always possible, as there are many examples when it can be best to ponder the appropriate response between firing back a quick reply. However in 90% of all email traffic, the HR Director or their team member should be able to choose one of three responses: ‘Do it, Delegate it, or Ditch it’. A further idea was in prioritising meetings into two categories of ‘urgent’ (that cannot be re-timed) and ‘non-urgent’ (that can be cancelled if necessary). This easy system helped leaders to remain as focused as possible on the most important tasks, while still leave enough leeway to do those ‘nice to have’ meetings when there’s time. And another idea was simple holiday planning — one HR Director made it a very key issue for their team to set their holidays in advance so that this can be diarised. With holidays ‘set in stone’, it helped to condense projects into very strict deadlines, and helped team members to prioritise their personal and family lives alongside their working life.

In conclusion, unlike the higher growth markets in Asia such as China and India, more stable and mature markets such as Japan and Australia are being asked to cut costs and improve productivity. So efficiency and smart use of resources will continue to be an important part of top HR management in the future.

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