Special Report: Schneider: Human resources significant in difficult times

The global economic recession has pushed many multinationals to cut jobs, but Karen Ferguson, executive vice-president of global human resources for Schneider Electric, believes that there are opportunities even in an economic downturn.

She said the company will not drastically reduce employment or even its training budget due to the financial crisis, especially in China.

Schneider Electric is famed in the industry for employee loyalty, Ferguson said, with less than 2 percent attrition in managerial posts, crucial talent and high performance employees.

Herself working at Schneider Electric for 14 years, Ferguson notes the company's culture, "which values and respects its staff".

During a recent trip to China, Ferguson talked with China Business Weekly reporter Li Fangfang about how she manages 114,000 employees working at a Fortune 500 company.

Q : As we all know, many top companies have reduced their workforce in the ongoing financial crisis. As a human resource executive, what's your approach?

A: Our strategy is to keep using our natural attrition where we can and make sure we still continue to invest so we are ready when the upturn comes.

Globally we have considered reduction plans in some countries - where the impact has been very high, such as in the US and France. But in new economies, especially in China, we still have reasonably strong local opportunities for growth.

We see China as a major growth area for us and we'll be looking at retraining our people with new programs and recruiting additional competencies.

As we have transformed from an electric product provider to an energy management specialist, we see a huge opportunity in China to work in the current environment where people are looking at energy efficiency.

We must have the foresight to look at this as being a future opportunity.

Q: So in such a difficult time, have you considered changes in your employee development strategies?

A: We always want to raise our performance bar so we have a good pool of talent. The aim is to keep developing them, keep getting them stronger.

We have not changed tack in the crisis. If anything it makes us conscious that this is a good time to prepare ourselves and to have more talent ready when the upturn comes. It's a good time to invest, as I said, in upgrading the skills that we have and helping people reach that potential.

Q: What are the biggest challenges in human resource in the transformation from a product manufacturer to solution provider? How do you find the right people for the new direction?

A: Our big aim is to train as many people internally as possible, as every employee should go through energy management training to have some awareness at all levels.

But we should have a mixture of internally trained people and some people coming from outside because I think it's important to have diversity in the business and to introduce new ideas and new ways. If we only have internal promotions then we can become a little bit inward looking. So I think it's important to have an injection of other ideas from outside.

Q: Diversity is an important issue for multinational companies. Can you give us examples at Schneider Electric?

A: Globally we focus very much on having strong talent from different nationalities. We've had that for a long time to make sure we have healthy mobility so people have the opportunity to work in a country that is not their home country.

The advantage is that it brings or creates innovation or different ideas by having a diverse population on the team.

We are working very hard to improve our gender balance. We are an engineering and industrial company, which does not often have an interesting image for women, so we make a lot of effort in getting women to work in the company, not just in the more manual, routine jobs but also in managerial positions.

Studies on the subject say that you should have at least one-third of a minority in a group to make a difference, to make that team really diverse and innovative.

In China we have about 30 percent women in our company, not too bad for an engineering company. And if you're talking about managers, we have 23 percent women managers.

Q: How will you balance a turnover rate that is too high or too low?

A: If we have a country or a particular factory in a country where we see a much higher turnover, then it's our warning signal that something is going wrong. We can then give support and see what the issue may be and we can help resolve it.

On the other hand, if we see it is very low, we have to ask ourselves some questions like: 'Are the managers not being challenging enough, because we aren't going in the right direction, or what is it that makes people just stay here forever?' It's like a thermometer - it doesn't tell us what the problem is, but it tells us where the problem is and then allows us to look at it in more depth.

(China Daily 04/27/2009 page9)