Cloud adds cloutExtra flexibility isbecoming standardin performancemanagementPage 2

Inside »

Mixed approachby headhuntersTraditional skillscomplemented byweb-based toolsPage 2

Sharing wisdomWith mobiledevices, trainingcan happen whenand where neededPage 3

Tools help tomanage talentHow software canget the best outof employeesPage 3

Don’t panicBe responsive andstay positive whenhandling a crisison social mediaPage 4

FT SPECIAL REPORT

The Connected BusinessWednesday November 6 2013 www.ft.com/reports | @ftreports

Cloud-based software andservices, social networksand big data are transform-ing how companies’ humanresources (HR) departments

operate, reshaping such activities asrecruitment, employee engagement,training and career development.

Underscoring the growing impor-tance of technology to HR – or humancapital management (HCM) as it ismore fashionably called – the leadersin the enterprise software markethave spent billions of dollars over thepast 18 months acquiring cloud-basedtalent management start-ups. SAPbought SuccessFactors, Oraclesnapped up Taleo and IBM purchasedKenexa.

“Over the past five years, and accel-erating in the past three, the industryhas changed markedly,” says AndreaBertone, executive vice-president forsales in Europe and North America atMonster, the jobs website.

Mr Bertone identifies four mainways in which technology is changingHR: the increasing use of social net-works, the growth of mobile (smart-phones and tablets), the expandinguse of mixed content – particularlyvideo – for training and other func-tions, and the use of big data analyt-ics to discover unexpected patterns inemployee data.

But perhaps the most obvious wayin which IT has changed HR is in theuse of online recruitment services

such as Monster and social networkssuch as LinkedIn to augment tradi-tional recruitment methods.

That does not mean that companies– even cloud-based companies such asBox.com – are abandoning traditionalrecruitment methods altogether. “Weuse both new and traditional meth-ods,” says Aaron Levie, Box.com’schief executive. Those traditionalmethods include recruitment agen-cies, referrals and college recruitmentdrives.

But Box.com, along with a growingnumber of companies, also uses

online services and talent manage-ment software to help recruit, trainand retain employees. The consul-tancy Capgemini, for example, proc-esses about 1m job applications andhires some 30,000 employees everyyear.

Its HR system helps the talent teammanage employees, from the recruit-ing process to their performance, com-pensation and also as they movearound the world.

Jeremy Roffe-Vidal, Capgemini’sHR director, says: “Right now, weare embarking on deploying SAP HR

globally, which will enable a muchmore seamless, comprehensive HRprocess worldwide. In addition tobringing together our two currentresourcing systems, it will also helpus manage mobility.”

Capgemini has also introduced anelement of “self-service” to its HR sys-tems. The company’s 125,000 employ-ees maintain their own CVs in a data-base that can be searched by skills,sector and client experience.

Sarah Sandbrook, HR director atDeutsche Telekom’s T-Systems unit,says her company faces similar

challenges. “We need to know whatskills and experience employees haveand what skills they need or want todevelop,” she says. “We use an inter-nally developed system called “skillshift” . . . that allows us to know allabout our employees and identify thebest place to deploy them, both forT-Systems’ purposes and to enable theemployee to progress.”

More generally, “new digital HCMfunctions are giving line managersmore control over relationships withemployees”, says Michael George, asenior director at Appirio, a cloudservices provider. “We’re seeingorganisations use HCM data to puttogether elite teams with specific skillsets that are built for the long term,as well as improve their ability toreact to changing business prioritiesby putting the right talent in the rightplace at the right time.”

HR professionals are relying onthese and other specialised IT tools tohelp prepare them for the develop-ments they expect in coming years.Those challenges, identified in arecent survey undertaken by theWashington-based Society for HumanResources Management, includeretaining and rewarding the bestemployees, developing the next gener-ation of corporate leaders and creat-ing a corporate culture that attractsthe best recruits.

“Paying more doesn’t keep valuableemployees, but not paying enough is asure way to lose them,” says Ms Sand-brook. “Once you have such basic“hygiene factors” in place, the chal-lenge for HR professionals looking tokeep their best employees is to givethem a sense of purpose and provideopportunities for development.

“In a very large multinationalemployer, the trick is to know wherethe development opportunities lie.This is a constant challenge and iswhere software tools really come intotheir own.”

Human touch gets a helping handTraditional and ITbased approaches arecombiningwell inrecruitment, trainingand development,writesPaul Taylor

Illustration:OivindHovland

2 ★ FINANCIAL TIMES WEDNESDAY NOVEMBER 6 2013

Where have all the skillsgone? Employers do notseem to be able to find theones they need, with someof the most acute “talentshortages” showing up inthe technology sector.

Is it that people are lessable and willing to learn?Or is it that organisations’demands have changed,both in terms of the skillsrequired and what they areprepared to do to securethem?

From the barrage of dataand opinions reaching myscreen, I can only concludeit is the latter – along withwider social changes thathave affected educationand attitudes to work. Theheadlines almost alwaystalk of a skills shortage,but the full story revealsthat it is more a “skillsmismatch”.

For example, a recentfeature in FT ExecutiveAppointments on joblessbankers quoted expertssaying that since the waveof redundancies four orfive years ago, the range ofskills required of bankershas broadened, leavingmany perfectly able peopleunable to find work.

I detect no shortage ofperfectly able individualsof all ages: plenty ofundergraduates seem easilyas bright and knowing asthose I met in myuniversity days. Thepotential for an exceptionalIT workforce abounds.

But it is beingsquandered by employers’demands for the perfectready-made recruit. AsKevin Green, chiefexecutive of the UKRecruitment andEmployment Confederation,said at a conference lastmonth, employers nowdemand far more than justtechnical skills – they wanta host of other skills, too.

The result is thatrecruitment practices aregeared more towardslooking for the idealcandidate and luring themaway from their currentemployer – a radicallydifferent approach fromappointing the bestapplicants, followed bytraining and development.

The impact of onlinesocial media is one of thefactors that makes thispossible. LinkedIn and thelike give employers a toolby which they can identifydesirable candidates innarrow fields and gaindirect access to them.

There is a parallel withfootball: the best playerscan either be bought orgrown through a club’syouth system. While thetop clubs also grow theirown, they cement theirleague positions by buyingthe world’s best players,resulting in spiralling pay.

The technology sector, ata lower level, is pursuing asimilar path, with salarysurveys regularly showingpay to be rising fast.

But technology is at a

disadvantage comparedwith football, as itstruggles to project anexciting workplace image,despite so many of itsproducts being cuttingedge. Employers need towork hard at improvingtheir image.

But vitally, they need toinvest more in training,apprenticeships and skillsdevelopment. This needwas highlighted last monthby The Survey of AdultSkills, a shocking OECDreport that assessed theproficiency of adults agedfrom 16 to 65 in literacy,numeracy and problem-solving in technology-richenvironments. It showedhow different approachesto education and skillsproduce different problems.

For example, SouthKorea, has more graduatesthan its technology-richeconomy needs, but ashortage of school leavers,according to the labourministry. Families arespending vast sums onovereducating their young.

The resulting levels ofdebt have repercussions,such as a low birth rateand reduced consumption.South Korean ITcompanies are being givenincentives to take onschool leavers in an effortto redress the imbalance.

The UK has the oppositeproblem – 16-24 year oldsin England and NorthernIreland were found, onaverage, to be no moreskilled in literacy,numeracy and problem-

solving than people as oldas their grandparents.

Within those averagesthe OECD found extremevariations in skill levels,largely based on class.

The most advantagedyoungsters tend to chooseacademic learning atuniversity rather thanwider skills and are leftwith inflated expectationsof what work has to offer.

The prospect of sufficientnumbers being content tojoin an IT company at thebottom and work their wayup is remote, and thesector is increasinglyrelying on imported skills.

Technology businessesneed to reassess the sort ofpeople and skills they needand be prepared to investmore in creating theirideal workforce and less inbuying it in.

They need to recognisethere is a plentiful supplyof able people – unexcitedby their sector, perhaps,and probably withimperfectly matched skills.But they need to exciteand educate them.

The second challenge isto work closely with policymakers. Governments andindividuals cannot hope tokeep pace with thechanging demands of theIT sector but, with properincentives and realisticaims, they can provideexcellent raw material forIT companies to work with.

IT groupsmustlearn to growtheir own talent

OpinionPETER WHITEHEAD

Technologybusinesses needto recognise thereis a plentiful supplyof able people

GQR Global Marketsmatches faces with roles infinancial markets acrossthe US, Europe and Asia-Pacific. On the surface, theadvent of social media haschanged everything abouthow GQR goes about locat-ing the right people for itsclients among hedge fundsand banks.

Hugo Sugden, GQR’smanaging director, hasbeen headhunting since2007, when he entered aworld that still relied onpersonal contacts to pin

down a name in specialisedfields such as quantitativefinance.

His arrival in the execu-tive search industry coin-cided with the rise of socialmedia. The online profes-sional networking giantLinkedIn, with its 238mmembers worldwide, hastransformed his business.But far from displacingheadhunting skills, socialmedia have magnified theirimportance.

“When we interviewpotential headhunters towork here the first thingthey want to know iswhether we use LinkedInRecruiter,” Mr Sugden says.

The global networkingbusiness sells its Recruitersoftware to companies suchas GQR that need a power-ful search engine optimisedfor the LinkedIn site withits huge reservoir of onlineprofessional résumés.

Other tools at GQR’s dis-posal include databases ofIT professionals’ CVs ontechnical forums such asStack Overflow. But theskills of the headhunterhave survived in the digitalworld because not every jobvacancy is filled by some-one who is seeking a newpost.

“The best people aren’tactively looking for a job,”says Mr Sugden, “so that’swhy you go to a head-hunter.” The 21st-centurybreed of headhunter usessocial media to develop alarge pool of potential tal-ent in specific disciplines,but does so with the diplo-matic skills that executivesearch firms always claimas their own.

“LinkedIn is one bigonline database of peoplewho can be approached, butyou need to ascertain theirinterest,” Mr Sugden cau-

tions. The software toolsGQR uses to interrogateLinkedIn and other special-ist databases have extendedthe scope of his searches.“Social media have made abig difference in terms ofhow effective and efficientwe are.”

In the past, Mr Sugden’sjob meant ploughingthrough conference docu-ments and business news-papers to highlight individ-ual names. Now the detailavailable on a LinkedIn pro-file permits GQR to weighup the precise attributes ofsomeone who has left aparticular bank and thenapproach it with a potentiallist of replacements who arevery good fits for the job,culled from social media.

If it sounds as if LinkedInhas taken the hard workout of headhunting then,think again. GQR is movinginto the extractive indus-

tries. Finding scarce skillsat a time of expansion inthe oil and gas sectorsmeans dealing with an envi-ronment very different froma trading floor.

Managing a drilling oper-ation does not leave engi-neers with a lot of time tospend updating an onlineprofile. So the telephone isstill the primary means oftracking down these pro-spective employees.

By contrast the high tech-nology industry of SiliconValley should be an onlinerecruitment paradise. But ifa headhunter wants to get agrip on the finest brains inventure capital-fundedstart-ups, he faces an uphilltask.

Many of these organisa-tions are intent on what isknown in Valley jargon as“running dark” and want todeter external scrutiny,sometimes discouraging

staff from even having asocial media profile.

This secretive behaviouris what leads GQR to aban-don online research forindustry gatherings such asCalifornia’s annual SiliconBeach Summit. This is atwo-day round of presenta-tions, panels and parties forrising techies and prospec-tive financial investors.

GQR works the sum-mit to identify promis-ing names inside digitalnewcomers.

Taryn Sheldrake isrecruitment servicedelivery manager forSiemens, the world’slargest engineeringcompany. The Germangroup has 370,000staff and a per-sistent appe-tite for newrecruits. MsS h e l d r a k eagrees with

GQR that the candidatewho is not actively job-hunting is the best target.

“It’s very important toengage with talent globally,and social media allowus to tell our story to thisaudience,” she explains.

LinkedIn Recruiter is use-ful, she notes, becauseLinkedIn itself is primarilya networking device andRecruiter allows her toopen up and explore themultiple networks it hosts.

Siemens may rely ontechnology, but for MsSheldrake the highlight ofher working year is Linke-dIn’s annual conference forrecruiters.

Just back at her deskfrom this event, she extolsthe one place where “all thetalent acquisition leadersget together and swap bestpractice”. The great thing,she continues, “is meetingpeople you mostly deal withonline. Face-to-face contact

changes the relation-ship.”

For all the excite-ment of social media,recruitment stillthrives on personalcontact.

Headhunters’ traditional skills survive in world of web-based tools

The automatic enrolment ofemployees in workplacepension plans unless theyopt out has exercised com-pany finance departmentssince it began in the UK ayear ago.

While many peoplebelieve outsourcing is theanswer, others prefer carry-ing out such tasks in-houseand say technology is mak-ing this easier.

The auto-enrolmentscheme requires employersto communicate withemployees, pension provid-ers and software suppliers,and to have the time andknowledge to answer thequestions that arise.

For big employers this isnot so bad. But the deadline

by which all businessesmust have completed theprocess is February 2018,although different typesand sizes of companies havedifferent completion dates.

Anthony Carty, groupfinancial planning directorof Bristol-based CliftonWealth Management, saysthat for small and medium-sized enterprises (SMEs)companies it is going to bea rocky ride.

Pensions, along with med-ical insurance, employeesavings plans and vouchersfor meals or childcare arebecoming an increasinglyimportant aspect of HR, ascompanies use them toattract and retain staff. Butmanaging such a widerange of benefits is difficult.

Outsourcing can helpcope with benefits manage-ment, especially if regula-tion is changing, says MrCarty. “When it comes toauto-enrolment, a DIYapproach has disasterwritten all over it.”

One reason is the finesfor non-compliance, whichcan be up to £10,000 a day.There are also harsh penal-ties for letting the rulesaffect recruitment. Choos-ing members of staffbecause they may opt out ofa company pension plancan incur a £5,000 fine.

Large companies are gen-erally capable of handlingauto enrolment in-house,says Mr Carty. “Smallerbusinesses are much lesslikely to have the resourcesto manage the complexityand processes involved.”

Third parties are unques-tionably better placed tomanage the processes forSMEs, he adds. “They canhandle the relationshipsbetween the company, pay-roll system and pensionprovider, as well as beingable to answer the difficultquestions that auto-enrol-ment will throw up.”

Amy Wilson, vice-presi-dent of human capital man-agement product strategy at

California-based Workday,which provides cloud-basedapplications for humanresources and finance func-tions, agrees that the com-pliance issues raised byauto-enrolment in the UK,and the Affordable Care Actin the US, known as“Obamacare”, are good can-didates for outsourcing. In

addition to the costs, thereis the damage to reputationcaused by getting it wrong.

Moreover, benefits man-agement can reveal organi-sations’ internal conflicts,says Matthew Gregson,consulting director atThomsons Online Benefits,which provides cloud-based

benefits management soft-ware.

“For example, there isoften tension between pay-roll – typically process-focused and less flexible interms of embracing change– and HR, which oftenwants to change and adaptto deliver greater employeesatisfaction,” he says.

A balance needs to bestruck between the two,and it can make sense for athird party to be brought onboard to ensuree both sideswork together effectively,he adds.

This is particularly truefor companies that areexpanding internationallyand want to control benefitsspending in other countries.

In the Asia-Pacific region,companies are increasinglyusing benefits as a tool inthe war for top talent, saysMr Gregson.

However, Harvey Perkins,a partner in KPMG, the con-sultancy, says improvedtechnology has enabled

organisations to take moreaspects of benefits manage-ment in-house – a strategyhe recommends for auto-enrolment.

“Auto-enrolment assess-ment is so integral to pay-roll that organisationsshould avoid third partiesand keep it within their pay-roll departments,” he says.

As benefits systemsbecome easier to use, com-panies will increasinglybring them in-house, saysWorkday’s Ms Wilson.

This avoids the risk ofdisjointed and outdatedinformation that can becaused by using third par-ties, she says, because“there is an additional hur-dle to unify benefits datawith core HR and financialdata such as payroll andcompensation.”

This can have a negativeeffect on the employees, aspeople often have to accessmultiple systems with dif-ferent logins to managetheir personal details.

Debate is open on whether to outsource or notStaff benefits

Decision will dependon level of in-houseskills, says Jane Bird

The staff management chal-lenges facing Plan Interna-tional will be familiar tomany global businesses. TheUK-based children’s develop-

ment organisation has more than10,000 employees spread across theworld – with the added complicationthat 9,000 of them are based in 50developing countries in Africa, Asiaand the Americas.

With specialists working in educa-tion, water and sanitation and health,and fundraising in 20 countries, it is abig job just to keep track of what eachemployee is doing and where. Tack-ling performance, motivation andstaff retention stretches humanresources systems even further.

In January this year, Plan Interna-tional signed a deal with SuccessFac-tors, a US-based provider of cloud-based human capital management(HCM) software. Like growing num-bers of large organisations, it is look-ing to the software to integrate manyof its human resources processes.

Mark Banbury, Plan International’schief information officer, says: “Wehave spent a lot of time in the pastcouple of years making sure we haveunified processes around the manage-ment of staff, whether it is recruit-ment, hiring, promotion, learning anddevelopment, pay and reward systemsor performance management.

“But we have found it challengingand problematic. We were using anumber of human resources systemsaround the globe that were uncon-nected. We had staff spending a lot oftime chasing data.”

Plan International began operatingSuccessFactors software at its firstoffice in May, and Mr Banburyexpects all 50 offices to be using the

system by next May. A key functionwill be performance management,which ties together factors such asmotivation, recognition and reward.

“We’ve a very structured perform-ance management process, whereindividual employees work with theirmanagers to set what we call an indi-vidual accountability plan,” Mr Ban-bury says. “We are also implementingpay for performance, and [this] helpsdrive rewards and recognition.”

The software will also help managedeployment. Because funding forinternational development organisa-tions often comes from a range ofsources, the need for specialised work-ers can vary considerably.

“Grant funding may last for a three-year or a five-year timeframe whenyou’re doing very large projects, andyou scale up a workforce for that par-ticular project,” Mr Banbury says.

“Then, as that project winds down,you have staff that you have to lay offor move somewhere else . . . The plan-ning within the HCM software willallow us to work out how to movepeople around the organisation.”

The flexibility offered by cloud com-puting – renting just those servicesand applications needed from a thirdparty rather than investing in in-house provision – has been critical inallowing software developers to createsystems that can handle such a widerange of tasks.

“Traditional HR functions such as

payroll and benefits have tended to beon-premises,” says David Ludlow, agroup vice-president with SuccessFac-tors. “Talent management, whichincludes performance management,succession management, learning andrecruiting, have tended to come withcloud-based systems.

“Recently, we have also seen a shiftin buying patterns towards the con-cept of a suite, where customers arelooking for end-to-end blueprint, andoften one vendor can supply all theHCM processes.”

Indeed, SuccessFactors has special-ised in cloud-based software, thoughthe company is now owned by Ger-many’s SAP, which also sells moretraditional, computer-based products.

Cloud-based systems have becomethe predominant model for perform-ance management, says MaureenBrosnan, managing director of theglobal HCM practice at Accenture, theconsultancy. “It is becoming standardto have these kinds of systems inplace,” she says. “They allow compa-nies to cascade goals down to individ-ual employee objectives.

“Companies are advocating thatemployees own their careers, whileevaluating performance is critical totheir motivation and career path.”

The growth in HCM software overthe past few years has been phenome-nal, agrees Emma Parry, reader inhuman resource management at theUK’s Cranfield University School ofManagement.

“If you looked at HR 10 years ago,”she says, “most organisations usedsome sort of technology for admin andtraditional things that needed data,such as payroll. More recently, thetechnology has advanced and it isused for more sophisticated functions,including talent management, succes-sion and career planning.”

But, she warns: “Whether HCM soft-ware works for a company depends onhow it is implemented. It is aboutlooking at the need in the organisa-tion and seeing if HCM can address it.It does not work to adopt technologyfor the sake of it.”

Mr Banbury of Plan Internationalhas high hopes for the broad benefitsthe software will bring.

“When we are planning, we set anoverall organisational goal,” he says.“[By using the software,] those goalscan then filter down so we can makesure they are aligned across theorganisation. So it starts to tie thingstogether that used to be very much amanual process.”

Cloud-basedsystems enableperformancemanagement

Employee retention Companies are usingsoftware to set goals for staff and involvethem in career planning, writesPaul Solman

‘SMEs are muchless likely to be ableto manage theprocesses involved’

Food aid: PlanInternationaldistributed cornfor school pupilsafter floods hitsouthwest Kenya

Plan

‘Software allows us to workout how to move peoplearound the organisation’

The Connected Business

Social media

LinkedIn and othersites are useful butcannot replace thepersonal touch, saysMichael Dempsey Taryn

Sheldrake:‘importantto engage

withtalent’

FINANCIAL TIMES WEDNESDAY NOVEMBER 6 2013 ★ 3

The Connected Business

Paul TaylorUS business technology andtelecoms correspondent

Maija PalmerSocial media journalist

Peter WhiteheadEditor, ExecutiveApplointments

Jane Bird, MichaelDempsey, Paul Solman,Jessica TwentymanFreelance writers

Adam JezardCommissioning

Andrew BaxterProduction

Steven BirdDesigner

Andy MearsPicture editor

For advertising details,contact: (UK) James Aylott+44 (0)20 7873 3392,

email: james.aylott@ft.com;(US) John Toth +1 212 6416439, email: john.toth@ft.com(Asia) Michiko Hayashi +81 33581 2097, email:michiko.hayashi@ft.comor your usual Financial Timesrepresentative.

All FT Reports are availableon FT.com at ft.com/reports

Follow us on Twitter attwitter.com/ft.reports

Contributors »

Companies of all typesexpect more from humanresources software thanthey did a decade ago.

Then, the goals were theautomation of key HRprocesses and conversionof personnel records todigital files, explains LoriWilliams, general managerfor Europe at Appirio, aconsultancy.

The emergence of talentmanagement tools haschanged all that, she says.

They can help companies“work smarter, when itcomes to organising andengaging with theworkforce, so thatemployees are moreempowered to help theorganisation meet itsstrategic objectives”.

Today, she says, mosttools are based onremotely hosted servers in“the cloud”, leading tofaster implementationtimes and lower costsassociated withsubscription-basedpayments.

So what are the benefitsthat organisationsimplementing this softwarehope will result?

Improved recruitingIf hiring the wrong personfor a role can be costly, socan missing out on hiringthe right person.

The recruitmentfunctions of talentmanagement softwareenable organisations tokeep a database ofpotential hires; co-ordinaterecruitment efforts acrossonline recruitmentchannels and socialnetworking sites; andstreamline the recruitment

process by turning paper-based information, such asapplication forms andinterviewer feedback, intoelectronic information thatcan be more easilymanaged and shared.

Karl Jolly, director ofpeople at Welcome BreakGroup, is expecting a five-figure cost saving inexternal recruitment costsalone by outsourcing HRservices to a cloud-basedcompany.

“Ultimately, up to 25 percent of vacancies will beinternally filled, thanks tovisibility of the talent pooland [more] effectivesuccession planning,” hepredicts.

Streamlinedperformance appraisalsRegular reviews are vital ifmanagers are to identifythe company’s highperformers and futurestars, as well as itsslackers.

But appraisals can getbogged down by paperforms. The performancemanagement capabilities ofsoftware speed things up,enabling employees andmanagers to collaborateclosely by using onlineforms.

Employees get a betterunderstanding of their role,how it is evolving and theobjectives they areexpected to meet.

These are all factors, sayHR specialists, in boostingemployee satisfaction andretention rates.

Before US online florist1-800-Flowers.comimplementedSalesforce.com’s Work.comapplications, its yearlyperformance reviewprocess at had not changedin years, says MaureenParadine, senior vice-president of HR.

Now, the company isplanning a quarterlyreview cycle starting in2014 and is achieving a 96per cent completion ratefor employee self-reviews,she says.

More effective trainingand developmentTraining and developmentmodules of a talentmanagement package canhelp HR staff analyseworkforce skills, identifygaps and ensure theprogrammes havemaximum impact.

They can track employeetake-up of learningopportunities and monitorpost-learning performance,to see how training affectsindividual development.

Clearer successionplansAs organisations face theissue of an ageingworkforce, HR staffincreasingly have toexplain how they arepreparing promisingyounger employees forleadership roles.

Talent managementsoftware gives them anintegrated view ofindividual employees’skills, how they areperforming against thegoals set for them andwhat training will beneeded to fast-track themto the top.

Mr Jolly says: “Clearsuccession plans and theability to engage employeeswith HR processes usingsocial media tools andmobile devices will becrucial differentiators forus.”

A chance for HR toshineFor HR professionals,implementing talentmanagement softwarepresents an opportunity to“take the lead in drivingbusiness transformation”,says Ruth Svensson ofKPMG, the consultancy.

“The combination ofeffective talentmanagement processes andsystems contributessignificantly to businessproductivity throughgreater agility and quickeridentification and sourcingof skills across anorganisation.”

Software helps get thebest out of employees

How many people does ittake to give a lecture? Itused to be one, the speaker,but with the arrival ofsocial networks, lectures

have become multi-dimensional expe-riences in which the audience, as wellas listening, are simultaneously tweet-ing, sending texts and looking thingsup on the internet.

Their behaviour might seem rudebut it means they are getting moreout of the occasion, says TamsinTreasure-Jones, senior strategist oftechnology-enhanced learning atLeeds University. “They are partici-pating in discussions on Twitter, mak-ing comments in 140-characterphrases and sending links toresources they had created earlier.”

Although you cannot say much in atweet, it means there is lots of turn-taking, so one person does not domi-nate the discussion, Ms Treasure-Jones says. She is studying the proc-ess as part of Learning Layers, anEU-funded research project investigat-ing how technology can support infor-mal learning in the workplace.

When organisations are under costpressures, training and developmentare among the first activities to getsqueezed. Small and medium-sizedbusinesses particularly struggle torelease staff to attend courses.

Enabling people to share knowledgeis one way technology can help. “Thisdoesn’t necessarily need a tutor tohave created a learning package,”says Ms Treasure-Jones. “It’s moreabout who’s around you. At present,

we tend to ask people nearby, but anonline professional network can helpget more diverse expert opinion.”

Some people have rich, supportiveprofessional networks, but others donot know where to start, says MsTreasure-Jones. “We are looking athow to use technology to help fill inthe gaps in their knowledge withoutoverloading them.”

A lot of information is shared byemail, but this is not very effective,says Ms Treasure-Jones. People use ittoo often, so that recipients are con-stantly fielding email rather thanfocusing on what matters.

“Technology can support profes-

sional development by connectingpeople in discussions to share knowl-edge and resources. But not everyonehas these skills and sometimes tech-nology makes it worse,” she says.

David Mallon, vice-president ofresearch at US-based Bersin byDeloitte, an HR and talent manage-ment consultancy, says video can helpshare knowledge and is growing fast,because the barriers to entry are solow. “It is easy to create high-qualityvideo. You don’t need a high-classcamera,” he says.

He adds: “Software companiessuch as SuccessFactors are embed-ding technology in their learning

management systems that letsemployees capture video with smart-phones and create an ever growinglibrary of good examples.”

Sales departments have been quickto seize the opportunity, says Mr Mal-lon. “It’s very hard for sales managersto coach trainees, because they don’tsee them visiting the customer. Butwith video they can create content ordemonstrate how they want it done.”Similarly, restaurant managers canshow staff how to welcome customersor talk about new items on the menu.

A big problem with conventionaltraining is that people easily forgetwhat they have learnt unless they can

quickly put it into practice. Technol-ogy can help by delivering training onthe job.

Managers want their training fiveminutes before they have to hold adifficult conversation with a memberof staff, or in the car park before theysee an awkward client, says StephenWalsh, a director at Kineo, a UK-based elearning company.

Mr Mallon agrees: “One of the mostexciting developments has been thechange from training being somethingthat happens away from the work-place to being available at themoment it is needed.”

In healthcare, this on-demand

learning can be used for decision sup-port, for example, helping ambulancestaff with triage in an emergency. Inmanufacturing, it can be used to showmachine operators how to work equip-ment before it is activated.

Mobile devices such as smartphonesand tablets are increasingly beingused to provide training when andwhere it is needed, says Mr Walsh.“People use their mobile devices foremail and accessing their organisa-tion’s intranet, so they expect learn-ing there too.”

Researchers are experimenting withshowing people how to use equipmentin real time by projecting images onto head-mounted displays. “An air-craft technician might have a diagramfor the engine to see how to take itapart,” Mr Mallon says.

Training on mobile devices also ena-bles people to use “dead” time ontrains, between meetings, in airports.Such courses can be in small bite-sized chunks, of perhaps 15 minutes.

Another technology being applied tolearning and development is data ana-lytics. It can flag up potential prob-lems with an individual’s performanceand forecast whether somebody willmake a good plant manager or super-visor, says Mr Mallon.

It can even predict what a factory’ssafety record would be like if a partic-ular person were in charge, and sug-gest what training would help. Suchassessments should not be taken tooliterally, but they can help identifywho needs training, especially for newrecruits, says Mr Mallon, if less so atthe leadership level.

Clare Roberts, HR expert at PA Con-sulting, says that for leaders, personalcoaching and mentoring is more use-ful than technology.

Human coaches help you think, askyou questions, and listen to what yousay, Ms Roberts says. “It’s very per-sonal, I don’t see how it could be doneby technology.”

Technology means wisdom is shared on demand

Decision support: helping ambulance staff with triage in an emergency is one application for on-demand learning Reuters

Talent management

Human resourcestools can identify,empower anddevelop staff, saysJessica Twentyman

Training and development

Mobile devices can helpemployees develop theirskills when and where theyare needed, says Jane Bird

4 ★ FINANCIAL TIMES WEDNESDAY NOVEMBER 6 2013

What started as a well-meaning attempt toengage with customerson social media recentlyturned into a public

relations crisis for British Gas.Executives at the energy company

decided to schedule a Twitter Q&Asession with customer services direc-tor Bert Pijls on the same day in mid-October that it announced a 9.2 percent increase in energy bills.

Customers were quick to make theirfeelings known, using the #AskBGhash to post thousands of mostlyvitriolic messages concerning pricerises, profits and executive pay at thecompany. As the session continued,other Twitter users got involved,hijacking the hashtag to taunt thecompany or simply get a laugh.

“How will you feel when pensionersdie from choosing to eat instead ofheat?” tweeted one. “Is it true yourtop shareholders heat their homes byburning loads of £100 notes they havefrom excessive profits?” askedanother.

British Gas has said that it standsby its decision to hold the Q&A ses-sion. But social media experts havecountered that the company wasnaive to schedule the session on thesame day as its controversial price-rise announcement.

Either way, the incident offers

valuable lessons from which otherconsumer brands can learn, says KateCooper, managing director of socialmedia agency Bloom Worldwide and aformer adviser to the UK governmenton social media strategy.

Listening to what customers aresaying about your company and itsbrand online is important, she says,but if online public sentiment turnssour, having a plan of action is vital.

This is where many brands falldown, she says: “There’s a real lack ofpreparedness. It’s only when a PR cri-sis arises that the importance of aresponse plan hits home and, by thattime, it’s often too late.”

In other words, consumer brandsmay find themselves scrambling tokeep up with a torrent of complaintsor, worse still, completely overreact.

Even at those companies that havethought ahead, response plans have inmany cases only been implemented inlimited ways, says Ms Cooper.

“They’ll have one department – nor-mally marketing or PR – that isprimed to respond. But the troublewith that is, that a company in thissituation needs to be able to activate anumber of people across the organisa-tion in order to deliver a well-rounded, coherent response.”

At the very least, she says, thatteam should include representativesof sales, customer service, plus a

selection of senior executives. Brandsshould also pay careful attention toexactly who is contributing to thedebate, whether the storm haserupted on Twitter or on anotheronline network, forum or blog.

After all, some commentators havemore “clout” than others, points outJames Jones, principal adviser atKPMG, the consultancy.

“It’s vital for consumer brands topay close attention to individuals withhigh social media clout,” he says. “Insome cases, they already do. Thebrands that offer these consumers thechance to review products recognisethat their opinion will be seen bymany and that their influence is pow-erful.”

Often, it is these “influencers” whoprove to be a brand’s best allies whena crisis hits. Toyota Europe, a BloomWorldwide client, has a powerful net-work of “brand loyalists” that willleap to defend it from negativecriticism online in response, for exam-ple, to a product recall, says MsCooper. “That’s a more powerful mes-sage to the marketplace than Toyotaitself could ever send out.”

For that reason, she adds, it may bewise for companies to take a “waitand see” approach in the initial stagesof an outbreak of online criticism.

By leaping in, they may be fanningthe flames of a fire that would have

died out naturally without interven-tion. It is only when the outbreakreaches a certain threshold that acompany should step in.

Many of the “social listening” tech-nologies in which big brands haveinvested – including tools such asSalesforce.com’s Radian6, Brandwatchand Converseon – offer users thechance to set those thresholds inadvance, so that the response team isautomatically alerted by email whenthe volume of negative commentsreaches a certain point.

It is only then that a “triage” strat-egy should be initiated. This is a termmore typically used by medical staffto describe the process of sorting andprioritising patients for treatment, butthe approach is increasingly used bysocial media professionals to prioritiseonline complaints, according to theinfluence of the complainant and thelegitimacy of their complaint.

In order to work, however, thattriage approach must also be carefullyconsidered in advance.

Too many are not sufficiently“granular” in their approach, says MrJones. “Companies should develop amatrix of social media clout versusseverity, where severity could be aview of the sensitivity of the issue andthe size of the population impacted.”

But companies should make no mis-take: responsiveness is the measure

by which their brands will be judgedwhen things go wrong for them.

And negative feedback online couldeven be an opportunity to increasecustomer loyalty, according to recentresearch from Bazaarvoice, a US-based company that hosts and moder-ates online reviews for retailersincluding Argos, Marks and Spencer,J Sainsbury and Next.

It found that, when consumers sawa brand’s response to a negativeonline review, their overall opinion ofthe product and their intent to pur-chase more than doubled, comparedwith when they saw a negative reviewwithout a brand response.

Similarly, when a brand’s responseoffered to refund, upgrade orexchange a disgruntled customer’sproduct, consumers were 92 per centmore likely to purchase than thosewho saw no response.

“Responsiveness is one of the mostimportant dimensions of a more‘human’ commercial relationship,”says Lisa Pearson, chief marketingofficer at Bazaarvoice.

“With the acceleration of marketchanges from social media, new tech-nologies and increased competition,companies that want lasting relation-ships with consumers must partici-pate in experiences that foster trust,dialogue and collaboration at eachstage of their journey.”

Once upon a time, in thehalcyon days before theinternet, a well-wordedpress release may havebeen enough to defuse acompany crisis, but inthese days of emails andsocial media, companieshave to do more to preventstorms in tea cups frombecoming tsunamis.

Here are five key stepsto how to deal with acrisis in the modern era.

Respond quickly“The demand for aresponse is 15 minutes onTwitter and about an houron Facebook,” says TamaraLittleton, chief executive ofeModeration, whichmanages social media forcompanies ranging fromSony Mobile to MoshiMonsters.

“That is just the way itis now. Brands have tomonitor everything and getback very quickly – even ifit is just to say: ‘We areaware something hashappened and we arelooking into it.’”

She warns that if acompany remains silent inthe face of an unfoldingcrisis, customers and thegeneral public will beginfilling in the gaps for themon social media, very likelytweeting or posting highlyunfavourable materialabout the business.

The longer the delay inresponse, the harder itbecomes for the businessto put its point of viewacross credibly.

“Delay is the worst thingyou can do,” agrees NickSharples at CrisisVu, acompany that providessoftware that allowscompanies to monitorsocial media.

During the horsemeatscandal earlier this year,when a number of fooditems advertised as beefwere discovered to containhorsemeat, Tesco, thesupermarket chain, wasvery quick to publish anapology to customers,while frozen food providerFindus did not go publicwith its findings for aweek.

Mr Sharples saysFindus’s delay wasperceived very negativelyby the public. “Peoplenever remember the crisisitself, but they remember ifyou covered it up.”

Similarly in 2011, whenSony’s customer databaseswere hacked, theelectronics company was

criticised more for thelength of time it took totell customers about itthan for the breach itself.

Practise, practise,practiseTo be able to respondquickly, it is important tohave a clear plan of actionin place well ahead of anycrisis.

“One of the key thingsabout a crisis is preparingbefore it hits,” says MrSharples. He says that,many times, companies areslow to respond becausethey spend too longdiscussing their responseswith the legal team, whooften want to use animpenetrable “legalese”.

“Have the conversationswith the lawyers before acrisis hits,” he advises.

Tom Hoskin, groupmedia director at Tesco,says the company’scommunications team isprepared to swing intoaction quickly.

The hardest part is oftendeciding what constitutes areal crisis. Once that hasbeen established – asduring the horsemeat crisis– there is a set plan thatcan be followed.

It is also essential tohave a social mediaaccount already set up.About 23 per cent ofFortune 500 companies arenot yet active on Twitter,according to research thisyear by the University ofMassachusetts Dartmouth.

Such companies will findthemselves virtuallyvoiceless when negativetweets about their productor service begin to fly.

Try to sound sincereSaying “sorry” quickly andclearly when a companyhas done wrong isessential, says Mr Sharples.

“An apology is one ofthe most importantelements in a crisismanagement plan. Itcan negate much of thecriticism that is likely

to be streaming in.”Again during the

horsemeat crisis, Tescotook out full page ads in anumber of newspapersheaded “We apologise”,while Findus publishednotices with the muchmore brusque heading “Amessage to our customers”,and buried the word“sorry” in the secondparagraph.

Getting the tone right isimportant, says MsLittleton. “It will varydepending on what yourbrand is. Humour can calmdown a situation and getpeople back on your side.But humour is not rightfor every brand. For thebanking industry it is notappropriate.”

O2 used humour to goodeffect during a networkoutage in July 2012. Amidmore serious advice, thecustomer service team sentwitty responses to some ofthe more abusive tweetsthey were receiving fromangry customers.

These were noticed bythe wider public andcreated sympathy towardsthe customer care teamwho were showingthemselves to be human.

Eventually O2 startedreceiving supportive tweetsfrom the public such asthis one fom @Bentwelly:“Whoever is running @O2twitter feed today ishandling the abuse well!Go you! :-)”

Take breaks andrefresh your teamCrisis management isintense and stressful, saysMs Littleton. “Werecommend you swap

teams over after a coupleof hours so people are nottaking things personally,”she advises.

“It is very important forpeople doing the PR orcommunications to remaincalm and not be goaded bythe public.”

Ms Littleton’s team ateModeration run crisissimulations for companiesto help them rehearsegoing through a crisisbefore one hits.

She says the team oftenfind that two or threehours into the simulation,people’s judgment beginsto deteriorate and mistakesstart to happen. “It’s calledthe monkey-brain – aknown physiologicalreaction to stress: yourbrain shuts down.”

Be prepared for thelong haulType “horsemeat” and“Burger King” into thesearch bar on Twitter andyou will still see a handfulof recent tweets linkingthe fast-food company tothe crisis, nearly a yearlater.

Tom Hoskin at Tescosays that the PR team isstill poised for thehorsemeat issues to bebrought up again, everytime any kind of food-related issue surfaces inthe media.

“A recent survey in theprocessed meat industryshows that a quarter ofcompanies in the processedmeat industry are stillbeing affected by thehorsemeat crisis,” says MrSharples. “There is a longtail to a crisis this public –and high profile.”

Sorry seems to bethe hardest wordHow to handle a crisis

There are ways torespond when thingsgo wrong andpreparation is vital,writesMaija Palmer The Bugatti Veyron is a

250mph supercar that hassold 340 units since itslaunch in 2005. At upwardsof $2m it was never going tobe a common sight, even inthe most affluent of cities.

So why would Volkswa-gen, Bugatti’s parent com-pany, care about buildingup a mass following for iton social media and thenspend money analysingpopular opinions of thisroadside rarity?

The answer lies in thenature of a brand, a termthat suffers from very lazyinterpretations.

People confuse it with aproduct or company iden-tity, ignoring the complexset of attributes that go tomake up a true brand.

Among the list of realbrand qualities are third-party perceptions. For aluxury car to succeed, itmust turn heads in thestreet. And what goes oninside those heads mattersto its brand image.

Connect Advertising hasbeen commissioned to mon-itor the Veyron’s popularimage as expressed viasocial media.

Alastair Duncan, Con-nect’s marketing director,uses a variety of softwareproducts that assess publicsentiment in social media toidentify views on the car,because these opinionshave an impact on thewider VW product line.

“Bugatti is a hero brandin the VW portfolio. Peopledo feel terribly passionateabout it.” Mr Duncan says.

This passion is what Con-nect measures when it digsinto Bugatti’s 1m-strong fanbase on Facebook. Wordsand phrases are isolatedand categorised to give a

picture of how far VW’selaborate Bugatti brand-extension exercise is work-ing.

Mr Duncan takes socialmedia seriously, but notesthat sentiment analysisdemands a degree ofrestraint. “It’s absurd torespond to every singletweet where your companyis mentioned. It’s far moreimportant to respond tocomments that matter, andto trends indicated bymounting levels of com-ment,” he says.

There are two big chal-lenges to isolating senti-ments buried in the chaoticenvironment of socialmedia. The sheer volume ofmessages flying aroundTwitter and Facebook isdaunting enough. And thenthere is the problem of the

way humans deploy lan-guage, with irony and sar-casm defeating any trueunderstanding of the feel-ings behind an online trend.

Chris Binns, managingpartner at media agencyMediaCom, employs a hand-ful of programs to performsentiment analysis for hisclients. He notes that meas-uring the volume of men-tions of a product is rela-tively easy, but that readinginto those mentions foremotional intent is tough.

“Automated tools start tofail when nuances andhumour feature in lan-guage,” he says.

“It is useful to know whatquestions people haveabout a brand, but you needto see the meaning of com-ments. There aren’t manyintelligent robots that cando that.”

Brandwatch, one promi-nent social media monitor-

ing tool, classifies com-ments as positive, negativeor neutral.

While this is not 100 percent precise, the UK-basedcompany claims to achieve70 per cent accuracy withthis approach, which can beenough to learn a lot aboutwhere an advertising cam-paign is heading. To movebeyond the 70 per cent rate,Brandwatch admits thatmanual analysis still has aplace, though even that issubject to error.

Knowing the right time tohand analysis over from therobots to the humans is theforte of Penrith-based Dolly-wagon. Named after anearby mountain in north-ern England’s Lake District,Dollywagon sits betweenthe worlds of IT and mar-keting, taking work on aproject basis.

Founder Jason Brownleedescribes the business as amix of analytics, internetsearch, social media andbrand consultancy.

For fees from £5,000 to£50,000 or more, Dollywagonwill embark on a mission toinspect the marketplacearound a product or brandas defined by social media.

Dollywagon’s softwareproduces a report that isthen further analysed by ahuman. “You have tounderstand the dividingline between the computerand the material,” says MrBrownlee. “Sarcasm doesnot compute.”

After logging mentions ina huge mound of tweets, hissoftware breaks the contentdown into words that relateto elements of opinion.

This material is then sub-ject to the human touch,with Dollywagon’s analystteam using their own quali-tative research system toherd comments into areasindicating a joke is beingmade or dissatisfactionexpressed.

“I don’t trust a machineto tell me how people feel,”says Mr Brownlee, “but I dotrust it to tell me what theyare talking about.”

Machine and man uniteto assess brand valueSentiment analysis

Clever software andpeople are needed tostudy opinion, saysMichael Dempsey

Whateverhappens, beresponsive andremain positive

Reputation management Companiesshould listen towhat people say about them,writes Jessica Twentyman, introducing a setof articles about brands and social media

‘Automated toolsfail when nuanceand humourfeature in language’

On FT.com »

Video: stay calmand don’t panicMaija Palmer onhow to handlesocial mediaduring a crisisft.com/brands

Questionable decision: socialmedia experts say British Gaswas naive to schedule a TwitterQ&A session on the same day itannounced price rises

Negative feedback onlinecould even be anopportunity to increasecustomer loyalty

The Connected Business