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Ep 380: Transformational Hiring

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Digital transformation is currently one of the fundamental drivers of talent strategy for many organizations. Ensuring your company has the right balance of skills is a complex task involving talent acquisition, L&D, retention, internal mobility and an effective HR and Recruiting tech stack.

So how are employers managing the complexity of all of this while prioritizing the employee experience?

My guest this week is Harm Otten, Executive Vice President Human Resources at DHL Global Forwarding & Freight. Harm has spent the last few years focusing on the talent aspect of digital transformation within his organization, putting recruiting technology at the heart of the strategy.

In the interview, we discuss:

• Digitizing the HR organization

• Improving the employee experience

• Creating a job architecture and an internal career marketplace

• Building an HR tech stack around a core systems

• The advantages of using end to end recruiting technology

• The impact of the pandemic on working practice

• How digital transformation is changing skill requirements in a competitive market

• The vital importance of EVP and being an attractive employer

• Being applicant centric

• Combing cultures after an acquisition

• The future of recruiting

Listen to this podcast in Apple Podcasts

Transcription:

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Avature (Ad) (52s):
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Matt Alder (1m 19s):
Hi, everyone. This is Matt Alder. Welcome to the Recruiting Future podcast. Digital transformation is currently one of the fundamental drivers of talent strategy for many organizations. Ensuring your company has the right balance of skills is a complex task involving talent acquisition, L&D, retention, internal mobility, and an effective HR and recruiting tech stack. How are employers managing the complexity of all of this while prioritizing the employee experience? My guest this week is Harm Otten, Executive Vice President of Human Resources at DHL Global Forwarding and Freight.

Matt Alder (2m 3s):
Harm has spent the last few years focusing on the talent aspect of digital transformation within his organization, putting recruiting technology at the heart of the strategy. Harm, and welcome to the podcast.

Harm Otten (2m 17s):
Hi, Matt. Welcome to join your podcast. How are you doing?

Matt Alder (2m 21s):
I’m very well, thank you. It’s an absolute pleasure to have you on the show. Could you just introduce yourself and tell us what you do?

Harm Otten (2m 29s):
Yes. My name should be in there. My name is Harm Otten. I am responsible for human resources in one of the divisions of the DP DHL group. People may know the DHL group from packages and stuff, but the group does much more than that. The group is about 600,000 people big. It consists of five divisions. One of the divisions I’m responsible for HR is the DGF, the DHL Global Forwarding and Freight Division, which consists of about 45,000 people globally. Our main business is around forwarding globally with air freight, ocean freight, land cargo, customs, all kinds of value-added services around the world.

Harm Otten (3m 16s):
That’s our main business.

Matt Alder (3m 18s):
Fantastic staff. Now talk us through your time there because you’ve not been there a super long time. When did you join and what did you find when you arrived at the company?

Harm Otten (3m 28s):
I’ve been in forwarding all my life. I’ve done 20 years with Shankar, which is a big competitor. After that, I joined Kuehne+Nagel for another 11 years, which is also a top-five player. I joined DHL Global Forwarding about two and a half years ago. During the course of my life, I was in multiple HR positions in different countries, ranging from country level to global head offices, to the regional level, and global levels. In December 2018, I joined DGF, which was a very challenging step coming into a divisional burb, being responsible globally for the development of HR in a company that just made a restart.

Harm Otten (4m 24s):
Between 2014 and ’17, DGF went through a bit of a difficult period. Under the new leadership of Tim Scharwath, we made a restart and building up the company around new entrepreneurship. So far, the last two and a half years have been a fantastic ride. We’ve made so many great steps in this area. The change process that the division and also the whole group are immense. We see what we’ve done so far on improving entrepreneurship, improving our product management, improving our software, looking at our cost control, lots of lots of challenges.

Harm Otten (5m 10s):
At the same time, just before I arrived, I was in the group with a new CHR, Mr. Thomas Ogilvy. He set a clear path, together with the HR board, on a new HR strategy, which is, by now because it changes every now and then, it’s now called our HR strategy, our HR mission 2025, which is a lot about digitization and adjusting everything to the new world. This is a very exciting period because when I came in, I found an HR organization that was very little digitized.

Harm Otten (5m 52s):
It was rather far from business and I found a green playing field of improving lots of stuff using very much the company strategy that is very clear with a fantastic purpose, connecting people, and improving lives with a very clear vision of being the logistics company for the world, delivering excellence in a digital world based on great values like respect and results. On this basis, with a few of digitally redesigning our people operating model towards, I would call it, a great employee experience and operational efficiency.

Harm Otten (6m 36s):
This was a fantastic basis for me to start my journey within our division. We see digitization as the most important driver to become more effective and efficient. We apply means of digitization to increase our operational efficiency, both in our business, but also in HR, and to optimize interaction with our customers, as well as with our employees. Now, improving the employee experience is really at the top of the agenda. Therefore, the applications we use are being modernized and processes are digitized to continuously improve, let’s say, the working conditions for our employees.

Harm Otten (7m 18s):
With that digitization strategy, we aim to constantly improve the employee experience.

Matt Alder (7m 21s):
Fantastic stuff. Tell us a little bit more about that in terms of the processes and the systems, but maybe, in particular, also the technology that you’re using.

Harm Otten (7m 33s):
Absolutely. We specifically implement tools that strengthen the collaboration and help us attract, retain, and develop the best talent. Well, digitization also plays a crucial role in the training and development of our employees. We also know that IT and technology are changing so fast that we constantly need to adapt to that. I found that we did not have one common HR system. We selected and rolled out a core HR system with a plan for a three and a half year rolled out. We chose Oracle as our provider for that. By now, we’re in the middle of that process and we’ve rolled it out to approximately 50 to 55 countries.

Harm Otten (8m 20s):
Our target is to finalize with over a hundred countries by the middle of 2023. This will give us a real basis for data and for all administrative actions that happen in HR, from onboarding, even from pre-boarding to offboarding. That’s a very important decision because it’s all about data in the future. If you don’t have a core system, how will you manage a hundred countries in a certain direction? The second thing that we started off with is if we have these best in class processes, how do we make sure that we have the right data of all of our people that we want to know to make sure that we have the right people, the right amount of people with the right competencies in place?

Harm Otten (9m 13s):
We started to build a job architecture with the aim to have every employee in our company tagged with a job reference. We know that in a global job catalog, we can generate a view on who is where, who’s doing what job, what level is he or she active, what competencies does he have, what competencies go along with that job? This will enable talent management processes and hiring processes in a very different way than we used to do before because we can digitize a lot. One example that’s a very exciting project that we’re working on across the business units in the group is our internal career market.

Harm Otten (9m 57s):
If we’ve got all this set up, if we’ve got our core system ready, if we’ve got a job architecture ready and we know what our people’s aspirations are, we will be able to match jobs to people and also to match people to future jobs. Try to imagine that we have a machine with technology and with also a bit of artificial intelligence that helps us. For example, you’re one of our employees. We see that you have a certain level and there’s a job vacancy. The machine will help us to propose to you, “Hey, these jobs are available.

Harm Otten (10m 38s):
Would this be something for you?” Just imagine how that world will change our internal marketplace, which is by the way, huge because the group has about 600,000 people. I also believe that if you offer this to your people, you’ve got a fantastic employee value proposition that is really attractive also for people in the market, because people will see that you can have a career. There are dedicated learning paths that we’ve developed for all kinds of job families. People see that you move up the ladder or you can have a very diverse career within our company. People see that from the outside as well. It will attract people, but it also makes sure that we retain our people because, nowadays, people don’t stick around, hang around 10 years in a job waiting for their boss to leave.

Harm Otten (11m 28s):
No, that doesn’t happen anymore so you have to offer something as a company,

Matt Alder (11m 33s):
That sounds like an amazing project for all the reasons that you’ve outlined there. You mentioned Oracle, tell us a bit more about the other core technologies that you’re using to drive talent acquisition in this internal marketplace.

Harm Otten (11m 47s):
We did get to thinking about how do we get, globally, all of our processes in place that we’ll be able to manage to recruit thousands of people every year that we do in this company. We set out to find the right partner to globally support this. In the end, after a careful selection tree, we chose Avature. Avature is delivering for us the full process from A to Z and is a perfect fit for us, and also a perfect fit for us with our other systems because it’s pretty easy to connect Avature to our other systems.

Harm Otten (12m 27s):
It helps us be the best in class with these processes. Now, we were able to roll out Avature within our division within a timeframe of nine months, over a hundred countries with, I don’t know how many recruiters are involved, how many managers got access. We spent an enormous amount of time in our thinking on how to interconnect Avature to our job boards, to our core system, to enable a very smooth process from recruiting to pre-boarding, to onboarding, to off-boarding.

Harm Otten (13m 17s):
This has been very successful. Avature is so user-friendly that our teams adapted to it extremely easily. That, of course, helped, and it was also part of the selection process that it needed to be easy to use.

Matt Alder (13m 28s):
Now, you mentioned the labor market has changed on a daily basis. Sometimes it’s an employer’s market, sometimes it’s an employee’s market. Obviously, we’re at a very unusual time as hopefully, we start to come out of the pandemic. We’re seeing pressures and changes in labor markets all around the world at the moment. How is this pandemic or coming out of the pandemic affecting what you do in terms of talent?

Harm Otten (13m 56s):
It’s affected just about everything that we do. What we’ve seen now, looking back, we can see that how well we can collaborate, be productive, and be a successful company while we collaborate digitally. Just imagine at early 2020, with the beginning of the pandemic, and try to envision what we do. We ship goods across the world using ships, using airplanes, using trucks. We provide customs between borders. Now, in early 2020, I think it was in February, ships stopped sailing from China.

Harm Otten (14m 37s):
A month or two months later, airplanes stopped flying and then borders were closed. We had to be extremely creative in how we serve our customers in this situation. At the same time, all of the countries in the world were confronted with the pandemic and governmental restrictions. On top of our minds was keeping our people safe. Now we’ve got a situation that 85 to 90% of our people are white-collar workers. We’ve got a few truck drivers. We’ve got a few people working in warehouses. That is a situation that you can’t change. You have to do that locally. Somehow, the goods have to be picked up and put into a plane, but most of our people were able to work from home so we shifted working from home for 85% of our people in most of the countries within 24 or 48 hours.

Harm Otten (15m 32s):
I can tell you, I’ve been always very fond and always a big driver for flexible work for working from home, but I haven’t been able to move that needle an inch in 30 years. Corona just helped me on that path. It was shown to our management and to ourselves that it is possible to have a very productive and successful organization while working from home. Our people were working from home in very different situations. It’s very different whether you’re working from home from India, from Sao Paolo, from New York, or in Western Europe, very different circumstances.

Harm Otten (16m 19s):
We’ve never seen a paradigm shift happened so quickly. I’m sure that because it’s been so long now, we will never go back to the way it was before. We will never go back to a hundred percent working from offices. Momentarily, we’re implementing, globally, a flexible work office concept, always adjusting this to the local situation, but we are moving into a hybrid situation, a 50-50 work from home, work from the office. Many things we had to rethink. Why did we travel around the world to discuss standard operations? We don’t do that anymore.

Harm Otten (16m 60s):
I don’t think we’ll do that in the future. We’ll be traveling to make sure that our network works, that we know each other, that we trust each other, that we work on the way that we work together. This has also been a very big push for digitization. It has been a push for getting all of our applications mobile. It’s been a push for enabling our people with technology that we can work on all kinds of different places. I must say that this has also become one of the points that is really become important in attracting people. There are many things that you need to do as an employer to be attractive, but it’s been a real change that people are now, next to the fact that they’re asking for good pay, that they’re looking at career opportunities, they are looking for growth, there are hardly any situations where it doesn’t come up in a recruitment conversation, “Do I have to come to the office every day or can I work from home?”

Harm Otten (18m 8s):
It also gives us huge opportunities to have people working from a distance. Taking two steps back, two years back, you would recruit people. Let’s take Sao Paolo. You would recruit people from Sao Paolo only just for the fact that it takes two hours to come to the office. Now, you can recruit people who are way farther from that, but it’s also important to keep our people because most of them don’t have to travel to the office every day, two hours single trip. This is a really attractive thing that we are now also bringing into our employee value proposition. Let’s be honest, there’s no way out, the genie is out of the bottle so this is what it’s going to be.

Matt Alder (18m 55s):
Yes, very much so. I couldn’t agree with you more. I think we’re seeing that in organizations all around the world. You mentioned digital transformation a lot and digitization of HR, but obviously, your industry has been through digital transformation as a whole. How has that changed in terms of your recruiting requirements and the skills that you’re looking for and the type of roles that you recruit for?

Harm Otten (19m 30s):
It’s changing a lot. A part of the change within our company is that we’ve introduced an operating system for our forwarders that now enables them to have a view on the files that they’re working on globally. Previously, we had, let’s say, our export or input departments managed partly by customer service people and also data entry people to just simplify it. It’s more difficult than that, but we saw that we were hiring people with making sure that they had the competencies to deal with a lot of data, with documents, entering documents, following documents, and printing them, et cetera.

Harm Otten (20m 18s):
Digitization now enables our forwarders to be different. It enables them to be a salesperson who is watching screens. It was enabled to deal with exception management, to deal with our customers, and to manage our shipments, instead of putting in data. Now, through this transformation process, I think we’re almost halfway, but we also see that we are now looking for different people with different competencies. This is the core of our business. Of course, we’re looking for different people who help us in our digital interactions with our customers because our systems enable our customers to, for example, book digitally.

Harm Otten (21m 5s):
We have digital billing. We have digital pricing. This also enables our people to deliver very much more value-added work. At a time, which is now very strange labor markets, the combination of sudden high demand from the last months of post-pandemic high demand, the difficulties within the logistics sector, new competitors popping up everywhere, there are many more companies jumping in on the e-commerce ship, but we also now see that we have to compete with companies that we were not competing with.

Harm Otten (21m 49s):
Just one example, McDonald’s has raised its hourly wages by a couple of dollars. The difference with our administrative people has shrunk and they could now think, “Okay, I can go to McDonald’s for this. With DHL, I can get a couple of dollars more.” We see that, in certain segments, there is pressure on pay in certain segments of the labor market. Last year, we saw the attrition go down 50%. I think all of the companies saw that because people were careful not to change so fast. We see that now picking up again.

Harm Otten (22m 31s):
There are a lot more opportunities for our people, and at the same time, we’re looking for people with new competencies. We’re looking for people who can manage shipments in a digital world and who can offer our customers very different solutions, instead of focusing also on the lower value-added part of the previous work because we’ve replaced that with digital systems. The profile of the people we’re looking for is changed very much. Same time, what we see is that, for the last couple of years, we’ve developed a very different approach on how we select.

Harm Otten (23m 15s):
If we look at diversity, there’s a huge pool out there that we were not engaging with. Also, looking at the internal career perspectives, for example, for females, but we’re looking at adding diverse teams and diverse people to be able to deal with the very fast-changing circumstances that we have in the world. We’re looking at different people, different kinds of competencies, very diverse teams that we’re looking for so that’s changed a lot, Matt.

Matt Alder (23m 46s):
No, it sounds like and I can imagine that there’s a huge amount going on. I suppose with that in mind, you’ve mentioned a lot about being a great place to work, employee experience, and your internal careers market. What is the future of talent acquisition look like for you in terms of how you attract these different types of talent into your business?

Harm Otten (24m 20s):
I think that the future of recruitment is around being an attractive employer with a fantastic employee value proposition. It is about digitization. It’s about connecting to your audience outside and having a very easy way of connecting, applying, thinking applicant-centric, and having a great pre and onboarding in your company. There’s a couple of points that are really important in future recruiting. First of all, I mentioned that it was being an attractive employer. This is an employee market. You need to have a good proposition for the people outside. You need to have a good purpose, a good vision, and a mission.

Harm Otten (25m 2s):
You need to tell the story of your success, of what you’re doing. Why are we on earth? What are we doing? What’s our success? How can you contribute to that? You need to offer growth, of course, good pay, and you just need to be a great place to work. Now, next to that, you need to know what you need because if your company processes, your operating model is changing, then you need to think about your future workforce. What are the competencies that you need? How fast is the change going? Can you recruit new people and, at the same time, help your own people to come along with that change?

Harm Otten (25m 49s):
You need to have a plan for that. You need to reach your audience. It’s very difficult to reach the right audience. You need to select the media that you use. You need to think about your Google search engine. You need to be able to define how and where to find your audience and maintain contact with that audience. You need to continuously tell your story. Once you’ve gained the interest of those people, you need to have a very seamless application process. It needs to be applicant-centric. You don’t want to have obsolete questions.

Harm Otten (26m 28s):
You don’t want to have too many clicks in there. You make it very easy to connect people and very easy for people to apply. Then there’s the technology that will help you select the right people. You can ask the right questions for your applicants. You can have a system helping you to make the first shifts and you can have artificial intelligence helping you there to select your future competencies. It’s also changing from looking at CVS and what you’ve done in the past.

Harm Otten (27m 7s):
It’s looking at competencies and what you can do. What are you good at? This easy process of hiring is extremely important. Most of the people we see that we lose, we lose them somewhere in the first 18 to 24 months of them being with us so having a fantastic onboarding, or even before that, a great pre-onboarding, helps you get the people to get acquainted with your company in the future job that they can do. We have been rolling out what we call as a smart connect app.

Harm Otten (27m 49s):
This is an app that’s available for all of our people, 600,000, whether they are working in the postal parcel, whether they’re delivering letters, whether they’re a truck drive, a forwarder, or an IT guy, whether they have a laptop or not. Our connection to our people has been that. This is one of the tools that established that. This makes learning available. It also makes pre-onboarding available so the phase between selecting a person, signing a contract, and then there’s a time in between before he or she starts the job, and in that period, IT and digitization helps us to connect to people.

Harm Otten (28m 35s):
We can show them videos. We can have them learn the needed compliance, training, or the first operating information that they need. Helping them onboard fast and getting them acquainted with our company, using digitization for that is helping us not losing those people. This is one of the strongest bases that we have, continuous learning. Our IT around learning and culture has developed greatly as well. We’ve developed learning journeys that fit certain job profiles or job families.

Harm Otten (29m 17s):
If people want to see how they can develop further within the job family that they’re in, they can just click on a system mobile or on their laptops and see what’s available. If we can combine our future marketplace with the continuous learning and our cultural drive programs that we have on leadership and on our functional necessary learnings, we have a fantastic employee value proposition. This is the most important because it’s a employees’ market out there and they need to be interested so driving then our internal marketplace, this also drives external hiring because people can see that they can have growth, a future, and a career with us.

Harm Otten (30m 8s):
I must say, this is a super exciting project that we’re working on. Coming to the end, it’s simply as, and as a leader, you need to make sure that you’re a talent magnet. You need to offer this to new people, but you shouldn’t be a talent hoarder. One of the jobs of all of our leaders is to attract people, to grow people, and then let them go into the next job. This is tough, but this is a very good thing for us.

Matt Alder (30m 38s):
It’s very obvious that the culture and employee experience are very important to your organization. As a final question, obviously, you’re a large organization. As a large organization, you’ll acquire various companies over time. What are the success factors for you in combining cultures and addressing employee concerns during those acquisition processes?

Harm Otten (31m 2s):
Well, previously we were talking about digitization. The top has had an impact on how we collaborate and also impact corporate culture. If you look at merger and acquisition, this is more of an iterative process. It’s very different when it comes to acquisitions. Whenever an acquisition is announced, there are worries with people. People worry about their jobs, especially of the acquired company of course. Now there’s a period. We call it the pre-close period and the after-merger announcement so that’s before it’s finalized by the authorities. This period requires special attention.

Harm Otten (31m 42s):
Of course, this is the time when competitors go after your customers and they go after your people. It’s also the time when your top talent will most likely consider whether they need to leave the company because the questions are arising, “What’s my future? What’s the identity of the company that I’m going to be working with?” Some of them may go for interviews and some of them may wait until the close is there. To avoid a loss of talent, it’s imperative that the rationale of the transaction needs to be addressed straight after the announcement.

Harm Otten (32m 23s):
Information is key, and it’s enabled both sides of the deal to understand the envisioned future set up after the completion and to address existing or occurring concerns. You really have to work on your culture with a clear view of how you want to work together. It’s all about respect and results. This needs to be clear from the beginning. It makes a huge difference whether this is a bolt-on acquisition with more or less seamless integration plans, or if the buyer intends to squeeze maximum synergies by combining two existing companies.

Harm Otten (33m 3s):
There’s a very different thing. Communication is, of course, the glue used to combine cultures, just conveying the combined organization’s future vision and strategy to all of the employees. You need to keep on doing that and you need to repeat that. Regularly communicating with people, with the employees in this pre-close period is critical so people can clearly see the road ahead and if they buy into that. That’s why communication between the announcement and day one should be a top priority for everyone. It’s also an important time for our leadership team to look and listen to feedback, to reinforce what’s going well, to be very close, and to take corrective action wherever necessary.

Harm Otten (33m 52s):
Paying attention very early to the envisioned operating model and to the culture that exists in both companies and the culture that you want to have is essential.

Matt Alder (34m 4s):
Absolutely. Harm, thank you very much for talking to me.

Harm Otten (34m 8s):
It was a pleasure, Matt. Absolute pleasure.

Matt Alder (34m 10s):
My thanks to Harm Otten. You can subscribe to this podcast in Apple Podcasts, on Spotify, or via your podcasting app of choice. Please also follow the show on Instagram. You can find us by searching for Recruiting Future. You can search all the past episodes at recruitingfuture.com. On that site, you can also subscribe to the mailing list to get the inside track about everything that’s coming up on the show.

Matt Alder (35m 2s):
Thanks so much for listening. I’ll be back next time and I hope you’ll join me.

Recruiting Future (35m 7s):
This is my show.

The Jim Stroud Podcast (35m 16s):
Fifteen minutes ago, the world changed. Companies are microchipping their workers, robots are hiring humans, and brain-to-brain communication is a thing. This is all happening now. If you want to know what happens next, listen to the Jim Stroud podcast.

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