This is how HR can lead, says one of the world’s best CEOs


Aron Ain’s opinions about HR are a little outside of the mainstream, and they’re part of why he’s regarded as a great CEO.

If the New York Times publishes an article about you with the headline The Incalculable Value of a Good Boss, you’re probably doing something right. But it’s not simply a compliment for the CEO of Kronos, Aron Ain – he has the data to back it up. Glassdoor ranks him as one of the US’ most beloved CEOs, Forbes reports that 92 per cent say they’re proud of their company, and in a list of Australia’s best workplaces Kronos ranks 20th.

The $1.2 billion company, which produces workforce management and human capital management technology and cloud solutions, obviously has a keen interest in the most modern HR approaches. This becomes especially clear when you talk to Ain, who we interviewed and who had these four points to make about HR’s organisational role.

1. HR should be a strategic weapon (and use analytics)

The point he returned to the most was that HR must make certain it isn’t being controlled by events, and instead is always planning to achieve their organisation’s long-term goals.

“I think what’s happened historically, though I do see it changing, is that HR has been really a clinical function. The approach has been, “We want to make sure we have the right benefits and compensation. We want to make sure we’re dealing with problems when they come up.” But what HR needs to do to have that valued spot at the table is to shift from that clinical view to more of a strategic one, and really work hard to drive business outcomes in all areas of culture and employee engagement.

“At Kronos we try to do what we call ‘exposed reality’ on a regular basis. That means “things are what they are, they’re not what you would hope they would be.”

As an example of how HR can take take the facts as they are and develop a strategic approach, Ain talked about how the department at Kronos focused on measuring how well they were treating their best employees.

“So we do analytics all the time and I’ll give you an example. I can tell you that our turnover among our top performers, people who were rated four or fives at their performance reviews, is four per cent. We used to know only what overall turnover was.”

2. HR should be in the leadership team

Close to a lot of HR managers’ hearts is the belief that if an organisation is to thrive, HR needs to be present at the highest level meetings. Ain couldn’t agree more.

“Our head of HR sits on the leadership team; he’s someone I work with as closely as anyone at the company. I know all of his key leaders. He has my support and they have my support to take deep action around what we need to do to continue to improve as a company.

“Culture, values and engagement are key strategic imperatives for us as a company and HR plays a vital role in creating this environment where we have a positive culture and where trust is a key part of who we are.”

3. Managers are the key to employee engagement

In a day and age where so many people are focused on company branding as a way to ensure employee engagement, Ain believes that how highly an organisation is regarded is only part of the story.

“I think people go to work for companies because of the company. But I think they leave because of who they work under. Once you’re at a place, who you work for and how they create an environment for you to excel and be happy makes all the difference in the world. It’s why Kronos has such a deep focus on leadership and management effectiveness.

“You can get a situation where an employee is fully engaged with the company, but simultaneously have low engagement with their manager. I can tell you that the people in the company that have the highest engagement scores, their managers have the highest effectiveness ratings. And the lowest engagement scores come from those whose managers have the lowest effectiveness ratings. And if you take it to the next level, people resign over this. Lowest engagement, lowest manager effectiveness, highest turnover.

“So on top of the common engagement survey questions, we’ve added our own specialty questions which focus on your relationship with your manager. “Does Aron Ain talk to you on a regular basis about your career aspirations? Does he understand what you’re doing in your job?” Then we give that feedback to the manager and we ask them to put a plan together on how they can improve. Because you can’t change what you don’t know you need to change.”

4. Family comes before business

Perhaps Ain’s most unusual belief (especially considering he’s a CEO) is that his company shouldn’t be so crucial to his employees.

“I have a strong belief in a proper work-life balance for all employees. All the time I tell people who work at Kronos that if the most important thing in their life is Kronos, they’ve got their priorities mixed up. I tell them that is just silly. The most important thing in their life should be their family. I’m not saying Kronos shouldn’t be important, but it shouldn’t be the most important thing.”

To this effect Kronos offers paid maternity leave, paid paternity leave and has an open vacation policy in every country where it’s permitted. People can take as much time off as they want as long as they get their work done and get approval from their manager.

What do you think of Ain’s approach to company culture and HR? Let us know in the comments.

Discover the best HR certification pathway for you by answering eight questions online about your professional profile to help you start your own certification journey. Get started HERE.

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Fiona Downes
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Fiona Downes

Wow.
This is good to see happening in a real situation.
I am a student and university studying Human Resource Management, and work/life balance and engagement is talked about constantly.

Paul
Guest
Paul

Agree with Aron Ain’s opinions about HR. However Australia’s proud employee relations culture still largely underpinned and supported by regulation and legislation shaped by 19th century adversarial ideology of workers versus bosses, labour versus capital, propped up by a IR coterie of Fair Work Commissioners, Lawyers, Union Officials, Politicians who are ex-Union officials, IR Advisors and Managers, it doesn’t auger well for any Australian CEO or organisation that might share Aron Ain’s opinions. Not saying that there aren’t Australian organisations/CEO’s out there trying to find a different and better way but if they step outside the Australian employee relations mainstream… Read more »

Lou Chambers
Guest
Lou Chambers

I think this is very sensible approach. I am lucky to have worked overseas with several organisations where HR has been highly valued and run by strategically minded, operationally focussed individuals who sat on the Leadership Team and were party to strategic planning the same as the other key senior managers. When I was a GM I also raised the profile of HR to the Leadership Team as I see them critically involved in creating a cohesive, challenged, engaged workforce who also develop and sustain an appropriate organisational culture. The unlimited leave issue seems to work elsewhere in the world… Read more »

Doug
Guest
Doug

I can appreciate where Paul is coming from – if you have a unionised working environment introducing change can be very challenging even with a consultative committee. It can be very slow if you are advocating changing work practices without offering an incentive for this to occur. Sadly, work life balance in my experience does not always address this, especially if you have young single staff members where this may not be a priority, or might be but not because of family commitments. The other myth with some of the flexible working arrangements is that they will encourage productivity and… Read more »

Rita Duval
Guest
Rita Duval

Thanks AHRI for a positive, real-life case study! While there may be restraints in a particular country’s legal framework, what I read in the article about Aron Ain’s approach has little to do with the formalities. He said “know your numbers” – how many HRM’s or senior managers do know or care about the attrition of their talent? How many HR GM’s that ‘sit at the table’ are really key to building the culture and values of the business – or do they just sit there and talk about ‘personnel stuff’ like adding to/reducing the workforce? How many surveys actually… Read more »

More on HRM

This is how HR can lead, says one of the world’s best CEOs


Aron Ain’s opinions about HR are a little outside of the mainstream, and they’re part of why he’s regarded as a great CEO.

If the New York Times publishes an article about you with the headline The Incalculable Value of a Good Boss, you’re probably doing something right. But it’s not simply a compliment for the CEO of Kronos, Aron Ain – he has the data to back it up. Glassdoor ranks him as one of the US’ most beloved CEOs, Forbes reports that 92 per cent say they’re proud of their company, and in a list of Australia’s best workplaces Kronos ranks 20th.

The $1.2 billion company, which produces workforce management and human capital management technology and cloud solutions, obviously has a keen interest in the most modern HR approaches. This becomes especially clear when you talk to Ain, who we interviewed and who had these four points to make about HR’s organisational role.

1. HR should be a strategic weapon (and use analytics)

The point he returned to the most was that HR must make certain it isn’t being controlled by events, and instead is always planning to achieve their organisation’s long-term goals.

“I think what’s happened historically, though I do see it changing, is that HR has been really a clinical function. The approach has been, “We want to make sure we have the right benefits and compensation. We want to make sure we’re dealing with problems when they come up.” But what HR needs to do to have that valued spot at the table is to shift from that clinical view to more of a strategic one, and really work hard to drive business outcomes in all areas of culture and employee engagement.

“At Kronos we try to do what we call ‘exposed reality’ on a regular basis. That means “things are what they are, they’re not what you would hope they would be.”

As an example of how HR can take take the facts as they are and develop a strategic approach, Ain talked about how the department at Kronos focused on measuring how well they were treating their best employees.

“So we do analytics all the time and I’ll give you an example. I can tell you that our turnover among our top performers, people who were rated four or fives at their performance reviews, is four per cent. We used to know only what overall turnover was.”

2. HR should be in the leadership team

Close to a lot of HR managers’ hearts is the belief that if an organisation is to thrive, HR needs to be present at the highest level meetings. Ain couldn’t agree more.

“Our head of HR sits on the leadership team; he’s someone I work with as closely as anyone at the company. I know all of his key leaders. He has my support and they have my support to take deep action around what we need to do to continue to improve as a company.

“Culture, values and engagement are key strategic imperatives for us as a company and HR plays a vital role in creating this environment where we have a positive culture and where trust is a key part of who we are.”

3. Managers are the key to employee engagement

In a day and age where so many people are focused on company branding as a way to ensure employee engagement, Ain believes that how highly an organisation is regarded is only part of the story.

“I think people go to work for companies because of the company. But I think they leave because of who they work under. Once you’re at a place, who you work for and how they create an environment for you to excel and be happy makes all the difference in the world. It’s why Kronos has such a deep focus on leadership and management effectiveness.

“You can get a situation where an employee is fully engaged with the company, but simultaneously have low engagement with their manager. I can tell you that the people in the company that have the highest engagement scores, their managers have the highest effectiveness ratings. And the lowest engagement scores come from those whose managers have the lowest effectiveness ratings. And if you take it to the next level, people resign over this. Lowest engagement, lowest manager effectiveness, highest turnover.

“So on top of the common engagement survey questions, we’ve added our own specialty questions which focus on your relationship with your manager. “Does Aron Ain talk to you on a regular basis about your career aspirations? Does he understand what you’re doing in your job?” Then we give that feedback to the manager and we ask them to put a plan together on how they can improve. Because you can’t change what you don’t know you need to change.”

4. Family comes before business

Perhaps Ain’s most unusual belief (especially considering he’s a CEO) is that his company shouldn’t be so crucial to his employees.

“I have a strong belief in a proper work-life balance for all employees. All the time I tell people who work at Kronos that if the most important thing in their life is Kronos, they’ve got their priorities mixed up. I tell them that is just silly. The most important thing in their life should be their family. I’m not saying Kronos shouldn’t be important, but it shouldn’t be the most important thing.”

To this effect Kronos offers paid maternity leave, paid paternity leave and has an open vacation policy in every country where it’s permitted. People can take as much time off as they want as long as they get their work done and get approval from their manager.

What do you think of Ain’s approach to company culture and HR? Let us know in the comments.

Discover the best HR certification pathway for you by answering eight questions online about your professional profile to help you start your own certification journey. Get started HERE.

7
Leave a reply

avatar
500
  Subscribe to receive comments  
Notify me of
Fiona Downes
Guest
Fiona Downes

Wow.
This is good to see happening in a real situation.
I am a student and university studying Human Resource Management, and work/life balance and engagement is talked about constantly.

Paul
Guest
Paul

Agree with Aron Ain’s opinions about HR. However Australia’s proud employee relations culture still largely underpinned and supported by regulation and legislation shaped by 19th century adversarial ideology of workers versus bosses, labour versus capital, propped up by a IR coterie of Fair Work Commissioners, Lawyers, Union Officials, Politicians who are ex-Union officials, IR Advisors and Managers, it doesn’t auger well for any Australian CEO or organisation that might share Aron Ain’s opinions. Not saying that there aren’t Australian organisations/CEO’s out there trying to find a different and better way but if they step outside the Australian employee relations mainstream… Read more »

Lou Chambers
Guest
Lou Chambers

I think this is very sensible approach. I am lucky to have worked overseas with several organisations where HR has been highly valued and run by strategically minded, operationally focussed individuals who sat on the Leadership Team and were party to strategic planning the same as the other key senior managers. When I was a GM I also raised the profile of HR to the Leadership Team as I see them critically involved in creating a cohesive, challenged, engaged workforce who also develop and sustain an appropriate organisational culture. The unlimited leave issue seems to work elsewhere in the world… Read more »

Doug
Guest
Doug

I can appreciate where Paul is coming from – if you have a unionised working environment introducing change can be very challenging even with a consultative committee. It can be very slow if you are advocating changing work practices without offering an incentive for this to occur. Sadly, work life balance in my experience does not always address this, especially if you have young single staff members where this may not be a priority, or might be but not because of family commitments. The other myth with some of the flexible working arrangements is that they will encourage productivity and… Read more »

Rita Duval
Guest
Rita Duval

Thanks AHRI for a positive, real-life case study! While there may be restraints in a particular country’s legal framework, what I read in the article about Aron Ain’s approach has little to do with the formalities. He said “know your numbers” – how many HRM’s or senior managers do know or care about the attrition of their talent? How many HR GM’s that ‘sit at the table’ are really key to building the culture and values of the business – or do they just sit there and talk about ‘personnel stuff’ like adding to/reducing the workforce? How many surveys actually… Read more »

More on HRM