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Staying Power
Kruger Products Limited integrates HR strategy to support attraction and retention
Photo by Jason Hawkes/Getty Images
Staying Power
Kruger Products Limited
integrates HR strategy to support
attraction and retention
By Jennifer S. Arapoff
A few years ago, Canada-based tissue manufacturer Kruger Products Limited
was going through a period of turmoil. While sales were good, there were
challenges to employee engagement. Competition for talent in the Toronto
area, where the company is based, was intense. And as employees prepared
to say goodbye to the name Scott Paper Limited — a company that parent
company Kruger Inc. had acquired — many of them were uncertain about
the company brand and their role in the newly formed Kruger Products. As a
result, turnover was at its highest in the firm’s history: more than 14%.
“Kruger Products was dealing with an unprecedented level of change,” says
Debra Horsfield, Towers Watson senior consultant. “The Toronto market
had been luring away its highly trained people. Employees simply didn’t feel
incented to stay, and they were confused about the company’s brand identity
after the Scott integration.”
The director of human resources and legal counsel, Alex Teijeira, realized the
company needed to clarify its brand and solidify its standing as an employer
of choice in order to improve employee engagement and retain talent. He set
a goal of creating an HR strategy that would align with the overall business
strategy and address the attraction and retention problems.
The first step? A comprehensive employee survey to identify areas of
concern and opportunity. After reaching out to several vendors regarding the
design and implementation of a survey, Teijeira ultimately selected thenWatson Wyatt,1 a longtime partner.
1
In January 2010, after the Kruger Products project had been completed,
Watson Wyatt merged with Towers Perrin to form Towers Watson.
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Mario Gosselin, chief
operating officer, Kruger
Products Limited
About Kruger
Products Limited
Leading Canadian manufacturer and distributor of
tissue products, including
Cashmere, Purex, Scotties,
SpongeTowels, White Swan
and White Cloud brands
Private company with more
than $1B in sales
2,300 employees in
Canada, the United States
and Mexico
Parent company Kruger Inc.
produces pulp and paper
and leads the industry in
sustainable forestry and
recycling
Photo by Patrick Fordham
From turnover to engagement
By conducting an employee survey, the leadership
was looking for innovative ways to move the existing
corporate mindset toward an engagement-focused
HR strategy. It was a much-needed shift.
“There was a solid history of successful collective
bargaining agreements for Kruger Products’
manufacturing entities,” says Rick Bougie, Towers
Watson account director. “That was wonderful,
but attraction and retention for a packaged goods
company was a different animal altogether. Company
leaders needed a road map to help them determine
what would genuinely engage employees.”
They began by assessing employee attitudes about
such issues as the firm’s total compensation
practices, professional development opportunities
and performance measurements. The consulting
team helped devise and implement a carefully
crafted survey, using broad, deep data from Watson
Wyatt’s WorkCanada research and best practices
experience. Within two weeks, the survey garnered
an impressive 85% response rate.
WorkCanada Research
Part of the reason Kruger Products chose to partner with then-Watson
Wyatt was the company’s research-based approach to HR strategy. Using
recent data for benchmarking was an important part of Kruger Products’
survey approach.
The WorkCanada research has found that employee engagement has
a strong positive impact on productivity and financial performance.
Analysis of the data collected provides insight into the primary drivers of
engagement among Canadian workers.
The WorkCanada report helps employers tackle the engagement
challenge. The report looks at the top four drivers of engagement among
Canadian employees: strategic direction and leadership, rewards,
communication, and training and development. It also investigates
conventional wisdom about employee attitudes and perceptions and
debunks some common myths related to these drivers. The report
suggests actions that will foster engagement and enable companies to
tap the full potential of their employees.
“As soon as we saw such a strong response, we
knew the voice of employees would be heard and
we’d have the guidance and information we needed
to make some real changes,” says Teijeira.
From survey to action
“The initial survey was quite a wake-up call for
Kruger Products,” says Serge Reynaud, corporate
vice president, human resources and legal. “The
results made evident what we needed to change
if we were to meet our goals of improved retention
and engagement. Among other things, it was clear
we needed to alter the way we compensated our
people.”
The survey results also exposed the need for
improved communication regarding organizational
changes and highlighted opportunities for more
employee involvement in decision making.
• Introduce a new intranet, as part of a revamped
internal communication program
Company leaders swung into action to:
• Design an employee onboarding process
• Strengthen reward plans and clarify compensation
goals
•U
pgrade the performance management program,
including a stronger link between performance and
rewards
• Create a new set of accountability- and
competency-based recruitment and assessment
tools for managers
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•A
cquire and implement an integrated talent
management information system
Photo by Patrick Fordham
Debora Horsfield, Towers
Watson senior consultant,
with Alex Teijeira, director,
human resources and legal
counsel, Kruger Products
Beyond Surveys
Kruger Products’ Alex Teijeira, Mario Gosselin and Serge Reynaud
offer some advice for other organizations developing an integrated HR
strategy:
•U
se employee surveys to establish baseline engagement levels, but
consider the survey work as only the first step in making changes to
meet the organization’s evolving needs.
•P
artner with a large, well-regarded consulting firm that has experience
helping clients accomplish things after an employee survey. “Towers
Watson wouldn’t crunch numbers for us and then back out of the
picture,” says Gosselin. “They’re in it with us for the long haul.”
• T ake decisive action up-front, and continue to be responsive to
employees’ needs down the line. “We’ll monitor our employees’
mindset and level of engagement,” says Teijeira. “But, more important,
we’ll continue to devise programs and provide tools designed to
support high levels of engagement.”
Phase two
Using the results of the first survey as a baseline
measure for the level of employee engagement, HR
decided to do similar employee surveys every other
year. The second survey had equally positive results:
an 85% response rate and employee feedback in
unprecedented detail.
After the second survey, company leaders saw
opportunities to further enhance the succession
planning and talent management programs. When
the third survey is conducted next year, the company
will include questions related to those initiatives
so that executives can track progress and clarify
employee perceptions of the changes that have
been made.
Keys to success
Three years ago, Kruger Products’ employee
engagement stood at 65%. In 2008, after the
company’s second employee survey — plus
enhancements to communication, talent
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management and succession programs, as well
as other HR strategic initiatives — engagement
had risen to 72%, a number well above the
norm for Canadian companies. Turnover had
dropped from a high of more than 14% to
5%, then had moved to 4.8%, and now sits
comfortably at a remarkable 2%.
“In the end, I believe the surveys — and the
subsequent actions we took — were essential
to retention,” says Mario Gosselin, Kruger
Products’ chief operating officer. “I’m more than
happy with the results.”
Teijeira points out that employees were involved
in every decision made and saw immediate,
significant actions being taken. “When we
changed the incentive plan, we launched a road
show, going to every office and speaking to
every employee about the survey results and
the new bonus system,” he says. “That built up
a great deal of trust. With that trust, we’ve been
rewarded with employees who perform better.”
Teaming with a trusted partner and involving
senior leadership at all stages of the process
were also key to success, says Reynaud. “We
kept senior management updated every step of
the way,” he says. “Also, leaders of our parent
company, Kruger Inc., saw our success. They’re
now facing their own retention challenges, so
they’re taking cues from what we’ve learned.
Our company served as a beta site of sorts,
where we discovered things that can be
leveraged across the entire organization.”
Teijeira agrees. “Our unique challenges required
unique actions. Our attraction, retention and
recruitment situation was a burning platform
at the time we decided to adopt a new HR
strategy. We learned a lot, and so did the larger
organization.”
Moving forward
When Kruger Products set out to create its
HR strategy, high employee engagement was
a goal, but the broader objective was to be a
world-class employer of choice. Today, Kruger
Products has what it needs to bolster its
employee value proposition and compete in a
dynamic labor market. Current and potential
employees have a much clearer understanding
of the employment deal — what they can expect
from their employer and what the company can
expect from them in return.
Photo by Patrick Fordham
“Kruger Products now has a robust plan,” says
Horsfield. “The company needs to be more
innovative than its competitors. That means not
only appropriate compensation, but also work/
life balance, unique and different rewards, and
excellent succession planning — something the
mega companies won’t provide.”
“Having a COO who listens is another big
differentiator,” says Teijeira. “Ours had a few
bad experiences with surveys in the past, yet
he had the guts to proceed anyway. It speaks
volumes to employees about the firm’s desire
to listen and understand them. And it makes for
more open, transparent interactions.”
That transparency is a fundamental element of the
organization’s new HR strategy.
“To me, one of the conditions of leadership is to be
transparent,” says COO Gosselin. “I’ve been with
this organization for 31 years, and I can tell you that
we enjoy an inherent sense of togetherness. Our
open-door policy means exactly that: I meet with
every single new employee personally. At the end of
the day, I think that intimate environment is what will
keep our people engaged.”
(Left to right) Richard
Bougie, Towers Watson
account director; Alex
Teijeira, director, human
resources and legal
counsel, Kruger
Products; Serge
Reynaud, vice president, human resources
and legal counsel,
Kruger Products; and
Towers Watson senior
consultant Debra
Horsfield
Strategy at Work 7
About Towers Watson
Towers Watson is a leading global professional
services company that helps organizations improve
performance through effective people, risk and
financial management. With 14,000 associates
around the world, we offer solutions in the
areas of employee benefits, talent management,
rewards, and risk and capital management.
Copyright © 2010 Towers Watson. All rights reserved.
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