Canadian HR Reporter

PM40065782 RO9496 March 21, 2016 INSIDE MISSING PIECE Are employers enabling mediocre leadership? The missing puzzle piece is accountability — the leadership contract — says one HR expert Big data still counts Roundtable looks at HR's role when it comes to numbers page 8 How do you rate? Online ratings can make a difference for recruitment page 13 Sweet somethings Nestlé focuses on boosting youth opportunities page 14 page 10 Venngo — a core element of a complete compensation and benefi ts strategy. the original perks company TM the original perks company TM www.venngo.com/perks 1.866.383.6646 ext.227 20160210_hrReporter_earLug_Mar21_001.indd 1 2016-02-10 12:08 PM Looking for leadership Skilled immigrants face challenges: Report see page 2 CEOs turfed too soon by short-sighted shareholders Study looks at risks when public companies put too great a focus on short-term results BY LIZ BERNIER CEOs of publicly traded compa- nies turn over too quickly, putting firms at a long-term disadvan- tage, according to a study from the University of British Colum- bia's Sauder School of Business in Vancouver. e major diff erence is in pub- lic versus private fi rm myopia, ac- cording to Kai Li, fi nance profes- sor at the university and co-author of the study. "We see many public compa- nies nowadays that worry about meeting short-term earnings tar- gets, like quarterly earnings tar- gets. So CEOs, top management, are under constant pressure to make those targets — otherwise, stock prices will go down and they will be targeted by activist share- holders or other competitors, and their own pay (may be) directly linked to stock prices." At private fi rms, it's a very dif- ferent arrangement, said Li. "You do not have the obligation and shareholders are more likely to think long-term." Unsurprisingly, that leads to the possibility public fi rms will make high-risk, short-term decisions at the risk of losing long-term value and competitive advantage — a risk private fi rms are less likely to face, at least not as acutely, he said. e excessive focus on short- term performance is driving the strategies of CEOs who know the security of their jobs is tied to the stock price rather than developing long-term strategies and competi- tive advantages, said Li. "I'm concerned that modern firms aren't investing in R&D enough because it has no short- term payoff , and CEOs are worried about their own jobs too much," he said. "We are in a knowledge- based economy, and innovation is a key driver of economic growth, productivity and corporate com- petitive advantages, so short- termism is a very real problem." When share prices go down, boards need to fi nd a scapegoat so they fi re the CEO, said Li. "Unfortunately, most share- holders, and even board members, don't have the time and expertise required for an in-depth look at a CEO's performance, so they just look at easy metrics like stock p r i ce a n d a c c o u n t i n g performance measures." Fo r th e study, the researchers CEO > pg. 6 HR plays key role in cyber security: Report Should cultivate risk-aware culture BY LIZ FOSTER HR can play a key role in securing an organization's cyber security, according to IBM's 2015 Cyber Security Intelligence Index, which pulled information from more than 8,000 client devices in over 100 countries. More than one-half (55 per cent) of all cyber attacks are car- ried out by insiders. ese insiders can be malicious — employees or third parties with physical or re- mote access to an employer's as- sets with the intention to attack an organization's cyber security — or "inadvertent actors." And the breaches can pose a signifi cant threat, resulting in sub- stantial fi nancial and reputational losses, said IBM. More than 95 per cent of the breaches by insiders are caused by human error. ey can include the accidental posting of confi - dential information, the sending of confi dential information to the wrong party via email, fax or mail, or the improper disposal of clients' records. e breaches can be mitigated through proper hiring, onboard- ing and training practices, accord- UNDERSTAND > pg. 9 Cellphones in spotlight after employer bans Can boost productivity, interaction BY SARAH DOBSON TIRED of fi nding employees se- cretly texting in his greenhouse, Bob Mitchell recently decided to ban personal cellphone use. The move generated headlines but Mitchell, owner of SunTech Greenhouses in Manotick, Ont., said he did what he had to do. "It became a total ban: Leave your cellphones in the staff room. If you want to skip lunch and catch up with your friends, texting, fi ne. I don't care. But when you're on my clock, I have to have you working... In a competitive world, you have to do everything you can." A little bit of texting became more texting, said Mitchell, "and then you get into the Facebook stuff and, before you know it, it's way out of control... And in a group environment, if you have one or two that are sitting still tex- ting while the others are working, then the workload gets shifted out of balance — that creates negative attitude in the staff ." Mitchell had fi rst asked his 16 employees to stop using their phones while working, but said "a full-out ban" was needed. "As a society, I think we'd better call this an addiction. Addictions, they don't cut back very well." Personal cellphone use is a big challenge for employers, along with social media use that's not for busi- ness purposes, said Laura Williams, BAGEL > pg. 17 TIME TO PAY UP An Ontario judge has approved a revised settlement that will see 1,600 Scotiabank employees — who say they were required to work unpaid overtime — receive $20.6 million. A class-action lawsuit against the bank was initially settled in 2014 and, since then, about $18.7 million has been distributed among 600 class members. Credit: Sarah Dobson

• Cover