Renewing the Employee-Company Contract
The following is an excerpt from The 50: HR Leaders Reimagining the Filipino Organization. Authored by Ezra Ferraz, this chapter is titled, “Renewing the Employee-Company Contract.” In it, Txabi Aboitiz, the Board Advisor and Former Group Chief Human Resources Officer of Aboitiz Equity Ventures, is interviewed about how the organization executes its strategy in reforming business relations within an organization
As it inflates their organization’s attrition, most HR leaders view the millennial tendency toward job-hopping with disdain. But Txabi Aboitiz, the former group Chief Human Resource Officer and current board advisor of the family-led Aboitiz Equity Ventures, is one exception. He believes such exploration, especially early on in a career, is important.
According to the man himself, exploration is a good thing because very few people know exactly what is best for them right off the bat.
“If the right talent is given the right opportunity, their level of performance improvement is really quite exponential. They may still do well if they’re on a team that’s not ideal, but it will pale in comparison to what they can achieve if they find the truly best one for them,” said Aboitiz, who believed that people will be 20% to 30% more productive, if not more, with the right team.
This view is not just lip service. When a leader asked Aboitiz to speak to a talented young person at the company who was considering leaving for a startup - one whose mission he was passionate about and where he would learn a lot from - he encouraged him to leave. At that stage in his career, the experience and learning he would receive in that new job was a once in a lifetime opportunity. So instead of trying to convince him to reconsider his decision, Aboitiz actually encouraged him to take it. What he did leave with though was that returning to Aboitiz should always be an option.
“There’s nothing worse than dreaming about greener pastures yet not doing anything about it. In some cases, they find it’s not as green outside, and they decide to come back. That option has always been available in Aboitiz.”
Txabi prefers that A-People, what talent in Aboitiz are fondly called, have many choices, and choosing to stay in an Aboitiz organization needs to be the right one for them. “For those that have left and returned, that mindset makes such a huge difference,” said Aboitiz of the group’s boomerang hires, which he estimates to be as high as 10% and extends all the way up to senior leadership.
The group was not always this open-minded to boomerang hires. In the old days, leaving at all was seen as disloyal, like it is at most local conglomerates. But Aboitiz experienced the benefits of such returnees when he led HR at the group’s shipping subsidiary, and he then tried to cascade this to the rest of the group’s business lines - power, banking, food, infrastructure, and real estate - when he became Group HR.
In practice, this means Aboitiz takes a long-term perspective on talent. He’s more than willing to let the bright, twenty-something leave for another corporation, gambling that they may come back in five or ten years as a key leader for the organization. Aboitiz has always believed that the second half of one’s career should be vastly more productive, given the right experience and breaks between the ages of 20 to 30 years old.
It’s worth pointing out that Aboitiz won whether the promising young talent returns or not. If they return, the group gains a valuable addition.
“They bring a different perspective. When you work for other companies, you just see things differently and you bring that back with you,” said Aboitiz. These boomerang hires also tend to exhibit greater confidence (since they know the group is right for them) and require little-if-any orientation or time to fit in (since familiarity is high). While each person has unique reasons for their return, the most commonly cited is a sense of belonging, which makes sense - if you know where your talents are maximized, you will also feel like you belong.
If the promising talent does not return, Aboitiz still wins. “We can never go wrong with having good relationships within and outside the group,” he said.
During his time as CHRO, Aboitiz pushed for a more partnership-style relationship, where employees are viewed as partners with the organization and each other. A-People must believe that they have something important to contribute and “When you get people to start to think for themselves, magic happens,” he said.
Transformation to this level is of course easier said than done. There first has to be cosmetic change, baby steps. “I would tell them, first things first: Quit calling me ‘sir’. Call me by my first name. Even that was difficult, as they felt it was disrespectful and many could not do it,” he said.
Many worked for multinationals and were fine on the first name basis there but when they moved to Aboitiz, they reverted. The Aboitiz Group was and still is very much seen as a local organization, one where the respect for hierarchy should prevail. It is a difficult impression to break.
Apart from these cosmetic changes, the biggest challenge was getting people to speak up. Even today, Aboitiz says the transformation is still ongoing. There are pockets of people who have the voice that you would expect from a partner, but more across the organization need to develop it. They need to believe that every person - not just the CEO, not just the senior leadership, or not just the twenty-odd Aboitiz family members across the group are in the position to speak and contribute to the thinking process.
Fundamental to this process is trust. Saying that they can do something is not enough. They need to be able to trust the organization that their voices will be heard, contributions valued, and that they have the say of a true partner.
Aboitiz believes that feedback from both parties is essential to building this trust. “You have to get the right feedback as often as you possibly can. It’s like when you first ride a bike - you get feedback right away. You might fall or you might bump into something. There’s no guessing. So you adjust and adjust and adjust until you get it right,” he said.
Feedback, often and unfiltered, is a key component to achieving one’s full potential. As Txabi succinctly put it, “Going without honest feedback from wherever it is needed is like driving the highway blind and only relying on feel.”
To get more insights from other HR leaders like Txabi Aboitiz, please check out the full book, available for purchase here.
The 50 - and other business books about the Philippines and Asia Pacific - will soon be streaming on Audiophile, our platform for exclusive Filipino audiobooks.