Matthew Owenby, Chief Human Resources Officer at Aflac Inc., dives into company culture and talent management in our current business climate. In this interview with Tony Lee, Vice President of Content at SHRM, Owenby discusses hiring employees for life, the role of digitalization and skills learned from the pandemic. (length 31:39)
Matthew Owenby, Chief Human Resources Officer at Aflac Inc., dives into company culture and talent management in our current business climate.
In this interview with Tony Lee, Vice President of Content at SHRM, Owenby discusses hiring employees for life, the role of digitalization and skills learned from the pandemic. (length 31:39)
Speaker 1:
People and Strategy is a podcast from the SHRM Executive Network, and it's sponsored by PNC Organizational Financial Wellness, organizational financial wellness, organized for you. Learn more at pnc.com/wellness. PNC and PNC Bank are registered marks of the PNC Financial Services Group, Inc. PNC.
Tony Lee:
Welcome. I'm Tony Lee vice president of content for the Society for Human Resource Management and the SHRM Executive Network. The SHRM Executive Network is the premier network of executives and thought leaders in the field of human resources. We advance the HR profession by engaging thought leaders and executive practitioners to create solutions and drive success for people and organizations. I'm very excited today to talk with Matthew Owenby, CHRO for Aflac. Matthew joined Aflac in 2012 as vice president of HR business partners, bringing with them more than a decade of HR experience at Bank of America and General Electric. Matthew currently leads the global human resources division along with the corporate services division, where he's responsible for planning and executing the enterprise talent and campus solutions. Matthew, thanks so much for joining us.
Matthew Owenby:
Hey, thanks for having me today.
Tony Lee:
Well, it's our pleasure. So let's start off. You've spent your career in HR. A lot of people get into HR by surprise, not necessarily by choice. What's your story? How did you get into HR?
Matthew Owenby:
Well, I got into HR on purpose and I am actually a second generation HR person. My father was in HR for 47 years. It was not HR back in the sixties and seventies, as you may know Tony. It was really almost more akin to sort of industrial relations, primarily training and safety. And then over the years it changed into personnel. And then over the years it turned into what it is today, which is HR. So I was interested in it because I wanted to be like my dad. And it was a very deliberate reason to get into HR. And I'm glad to still be in it after all this time.
Tony Lee:
That's that's wonderful. Well, as I'm sure you know, our previous name was American Society for Personnel Administrators.
Matthew Owenby:
I do know. Yes, I remember that.
Tony Lee:
Indeed, well, that's great. So do you have, now that you've been in HR and in a leadership role in HR for some time, do you have kind of a leadership philosophy that you use to help guide your decisions with your HR team?
Matthew Owenby:
Yeah, and I think it's kind of broader than just the HR team. I'm fortunate to be a leader and I take that very seriously, meaning that my role as a leader is to support my people in whatever way that is, based upon their work style and work preference. And that's pretty much it. I mean, the leader obviously has to set the direction and support your people to achieve that direction. But over the years I've been blessed to be a part of very capable teams. In most cases, people working for me are better, and smarter, and brighter, and more talented, and innovative, so the nice thing about being a leader of a team where you have such talented people.
Tony Lee:
Right. Yeah. Well, that truly is a blessing. I'm curious, did you get leadership lessons in any way from your dad, given his experience?
Matthew Owenby:
I did. I mean, he was fortunate to work for a company his entire career, that much like the company that I worked for today, was very focused on treating people fairly, with dignity and respect, and care and kindness. And once you have that ingrained in how behave, both in society and on the job, it's easy to be a leader, because people tend to want to follow people like that. And I certainly picked that up along the way from both of my parents, that it really is back to sort of this simple thing is that you treat people how you want to be treated, and that they tend to behave differently than they would otherwise.
Tony Lee:
Well, that's always the case and great advice. So let's talk about Aflac.
Matthew Owenby:
Sure.
Tony Lee:
You have kind of a unique culture there. Can you tell us about the culture, and how you helped shape that culture?
Matthew Owenby:
I can. The culture is unique in several ways. It's unique in the sense that its values are the foundation of all decisions and strategies. And I'll get into that a little bit later perhaps if we have time. It's not just a slogan on a wall, or on a card in your pocket, or on the back of your ID badge. It's a culture that is built upon values that inform all the decisions of the corporation. And so some of the elements of that unique culture are that we tend to hire people for life. And because of that, it's a very strong relationship experience. And that takes a very special person, particularly in this day and age, to really integrate into very easily, very well. It takes time. And so when you think about Aflac, you think about the relationships that we have both internally, but we also want to have relationships with our customers.
It probably is not a surprise to you Tony, that when people call us or use our products, they're generally having a pretty bad day. Recall that we are a cancer insurance company. We are a hospital indemnity accident, insurance, critical illness. And so when you're calling for a reason of a claim, it's usually because it's a pretty bad day. And we want to make sure that those customer interactions are caring and compassionate and supportive, in what a lot of cases is people that are having the worst day of their lives really.
And that means that our culture has to be very focused on taking care of these employees that are ultimately taking care of the business and taking care of our customers, in a way that's consistent with those values. And so when you think about those things wrapped up together, they're generally not things that are related to insurance companies. You tend to, because of experience primarily think about insurance companies in a negative light, but with Aflac, it's quite different, because we intend to have relationships that last, and we want to foster and maintain those relationships. And we're okay with it. We, we know that relationships can be messy sometimes, but when you have the outcome that you want for a customer that I just described, there's probably only a few ways to establish that type of expectation at a corporate culture. And that's through relationships.
Tony Lee:
Mm-hmm. It's interesting you say that because I would imagine most people listening to this podcast, they think of Aflac, of course, they think of your commercials, which make it seem like a very caring experience. And I'm sure your employees like those commercials, they like the way that it portrays the company. But as you say, it's a very difficult scenario that they're in.
Matthew Owenby:
Right.
Tony Lee:
Is that something that you work on when you're working on employee engagement, that you're working on employee attraction, retention?
Matthew Owenby:
Yeah, it absolutely is. It's really sympathy, empathy and caring, which is something that we want all of our customers to experience. Remember that whimsical duck that most people in the United States interact with, it's just a fairly small portion of the Aflac incorporated story. About 80% of our business is actually in Asia and Japan. And the culture of care in Tokyo and Japan specifically is very, very high. There's a high level of expectation that large corporations are going to take care of the consumers that they service. So it's interesting how our company culture kind of matches the cultures of the countries that we operate in, and they sort of feed on each other. So when you think about how this impacts employees, or how this interacts with employees, it's a minimum expectation that a person that is employed by Aflac, they have that attribute of caring and putting other people's needs before their own, because that's really what we're we're trying to do here is make people, particularly in the circumstances that they're having, feel like they're the only thing in that moment that we are focused on, to help them.
Tony Lee:
Yeah, well, it must create such an amazing culture. You know, there's been a lot of discussion lately about engagement and retention coming out of the pandemic. A lot of companies are, are struggling to retain employees who are kind of looking around. Do you have ... How does that work within the philosophy of what you're talking about?
Matthew Owenby:
Yeah. I mean we have our share of attrition in this post pandemic world, as things are heating up. But let me give you the context for that. As you probably would expect, we're operating call centers all over the globe and certainly across the United States. And call centers are not well known for having very reliable attrition metrics. They tend to be very, very high. Aflac runs generally speaking in the call centers, somewhere between 18 and 22%. That spiked a little bit in post pandemic world where we live, in the case of the United States, I think the last Department of Labor estimation was something like 12 and a half million open positions. So it's a bit of an employee market for sure. And so we hire in advance of attrition. We recognize that attrition will happen. It's unfortunate when it does.
We tend not to lose people once they've passed that three to sort of five year, 10 year level Tony. And so when we see attrition, particularly in the call center areas that are high pressure jobs, that are dealing with somewhere between 15 and in some cases, 22 calls a day, all of them are not great. They tend to have kind of an emotional weight on people over time. And if you're not equipped, and there are other options that are less challenging in the environment that you work within around, then you're probably going to leave. But what we want to make sure is that we connect to those folks and support them as we can. But we are experiencing higher than normal turnover for even Aflac. When you think about Aflac in general, more corporate wide, so Aflac Inc, our turnover generally is somewhere between eight and nine percent in total. But the areas that are sensitive to employment market shifts are certainly in that call center or entry level roles. And we are seeing a higher level of turnover there.
Tony Lee:
Yeah. Well, and as I say, you're certainly not alone. It's an industry wide problem across every industry it seems. So let's talk a little bit about talent management and recruiting, very hot topics. Pre-pandemic it was a war for talent. Through the pandemic it was a war for talent. Now we're coming out of the pandemic and the war is even greater than ever before. So what's your philosophy there? I mean, you try and hire employees for life. How do you manage a recruiting process that identifies employees who want to work for Aflac for life?
Matthew Owenby:
Yeah, that's a great question. And the reason it's a great question is because it's got a complex answer. And I am happy to finally Tony, after nearly two decades of hearing about the war for talent, it's finally manifest itself in my career. I've come from working HR in the mid to late nineties. And I remember the warnings that we were hearing from consultants and gurus alike, that the war for talent was coming, and it never quite manifested itself. It's certainly raging now. And I think it's a unique opportunity to be in HR, to add value.
When you think about the recruiting process for a corporation that intends on long term career relationships, you have to go into it with the same level of commitment and understanding as though you would with a relationship, because that's ultimately what you're you're building. And you have to be really, really diligent.
And it's a slow process, unfortunately, that yields the right level of talent that is going to not only be committed, but a good fit for the environment, the culture, because it is so focused on values that I think you would probably recognize and be comfortable with, like communication, responding, knowing your role very well, treating others with respect and care, putting other people's issues and needs before yours, and covering other people's concerns before you cover yours. While that is certainly attributable and people would be interested in that, the challenge is finding people that are really going to commit to that, because if you cannot, or if that is not attractive to you, not only are you going to be uncomfortable here, it's going to be very, very obvious that you don't fit.
And so to achieve a role at Aflac, it is a fairly lengthy process, because we are very careful about who we hire, because in the vast majority of cases, it's for the life of that person. And there's huge value in that. I mean, think about the opportunity cost of hiring, developing, maintaining, incenting, and building systems that are retentive to employees, just to have them leave, is extremely expensive and not very efficient. When you think about all the things that need to happen in HR beyond just hiring someone, having attrition on top of that is certainly akin to sort of dead weight losses in manufacturing, where you just, you lose your product at the end for some reason or another. So it's really an approach that it has more in common with entering into a relationship from a measurement and from a evaluation perspective, than it would be kind of a traditional come in here, fill out this paperwork, run through a few questions and you're ready to go.
And then on top of that, from there, let's just isolate employees that are going to be interacting with consumers, we spend another six to eight weeks before you even have your first interaction with a customer, training you, giving you the tools, the technology the cultural integration, before you even have your first interaction with a customer, you've been employed for two months in most cases, because we have such high standards and high expectations of those interactions. So it's a very long process. Many people would say, "Well, that's a very old school process." You're right. But we like it. And it generates the right outcome.
Tony Lee:
Yeah. No, it sounds like a perfect process for the type of business that you're in and the type of people you're looking for. Let's put it in perspective for folks, roughly how large is your HR department overall?
Matthew Owenby:
Yeah, so we have about 258 HR employees globally. We have about 127 here in the US and the balance are in ...
Tony Lee:
Wow. Now, does that include the folks who are doing the training of the new employees when they come in, or is that a separate group?
Matthew Owenby:
That's a separate group. We have a internal leadership learning and development program that is designed to develop non call center employees. The call center training and development department is a little over a hundred people. And because it's focused on that specific outcome, we have separated it and embedded it into our operations division.
Tony Lee:
Got it. Okay, and can I ask, roughly how many recruiters, or how many people are working in talent acquisition, whether sourcing or recruiting? Yeah.
Matthew Owenby:
Yeah. We have about 12 people today, three contract recruiters on top of that in the US, so 15.
Tony Lee:
So given the number of folks, well, I might as well ask, about how many new employees a year?
Matthew Owenby:
We hire between 450 and 650 employees per year. And that's been primarily due to, we have been pretty acquisitive over the past five years. So we're standing up several new business operations. And then when you overlay 8% attrition on top of about 6,000 US employees, you get to your math basically around that.
Tony Lee:
Right. So you feel comfortable with that balance, that seems about right.
Matthew Owenby:
Yeah, that seems about right.
Tony Lee:
Okay. Now I assume you guys went through a period of a lot of employees moving remote. Has that changed your recruiting philosophy in any way?
Matthew Owenby:
Yeah, I mean, it's definitely give you some perspective there, back on first week of March, 2020, we made the decision to send 98% of our employees home. We left a what we'll call a limited amount of people on campus, primarily in security, facilities, et cetera, to maintain the continuous operations of the facilities for a variety of reasons, safety, security, things like that. And we continued on with our internship programs, our development programs, our hiring programs. I'll tell you that recruiting and training in a virtual environment, and there's some data around this so it's not just my opinion, is certainly less effective. There is clearly a different level of retention that an adult has in a classroom with hands-on training versus a completely virtual training environment. It's just been our experience. And so what we're doing now is those classes that went through training and hiring, we're literally last week and this week, bringing them in for the first time and having them come up to speed.
But for the most part, I mean, we maintained every element of our operations during the vast amount of people being away from campus. It was just slower. And we recognize this gets back to some of the philosophies and culture, the management team is intent on building a corporation that survives perpetually. And so because of that, we recognize that there's going to be business cycles. There's going to be pandemics, there's going to be business disruptions. And so we're very, very slow to shift to the strategy, or change what we're doing. We're okay with things to just go slower, because we know that things will recover eventually, and the sun will come up tomorrow. And our job is to keep this system on the track for the next generation of leaders that come in here. It just slowed things down. We did not stop any activity.
Tony Lee:
Right. So let me ask you this. From the lessons that you've learned, did it change in any way, the types of folks that you hire for your HR team? Are you looking for different skill sets or is anything different?
Matthew Owenby:
Yeah, the main difference is we are looking for some unique specific to the virtual world skillset, because we are going to have probably somewhere between 35 and 45% of our workforce remain in a remote configuration, certainly through the next year, perhaps even year and a half, we are building out a brand new function that is really around virtual employee advocacy, where we are ensuring that not only leaders that have virtual teams now, which primarily everyone does, have the right skills. But we don't want people because of distance to be isolated.
And leaders are busy and they're stretched. So the HR team is going to fill in the gap with this virtual worker advocacy program that we're building out now. So we're looking for people in the HR organization that have their own personal experience working in a remote environment or working for a leader that they've never ever met or seen. And they understand and can empathize with those circumstances, and be able to build programs around them, given that more and more people are going to be in the remote configuration.
The additional lessons we've learned from the pandemic as an organization that prior to the pandemic had less than three or four hundred people globally working remote ever. And to shift to a 98% model, both in the US and in Japan is a testimony to how capable and flexible the culture of the corporation was, because frankly, while things did get a little bit slower, there were no misses from a business perspective, from a regulatory reporting perspective. And so when we think about the skills that we're going to be looking for in the HR organization, it's going to be obviously surrounded and heavily influenced by the ability to not only work, but manage and lead and teach in a virtual context.
Tony Lee:
Well, it sounds like there are some amazing lessons learned there. I want to ask a little bit about HR data analytics, and I'm assuming that as you're reviewing the last year, year and a half, you're looking at the analytics as to how things worked. What metrics are top of mind for you now? I mean, what do you look at every day, every week?
Matthew Owenby:
Yeah, clearly attrition.
Tony Lee:
Right?
Matthew Owenby:
Clearly attrition. Yeah, I mean it's something, I actually spent a great deal of time this morning talking about it. But it's in the context of do we have the right tool set to do some predictive attrition, so we can hire in advance of it? It's a topic heavily on people's minds, because like you said, the war for talent is here, and we're right in the middle of it, where we're competing with companies and industries, frankly, that we've never had to compete before. We looked at an extensive amount of exit interview data to try and inform some of our positions around, "Well, what can we be doing more of, less of, what can we provide to attract people who now can literally go work at a retail restaurant provider for two, three, four, five, sometimes even $6 more per hour, which was unheard of even 18, 24 months ago?" And frankly, the jobs are easier relatively speaking.
So a lot of the data we're looking at now really is around that attrition being in an anticipation mode, in a forecast mode, so that we can staff in advance of attrition, because of that learning curve, and the expectation of training and development, we have to hire 70, 80, 90 people at a time to prepare them for work for September, basically. So primarily, it's been around just the general people metrics. As we look at the second half of the year, obviously some of the other metrics we're looking at is just kind of the finance, typical finance activities and planning activities that we get into around here, which is attempting to achieve a fairly low cost of service, relative to other internal support functions. So I tend to be a bit of a budget hawk around here, given that we're we're spending a good chunk of capital, not only on the HR operations, but just in support of employees. As you would imagine, it's 80% of our expense base is in our people. So pretty traditional analytical type measurements and primarily favoring attrition these days.
Tony Lee:
Yeah. So I want to ask you about one other area before we wrap up, which is kind of unique to you. Being at Aflac, you see both sides of benefits. I mean, you're providing employee benefits, and a company that provides benefits to many other employees out there. So how are employee benefits changing in light of what we've seen over the last year, year and a half?
Matthew Owenby:
Well, what I'll tell you is it's really almost like the word benefits is being redefined. When you and I talk about benefits, the things that come to mind are really kind of healthcare, traditional benefits primarily, is what I would assume. I haven't asked you, but that's what I think you would say is, "Well, Matthew [inaudible]"
Tony Lee:
Yeah, you're right.
Matthew Owenby:
But when those are table stakes, as you probably would expect, and anybody listening to this podcast would probably expect as well, what we see on the horizon for employee benefits are things that you and I would've called perks 10 years ago. They'll just be incorporated into the general benefits program, whether that's activities around concierge, whether that's ... The number one thing we see in our employee benefits program ask is pet insurance. Can you get insurance for your pets? But I think the world that we're going to be living in from a benefits perspective and an HR practitioner perspective has more in common with a university experience and a all inclusive resort experience, rather than a traditional employer. And that may sound crazy, but I think that's what it's going to take to attract a talent pool in an age where the talent has a lot of options. And so employee benefits as you and I define them are going to be very, very different in the future.
And from an Aflac perspective, just in a product scale perspective, we are looking at all those types of kind of non-traditional benefit offerings like pet insurance, because we know that's what employees are asking for, not only internally, but as we work with brokers and sales agents, it's way up there. It's the things that historically have not been considered benefits that companies are going to have to start offering.
Tony Lee:
Yeah. I mean, we're in our reporting on shrm.org we're hearing a lot more companies starting to pay off student loans.
Matthew Owenby:
Yes, absolutely.
Tony Lee:
Retention bonuses, you reach a certain date, you qualify for an additional bonus on top of whatever bonus you might have had.
Matthew Owenby:
That's right. Yeah.
Tony Lee:
I mean, is this the future?
Matthew Owenby:
This is the present and the future. It's just going to be more of it. There's no doubt about it. I mean, the employee employer balance is now balanced more heavily in the employee side. There's just less employees that we have access to. And so as practitioners, we're going to have to be more and more creative and retention bonuses, while they're important, they're not all that creative. And so I think over the next couple of years, we're going to see that word benefits mean something completely different than it does today.
Tony Lee:
Yeah. And I just got to ask, sign on bonuses? I mean, they're sweeping the country. You can't go to a Burger King or a McDonald's and not have a sign on bonus.
Matthew Owenby:
They are everywhere. I mean, just down the street from where we operate in Columbus, Georgia, driving in this morning, it's a thousand dollars sign on bonus with a brand new iPhone at a very popular retail, fast food place. And it sort of gets your attention and you shake your head. And you're like, "What world is this?"
Tony Lee:
Exactly. And you wonder how many employees jump ship for an extra $500 sign on bonus, rather than stay put. It's a crazy world.
Matthew Owenby:
It is. And I think that part of the turnover that I described and the attrition that I described, especially in sort of the younger, less obligated employee, I remember the days when the minimum wage was four and a quarter, and you would move from one employer to another, for 15 cents. Well, now when you've got people that are offering 15, 16, $18 an hour, $20 an hour to work at large kind of big box retail stores, it's a pretty simple choice. It's just a simple opportunity cost equation that an employee is making.
Tony Lee:
So does this mean a reevaluation of compensation structures at the corporate level?
Matthew Owenby:
It definitely has been for us. I mean, we are completely looking and have made some changes recently. I mean, our starting wage at Aflac is now $15 an hour. Historically it's been in that sort of 12, $13 an hour range. And I suspect our peers, and certainly, I know for certain large banks are doing the same, and adjusting their sort of entry level compensation levels up higher and higher.
Tony Lee:
Yeah. Well, Matthew, I want to thank you so much for sharing your expertise with us today. This has been Matthew Owenby, this CHRO for Aflac. And thank you, just appreciate your time.
Matthew Owenby:
You're welcome. Thank you for having for.
Tony Lee:
Absolutely. For more information on the many topics we covered today, as well as further details on SHRM Executive Network, please visit shrm.org. Thanks for joining us.
Speaker 1:
People and Strategy is a podcast from the SHRM Executive Network, and it's sponsored by PNC Organizational Financial Wellness, organizing multiple customizable financial health solutions to help address your employee's specific needs all in one place, PNC Organizational Financial Wellness, organizational financial wellness, organized for you. Learn more at pnc.com/wellness, PNC and PNC Bank are registered marks of the PNC Financial Services Group, Inc. PNC.