Case Studies
Shalini Shukla-Pandey
17 Nov 2014
Walking into Pacnet’s new facility in Singapore, a beautiful office which also houses a state-of-the-art Customer Operations Centre and arguably the best data centre in Singapore today, it is difficult to imagine that just two years ago the company was going through difficult times. Those challenges led to significant change in the top leadership and a decision to exit from the consumer sector – then a core part of the business – in favour of a focus on higher-value data centre and managed services.
Pacnet’s exit from one business unit and entry into another caused a shake-up within the entire organisation, from junior staff to top leadership. Many people left and many more needed to be hired to facilitate the change and grow the future of the company.
“As the business transformed, HR had to do the same to keep up,” says Syed Ali Abbas, Chief HR Officer, Pacnet. He was brought in by the new CEO at the start of the transformation period to drive the change.
“The HR function at Pacnet had solid foundations in 2012 – a good team and a range of useful practices,” says Abbas. “However, it was still a little traditional and needed to change in line with where the business was going.”
“The specific mandate I was given was to place increased HR focus in areas like talent management, alignment with the business, and supporting organisational change,” he adds.
First step – quick wins
Upon joining Pacnet, Abbas set about going for specific quick wins for both the business and the employees. “On the business side, we focused on supporting the rollout of a new Sales Incentive Plan and putting in place a high-level framework for talent assessment by the CEO team,” Abbas explains.
On the employee front, the first three months saw the rollout of new HR policies to help assure staff that the organisational changes were positive and impacted them in ways they could appreciate.
The first priority was to develop a formal recognition plan. While the company had a recognition plan in place from before, it needed to be reorganised and made more accessible to all levels of employees.
The new recognition plan allowed the CEO and top management to directly provide recognition to staff. Line managers and supervisors were also able to reward their direct reports more easily. A key addition was the peer-to-peer component of the recognition plan. This meant that even colleagues from different departments could nominate one another to be recognised for a job well done.
Where initially, Pacnet was giving out between 25 or so awards per quarter in the form of a letter and bonus, the number soon doubled. Staff were also recognised in front of the whole company on top of receiving the commendation and financial incentive.
“We began showcasing all winners through the company intranet and CEO calls to drum up support for staff who had gone above and beyond their scope of work and demonstrated core values in their actions,” says Abbas.
“We were giving out over 50 awards by the third quarter of 2013,” he adds. “The numbers doubled.”
By mid-2014, HR rolled out an online points-based platform to recognise staff who were aligned with core values. This allowed the recognition mechanism to become truly peer-to-peer, says Abbas.
While there are still some one-off cash bonuses in use, the vast majority of employees are now recognised through points which they can exchange for a host of benefits, including movie tickets, spa treatments and even trips overseas. Rewards are also tailored to suit the needs of staff in different countries across the world.
“The results were phenomenal. Where we were averaging about 50 awards in the third quarter of last year, we hit more than 300 awards within the first quarter of implementing the online platform,” Abbas notes.
Employee engagement levels soared too. Where companies mostly tend to reward sales employees with tangible rewards, Pacnet also successfully recognised non-sales staff with its rewards policy.
Besides recognising staff, a retention plan for key talent and a new exit survey to understand the drivers of employee attrition were also rolled out in the first half of 2013.
The telecom industry has an attrition rate of about 15 to 20%, and Pacnet historically had a high attrition rate of more than 25%. “We rolled out a simple online global survey to find out why employees were leaving,” Abbas explains. “Once we got feedback from there, we started to prioritise HR policies and actions based on our findings.”
Through these initiatives, the attrition rate at Pacnet went down from 25% at the beginning of 2012 to 21% by the end of 2013, and looks set to fall well below 20% by the end of this year.
Building upon foundations
Once initial plans were kick-started, Abbas got deeper into foundation-building for the HR function by creating best practice initiatives in areas such as employee engagement surveys, policy and governance, compensation and benefits, and HR metrics and reporting.
“One particular success from that period has been our use of employee surveys that focus on just a few areas to get feedback every few months, as opposed to the big annual employee engagement surveys a lot of companies use,” Abbas highlights.
“This has enabled us to get faster access to employee feedback and get enough details to drive meaningful changes based on that,” he explains.
An example of how HR used regular feedback to drive change was through the first survey conducted in 2013. That survey was centred on culture and Pacnet as an employer.
Feedback collected led to two major initiatives – the first being the development of the company’s new Core Values which were rolled out at the turn of this year. The second was the introduction of a Career Management initiative to provide employees with guidance and tools to develop their careers at Pacnet.
One of the key metrics Pacnet also began using was an Employer Net Promoter score. This enables Pacnet HR to measure employee satisfaction with the company, in the same way as customer service departments measure customer satisfaction. Being one of the first telecom companies to use this data-based approach has also given the company a strategic advantage in retaining talent within the industry, Abbas says.
Along with driving transformation, HR continued its normal day-to-day operations, keeping up its efforts to bring in more leadership talent for the business, fine-tune the function’s overall approach, and roll out items such as a new relocation policy to enable staff to take advantage of mobility opportunities when they arose.
“This brought us close to the end of 2013,” says Abbas. “The company was recovering well from the changes of 2012 so the leadership team decided that 2014 would be when we really pushed to drive higher performance in the business.”
Changing gears
These major strategy changes have meant that within two years, Pacnet jumped from being a traditional telecom bandwidth company to one that thrives on providing innovative cloud computing and managed services.
That high performance culture became the backbone of Pacnet’s HR plan to sustain the company’s journey on the road towards innovation. This consisted of a list of 10 carefully selected initiatives that were reviewed and agreed upon by the entire C-Level team.
One such initiative has been to improve leadership skills and behaviours. “We implemented leadership development programmes in the first half of this year to ensure leaders not only manage and lead better, but also get help to improve themselves as individuals and perform better,” Abbas explains.
To achieve more clarity on how employees’ roles and objectives connect to the big picture, HR helped the senior management team refresh and re-launch the company’s vision and strategy, making it more focused and easier to understand.
A high performance organisation also requires a more collaborative environment. The IT team took the lead in this space to roll out social tools such as Lync and Yammer. These better facilitate collaboration amongst staff and support a Bring Your Own Device (BYOD) policy across the company, Abbas says.
“Because we’re a mid-sized company, it was not possible to roll out all these changes in a single year,” says Abbas. “We’ve been working on them in a quarterly manner.”
Q1 2014
• New vision and company strategy introduced
• Implementation of leadership programme that included 360-degree feedback, executive coaching and group workshops on personal leadership styles
Q2 2014
• More “pay for performance” differentiation in annual bonus payments
• Leadership development programme continued
Q3 2014
• Career management programme and new compensation and benefits policies rolled out
• Interview forms, collateral and workshops initiated
• Started a new peer-to-peer recognition programme that empowers all employees to recognise the right core values in behaviours of their colleagues
Q4 2014
• In the process of reviewing KPIs, resourcing and organisation structure for 2015
• Implementing SuccessFactors HR Management System (HRMS) and Talent Management suite to replace legacy systems by year-end
• Preparing employee and manager training to be rolled out in 2015
Looking ahead, the results have pointed to a successful business and HR transformation thus far. On the business front, profitability, productivity and innovation have all improved significantly. Pacnet has also seen significant success in new business areas such as data centres and software defined networking.
On the HR front, Pacnet made good measurable progress in terms of hiring, recognising and retaining talent. HR also revamped compensation and benefits policies and engagement practices, and is now looking to do a massive upgrade of its systems by the end of 2014.
“We have moved from a traditional HR function to a more mature and innovative one, emphasising the use of feedback, technology and HR metrics to drive performance,” Abbas concludes.
At a glance
Total number of employees at Pacnet: 165 (Singapore) & 835 (ASEAN)
Size of HR team: 6 (Singapore) and 22 (Global)
Key HR focus areas: Business Performance, Customer Experience, Innovation, High Performance Culture
HR for HR
While HR set about driving organisational change within Pacnet, the function also needed to reinvent itself. Syed Ali Abbas, Chief HR Officer, Pacnet, championed a push to drive a higher level of productivity, project management and service in HR areas visible to both employees and managers.
“Work was done in the background to fine-tune the overall HR plan, assess the effectiveness and efficiency of the HR function, and identify improvement opportunities,” Abbas explains. “I made sure we applied good business and HR principles to our own function as well.”
To energise the HR team, Abbas ensured all team members across the world came up with career plans for themselves within the first two months of his tenure. This helped HR to clarify what areas staff were interested in and assign projects aligned with those interests.
“This was a win-win situation for both HR and the company,” says Abbas. “HR staff are working on projects that truly interest them, thereby allowing them to develop their own passions while the business benefits from the fact that focus areas are driven faster and more effectively by an HR team which is motivated and enthusiastic to carry them through.”
Who’s Who in HR
Syed Ali Abbas
Chief HR Officer, Pacnet
Louisa Gregory
HR Director – South Asia and Global Talent Management
Katherine Lee
HR Manager – Singapore
Thomas Wee
HR Specialist – Singapore
Paulind Tan
Payroll Specialist – South Asia
Cindy Teo
Group HR Administrator
employee engagement
Article Summary:
Pacnet has risen from times of uncertainty and leadership upheaval to become the award-winning, innovative technology service provider that it is today. Chief HR Officer Syed Ali Abbas says the organisation went through massive transformations in almost every area of business, with HR at the forefront. He shares their journey from a traditional HR function towards a more strategic, best-practices driven role within the company
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Case Studies