Smaller firms' HR departments achieve top results

By Candace Walters

Published in the Rochester Business Journal, August 29, 2003 © HR Works, Inc.

Each year Fortune magazine recognizes the top 100 companies to work for. Typically large corporations with significant human resource department infrastructures and budgets, these companies serve as good role models.

But equally inspiring are the HR departments in smaller and midsize companies that are revolutionizing their processes and achieving superior results.

Rochester-based Microwave Data Systems Inc. is proving you don't have to be large to be a leader in HR management. Poised for rapid growth, MDS -- which currently employs 226 -- has rolled out a state-of-the-art employee Intranet, HR branding initiatives and unique employee programs intended to support the organization's aggressive growth plan while making employees' lives easier.

MDS designs and manufactures microwave radios for use in energy, telecommunications and other industries. Though small, MDS is making a big impact. Since 1985, the company has installed more than 500,000 radios in some 110 countries. MDS was ranked No. 9 on the 2003 list of Rochester Top 100 companies, based on revenue growth from 1999 to 2001. It was the second year MDS had made the list.

Over the next few years, MDS plans to accelerate its introduction of new products, says Susan O'Brien, the company's director of human resources.

"To support this growth, the HR function has had to move from a traditional infrastructure to a strategic partner," says O'Brien, who joined the company in 2001. "To ensure that MDS has the talent to achieve these ambitious goals, we're committed to creating a work environment that encourages intelligent, team-oriented people. That includes offering benefits that provide the greatest return on investment."

Transforming HR was a multi-step process. O'Brien teamed with WorkSmart Learning Systems Inc. to conduct a cultural audit, which identified the driving cultural forces inside MDS. The process helped determine what needed to change or stay the same in order to support the achievement of MDS' company's goals.

Based on those findings, O'Brien built a competency model and uses behaviorally based interviewing to attract just the right mix of talent. So far, the results are excellent: MDS boasts a turnover rate of only 2 percent.

Last year MDS engaged Brand Orchard, a local agency, to refocus and strengthen MDS' brand strategy. O'Brien and the HR team participated in the initiative to ensure that HR efforts align with MDS' business plan. Several key results emerged, including "Rule the Waves," an internal battle cry for the employees to rally around. In addition, MDS developed a full-service, interactive employee Intranet site called the Wave, which debuted last November, replacing MDS' one-page site.

Using the Wave, MDS' HR team can offer enhanced service and information more efficiently; employees save time as well. For example, each employee can log on to a secure account that allows him or her to view a snapshot of benefits, including information on how much MDS contributes to benefits on his or her behalf. Employees can easily change addresses, beneficiaries and emergency contacts. For employees who don't work on computers, MDS makes two machines with Wave access available.

The Wave is MDS' primary internal communication tool, replacing fliers, email and quarterly newsletters. It quickly informs all employees, including those in satellite offices, about company news and departmental initiatives. Each department also has its own section on the Wave.

A cross-functional "Wave team" continues to enhance the Intranet site's features.

Benefits focus on employees

MDS provides its employees many of the traditional benefits such as profit-sharing, tuition-assistance and comprehensive medical and dental coverage, including paying 80 percent of the premiums. It also matches employees' 401(k) plan contributions and offers a 529 college savings plan.

But MDS goes further than most companies its size by providing:

• An on-site cafeteria, where employees can purchase lunches catered daily by a local restaurant;
• A very popular workplace Weight Watchers program, subsidized by MDS;
• Lunch & Learn events on wellness topics;
• An on-site exercise room;
• Discounted classes in yoga and kickboxing;
• Sponsorships of employee softball, golf and soccer teams; and
• Informal employee clubs featuring every interest from running to Spanish classes to ham radio operation.

To encourage employees to balance work and home life, MDS also promotes family involvement by offering free tickets to Science Saturdays and other events at the Rochester Museum and Science Center. MDS hosts an annual company picnic, an Erie Canal ride and a holiday party, and provides discounted tickets to other sporting events.

Focusing on recruitment and retention

One look at www.microwavedata.com, and it's easy to see why MDS experiences so little turnover. The website's Careers section features photos and mini-profiles of MDS employees who have interesting stories: One volunteers teaching science to children; another quit smoking with MDS' help. A story of one employee who pursued an unexpected but satisfying career path at MDS highlights the company's emphasis on growth opportunities.

The website also highlights the company's diversity efforts, again with well-written stories and photos of employees' experiences.

In addition, MDS conducts college recruiting year round and provides ample internship opportunities. The company currently employs 14 interns working on meaningful projects in engineering, IT and sales and marketing. Interns receive pay, college credit, paid holidays and the opportunity to participate in all company events.

Support for volunteerism

Through an initiative called MDS Volunteers with Frequency, the company gives employees two paid days per year to devote to volunteer activities. The company also sponsors employees who run, walk or bike in charity events for health-related organizations, and donates money annually to employees' favorite charities. In addition, MDS employees participate in annual food and clothing drives.

The future of HR

What does O'Brien foresee for HR teams everywhere?

In order to support their companies' growth plans, "HR will need to streamline processes, automate everything they can, and outsource responsibilities that are not core competencies," O'Brien says. "For example, not all HR people are good trainers, but we are often charged with that role."

As a business partner, HR will become experts in organizational development and structure, she adds, encouraging HR professionals to work with the executive management staff to:

• Determine what the business needs in order to grow.
• Identify the skills, knowledge and competencies required to achieve that growth.
• Analyze current work flows to set necessary staffing levels.
• Develop and train current staff.
• Recruit new talent that will bring value to the corporation and help achieve growth goals.

O'Brien advises: "Always look to where you want to go, not back. Communicate with and educate the current employees about where the company is going -- and how they fit in. Change should be exciting and commonplace in the organization, not feared."

For many small and midsize companies, conventional wisdom holds that instituting the kind of leading-edge HR programs that get attention and generate results is beyond their financial reach. MDS' experience shows that, with vision and creativity, an HR Department, regardless of company size, can transform its role, impacting the business positively on many levels.