Sharing HR practices across Europe at Hitachi

Overseeing HR for 20,000 is difficult. The key at Hitachi is sharing good practices, and people, around the different businesses

Say ‘Hitachi’ to most Brits and they’ll probably start fantasising about their next ultra-high definition, 55-inch TV. Less likely to spring to mind are high-speed trains, nuclear power systems, medical ultrasound and CT scanners, or construction machinery.

Yet, in the words of chief HR officer of Hitachi Europe Stephen Pierce, the company is “a bit of a sleeping giant… It’s in the technology all around us.”

Hitachi Europe alone consists of 194 group companies spanning from Hitachi Rail Europe – currently working on replacing the UK’s ageing intercity trains – to IT consultancy Hitachi Solutions, then through to Horizon Nuclear Power. The wider global company boasts around 330,000 employees.

Thankfully Pierce is tasked with overseeing HR for ‘just’ the 20,000 employees sitting in Hitachi’s European businesses. But this is challenge enough.

“We have a complex structure as big companies often do. We’re the European head office in Maidenhead; some companies are part of us, some subsidiaries, some sister companies,” says Pierce. He explains that there’s no reason any of these companies would necessarily take their lead from him.

“Because we have such diversity of different organisations and companies there is no mandate to say ‘you must’ in anything, because we have empowered organisations with their own P&L. It’s very difficult to do that and then say ‘and now you must do all these things’. Because you hire entrepreneurs, people who know how to run and drive their own business successfully, and those people typically want the freedom to operate.

“Many have their own HR teams,” he adds. “Some rely on us for support… so there’s a whole matrix of different organisations and people.”

So heading up HR at Hitachi Europe is a lesson in HR influence. Central European HR is currently on a standardisation journey where possible and beneficial, to ensure “good HR practices” are widely disseminated. “That’s a fascinating challenge,” Pierce remarks.

A new careers site is one example. “When I joined eight years ago finding a job in Hitachi Europe was very difficult,” Pierce reports. “So we went to an external vendor and developed a Hitachi Europe careers site and worked with colleagues in other companies at Hitachi to place their vacancies on there to create that presence. If you Googled our competitors you would find their jobs really easily but we just weren’t visible.”

Pierce explains this is a good example of the need to tie in with the global business: “About three years ago there was a project to take what we’d done global. We now have within Europe about 20 companies who advertise roles on there.”

This is critical to retention and development, explains Pierce: “There’s the external talent piece of someone saying ‘I’ve heard of Hitachi Rail, how do I get a job?’ But the other aspect is for our own people, because otherwise we live in silos. So it’s about sharing talent and recognising there are transferable skills. You could work in rail and move to consultancy… Because I would much rather lose people from Hitachi to another Hitachi company.

“We’ve also implemented a talent review process to try to stimulate thinking about who our high performers are and how we ensure we’re doing the right thing for them and finding the opportunities where appropriate,” he adds. “That’s just one of a number of initiatives we’ve implemented across the world.”

Another is global job grading – a simple sounding but nonetheless crucial process for a company of Hitachi’s size. “We have so many different companies, with different structures, how do you know if one job is bigger or smaller than another?” says Pierce. “The same title can mean totally different things.

“So we put in a global grading structure to compare one job with another… Something like 50,000 jobs have been graded so far. But they’re not in place in every company yet; it’s going to be a long journey to get there.”

It’s a journey that relies heavily on good old-fashioned relationship building, reports Pierce. “It connects through developing relationships and trust,” he says. Which is where the wider global company’s roots as a Japanese business, founded in 1910 in Hitachi City, come in.

“I think that’s probably a bit of a Japanese thing, to say a relationship with someone is important and you’ve got to meet and develop that trust,” says Pierce. “All my team have this in their objectives; it’s a focus for everyone to say we need to get out to the group companies, we need to share the best practices, and we need to connect with leaders.”

Similarly crucial in persuading people is demonstrating what’s in it for them. Pierce cites the example of a current global Workday rollout, where costs have been kept down by sacrificing (to a certain degree) tailoring the package to each country, which also “avoids complexity and fragmentation”.

This reduced cost makes adoption much more attractive, explains Pierce: “So we’re able to push companies to use this by subsidising what they do. Why wouldn’t you advertise your jobs, for example, if you’re not paying for it? And it’s the same with other systems. Because we’re buying them for tens of thousands of people the costs will be much lower.”

For Pierce HR influence is ultimately, particularly in his environment, about being proactive. “We have a choice in HR,” he says. “We can wait for people to come to us. We’ll do the admin, the payroll, the basics… But the real added value is proactively engaging with the business to identify how our knowledge and expertise can help it address its challenges.

“We talk about business partnering and there are various definitions of what that is. But in the end it’s about developing a relationship with the business to understand where it is and ensuring we can do the right things to stay successful.”

Pushing through change should start with HR, according to Pierce. “Of all the things we do in HR probably the most exciting and interesting is change, because if we’re not creating change then we’re not really adding value or doing our job. We need to be the catalyst for change.”

And nowhere is constant change more important than in such a highly technical environment as Hitachi. “The company’s challenge and strategy is increasingly focused on innovation – recognising that the future is about change – because we’re going to be in a different world in 10 years’ time,” says Pierce.

“Hitachi isn’t a steady business… I think people see the name and size but they don’t always see that there’s always change and churn within. We’re buying businesses, selling businesses, doing joint ventures, we’re restructuring businesses – there’s always change.”

Pierce is also mindful, however, of supporting employees through such rapid change. This is again where the Japanese approach of strong involvement and democratic debate in decision-making comes in. “Change and people aren’t always comfortable bedfellows. I think if you want to change you need to have people involved,” says Pierce, citing the example of the new recruitment website where central HR “got the companies involved before [we] did it so they could input into it… Because if you’re involved you feel more ownership than if you’ve just been given something.

“I’ve worked in a few American companies,” Pierce continues, citing his time at WR Grace and Chesapeake. “You’ll sit around a table and debate the subject, then the person at the end will make a decision and you go away and do it. Whereas what we’ll do [at Hitachi] is sit around a table and talk about something and then a couple of weeks later we’ll come back and talk again. Meanwhile people will have talked separately, in different situations… The attraction is that everybody gets a voice.”

Which is not to say the Japanese way is always ‘the right one’. Enacting change at Hitachi also involves challenging the Japanese HQ’s assumed ways of doing things. “We tend to be more bureaucratic than some companies so we’re not as nimble as we might be,” says Pierce. “In Europe we need to be willing to speak up and say what we see. It’s recognising we need the best of East and West to create something stronger than either.”

This is particularly important when it comes to diversity. Like many Japanese companies Hitachi has been historically run by men. But it has now diversified the board to around 50% non-Japanese, with half of those female. “We said: ‘We can’t be a global business by only having one nationality and one gender’,” comments Pierce.

This sends an important message to lower down the company. Progress in encouraging more women into Hitachi’s engineering jobs is there but it’s slow going, reports Pierce. “We still get the question ‘where are the women’s jobs here?’ as if there’s a line between the two,” he says. “It’s great when we have women in engineering jobs to break that vicious cycle. But we don’t have enough.

“I’ve seen girls that have studied engineering but then gone into teaching or accountancy. I think there is a big perception issue,” he adds, citing the example of Hitachi Rail Europe’s new County Durham business where, despite open days and targeted recruitment, converting “a lot of interest” into applications has been tough.

“It does take time and it’s a country issue. It needs a lot of energy and focus from all angles because it isn’t going to shift quickly; I think we could all do more,” comments Pierce.

Which is why, given the need to tackle many challenges more widely than at organisational level, Pierce is a strong advocate of HR professionals getting out and about, and out of their comfort zones. “We need to be outward looking in HR because we get so busy and sucked into looking inwards,” he says, citing his position as an NED at Hitachi Rail Europe as key, as well as networking and learning events “broader than HR”. “If we’re not outward looking who’s going to bring this stuff into our organisations? Who’s going to have that knowledge of what the potential implications of Brexit are, for example?” he says.

“HR has a huge role to play” and so “has to step up” in regards to Brexit, according to Pierce. For now he’s stoical about this particular change challenge, highlighting that nothing has materially changed yet and the importance of seeing it in the context of the wider global picture.

“We want to be able to move people around… But there are many things going on in the world right now so we have to see it from that perspective,” he says.

“We’ve been around for 107 years, we’re in every country in the world pretty much. And this is just one key challenge. So we’ve got to focus on everything else as well and make it successful.”