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The Employment Line

ManpowerGroup CEO Jeff Joerres on training, honor, and transcending checkbook philanthropy.
 

By Dirk Olin 
 
 
Jeffrey A. Joerres is chairman and CEO of ManpowerGroup. He joined the organization in 1993, serving as vice president of marketing and senior vice president of European operations and global account management. In 1999, he was named President and CEO, and in 2001, chairman of the board.




Under Joerres’ tenure, ManpowerGroup’s growth has spiked. It now occupies 3,900 offices across 80 countries and territories. It has also moved from 183 to 129 on the Fortune 500 list, and is a repeat member of this magazine’s 100 Best Corporate Citizens List.




In 2012, Joerres was asked to co-chair the B20 Task Force on Employment, beginning with leading discussions at the 2012 World Economic Forum annual meeting. After months of collaboration with the private and public sectors, the task force delivered recommendations for focused actions to inspire sustainable employment creation at the G20 Summit in Mexico. Joerres also co-chaired the World Economic Forum on Latin America in April 2012, leading discussions on the region’s role in bolstering the global economy.




Joerres serves on the board of trustees for the Committee for Economic Development (CED), and is co-chair of the Future Workforce Committee of the Greater Milwaukee Committee. In addition to the ManpowerGroup board, he is a member of the board of directors of the Federal Reserve Bank of Chicago, Johnson Controls (another repeated Best Corporate Citizen), and the U.S. Council for International Business.
Beyond leading those collective achievements, in 2011 Joerres received CR Magazine’s first Lifetime Achievement Award for significant accomplishments made throughout his career. CR Magazine is also published by SharedXpertise.



He recently sat down with HRO Today Editor-in-Chief Dirk Olin to discuss his vision on sustainability, governance, the coming challenges to the global workforce, and the ManpowerGroup’s philosophy on philanthropic initiatives.
 

Let’s start by just hearing your general take on corporate responsibility writ large—its place in the company’s mission and how or if you measure the “return on responsibiity.”
 

We’re in a thin margin business, so we pay close attention to all our metrics. But when you look at what our purpose is, it’s to do the right thing—by finding people jobs. You don’t achieve that, though, by holding hands and singing Kumbaya. It is, though, about connecting what we do with the world and how we must bring honor to what we do. We need to be the most productive and profitable we can be—in the long term—by putting people who need jobs together with the right match. Short term? We might make sacrifices, and we do. We’re not in Indonesia right now, because it has too much corruption. Some of our competitors are.
 
 
Corruption can be a relative term, right? One culture’s fulfillment of family duty is another culture’s “nepotism”?
We’ve run into some of that. Which is a reason we spend a lot of time examining what we say to ourselves. And we say to ourselves, “We are a U.S.-based company, and this is how we do business.” And it’s not just because rule of law is important. Even in those countries that say “It’s part of the deal,” you still get emails from the population saying, “Why is Uncle Joe working there?” We’re on the side of what is easier to stay consistent about.
 
 
It starts at the board and with the executive management team asking ourselves a lot of questions about why things are the way they are. We had one issue recently—and I can’t get into the personal details here—where we found $500 on an expense report for personal expenditures, and this was in an Eastern European country where the act is considered perfectly legitimate. I just found out this morning that our regional manager let that person go within five minutes of finding out. So there aren’t that many gray areas. If the person had, say, a serious family or medical issue, we might not be that black and white about it. And this incident was such that it never would have been found out in public, but that’s what we do. Because we have a policy of education, communication, and conversation that is consistent, so our people know what to do.
 

How do you measure that?
We do surveys, for one thing. And when we got our most recent survey back, among our Manpower employees around the globe, we had 84 percent say that we conduct our business with “the highest ethical standards.” One way we achieve that is that we have between 4,000 and 5,000 people a quarter taking our online certification for the Foreign Corrupt Practices Act (FCPA). And the U.K. compliance test is even more stringent because it applies to clients, not just governments. And we have others for things like sexual harassment, in addition to FCPA.
 
 
Do people complain about having to take it so often?
Sure. And we say, “You’re right, the questions haven’t changed much since last time. But you’re thinking about it now, right?” Again, it’s about driving the consistency. And we’re in 80 countries with only 15 percent of our business in the States, so you might think there’d be a lot problems for us out there, but our branch people take a lot of pride in the consistency. Which sometimes puts us at a competitive disadvantage, because some of our competitors are out there searching for the line and crossing over it and just chancing they won’t get caught. Because in our business, with labor regulations, you can do a lot to minimize your costs. Our view is that you should know those things, but you stay far left of crossing the line. If you’re always trying to find the line, you will cross it unknowingly, because it’s not straight, it’s serpentine.
 
 
Example?
We’re one of the only companies for many years in Italy that fully funded what we felt was our obligation by law, which was a training fund, and for that we set aside a percentage of our revenue. Which is something that a lot of companies bigger than us don’t do.
 
 
So that’s a higher cost. How is it a competitive advantage?
You are more trusted by unions. You are more trusted by individuals You are more trusted by governments. Short term, that can cost you. Over time, it’s going to be more profitable.
 
 
Don’t boards and shareholders push back on that? Don’t they want profits maximized each quarter?
I’ve written, let’s see, 55 quarterly reports here. And not once have I mentioned the stock price. Look, I drive for shareholder performance. I look at the cost of capital. We make acquisitions. We’re very sophisticated on that. But when it comes to conducting the business, it’s my view that if you focus on your customers and clients, that will be best for your shareholders over time. Remember, most of our investors are in and out in a month or two. I have 10-year options. I am the long-term shareholder. And that’s why I’m a little cynical about the pronouncements of an ISS [governance activist Institutional Shareholder Services] that might hit us for having a staggered board. I want a staggered board. And the reason is that if I have a [disgraced former turnaround specialist] “Chainsaw” Al Dunlop who wants to come in, pop the stock price, and then get out, he or she is really going to have to think about it, because you’re not going to be able to flip my board in one year.
 

Beyond the spirit of that notion, how has its implementation changed over the two decades you’ve been at Manpower?
The sophistication of all this—and you can see it in the complexity of our GRI (Global Reporting Initiative) report—has gone up exponentially. For us, we were already doing a lot of it, so it didn’t require much change on our part. It was a natural evolution for us.
Or take the Athens Principles. If ManpowerGroup stands for anything, it’s the dignity of work and employment opportunities for everybody. So we are implacably opposed to the human trafficking that is forcing more than 12 million people into bonded labor at any given time. So we helped create the Athens Ethical Principles, which declare a “zero tolerance” policy for working with any entity that benefits in any way from human trafficking. And it’s active.
 
 
You’re required to search it out within your supply chain. We were the first company to sign the declaration. And we went beyond that. ManpowerGroup engaged more companies, and that helped result in more than 12,000 organizations signing up—either directly or through the commitment of their industry federations.
 

One thing that differentiates us from many companies, and in our CR report you can feel our soul when it comes to this, is that we’re surrounded differently—by that I mean that we’re historically long-term thinkers. This is a 65-year-old company, and I’m only the third CEO. So I’m not here to just pop the stock price and disappear. We’re not interested in the flavor of the day. In fact, I’m confident that if someone like that were put in this job and started running things that way, there would be a revolt.
 
 
So the goal here is not to ensure that we’re making the most amount of money but that we’re making the right amount of money.
 

We process 10 million interviews a year for 4 million jobs. On the one hand, we have to make sure that that what we call the branch candidate experience is right. We’ve done internal surveys—using “mystery shoppers” so our staff didn’t know—and we found in the past that some of the experiences were quite cold. So we addressed that through training, and now our people come out from behind the counter. They look up at you. They smile. And you know what? That doesn’t cost a dime.
 
 
But it’s a balancing act. We can know within minutes whether we’ve got a job for someone. Now if I told our people to just shove those candidates out the door, they’d think I’d grown a second head. On the other hand, if you spend 50 minutes trying to make people feel better, you’re not necessarily doing them any favors. That’s 50 minutes they’re not out looking in a more appropriate place. Their skills might be better matched for one of our competitor’s clients, or they might need a job that offers child care that we don’t have in their profile. So it’s a balancing of engagement of our people to stand for our brand, on the one hand, and the commercial challenge we face, on the other. And we do that very very well, which is why most companies would die for the soul we have. One way I know that is I can’t tell you how many emails I got during the recession from people on staff who volunteered to forego pay.
 
 
What’s your approach on philanthropy?
On philanthropy, our philosophy is brains—the idea—before brawn—the money. We’re very reluctant to just give money. It’s more sustainable if it fits with what we do, and if our people are moved to volunteer for the effort. So we do give a lot of money, but after we’ve assessed the cause and aligned it with our people—and then we give to places like Junior Achievement or End Human Trafficking Now, because those fit with what we do.
 
 
We stopped doing a lot of tables, for example, just sponsoring a table at a fundraiser, because we felt that it was just spreading the peanut butter so thin that it wasn’t consequential. I appreciate their model, but we need the deeper connection to justify spending that money. If we just gave money toward Alzheimer’s research, because my father has Alzheimer’s, the staff would be within its rights to say, “Hey my cause is just as valid.”
 
 
And you’ve done something particularly ambitious abroad. Can you talk about how this philosophy led to your response in India a little while back?
Right, the tsunami six year ago. Our people are often very emotional, and they started asking, “Why aren’t we giving more money?” But we are not first responders. For us, the question is what do you do once the dust settles. How do you put in a training center?
 
 
How do you help people get jobs?
So that’s what we did. We opened two Manpower Vocational Training Centers (MVTCs) in India’s Tamil Nadu state. The centers in Tharangambadi and Nagapattinam have helped survivors to develop new career paths through skills assessment and training. Those were in mobile phone repair or tailoring or masonry, because the locally fishing industry—and that’s what those communities depended on—had been decimated. And guess what? Almost 8,000 people have been trained, and 95 percent went on to find gainful employment. Plus, we built a micro-credit assistance program, and that has helped to launch more than 1,500 small businesses. That’s real.
 

And, by the way, when you look at all the pledges of money that were made on that, 80 percent of the companies reneged anyway. So when we didn’t give $500,000 at the outset, some of our people felt that was a hit to their pride. But our feeling is that with our giving, if we stick to what we know how to do, it will be more sustainable. And, by the way, it has actually helped us commercially.
 
 
Now let’s go very big picture. The world economy, or economies. Where are we in the historical stream of things?
I was asked to head an idea stream and attend all the job-related Davos events that I could to address the global jobs shortage. The number of unemployed worldwide is counted at about 50 million people, so we’re talking about a big number. I headed up a task force, and we reported to [Mexicain President Felipe] Calderone and, I don’t know, 10 or 15 cabinet members. We came up with five key recommendations backed by three principles.
 
 
First, apprenticeships and internships are key. No more of this, “I’ll study history and wait tables instead of learning to become an electrician and make $100,000 a year.” We need to restore the idea that there’s honor in work.
 
 
Second, we want to promote greater support of education by business.
 
 
Third, we want to help SMEs [small to medium enterprises], because they account for 60 to 65 percent of employment in OECD (Organization of Economic Cooperation and Development) countries. So we’re asking big companies to mentor the smaller companies in their supply chains.
 
 
We’re also pushing labor market reforms, with an emphasis on raising the threshold for when some regulations kick in. For some countries, they start at five-employee companies, and that just encourages employers to play games with their payrolls and hiring.
 

And the last one is that we’re also looking to promote worldwide infrastructure to create sustainable businesses. We have our share of crumbling bridges and tunnels here, of course, but it’s a different problem in many part of the globe where you can’t get goods and services to market because you don’t have even basic roads.
 
 
And the three principles?
First, we want scalability. That 50 million number of unemployed is not going to be fixed by a few places hiring a couple extra people. You need many, many companies to hire those extra people.
 
 
Second, despite that need for global scalability, you also need local engagement. We need to get out of the White Houses and even the governor’s offices and get down to the mayoral level or lower.
 

Last, we need commitment, combined with accountability. This can’t be something where employers can say they’re on board and then disappear.
 

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