In Conversation With John Sigmon, CHRO, AARP

November 11, 2016

How big an organization is the AARP?

We like to refer to it as a relatively small organization employee-wise, but we have a very large footprint. We have about 2,100 employees, but we also have about 90,000 volunteers so that adds up to a little less than 5,000 FTEs. The reality is that we would never be able to do the work that we do without that army of volunteers. Some of those people work maybe an hour a month, some people it’s almost like a full-time occupation for them. So that’s our total labor force, I guess.

 

Other than advocacy, what other activities does AARP conduct?

Advocating for the rights of people who are 50 plus is a critical part of what we do. The other thing that we have just embarked on in the last year is a platform called Disrupt Aging, which is the title of a book just published by our CEO. We feel it’s important to vocalize and make sure people understand the value that people who are 50 plus bring to our communities, and our workplaces. I think there’s a lot of, I wouldn’t call it discrimination, but a lot of misconceptions about what it means to age in this country. And so we’re trying combat a little of the ageism and debunk the idea that people who as they get older really aren’t as valued or they’re not really worth as much. That’s really what the Disrupt Aging platform is all about.

We also have a charitable foundation that is focused on the needs of the vulnerable 50 plus community. Every day in this country, millions and millions of senior citizens, people 50 plus and older, go hungry. We’re also focused on adequate housing for the 50-plus population, and creating some income opportunities for them. So the foundation is also a big part of what we do.

And then we have AARP services, which is our for-profit affiliate where all of the goods and services we provide to our members reside. So if people want to take advantage of a Medicare supplement plan or travel discounts and things of that nature, they go to AARP services.

 

Your employee group seems to stretch across demographics.

That’s right. We’re very proud of our hiring profile or our employee profile if you will. We are about 65-per-cent female, 35-per-cent male. Compared to some other organizations, particularly for-profits, we are very well represented on the female side of the house in leadership roles. Our average age does skew a little higher than typical – about 48 or 49 years old. Some of that is because of the mission of the organization, some of that is because of our hiring practices. We focus on hiring highly qualified professionals at a certain stage of their career. However, we are also embarking on a new intern program.

In years gone by, we just had an intern process where we processed interns in through the summer; we processed them out in the fall. But this year we’re revamping the intern program to create influx of younger folks. Of the 40 people going through new employee orientation, about 28 of them were actually summer interns. We’re pretty excited about that. We have onboarded quite a few interns this year and we’re hoping to develop a program where we can actually convert them into full time employees after graduation.

 

What kind of employer does AARP try to be?

We are very much a high-profile employer. We have had few challenges, at least to date, attracting applicants for roles here at AARP. We are very much an engaged employer because we’re small, again relatively speaking for a 1.7-billion dollar organization, 2000 employees, and we’re scattered across all 50 states. We try to make sure that all of the things we do from an organizational standpoint align to the employee.

One of the things we try to do is match the consumer behavior with the employer behavior. I’ll give you an example of that. Prior to my getting this role we had this convoluted process about when employees could be members of AARP. There were all these rules. So when you became an employee of AARP you became a member of AARP, but if you left AARP and you were less than 50, you didn’t get to keep your membership. If you were over fifty but had been here less than five years you got to keep your membership but you had to pay for it. So, we basically just did away with all of that and so now every single person who comes to work here at AARP whether you’re 21 or 81 you are a permanent lifetime member of AARP.

We also try to instill within the organization the things that we promote to the community. So, because we advocate for retirement incomes, we offer a pension plan ourselves. We are out advocating for people to be healthy, to promote wellness. So, we’re pulling together a wellness centre and a revised state of the art fitness centre here at our headquarters. All of the things that we promote to our members we try to make sure we do for our employees.

We do an employee feedback survey about every 18 months and we just got back our most recent results. We had an 88 percent participation rate, which was extraordinarily high. And we had an engagement score of 86. I think that demonstrates how people feel about our strategy, how they feel connected to our organization, to their frontline manager. All of those things culminate in an engagement score that makes us extraordinarily proud.

 

You’ve recently been involved in a voluntary outplacement program. Can you tell me a little bit about that?

We had a new CEO come on board in September of 2014 with a brand new vision for the organization. One of the things that she wanted to accomplish was the creation of an enterprise strategy and innovation business unit that would drive more revenue and more resources for our social mission. However, a complicating factor was that historically have had a very low voluntary turnover.

Our voluntary turnover rate is four and six percent. So as a result of that, we implemented a voluntary separation program at the end of 2014 and into early 2015. We offered the opportunity for any staff under any circumstance that wanted to take advantage of an early out. We have a very robust severance practice here at AARP to begin with, but we enhanced that just a little bit to encourage people that might be kind of on the fence, maybe people who were planning to retire anyway, they wanted to go back to school, whatever the reason was. Again it was completely voluntary and we saw about 230 people take advantage of it and that gave us a lot of opportunity to do things a little differently. We believe now we’ll be able to free up about $47 million over the next five years to support our social mission.

Now, we didn’t permanently reduce our headcount. In fact we have virtually replaced all of that headcount, but we’ve done it in a much more strategic way. So a lot of that headcount went to our state and local community efforts, some of that supported enterprise strategy and innovation and some of the other future directions for the organization.

 

So, it was somewhat problematic that AARP is such a desirable place to work that your turnover rate was unusually low?

I’m not a career HR person, and in fact I’ve had many other careers over the course of my working history. This is probably the 16th employer I’ve had since I really began working fulltime in my life. However, this is one of the best places I have ever worked. The environment is engaging, and the people are focused on the mission of the organization. And you will never have to be the smartest person in any room, because there’s a lot of intellectual stimulation. We’re an organization that’s not afraid to try new things and we’re not afraid to abandon things that don’t work. So it really is quite an engaging and exciting place to work and our new CEO has brought a new level of excitement and verve to the organization.

 

How did the remaining employees react to the voluntary outplacement?

I think the reality is that it did create some anxiety in some pockets of the organization where people were concerned about how they were going to get all of the extra work done while we’re waiting for some new people. But I think that was overshadowed by the fact that people generally saw this as an opportunity to reshape the organizations and do things really differently.

The other thing that produced a little bit of anxiety for folks was that in the midst of all of this, HR was undergoing a fairly significant transformation itself. So I think that there was a little hesitancy on the part of line managers and line employees, wondering how we were going to pull this off. People wondered, 'If we have 233 or 234 vacancies to refill, and at the same time HR transforming, how are we going to pull this off?' But we managed to pull it off. We had a very, very robust internal communications platform. We did manager meetings, which for us are audio-visual broadcasts. We did what we call E-team Live, which is a telephone conference available to all staff; we have an internal communications channel called News Now that comes out every day at 7 am. We posted frequently asked questions that were constantly updated based on the questions that we received on an ongoing basis. Again, that doesn't always quell everyone’s anxiety. But we made it through to the other side of that without many problems. It helped that the people who left had a 94-per-cent satisfaction rate. So 94 percent of the people who left said that they were either satisfied or very satisfied with how their exit was handled and managed.

 

How were you trying to transform the organization through the voluntary departure program?

Primarily it was not an exercise around headcount reduction because at the end of the day we didn’t really reduce headcount. We wanted to reallocate the resources to several of our strategic initiatives. One of those was an organization called Enterprise Strategy and Innovation. We merged strategy along with innovation, we created an innovation lab here at AARP and hired a team of people to lead that function.

The other thing that we really wanted to do was kind of put our money where our mouth is in terms of our efforts to go local. We’re trying to make a transition from being a national organization, which is sort of thought of as kind of an inside the Beltway think-tank, advocacy group, to a nationwide organization that has lots of things going on at very local levels. So we wanted to reallocate headcount and  dollars to those two primary areas. Tampa, Florida, has different needs than what might be important to people in Cheyenne, Wyoming. We needed to be able to be responsive to that and so our entire state structure really changed.

 

Could you describe the kind of people that you brought in to execute this plan?

We brought in somebody who came from the private sector, who worked for a very large public relations firm and he did global strategy for this firm. He was very much a big picture thinker who was ensconced in organizational strategy. So that, along with hiring people who have innovation skills and who have worked at startups. We have what we call innovators in residence, so we have people that we bring from other organizations into our innovation lab to help us do things like try to think through what does the future look like in a caregiving environment.

Many of our members are taking care of aging parents, and they still have young adult children living at home with them, so a lot of us are sort of in this sandwich generation. Are there technology things that we can put into place to help with caregiving, for aging in place, for creating walkable and livable communities. Of the new cadre, about 40 percent were brought in from outside of AARP. The other 60 percent were already here at AARP and were given other opportunities.

 

Was geographic location important - bringing in people from some of those local markets?

We really want people who understand the community because at the end of the day, the real work is done by the people in our state offices. For example, take New York City. We have an office in Rochester, we have an office in Albany, we have an office in Manhattan on Third Avenue. And the vast majority of those individuals who work in that office actually come from New York State and New York City. We had a couple people from DC apply for jobs in states where they wanted to be relocated and that worked out well too.

 

This kind of transformation can be fairly disruptive. What was the impact on your human capital?

Last year by all measures we had probably the best year in our organizational history. We hit $1.7 billion dollars in revenue, we had a dashboard score – it wasn’t over a hundred, but we purposefully changed our dashboard measures to make them much more difficult to achieve. Our board was very, very pleased with the progress that we’ve made with the innovation lab, creating the enterprise strategy and innovation business unit, staffing that business unit with the right people.

I think the other thing that was very successful for us and kind of interesting is we had I think around 25,000 applicants last year for around 560 jobs. And we did that at a time when we were actually rebuilding our talent acquisition function. In an average year, we have a turnover rate of about 10 percent, about half voluntary and half involuntary. And we’re on track this year to fill that many jobs again, as we get our headcount back up to where we need it. So we have ended up with an organization that is, I think carefully realigned the way that it needs to be. The right functions are aligned in the right place. Trying not to sound like I’m criticizing what happened before, but it’s a new day and we need to think about things in a new way.

 

Given that these were voluntary outplacements, why did you offer outplacement support?

What we try to do for our employees is to practice what we preach. We believe that employers should provide transition assistance for their employees and so we’ve always made a concerted effort to do that in my time here. Every individual who decided they were going to take advantage of this opportunity had their own reasons. Truthfully, some people just wanted to go home and be with their family, take their retirement and work in the garden. But other people were going to take that opportunity to reassess their career and think about what it is that they might want to do next. So having those tools and having that service available to people I think was vitally important.

A lot of the people who left had been here seven, eight, nine-plus years. Providing someone with severance pay and then giving them information on the skills in demand, helping them with their resume and interviewing skills, and networking with other people who are looking for jobs was just the right thing to do.

 

Did people at the senior levels of AARP take advantage of this offer or was it mostly people at the middle and lower levels?

It spanned almost the entire employee population. When you get right down to it, about 10 percent of the employee population took advantage of the program. We didn’t have anybody at the executive vice-president level, but we had quite a few people at the senior vice-president level, the president level, all the way down the chain so to speak. It cut across all of the demographics, all of the pay ranges and responsibilities and we made a decision early on that if we could help it we would not deny anyone this opportunity if they felt like it was the right thing for them to do. At the end of the day we didn’t do that. We had very robust meetings and discussions with the leaders of each of those units and the basic question was is there anybody on your list that has said that they want to take advantage of this, is there anybody that you can’t do without, is there anybody who’s critical. And the answer across the board was no. So we did not deny anyone the opportunity to take advantage of that program.

 

Do you think the experience was positive enough that if it were necessary, the organization would consider doing it again?

I think we would do it again if circumstances warranted it. A lot of positive things came out of it. It wasn’t by any stretch of the imagination perfect, but I think it was handled extraordinarily well. We set up an AARP alumni group on LinkedIn, which has over a hundred participants now. We had a large going away party for all of the participants. They got a meeting with the CEO and a little parting gift and we feel like we've created a whole new cadre of brand ambassadors out in the community as a result of what we did. So I would not hesitate to recommend it again. I don’t see that we have a need to do that in the foreseeable future, but we try to keep our options open, so I think it’s something we would wholeheartedly endorse again if the circumstances warranted it.

 

 

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