News
March 3 2009
Kennametal: Focus on Talent, Technology and Values Drives Business Success
The metal in Kennametal's name speaks to its heritage, which goes back to a 1938 cutting tool innovation that revolutionized the machining of metal. Today, innovation is still at the core of this global firm that engineers and produces the tooling and advanced materials used in most every manufacturing process.
"Kennametal products are used to manufacture virtually everything you'll touch today, from the time you wake up this morning to when you turn off the lights tonight," says Kevin Walling, vice president and chief human resources officer for Kennametal Inc. "Our products and processes are key to the making of everything from food processing and medical equipment to airplane engines and energy."
To serve its global operations, Kennametal's HR function is strategically aligned with the business. Its 140 employees are deployed along regional and functional lines to serve a workforce of 13,000 in more than 60 countries.
Kennametal employees also work together under the corporate motto of Talent Wins. "Kennametal really understands that acquiring, developing and retaining the right talent is critical to its success," says Walling. "It also has a long established culture of developing talent and is known for its values and ethics. For an HR professional, it's a great platform to lead from."
Global Expansion and Growth: Meeting the Challenge through Talent
Not surprisingly, Kennametal HR plays a critical role in the company's business strategy and has aligned their strategies with global business imperatives. Those imperatives center on enabling the company to reach its goals of leading innovation, generating a third of revenue from each major region (Europe, North American and emerging economies), and becoming an employer of choice with an inclusive global culture.
"Since I came on board in 2005, HR's main challenges have focused on building a performance culture, developing our talent pipeline to include more selling and technical expertise, enhancing manager competence, and establishing HR capability around the world," says Walling. Building that HR capability and creating a global vision is crucial. "We wanted to ensure our HR expertise and support existed in each region before business expansion," he adds, "in order to best serve our customers and accelerate business growth."
A Hard Sell and Lessons Learned
Walling notes that it wasn't easy to sell HR's talent acquisition and internal development strategies to management. "We had to show the business it was more effective and productive to bring these capabilities in-house," he says, "and that doing so would enable us to accelerate our talent initiatives and focus on becoming an employer of choice." Luckily for Walling, HR's efforts are netting some convincing metrics.
"It's been tremendously successful," says Walling. "In the last three years, we reduced our cost and time to hire by over 50 percent in each region, and drastically cut our reliance on outside agencies. We can now recruit talent in each region more efficiently than the industry standard."
Kennametal's HR team also learned several lessons through this process, including the power of a clear employer brand and of having a global talent game plan with region-specific considerations.
"We found that creating and communicating a meaningful employer brand—internally and externally—built the momentum needed for a successful change process," says Walling. And Kennametal's ability to proactively define its talent needs by region created opportunities for job enhancement, promotions and timelier recruiting.
Walling says, "We learned how to articulate our advantages as an employer offering career development, continuous learning, total rewards and employee engagement." Those efforts paid off for retention too. "Our voluntary attrition has averaged seven percent for the past two years, which we view as a distinct competitive advantage" adds Walling.
Sustaining Success in an Economic Downturn
The positive momentum from Kennametal's focus on becoming an employer of choice led to the creation of an employee engagement survey. Walling sees the survey, titled "Voice of the Employee," as a sign of success for his function and the management team overall. The survey's high global participation rates have allowed HR to address key areas of engagement throughout the company.
"Through the commitment of our managers, the survey has significantly improved communication," says Walling. "We monitor our progress quarterly on survey-generated action plans, and managers are now asking how we can use the survey to reengage the workforce during the economic challenges we’re facing." That level of manager involvement in an employee survey is something many HR leaders hope for but few see.
Like others, Kennametal is adjusting to the global economic downturn; HR is playing an important role in those adjustments. Two years ago, the HR leadership team set out five strategic imperatives for the function: building individual and organizational capability, ensuring proactive global talent management, driving employee alignment and retention, building global HR capability and systems, and managing change.
"These strategic imperatives continue to be right for Kennametal in a down economy, and with them as a guide, we can emphasize the strategy (or strategies) that best meets the company's evolving needs," says Walling. For example, change management has come to the forefront as the recession expands.
"Clearly communicating what our future includes for every employee and making sure we give reason and incentive to participate here is critical—especially in the current environment," explains Walling. "That’s good change management."
Despite the tough economy, or perhaps because of it, creating a great place to work while building HR excellence remains at the top of Kennametal's HR agenda. For Walling, partnership in Cornell's Center for Advanced HR Studies (CAHRS) will become one core component in achieving that vision.
"We're extremely pleased to be part of CAHRS. The global reach and topics discussed in this forum are right in line with what we want to achieve in our function," says Walling. Considering Kennametal HR's results, especially in talent acquisition and employee survey success, other CAHRS partners can learn from this winning HR team as well.