How Philips is leading the change in workplace diversity and inclusion

Ryan Atkins has dedicated his whole career to bringing out the best in people. Equal parts idealistic and pragmatic, the Human Resources Director for Philips Australia and New Zealand understands that doing so is not only morally commendable, but commercially profitable.

Ryan’s story with Philips began in 2014. At the time, Ryan had only been with his then employer for six months and had reservations about leaving the company so soon after joining. But the opportunity to work for Philips, a company that boasts a long-held tradition of pushing the envelope on progressive workplace culture, ultimately proved too hard to turn down.

Roughly three months after starting the role, Philips announced that it would be divesting its lighting business and bringing together the company’s consumer, health and sleep divisions as a dedicated “HealthTech” business. Rather than view the loss of the lighting business as a major setback, Ryan framed the shake-up as a welcome opportunity to create a cohesive culture for the newly minted health-technology company.

The first step was to take stock of the company’s starting point, explains Ryan.

“One of the first things we did was ask team members to fill out behavioral 360 questionnaires on their manager’s leadership style, which helped us paint a picture both of how each manager intended to behave and how their behavior actually landed with others,” says Ryan. “We relayed this information back to the management teams, and then worked with each of them to determine what type of leadership behavior and ultimately the culture we wanted to collectively create at Philips.”

The consensus was that Philips wanted to be a company that fostered active engagement, free-flowing collaboration and daring innovation – and that getting to that point required the creation of a more diverse and inclusive workplace.

Prioritizing gender equality

Driven by the belief that achieving gender equality is one of the most effective means of creating an inclusive workplace culture, the promotion of more women to leadership roles was initially prioritized. According to Ryan, the strategy has had a hugely positive impact on the company’s workplace culture and, by extension, its overall business performance.

“The proportion of women in leadership roles in our healthcare business, which is very male-dominated, has gone from 16% to 29% in about two years,” says Ryan. “We also conducted behavioral assessments which showed that female leadership at Philips was generally experienced as more constructive than male leadership, which is consistent with industry research. And so, simply increasing representation of women across our management teams changed our culture for the better.”

But Ryan and his team didn’t stop there, deciding to take a preventative and proactive approach towards eliminating any unjustifiable gender pay gaps. 

“Research tells us that women typically don't ask for as much money as men upon hiring, which makes it easy to create an instant gender pay gap at recruitment,” he says. “So we’ve put in place clear rules around hiring and remuneration, ensuring that there's no gender biases when we bring people into the organization. 

For example, in a bid to eliminate biases, and optimize opportunity for diverse candidates, the recruitment process at Philips is now heavily informed by objective psychological assessments, while pay is offered at market rates, within set bands per role and independent of the preferred candidates’ current salary. What’s more, regular and ongoing data analysis help Ryan and his team prevent gender-based pay biases occurring later down the track.

“We also know that in Australia and New Zealand women generally retire with far less retirement savings than men.  This is primarily due to two factors – being paid less throughout their career, and career breaks to be the primary care-giver of children.  So along with eliminating gender-pay gaps, we pay 52 weeks of superannuation to anyone taking parental leave.  For me, this choice truly represents who we are as a business - one that cares about our people in the present and in the future, and also as a company that since inception has actively considered its larger role in making life better.”

Perhaps unsurprisingly, Ryan’s hard work hasn’t gone unnoticed. Earlier this year, in recognition of the efforts made by him and his team to promote equal opportunities for men and women in the workplace, Australia’s Workplace Gender Equality Agency (WGEA) recognized Philips as an ‘Employer of Choice for Gender Equality’, an official citation that Ryan says he was thrilled to receive.

But rather than just focus on women in the workforce Ryan also identified other hurdles for Philips to overcome.

Overcoming the ‘demographic cliff’

Philips’ rapidly ageing workforce presented one such problem. After company data revealed that 50% of its engineers were over the age of 55, Ryan turned his attention to finding ways to prevent the huge loss of technical expertise and client connections that the impending retirement of numerous experienced engineers threatened to bring about. 

“We put together a program that offered late-career employees the opportunity to sit down with external, trusted advisors and critically evaluate their paths to retirement, and then work with Philips to meet those objectives,” says Ryan. “Bringing in the advisors helped to challenge the idea that these employees would simply stop working at 65.”

For Philips, the aim was to encourage long-term employees to extend their working life by dropping down to part-time hours. If enough engineers did so, it would free up the necessary funds for the company to set up a graduate engineer program while crucially retaining the experienced engineers’ knowledge and expertise. The extra free time, Philips argued, would also give the long-term employees more opportunities to pursue non-work related interests and take a graduated approach to retirement. 

But broaching the topic of retirement with long-term employees wasn’t straightforward for Ryan. Many were initially dubious about his intentions. 

“The first iteration didn't land as well as I'd hoped. So, I went to members of the Philips Retired Persons Association about what I was trying to achieve, and this idea of “leaving a legacy” popped out of my mouth,” says Ryan. “It really resonated with them. They were inspired by the idea of having a lasting impact on the company.” 

The experience taught Ryan that managing change often boils down to telling the right story, and doing so in a respectful manner. 

Referred to as the ‘Life Options’ program, the strategy convinced numerous long-term engineers to help train their eventual replacements, while slowly reducing their working hours over time. It wasn’t just Philips employees who were impressed; Ryan’s solution to what many have called the ‘demographic cliff’ also won over Human Resources Director (HRD) magazine, which subsequently listed Philips as having one of Australia’s most innovative HR teams in 2018.

As HRD magazine, the WGEA and Ryan’s colleagues will attest, it’s an approach that’s delivered results, significant improvements that unsurprisingly provide Ryan with a source of great pride.