Hilti Korea's human-resources focus pays off
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Chung Hyun-suk, president of Hilti Korea, poses in the company's office in Gangnam district in southern Seoul. Hilti Korea was one of the 10 companies to win the "Best Employer" recognition by Aon Hewitt this year. / Courtesy of Hilti Korea
Power tool company wins best employer recognition after 30 years in Korea
By Kim Ji-soo
The Hilti brand’s familiarity is noticeable for a professional power tool manufacturer, perhaps because of its signature red tool box seen on construction sites or in the backyards of do-it-yourself guys who use its tools for home repairs and other chores.
“We call it the red marketing — the red tool box and the red car,” said Chung Hyun-suk, CEO of Hilti Korea, in a recent interview with The Korea Times.
Hilti Korea provides innovative products, equipment and services for construction professionals. Its bestsellers, namely anchors, nailing machines, chemical firestop and power tools are often used on landmark construction projects, including the Lotte World II high-rise and the second passenger terminal at Incheon International Airport.
But in addition to its commercial success, the company was voted this year one of the top 10 best employers in Korea by Aon Hewitt, one of the world’s largest human resource consulting companies. For Hilti Korea, which marks its 30th year in Korea, it was the first inclusion in the recognition that rates companies based on assessment and feedback of employees, the CEO and human resources people.
“One of the main reasons it was voted so high is that Hilti Korea shifted to putting people first, in accordance with the Liechtenstein-based group’s core values,” Chung said. Until only two years ago, the company had been focused on increasing sales since entering the market in 1986.
Interestingly, the company’s foray into the Korean market was faster than those of other industry power players such as Bosch and Stanley Black & Decker, because its construction materials products such as anchors were already familiar to Korean construction workers, many of whom used the products while working overseas.
“Hilti products are familiar to the Korean construction workers who worked on construction sites in the Middle East in the late 1970s,” Chung said. In the heyday of industrialization, Korean workers went to the Middle East to earn higher wages and valuable foreign reserves. He said once professionals use Hilti products, they realize that their quality and durability make the higher prices worth it.
“Our products’ value allows users to finish tasks early, which means lower labor costs; our tools last long and do not break down or malfunction often, which means that overall labor and personnel costs will likely be lower also,” Chung said.
The significant size of the Korean construction industry, ranked 15th in 2015 in terms of investment according to IHS Construction Outlook, provides opportunities for growth for companies in related industries, like Hilti.
Hilti’s horizontal corporate structure, which promotes communication and initiative among employees, also helped the company gain the Aon Hewitt recognition. Hilti has adopted its parent company’s corporate culture and core values — “integrity, courage, teamwork and commitment.”
Asked if the concept of commitment is recognized by today’s young workers, Chung said that it is at Hilti Korea. Each Hilti worker recognizes the concept and appreciates their fellow workers’ efforts. “These core values and our corporate culture prevail across Hilti companies around the world.” The company, which started in the European principality of Liechtenstein in 1941, employs around 24,000 employees in over 120 nations. It is interesting to note the number of worldwide employees when Liechtenstein has a population of around 36,000.
Yet at the same time, each company adapts to its local market, which translates into further growth for both the company and its workers.
Hilti Korea has 184 employees, including 18 engineers. It has seen both profits and losses. But last year, the company turned into the black, with 68.4 billion won in sales and 2.8 billion won in operating profit.
As more affordable competing products, particularly those from China, enter the market, Hilti needs to continuously promote its products to consumers, primarily through “direct contact” with customers and “direct distribution,” which are Hilti Korea’s strong marketing capabilities. Chung said the company hopes to further sharpen its “direct contact” with customers — where salespeople go directly to the sites and conduct demonstrations for would-be buyers. The company currently has about 7,000 clients, mostly in construction, and the plan is to have its salespeople cultivate more specialties in reaching out directly to them.
Chung earned bachelor’s and master’s degrees, both in architectural engineering, from Yonsei University in Seoul, and earned an MBA at INSEAD in France. He was an engineer with Research Institute of Industrial Science and Technology and worked in Korean firms such as Yehwa Construction. He joined Hilti Group in 2008, and took the helm of Hilti Korea in January 2014.
As a young CEO at a multinational company, he said he is well-suited to the corporate environment where people can rise up the ranks as they put in more effort. “You have to be really a hands-on person,” he said, as you go up the corporate ladder. Chung said his role models include Hilti board members such as Matthias Gillner, an executive board member of Hilti, who visit sites, and meet employees and customers.
As Chung himself has the support of his bosses, the company’s board members and the company, he said he is most fulfilled when his employees perform well.
“As a leader, Icannot do everything,”Chung said, expanding that a leader must trust and delegate. “Also, I believe stellar people should be working for me. That makes my life easier,” he said, laughing.
When he first took the helm of the company, he said he faced the dilemma of focusing on what was important versus what was urgent.
Asked about his plans for the company, Chung said the goal is to work toward “Champion 2020.”
“That is, to double the 2014 sales by 2020 and to become one of the top 10 companies within Hilti Group,” while retaining the distinction that it is a great place to work, Chung said.
Chung also said he hopes Hilti Korea will become one of the top three companies within the group in the Asia-Pacific region; it is currently in the top five in the region, following the branches in China, Australia, Japan and Hong Kong.
“The competition is always tough, but we have our specialties,” Chung said.