AI in HR: The New Manhattan Project

[00:00:05] Mo Fathelbab: Welcome to today's episode of People and Strategy. I'm your host, Mo Fathelbab, president of International Facilitators Organization. We're here at Term 25, the largest HR conference in the world. People and Strategy is a podcast from the SHRM Executive Network, the premier network of executives in the field of human resources.

Each week, we bring you in-depth conversations with the country's top HR executives and thought leaders. For today's conversation, I'm excited to be joined by Laurie Monfiletto, CHRO at Los Alamos National Laboratory. For today's episode, we'll be discussing several different topics, but we'll start with the process of revamping the organization's benefits comp system.

Welcome, Laurie. Thank you so much. How are you today?

[00:00:56] Laurie Monfiletto: Doing well.

[00:00:57] Mo Fathelbab: Wonderful. Laurie, I wanna start with your career journey and how you got into the field of HR.

[00:01:02] Laurie Monfiletto: Well, it was not a straight line, that's for sure. I, received my master's in public administration from Syracuse in state and local finance. So I went into, city government and thought, oh, this is exactly what I wanna do.

When I got involved, they had me do finance, but they also had me do HR work, and I fell in love with HR work. It was something different every day. And I haven't looked back since.

[00:01:30] Mo Fathelbab: All right. Well, I love that. And I also am a recovering finance, finance person. So I, could relate and I see that the, softer side of HR is just much more, fulfilling, at least to me.

is that. Part of it for you?

[00:01:45] Laurie Monfiletto: Very much so. I, was able to see some, do something different every day. It showed me that, you know, those are the complicated things. The people side really work, trying to work through the issues and things. Finance, you can usually figure out a numbers, ga numbers situation, but this, you couldn't, so yeah, it was easy.

It was. More challenging.

[00:02:06] Mo Fathelbab: More challenging. Yeah. I love a challenge. So, since joining, Los Alamos, you've led, and revamped the entire HR organization over the past five years. Can you tell us about that project?

[00:02:17] Laurie Monfiletto: Yeah. So when Triad National Security, who's the federal contractor for Los Alamos National Labs took over, they realized that we had a new mission.

In Los Alamos, we had been a design agency for many years, science, technology, engineering, but we took on a new mission, and that is production of Pitt, which is the core of a nuclear weapon, and we had to change tactics. But we also had to look at our entire HR system. It was antiquated and although it served its purpose at the time, it needed a revamp.

so we could attract folks. We had, at the start we had about 7,000 employees. We've doubled that, in the past five years, and we had to do that through. Better benefits, better comp, so we could attract, but also retain employees.

[00:03:10] Mo Fathelbab: Yeah. And I understand also that you've revamped the comp system and, you've brought in variable pay.

what did that change entail?

[00:03:19] Laurie Monfiletto: So what ha what happened was, Los Alamos had. Base pay, but they really didn't. And maybe some retention plans, but they really didn't have an incentive plan, something that wouldn't incentivize. And given that we had the new mission, we had to have people learn new things, think about things differently and put in a production line.

So we sat down and talked to the leaders and said. Where is the group? What is the group that we need to incentivize? And they came, they decided that yes, it was our leaders and our, individual contributors, strategic, individual contributors. But that, you know, at first because it came from a university environment, you know, they wanted to have incentive comp for everyone, but that really wasn't.

The group that would in we needed to incentivize to make sure the mission would grow is that group, those leaders and indu, strategic individual contributors. So we focused on that group and we set up a in incentive comp plan. It's been there for five years and it really has helped us grow and improve our work.

And how did you roll out that comp plan? initially we, sat down, our leadership and I sat down something very similar to this, talking through what the incentive comp plan would be, but it was really our leaders who took it on, and talked to our employees and talked to the affected employees as to why we were doing it, but also talk to the employees that didn't have a part in it.

Describing the transparency of why it is the way it is.

[00:05:04] Mo Fathelbab: Yeah, and of course that's a change management process. How did your HR team and employees respond to these changes?

[00:05:12] Laurie Monfiletto: You know, I think once, once they understood the reasoning of why we, didn't do a peanut butter approach, but really targeted the certain folks because we needed to, those were the ones who could really affect the mission.

I think it was very helpful and I think they're very proud and accomplished of what they did, and they should be.

[00:05:33] Mo Fathelbab: So it was mission driven

[00:05:34] Laurie Monfiletto: it. It was mission driven. Absolutely everything that we did in human resources, the revamping was mission driven because we had to come up with something different.

[00:05:44] Mo Fathelbab: so Laurie, let's dig into the service delivery model just a bit. How, did that change go about and how did it impact people? How did they react to it?

[00:05:53] Laurie Monfiletto: So the service delivery model, we decided we needed to change that because. We put together a communications chart of how people, how employees, leaders got their information from HR.

And it was a spaghetti chart in the end. you went to anyone about anything and maybe you got the right answer or maybe you didn't. So we realized we really, we needed to restructure. So to have a, a, Customer service, pod that, really answered questions, either online or, calling, and then are revamping how our business partners did the work that they did.

I think it was unsettling at first. First of all, why is that? Yeah. for the HR employees. They, there had been fits and starts for years and years to revamp the structure for HR, but nothing had ever happened. So it was okay,

[00:06:54] Mo Fathelbab: so you were the first to change it and. Over a decade, perhaps.

[00:06:57] Laurie Monfiletto: Oh no. 20, 30 years. But that's because we had leadership who wanted the change, which we had. there were so many talented HR direct directors and CHROs there, and the years before I got there, the difference was the leadership. They were wanting to have the change and willing to stomach that change.

Change is hard. So first was, ta making sure the employees understood what we were doing. It took about a year, but they real started embracing it. and keep in mind, while they were trying to change the service delivery model, we were hiring 2,500 to 5,000 employees a year. At the same time. So it was a very busy time for our employees and managers.

it was. Uncomfortable because they had one belly button, their business partner that they go talk to and ask them anything, benefits, comp, anything. And that model just didn't work anymore. There was too much information. We have too many things happening, so we just couldn't do it. So with the leadership, we realized a change management plan would be important.

So we would go to key stakeholders and key constituents to talk about what they needed, what they did, weren't getting. And then as we worked on the model, we met with them on a monthly basis to give them updates where we were, what we were working on, what the model would look like, and. By the time we were about ready to, stand it up, we were meeting with them on a weekly basis to make sure to ha make sure they knew what to expect, to the point where they said, we got it.

You don't have to come anymore. Which we realized that was great the first day. we rolled out, of course the phones went down, which, you know, weather, but otherwise. People started using it. And I think in that regard, it was not a big uproar. It was just, let's start using it now. We continuously improve.

There are areas and glitches and things that we have to improve upon as we're two and a half years out, and we have new things that we need to work on that Oh. This may not be working. Our customers are telling us this isn't working very well. So we're continuing to do that. And with business partners, we're moving them to a strategic function.

So they're, taking on succession planning, taking on, you know, staffing needs, taking on, employee relations, you know, big picture issues, taking on organizational development and it's been. A difficult transition for them and our customers because our customers still want them to answer the basic questions and having to go through a, service, a, centralized model.

But I do think that, we're seeing great benefits in the re reduction in time, of the questions being answered. We're seeing a reduction in the. wrong answers, so to speak, or getting the right answers faster the first time. Still a ways to go, but it's also giving us data and metrics so we're able to put this year, service level agreements together, that have real metrics around it that we can say, you as a customer should be able to expect X, Y, and Z.

[00:10:41] Mo Fathelbab: Did you have to train the customers as well?

[00:10:43] Laurie Monfiletto: Yes, the customers need it, and we still do. I think a lot of people think, oh, one and done. we've put this new model in. Everyone will know what it is. We're starting to realize that no, they won't remember necessarily everything. So we need to do, that kind of, update and reminder of how things work.

Very continuously, much more than what we have been.

[00:11:10] Mo Fathelbab: So you also revamped the benefits and the compensation models. Were those done in tandem or as

[00:11:17] Laurie Monfiletto: they were worked on in tandem? It took our benefits. About two years to revamp the entire thing. The comp we did over time. So the incentive comp came in, was the first thing that happened, and then we put other compensation programs in that was happening at the same time that we were revamping the benefits.

Now the benefits, that was a different story. There were, there were situations, you know, we were able to provide more PTO, but we took vacation away. So there were, Long tenured employees that lost, a few a week or so of vacation, which of course was controversial. it took time and it took time to talk through.

Not everyone is still happy to this day, but I think a lot of people now understand the limitations of our old program. And so. They now understand that they have perhaps a better, stronger foundational, benefits program and for people coming in, it's one of the best packages around. So I, we do think our benefits program is one of the best in the nation.

[00:12:27] Mo Fathelbab: Did you lose anybody because of the change of the benefits program?

[00:12:32] Laurie Monfiletto: I do not think, no one has said that they, no one has said that they left because of benefits. In fact, if you look at our exit surveys, benefits were, People leaving because benefits is like 20th in our exit. compensation used to be two or three, now it's down to 10.

as to why people leave.

[00:12:54] Mo Fathelbab: Yeah. And so let's talk about the compensation program just a little bit. So when you changed that, did you have any challenges there?

[00:13:02] Laurie Monfiletto: We did. I think when you add incentive comp and it's only for a certain population, the rest of the population is, Hey, what's going on with me?

So that, that explanation and trying to show that transparency was important. And then when we realized we needed to put incentive programs together for certain areas because we had a. A real need, a mission need for those particular jobs to do a particular thing. I think that what we have found is that they've embraced it.

but we needed to really understand how that particular program helped. And so we're evaluating them now as to. Was this the right tool to use, or is this the right tool to use? So I think we constantly evaluate our compensation programs to see if it's still applicable for what we're doing or if we need to tweak it.

[00:14:03] Mo Fathelbab: I understand you also improved the benefits and service delivery model. can you tell us about those initiatives?

[00:14:09] Laurie Monfiletto: So, on the benefits, they were very antiquated. We had, for example, we had a disability insurance program that if you made more than $50,000 a year, you would get only a quarter of that.

So we revamped everything. We, had the same piece of pie, so to speak, in the dollars. But what we did was put in a PTO program. we put in a compassionate care program, which was pretty, which is pretty innovative, which is, you know, if your family is sick, meaning colds or they have serious medical conditions, you can use that pot of p of, time off instead of using your PTO.

So we added five weeks of PTO instead of. Three weeks of vacation, we have this compassionate care. So you we're not taking away from your PTO, but you can take care of your family. revamp the whole disability insurance. So there's a great foundational, component to it, or our medical is one of the best in the nation.

[00:15:13] Mo Fathelbab: Wow. And how do you know? How do you measure so that you could know when these programs are a success?

[00:15:21] Laurie Monfiletto: I think our measurement was being able to hire the right people at the right time. We were able to, double our workforce during that time period. Keep in mind that was the time of the great resignation.

We're, in the middle of pretty much nowhere and we were able to double the workforce and find the people we needed to find, and that was our measurement.

[00:15:43] Mo Fathelbab: So. How does Los Alamos compete for talent with technology and, private sector firms? Was the compensation and benefits package the answer or

[00:15:55] Laurie Monfiletto: no?

It's not the total answer. I mean, what our, goal and what our mission is, to solve national security challenges. That mission is very strong and people come for the mission. we are somewhat competitive, but they're there for the mission. So we're there for, we wanna make sure that they had the comp and benefits that we're foundational and, would attract them.

But we also have that mission that has. That really attracts people to come.

[00:16:31] Mo Fathelbab: And I would imagine when you say attracting people to come, you're recruiting probably globally or maybe nationally, but you know, so people have to move.

[00:16:41] Laurie Monfiletto: Yes. Yeah. and, a great majority of our workforce is on site, so people would have to move scientists.

Reese. R and d. Engineers. Engineers, they're coming and they're coming because they wanna be part of something. Bigger than they are.

[00:17:01] Mo Fathelbab: And interestingly, you know, the movie Oppenheimer was, all about the, nuclear bomb. And, in the movie, if I recall, they, people had to move. Like, he's like, we're gonna build this and people are gonna move here, and they're gonna come here.

So I'm just curious, how the movie has, impacted you all, if it hasn't anyway.

[00:17:22] Laurie Monfiletto: Oh, well it has. I mean, they filmed. Nearby. So that was very exciting for a lot of our employees were in the movie as extras, so that was fun to see. but I think. For us, it gave the, it, it gave us, you know, some credibility.

I think we already had high credibility, but even more credibility that, oh, this is a premier employer. We want to go there. If you wanna do great science, if you want to, really be a part of the national security. Challenge, this is the place to be. So I think it really brought a spotlight on them.

[00:18:00] Mo Fathelbab: Yeah. the other thing that strikes me is the security clearances must have an impact on your hiring pipeline. How do you, manage that?

[00:18:10] Laurie Monfiletto: Well, we actually have worked very closely with the federal government and we actually, you're right, people need clearances to work there. but we work very it, it is a very, streamlined process, so we've been able to get, that process worked very easily.

[00:18:31] Mo Fathelbab: Yeah. And looking ahead, how are you preparing your workforce for ai?

[00:18:36] Laurie Monfiletto: So in HR, I can talk to HR. HR is an area where we're trying to, get people comfortable with AI because as I like to, someone has said this to me, so I'm shamelessly stealing it, but you don't.

Do long division, anymore you use a calculator. Same with ai. You don't have to necessarily research or write everything word for word. You use AI to help you, but it's not to hinder you, but it's to help you, do your job quicker, better, faster, so to speak. So I think we're just getting people used to it.

However, on the, other side though, on the mission side, we are. Ai, the Energy Secretary has come and he said, AI is the new Manhattan Project, and we are taking that on as part of a mission is, to not for other types of. Scientific reasons and technological reasons to use ai. It's a very exciting time to be in Los Alamos.

[00:19:40] Mo Fathelbab: When you think of AI and what you've seen so far, have you seen AI displace any actual workers? I know that this is a conversation that we're having here at SH rm, and I've heard some estimates from some folks that. As many as 30% of their employees might be displaced by ai. But yet in the room yesterday, I asked people to raise their hands if they've had anybody displaced by ai.

And out of a room of about 500 people, I only saw like four or five hands. So I'm curious what your answer is.

[00:20:11] Laurie Monfiletto: No, it really, once again, back to the analogy of a calculator, we're basically using it to. Create more efficiencies. We're not using it to displace people, at least at this time. We really do see it as a tool for efficiency, not as a replacement.

[00:20:28] Mo Fathelbab: So no replacement just yet. Okay. that's gonna give some people a sigh of relief.

[00:20:33] Laurie Monfiletto: Yeah, I don't actually see it. We, have a very important mission and AI can do a lot of things, but we still need the human judgment. I don't see it replacing, I see it as a efficiency tool.

[00:20:47] Mo Fathelbab: It's an efficiency tool.

Absolutely. so last question. What is one piece of advice that has shaped your work or personal life the most?

[00:20:57] Laurie Monfiletto: See everything as something, as an opportunity. You know, we've been, going through. You know, different challenges, but look on the other side. Look to see what that opportunity is. It's not just the challenge part of it, but what, opportunity could you get from it?

And I think that's always something that in my personal life as well as my professional life, has allowed me to look at things differently and really consider things in a different vein, so to speak, and not, yeah. Be excited about it, not fearful.

[00:21:38] Mo Fathelbab: So I think that shift is critical, and this is something I learned in positive psychology to look for the bright spots.

We heard it yesterday, in fact, to look for the opportunities to look for even the gift, right? do you have a story or an example of how that shift has enabled you to transform what seemed like a challenge into a win or an opportunity?

[00:22:01] Laurie Monfiletto: Yeah, so when I was, earlier in my career, I was asked to do something different, and at first it scared me.

I was like, oh, I don't really know how to do this job. Okay. I started my career as a benefits administrator and they wanted me to recruit, and so I didn't know anything about it. So I went out, learned about internet recruiting, started to do internet recruiting, and we changed our whole process of how we do recruiting, because we did something different.

It's just going out there, grabbing don't, not being afraid, but really taking something on differently and thinking about it as a. An opportunity.

[00:22:46] Mo Fathelbab: I love it. Thank you so much. What a pleasure to be with you today, Laurie. Thank you. Thank you so much. Thanks for tuning in. You could follow the People in Strategy podcast wherever you get your podcasts.

Also, podcast reviews have a real impact on podcast visibility. So if you enjoyed today's episode, leave a review to help others find the show. Finally, you could find all our episodes on our website at SHRM dot org slash podcast. And while you're there, sign up for our weekly newsletter. Thanks for joining us, and have a great day.