Page 1

COVER HRM10 3:nov08 13/11/2008 11:12 Page 1

OVERNIGHT SUCCESS www.hrmreport.com • Q4 2008

WHY FEDEX’S PEOPLE ARE KEY TO ITS STRATOSPHERIC GROWTH Page 26

FIGHTING FIT

PERSONAL FAILINGS

IF IT AIN’T BROKE

A healthy workforce is a productive workforce

Business ethics and the economic crisis

How Edward Jones’ culture is helping it buck the downturn

Page 32

Page 38

Page 98


trouble or test?

10775_Regent_Ads_HRM_mech_10x.indd 1

10/11/08 09:10:33


Great leaders can tell the difference.

When your employees can properly assess situations and take the initiative to lead their peers, your organization thrives. With Regent University’s flexible online programs, you can introduce your workforce to leadership skills that transform them into pivotal figures who can weather any storm. Learn how Regent can help strengthen your personnel at regent.edu/hrm

regent.edu/hrm

10775_Regent_Ads_HRM_mech_10x.indd 2

10/11/08 09:10:39


JWT1.indd 2

10/11/08 09:04:58


JWT1.indd 3

10/11/08 09:05:02


GordianHealth.indd 2

10/11/08 09:02:46


GordianHealth.indd 3

10/11/08 09:02:48


OmniprepaidVISA.indd 1

10/11/08 09:07:12


EDITORS NOTE HRM10:nov08 12/11/2008 15:39 Page 7

FROM THE EDITOR

7

Man vs. machine Technology is changing the HR landscape, but it has its limits.

G

“HR today has the capabilities to be that strategic partner whether it’s in recruiting, talent development, performance management, employee relations or compensation.” FedEx’s Judith Edge (page 26)

“We need to make sure we understand the difference between acceptable profits and greed, that we understand that there’s no substitute for hard work.” Keith Darcy of the Ethics and Compliance Officer Association (page 38)

rowing up, I was a big fan of the cartoon series The Jetsons. It posited a future of impossible ease and technological improvement, where robots catered to our every need. Perhaps more importantly, it was a future where I would have my own personal jet pack. As time has passed, the innovations I craved as a child have remained frustratingly distant. That mechanized butler still seems a long way off. However, if you judge progress by slightly more rational metrics, we are clearly living in a world unrecognizable from that in which my younger self watched his Saturday morning cartoons. The kind of computing power we now carry around in our pockets and briefcases inhabited refrigerator-sized boxes not that long ago. In an incredibly short space of time, the very shape of our lives has been altered irrevocably. HR too has been transformed by technology. Anyone who has been in the sector for a decade or more will have seen the changes for themselves. Paper based systems have given way to sophisticated applications which allow HR professionals to track applicants, manage performance, administer benefits and much more besides. These advances have streamlined processes and given managers a much clearer view of their people operations. Automation is giving HR the opportunity to become less transactional and more strategic, to really become an effective partner to business. But while technology’s power is bringing major benefits, there is a risk that we could come to rely on it too much. If processes are reduced to a series of box-ticking exercises, the danger is that the human element of HR could be lost. A workforce could be reduced to nothing but data, people mere stats on a database. Such an excessive dependence on technology overlooks a number of vital concerns for HR professionals, not least that of ethics. Take our current economic crisis. Finance is a heavily regulated industry and strict compliance limits are placed on its people, often in the form of technological controls. But even without breaking their own rules, traders were able to bring the system to its knees by operating at the very limits of acceptable business behavior. Compliance is one part of the puzzle, but it can only be effective if there is a similar focus on doing the right thing. Likewise, regardless of how advanced HR technology gets, it will still fall to human practitioners to manage its less tangible elements. This brings to mind a very different vision of the future than that depicted in The Jetsons. In Stanley Kubrick’s 2001: A Space Odyssey, a manned mission is nearly undone when HAL, the ship’s sentient computer, goes rogue. Instead of helping the crew complete their mission, the computer instead begins to eliminate them. It eventually takes the efforts of the last surviving crewmember to completely avert disaster. I am not suggesting that HR systems might one day rise up against their human masters, only that professionals need to retain their traditional skills no matter what technology’s capability. After all, it is called Human Resources for a reason.

“Automation has reduced the workload and the time spent on transactional activities. It allows HR to focus on these more strategic initiatives around talent.” Ken Dude of Edward Jones (page 98)

Huw Thomas


Hallmark.indd 1

10/11/08 09:03:27


CONTENTS HRMUS10:oct08

13/11/08

09:46

Page 9

CONTENTS FEATURES

9

Q4 2008 www.hrmreport.com

Healing hands

32

OhioHealth’s Debra Plousha Moore explains why people are the lifeblood of a thriving organization

26 Time to deliver How does a global entity like FedEx continue to excel on people and performance? Corporate VP of Human Resources Judith Edge explains

38 Do the right thing? Why the economic crisis is a direct result of a collapse in business ethics

98 Keeping up with the Joneses While its peers founder, Edward Jones continues to perform. Are its people really the key to its success?

26


CONTENTS HRMUS10:oct08

13/11/08

08:36

Page 10

CONTENTS

10

WORKFORCE MANAGEMENT, RECRUITMENT & EDUCATION, HEALTH & BENEFITS

ROUNDTABLE DISCUSSION 88 Online Education

60 The power to improve HRM sits down with Margaret ‘Peggy’ Pego of PSEG, to find out how the energy company is training to beat the looming skills shortage

130 Healthcare Savings 64 Automatic for the people

What impact is the economic slowdown having on employee relocation?

IT has the potential to transform HR into a genuine strategic business partner. But only if those involved stand up and make their voices heard, says Jacqueline Kuhn

48 Humanizing your resources

68 Getting the right results – part one

Are ethics officers and HR professionals kindred spirits? HRM spoke with Paula Desio to find out how deep the connection goes

Exploring the Results Oriented Work Environment, one of the most innovative ideas in management

54 Tipping the scales

70 School’s out?

Can leadership skills really help enrich other aspects of your life? Stewart Friedman thinks so

Learning and development in an economic downturn. By Josh Bersin

42 Grinding to a halt?

ASK THE EXPERT 46 Eric Hutchison, Vangent 62 Lynne Morton, TalentScope 72 Stephen Paskoff, ELI 78 Darren Revell, Attract HR 118 Beat recognition Tom Miller explains the relationship between recognition and reward programs and corporate culture

“When I would talk about ethics, especially to people directly in the Wall Street community, I would typically get a response, ‘What do you want, Darcy? Do you want ethics or profits?’” Keith Darcy, Ethics and Compliance Officer Association

INDUSTRY INSIGHT 66 Frances Martinez Myers, Employee Transfer Corp 116 Tron Emptage, Progressive Medical 126 Evan Scott, Shumsky

74 Relationship matters What value is there in improving the relationship between recruiters and potential candidates? HRM speaks with ERE’s Todd Raphael to find out

81 Spy games Leonard Nolan goes undercover with online recruiting tools for would-be secret agents

82 The future is now The RPO Alliance on the growth of technology

104 Just what the doctor ordered? Innovation, obesity and the future of Pharmacy Benefit Management

110 A healthy product Healthcare reform is on the government’s agenda. But what does this mean for businesses and HR? Karen Ignagni of AHIP explains more

114 It pays to be healthy

66

Barry Barber of Kimley-Horn & Associates tells HRM about the positive side effects of the firm’s decision to pay 100 percent of employee healthcare premiums

38


CONTENTS HRMUS10:oct08

13/11/08

08:36

Page 11

IN THE BACK

64 136

140 136 Working life A look at unusual perks 138 Matt Buttell How GLBT-friendly is Corporate America?

54

140 Spotlight Coping with job loss 142 In review A look at this quarter’s business books 144 Final word David Nosal, Nosal Partners

EXECUTIVE INTERVIEW 76 John Fortino, Velocity Resource Group 108 Dr. William Fleming, Humana 122 Roger Reed, Gordian Health Solutions

GOLD SPONSORS


CREDITS HRM10:nov08 12/11/2008 14:29 Page 12

4-6 April 2009 The Fairmont Mission Inn Sonoma, California Th soonere regis you more y ter, the ou sav e! S ee gpsum for deta mit.com ils

www.n

Chairman/Publisher SPENCER GREEN CEO/Publisher JAMES CRAVEN Director of Projects ADAM BURNS Editorial Director HARLAN DAVIS

Editor HUW THOMAS Managing Editor BEN THOMPSON Associate Editor MATTHEW BUTTELL Deputy Editors NATALIE BRANDWEINER, FRANCES DAVIES, REBECCA GOOZEE, DIANA MILNE, JULIAN ROGERS, MARIE SHIELDS,

Creative Director ANDREW HOBSON Design Directors ZÖE BRAZIL, SARAH WILMOTT

The Next Generation Pharmaceutical Summit is a three-day critical information gathering of Clevel technology executives from the financial services industry.

Associate Design Directors MICHAEL HALL, CRYSTAL MATHER, CLIFF NEWMAN Assistant Designer ÉLISE GILBERT

Online Director JAMES WEST

A Controlled, Professional & Focused Environment NGP ’09 is an opportunity to debate, benchmark and learn from other leaders. NGP ’09 is a C-level event reserved for 75 participants that includes expert workshops, facilitated roundtables, peer-to-peer networking, and coordinated technology meetings.

Online Editor JANA GRUNE

Project Director DENISE TEIXEIRA Sales Executives ROBERT FISHKIN, MORGAN GAZETOS, PRIYA PATEL, MORGAN MORILLO, JOHANNA BOTTA, CONOR DUFFY

Finance Director JAMIE CANTILLON Production Manager ROBERT SIMMS

A Proven Format

Production Coordinators HANNAH DRIVER, HANNAH DUFFIE,

This inspired and professional format has been used by over 100 CIOs and CTOs as a rewarding platform for discussion and learning.

Director of Business Development RICHARD OWEN

JULIA FENTON

Operations Director JASON GREEN Operations Manager CHRISTIAN MORATO

“What stood out was the quality of the speakers chosen to moderate the roundtables. I like working with genuine facilitators who can open people up and keep the discussion moving” Paul Bergamo, VP & CIO Liberty Mutual “There is no expense or effort spared to ensure that everyone has a good experience” Matt Calman, Senior Vice President, Bank of America

Find Out More Contact NGP at 212 920 8181 www.ngpsummit.com

Subscription Enquiries 212 904 0888. www.hrmreport.com General Enquiries info@gdsinternational.com (Please put the magazine name in the subject line) Letters to the Editor letters@gdspublishing.com

HR Management (Q4 2008) is published four times a year by GDS Publishing. All Rights Reserved. GDS Publishing, 33 Whitehall Street, 14th floor, New York, NY 10004. newyork@gdsinternational.com 212.920.8181

Legal Information The advertising and articles appearing within this publication reflect the opinions and attitudes of their respective authors and not necessarily those of the publisher or editors. We are not to be held accountable for unsolicited manuscripts, transparencies or photographs. All material within this magazine is ©2008 HR Management.

GDS International Queens Square House, 18-21 Queen Square, Bristol, BS1 4NH, UK. +44.117.921.4000 info@gdsinternational.com


ADVERTISING FEATURE

The Evolution of Talent Acquisition

T

raditionally, companies divide workforce talent into full time, contract labor, and project sourcing categories and maintain completely separate teams to manage the acquisition of each. The acquisition of full time talent receives a more thorough vetting because full time talent is considered a company asset to be developed, trained, and retained. Contract talent is viewed as a flexible addition to the workforce that allows companies to keep costs

down while pushing ahead towards results. Companies use project talent to complete specifically defined initiatives while the third party company maintains responsibility for the outcomes. As the global workforce evolves, how does this model evolve to a higher effectiveness? What needs to change in order to integrate and balance the acquisition of talent across a company?

Direct

Project

Contract

The Case for an Integrated Talent Strategy The implicit challenges and risks associated with the separate ways that companies administer their talent sourcing programs set the stage for a new point of view. Clearly, improvements in these processes are strategic necessities to the continued success of any organization. The correct path is to: • Assess the current workforce by skills and proprietary knowledge to develop an “as is” talent map • Assess the current sourcing channels for effectiveness and efficiency • Evaluate the roles to determine if the current employment arrangement creates the best value for the organization • Develop a migration plan that executes the strategy , in order to have a “right sourced” workforce that allows for flexibility, talent development, risk mitigation, and cost controls.

Please look for our article at : http://hrmreport. com/currentissue/currentissues.asp 

Guidant Group Traditional Talent Sourcing Traditional talent sourcing has typically been defined by locality, thus leading to different sourcing channels for different employment arrangements. • Direct hiring has for the most part been a collaborative process between line managers and HR recruiters, though occasionally supplemented by search firms. • Typically, contract labor has been hired by line managers, and only more recently have we seen increasing cooperation with Procurement and HR in this area. • Project staff has been hired to do specific tasks and/or assignments, mostly in agreement between a line manager and a third party firm, although increasingly supported by a procurement department.

Guidant.indd 1

This disparate talent acquisition process often results in haphazard and loosely connected practices where the main focus is on fulfilling a single job or role. The time span and skill level needs have for a large part defined the channel chosen to acquire that talent. This separation of process has in turn created completely separate support paths for talent acquisition, including the policies, processes and technological support for these programs. As a result, there is an increased compliance risk. In a truly global workplace where there is variation from locale to locale and a much higher emphasis on compliance, an integrated talent plan is critical.

Guidant Group’s mission is to develop and help implement a comprehensive and integrated talent acquisition plan for our clients. This plan encompasses full time, contract, and project based talent needs. As leaders in this space, AJ Althuis - Guidant Group’s VP of Consulting Services who has over 15 years of international experience in HR Consulting, HR Strategy & Management - will be presenting a series of articles online which will describe the process for developing an integrated talent strategy. Information on the Guidant Group can be found at to our website, www.guidantgroup.com.

10/11/08 09:03:07


UPFRONT HRM 10 NEW:12june

12/11/08

15:22

Page 14

UPFRONT

14

A NEW BEGINNING After a world-changing election, now the real work begins for President Obama.

14

www.hrmreport.com

P16 People skills P18 From the vault P20 The Five-Minute Executive P22 The burning issue

B

ut what impact will the United States’new leader have on the country’s labor environment? At first glance there are a few causes for concern, at least from the perspective of employers. Major promises of the Obama/Biden ticket centered around strengthening workers’ rights to unionize, protecting strikers and raising the minimum wage. While these are all be admirable objectives in many respects, there is little doubt that they have the potential to prove extremely costly, particularly for small and mediumsized businesses.

However, at least some of these losses could be counteracted by the new administration’s pledge to encourage innovation and job creation by eliminating capital gains taxes on start-up and small businesses. They also promise to support small business owners by providing a $500 ‘Making Work Pay’ tax credit to almost every worker in America. Self-employedsmall business owners currently pay both the employee andtheemployersideofthepayrolltax,andthismeasure will reduce the burdens of this double taxation. Obama also hopes to build up American business by investing in the sciences and doubling feder-


UPFRONT HRM 10 NEW:12june

12/11/08

15:22

Page 15

NUMBER CRUNCHING

EXCEEDING EXPECTATIONS

$2.4 billion

I

Estimated cost of this year’s presidential election campaign

71million Number of US viewers who tuned in to witness Obama’s historic win

65 million Number of votes won by Obama compared to McCain’s 57 million, according to exit polls

$150 billion Will be invested over the next 10 years to advance the next generation of biofuels and fuel infrastructure in an effort to create 5 million new green jobs

al funds for research and development. After eight years of an administration that sometimes seemed actively hostile to science, the move would be a welcome one. It would hopefully foster home-grown innovation, help ensure the competitiveness of US technologybased businesses and ensure that 21st century jobs can grow in America. But after inheriting the worst economic situation in living memory, there is the possibility that President Obama’s hands could be tied by circumstance. Change may be coming, but it remains to be seen how drastic that change will be.

n 2008 PenSoft – a manufacturer of payrollsoftware designedspecificallytohelp small to mid-sized businesses and payroll service providers – focused on developing e-filing technology for employment tax forms in PenSoft Payroll. This 94X program wasreleasedinJuneandwasa hugesuccess, exceeding all expectations. The firm managed to increase participationine-filingbythoroughlyeducatingitscustomers, offering personal customer service and developing easy to use software. PenSoft’s goal continues to be to make the filing and paying of taxes as easy and convenient as possible. A few of the 2008 highlights of the firm’s success in serving its customers were

implementing the 94X web service to help alleviate the administrative burden placed on employers while complying with federal reporting requirements, educating small businesses on the value of e-filing to promote voluntary compliance and increased efficiency and the redesign of the firm’s Knowledge Database to improve assistance through this 24/7 service channel. PenSoft anticipates 2009 will be another year filled with accomplishments. The firm is committed to providing the best value in payroll software, backed by program support unsurpassed in the industry. With over 20 years experience in payroll software development, PenSoft is certain it knows what is required to remain a leader within this industry.

AUDITING JUST GOT EASIER Laurdan Associates, Inc. have announced the release of the ninth edition of its internationally acclaimed HR auditing tool, ELLA, the EmploymentLabor Law Audit.

O

rganizations face significant threats from misaligned and ineffective human resource management policiesandprocessesandareexposed to considerable liabilities from unlawful employment practices. Misaligned and ineffective human resource management policies and processes prevent organizations from achievingbusinessobjectives,negativelyeffecttalent management, increase labor costs and lower productivity. Unlawful employment practices expose organizations to claims, lawsuits and legal expenses, negatively impact organizations’ employment brand and reduce profitability. More importantly, these threats and liabilities can prevent organizations from seizing business opportunities. Integrating strategic management, risk management and internal auditing best practices, ELLA provides users with a systematic, disciplined approach to evaluating and managing their most important asset: their human capital. As an auditing process, ELLA helps organizations collect critical evidence, ensure compliance and manage outcomes. ELLA of-

fers a suite of auditing tools and services that enhance the value of the organization’s human capital while reducing its exposure to employment related liabilities. The ninth edition of ELLA includes the HR Auditing Worksheet, a tool that helps organizations assess the five critical components of HR auditing:activities,behaviors,risksandopportunities, internal controls and outcomes. It also includes HR Audit Maps that provide a graphical presentation of employment related risks and employee satisfaction. Its release also expands the HR auditing consulting services of ELLA Assistance, which now includes customized HR audit products, train-the-trainer HR auditing programs, on-site and off-site reviews of ELLA findings, thedevelopmentoforganizationspecificHRmetrics, benchmarking and the use of employee surveys to validate audit findings.

For more information, contact Ronald Adler, president-CEO, Laurdan Associates, Inc., 301-299-4117 or radler@laurdan.com

www.hrmreport.com

15


UPFRONT HRM 10 NEW:12june

12/11/08

15:29

Page 16

PEOPLE SKILLS

16

Make the right things easy, and the wrong things difficult!

Leadership expert Toni Chinoy on making the right choices under pressure.

D

o not be naïve! In any tough environment, people will follow the path of least resistance. You will often follow the path of least resistance, in spite of a sophisticated sense of right and wrong. In a threatening situation when feeling exposed, individuals or groups respond in terms of survival. The survival instinct rarely focuses on the ‘right’ thing to do. Why do we run from bears, pull back on the stick creating a greater stall in a stalling airplane or accidentally yank a horse over backwards to stop it from running away: all bad Toni Chinoy decisions, but natural in the moment. You may be confounded by the bad choices people make, but when you are in the game, “How do I best get through this moment?” is often the relevant question. Good people, ethical people, become expedient as they quickly react to unfolding threats. The future and the potential penalties are simply not yet here. Expedience becomes habit and values are something to be examined at leisure. There is logic to ethics. The ethical path may be the harder path to follow in the moment but it is almost always the path to the best outcome. The student pilot learns that the instinct to pull back on the stick when the plane is stalling will cause the plane to stall further. He or she learns through repetitive practice to short circuit instinct and push for-

16

www.hrmreport.com

ward, increasing the speed even though the plane is now moving faster toward the ground. We have learned that running from the bear is the wrong thing to do, even though any sane person would have that instinct when confronted. A trained woodsman knows better. In other words, we must teach a way of thinking that makes the right things easy to do and the wrong things difficult. We must get comfortable with the sensation of speeding toward the ground when our plane is stalling because we know that is our ultimate safety net. Ethical people know there are no other options. They cannot think of running from the bear because they are so aware that to do so increases the danger. They are willing to take the short-term hit of the loss of a job, or the disfavor of the power structure because it is easier than the long-term impact of going to jail or facing the disappointment of their followers. The training starts on simple things like confronting bullies or bosses who are short sighted. That training involves two elements. First, the examples of what can go wrong if your instincts take over must be emphasized. Second, and more importantly, we have to identify and teach the correct responses for crisis. We have to teach people how to push forward on the stick when they want to pull back. And we have to teach it until it becomes second nature. Skip the platitudes about values and teach common sense!

AN AGE-OLD ISSUE

N

ew research suggests that generational differences could be causing older workers concerns over fears of redundancy, the relevance of their skills in the modern workplace and resentment from younger colleagues. The study, conducted through 50 indepth phone interviews, shows that older workers believe younger associates drop them from critical informal communications networks, often blocking access to important business developments. Older workers are also concerned that companies inadvertently close-off career paths and training opportunities, assuming they are either uninterested or unwilling to accept new challenges. Whether it happens overtly or unintentionally, mature workers find it difficult to make strategic decisions or career moves because communication seemingly closes down around them. The advice offered is to implement awareness training during the onboarding process about generational differences, office and meeting etiquette. Older workers also need to use new approaches to reach out to younger colleagues, such as initiating social outings and keeping up with modern communication methods such as text and instant messaging.


We focus on payroll. So you can focus on your business.

All companies do payroll. But it is not the only thing they do. PenSoft Payroll is a complete payroll solution for small to mid-sized businesses. We maintain the tax tables to ensure your payroll software is in compliance so you can focus on your business. To increase efficiency PenSoft Payroll offers remote data entry and the capability to electronically file IRS Forms 941, 940, and 944. Payroll software priced from $149 annually. Call PenSoft today to register for a personal demonstration. Let us demonstrate how PenSoft can save you money. www.pensoft.com

Pensoft.indd 1

888-PENSOFT (888-736-7638)

10/11/08 09:07:35


UPFRONT HRM 10 NEW:12june

12/11/08

15:23

Page 18

FROM THE VAULT Q2 2008

18

Jim Freer Ernst & Young’s Americas Vice Chair of People

Earlier in the year, we spoke exclusively to Jim Freer who, after four decades of working at the same firm, was on the verge of retirement. “One of things that attracted me to this role is I just have a passion for our people,” he told us, explaining that last year 94 percent of Ernst & Young’s associates said they were proud to work there. To read the article in full,access an entire archive of past issues and subscribe to the magazine, please visit www.hrmreport.com

THE FORECAST

T

he latest employment report from the US Bureau of Labor Statistics paints a dark picture of the US job market scene. We investigate what it all means.

18

www.hrmreport.com

1 2 3 4 5

MORE SECTORS BEING AFFECTED Job cuts have now permeated the retail, professional services and hospitality sectors. 40,000 retail jobs were cut last month, highlighting how consumers are spending less.

THE SIX-MONTH ITCH One in five job hunters have been looking for work for more than six months. Competition is particularly fierce and candidates are looking for positions below their capabilities.

STRAINED NON-PROFIT AGENCIES Budget constraints are preventing many agencies from hiring more staff and many are being forced to volunteer as job opportunities simply aren’t there.

WE’RE IN A RECESSION Recent business surveys have shown that only 25 percent of employers intend to add staff in the coming months. These figures clearly portray a recessionary job market.

HR’S GOT TALENT

N

ew research from the Human Capital Institute found that while many organizations have talentmanagement processes in place, they are often underused. While 92 percent of business leaders recognize superior talent as providing a vital competitive advantage, only seven percent consistently hold managers accountable for developing direct reports through performance-management processes. Organizations have to build accountability into managers’ and executives’ compensation packages, the study warns. And for HR leaders aiming to bolster their execution of these strategies, the survey suggests focusing on three steps. 1. Determine the most critical areas of the business to support. 2. Position HR to be the internal experts on talent management. 3. Measure the results.

THE RISE OF CONTRACT JOBS 3.64 of every 100 workers in small businesses are independent contractors. Last month 11 percent of the US workforce were working part-time when they really wanted full-time employment.

When dealing with turbulent times companies can’t afford to have a cut and run mentality. They have to know who their top talent is and how to keep them.


UPFRONT HRM 10 NEW:12june

12/11/08

15:24

Page 19

IT’S NOT THAT EASY BEING GREEN

A

s more and more companies launch green initiatives, a new breed of cynicism is growing throughout companies across America. A survey, which polled 755 US workers, showed that 22 percent believe companies engage in environmental issues simply to get publicity. Just 17 percent said companies are genuinely motivated by a desire to be ‘truly socially responsible.’ The findings of the report present some interesting challenges for HR leaders who are trying to keep employees positively engaged in company initiatives. Environmental and communication experts have suggested the simplest way to combat cynicism is honesty. Employees often become cynical over environmental efforts because companies tend to put too much hype on their programs. The reality is, businesses usually go green for busiwant to work for ness reasons, and HR leaders need to feel an employer that is comfortable about being honest about this. ‘going green in a 77 percent of respondents want to work significant way’ for an employer that is ‘going green in a significant way,’ but only half said their employer had significant environmental initiatives in place, such as carpooling and recycling. Research actually shows that many companies do have such programs, but just aren’t doing enough to communicate them. Workers often say that while they know what to do at home in terms of going green, they don’t know what their company is doing because the company isn’t telling them. Joel Makower, executive editor at GreenBiz.com, an online news center focusing on business and the environment, says, HR leaders need to make clear to employees that there’s no wrong reason for doing the right thing. “This is not about saving the Earth, it’s about creating better-run businesses. If it doesn’t make money or save money, it’s unsustainable and simply won’t last.” Employees want companies to do the right things for the right reasons. If employees think the reasons are shallow, companies won’t get the points. People want to work for companies that make a real effort to go green, but will be cynical if it’s just window-dressing. Efforts need better communication. If workers are really going to buy into a company’s environmental initiatives, they have to be included in the company’s values and in everything the company does.

70%

ISSUE IN NUM8ERS

45 million

in the US without health insurance coverage means there is a significant impact on productivity (p110)

Investing money in the top performing companies and you could’ve made you a staggering 6300 times your stake (p38) Edward Jones receives over

250,000 applications and inquiries for employment every year (p98)

Corporate training departments have cut their spending on learning and development by

12% (p70)

In 1983, FedEx became the first US company to reach revenues of

$1billion

within 10 years of start-up without a merger or acquisition (p26)

www.hrmreport.com

19


UPFRONT HRM 10 NEW:12june

12/11/08

15:25

Page 20

THE FIVE-MINUTE EXECUTIVE

20

Be our guest Bruce Jones, Programming Director at the Disney Institute, explains how the firm’s people really are working in the Magic Kingdom.

The key at Disney is in understanding that we love our guests to experience the Disney brand and have the most wonderful experience of a lifetime. That’s the one thing here that everyone knows is the goal. We talk about it in our programs, and we introduce it to people as we refer to it as a common purpose. We’ve referred to it since the mid-1950’s. Everyone in the organization knows and understands that. We recruit and hire people who understand and want to contribute to that, we train with that in mind, and we reward, recognize and communicate with that in mind. If you boil it all down to one key business strategy, it’s that everyone in the organization must understand that there’s a single purpose that we come to work with every day, and we work diligently to make sure everyone understands that. Several years ago, one of our leaders made a statement that there are different types of organizations who take on change, and some of them are bottomed out or desperate, and if they don’t change, their very survival is at risk. Some organizations change because the industry or the marketplace has changed, and they have to change in order to keep up with the pack. The third type of organization is the organization that changes whenever it needs to completely outdistance the competition, and the idea was that Disney is that type of organization. One of the things we talk a lot about is being accessible, being approachable, walking the parks, and working with and talking with the cast members – another part of our language versus employee. We know that the behaviors of the leader in the organization will influence the behavior of the cast members and their ability and willingness to deliver exceptional guest service. We call it people management, and part of the program is to help people understand that people management is not just a human resources function, but that everyone has responsibility for the culture of the organization and the way we do things. We literally show people how we recruit and select the best and how we train and develop the people that we have with us because those are key components of the success formula and how we recognize, reward and communicate with our cast. We measure the level of pride in the organization, and we work hard to help people connect to the rich heritage and traditions of the company. It is something we’re proud of, and no one wants to be the one

20

www.hrmreport.com

to let that down, particularly in the eyes of our guests. And there’s a regular community of guests that have become advisors to our parks and to Disney across the globe. It’s a nice thing to treat people as guests, because then they provide you with information that’s highly useful in improving the guest experience. We take great pride in that, and we know that our guests take great pride in this kind of collaborative environment we’ve nurtured between the guests and the business. Walt said it himself, ‘If we keep the place clean, friendly and fun, we’ll stay with that because it’s a proven, good business decision’. And we’ve tried to stay with that ever since. To read the full interview with both Bruce Jones and Disneyland Resort’s President Ed Grier please subscribe to HRM’s sister publication Business Management at www.busmanagement.com


UPFRONT HRM 10 NEW:12june

1 2 3 4 5 6 7 8 9 10

12/11/08

15:26

Page 21

A safe, happy and healthy workplace An open-book management style Performance-linked bonuses A complete performancemanagement feedback system

TOP 10 PERK UP

A

new online survey has gathered opinions of global executives to reveal a list of the Ten Commandments HR professionals should implement to achieve organizational goals. Take a look.

Fair evaluation systems

Knowledge sharing

Highlight key performers

An open discussion space

Reward ceremonies

The unexpected Source: www.bnet.com

WORKING ON SOCIAL SKILLS

I

nternetsecuritycompany8e6Technologies has revealed a new survey showing that over half of US employees are using internet social networking sites at work. 72 percent of respondents think they should be given full access to social networking sites for personal reasons. The survey also shows that 63 percent of respondents were busy dealing with personal emails at work and when major news or sporting events are happening, 51 percent regularly check for online updates during working hours, putting more demands on bandwidth as they watch highlights on streaming media.

Over half the respondents said their organizations had a policy stating the rules on internet use at work, though very few said they had received any formal training on such a policy. A massive 85 percent of respondents thought that their level of personal internet use at work was acceptable with 34 percent of those spending at least an hour or more each working day on personal internet use. Conclusions of the survey suggest that employers should hold more regular training on policies so workers are aware of guidelines.

Source: www.8e6.com

R

evealing the most common executive perks among US employers, a new study, which polled 5300 organizations, discovered that cell phones are the most common item offered to execs as perks, with 60.2 percent of respondents doing so. As well as phones, results revealed that while 43.8 percent of employers provide their executives with laptops or home PCs this year, less than a third offered car allowances or company cars. The frequency of most perks featuring depended on the revenue size of employing organizations, but cell phones were offered by over half of the companies surveyed, regardless of size. Only those businesses with revenues over $20 million were most likely to provide executives with laptops or home PCs. Other perks mentioned in the survey included supplemental life insurance (26.2 percent), annual physical exam (17.6 percent), post-retirement insurance (4.6 percent) and airline VIP lounge membership (3.1 percent). Most interestingly, the survey showed that the number of organizations offering each kind of perk has remained consistent over the past four years.

43.8% of employers provide their executives with laptops or home PC’s this year Less than

1/3 offered car allowances or company cars Other perks mentioned included supplemental life insurance of

26% www.hrmreport.com

21


UPFRONT HRM 10 NEW:12june

12/11/08

15:26

Page 22

THE BURNING ISSUE

22

Counterbalance The credit crunch may have seen some unprecedented job losses across our industries, but many companies are still experiencing tremendous growth despite the tough climate. HRM checks out three employers who are ahead of the curve.

Larry Page and Sergey Brin, Co-Founders Google Job growth in the last year? 60%

“Put simply, we care about what people think of us in the long term”

As we get bigger, the way we’re going to maintain our culture is to make sure we have the right sized groups. The office in the Seattle area really feels how Google felt when we were just a couple of hundred people. We believe that there is a natural size for human organizations, and that by creating groups that fit those sizes we can retain and improve our culture. We shouldn’t, in our golden years, be looking back and saying, ‘Oh, I wish it was the same.’

We’re not trying to Google-ize the companies we acquire either. Put simply, we care about what people think of us in the long term.We’re sometimes willing to take an unconventional position on a short-term issue that maybe people aren’t used to or haven’t considered before, but if we think it’s going to be right in the long term, therefore the company is going to be even more respected for it and that’s what is important.

Dan Gilbert, Founder and Chairman Quicken Loans Job growth in the last year? 68%

“Our growth is especially pleasing in that it comes at a time when most home lenders are focused on fighting for survival”

People are motivated by many things, but when it comes right down to it, most people just want to knowthatwhattheydoeverydaymakesadifference. We’ve removed the red tape and bureaucracies that stifle creativity and innovation and have built a strong, entrepreneurial culture that encourages people to think big and rewards them for putting their ideas, large or small, into action. Ourgrowthisespeciallypleasinginthatitcomes at a time when most home lenders are focused on fighting for survival. One of the primary reasons we

have actually grown our volumes during this time is that we have attracted a work force that is secondto-none. Our people are passionate, aware and curious and have a high sense of urgency. We want our team members to take action when they see something that should be fixed. This means trusting them to make good decisions.This is especially true as we grow, and the time we spend with new team members during their first few days helps them understand who we are and what we stand for so they can make the right decisions.

Ben Leedle Jr, President and CEO Healthways Job growth in the last year? 42%

“Every company aspires to make a difference”

22

www.hrmreport.com

We’ve repeatedly been recognized as one of the nation’s fastest growing companies, but our inclusion on this list is very special. More than anything else it is a measure of our success in creating and maintaining a culture that enables more than 4000 colleagues to do their best work while pursuing our company mission of creating a healthier world, one person at a time. Every company aspires to make a difference. At Healthways we focus on making a difference for more than 26 million individuals

around the world by helping them be as healthy as they can be. We are able to impact the lives of the people we touch by attracting and retaining the best and brightest talent from around the world and then creating an environment where they can thrive. People join our organization because of our purpose and are collectively committed to what we believe is our obligation to succeed. Our colleagues’ passion to achieve this higher purpose makes Healthways a great place to work.


UPFRONT HRM 10 NEW:12june

12/11/08

16:19

Page 23

I DON’T THINK WE’RE IN KANSAS ANYMORE

T

he Kansas Career Pipeline (KCP) – a non-profit organization that operates in partnership with both state government bodies and a number of business and educational organizations – has announced that more than 56,000 Kansans are already accessing the KCP Career Planning Center to begin planning for future career success. The center was designed to address some of the major challenges in education and workforce development in the state of Kansas and was launched in March last year. It is provided free to Kansans of all ages giving users the ability to discover their interests, learn about careers, plan for education, and connect with employers in Kansas. Over 75 percent of the middle schools and high schools across the state, in addition to many community colleges, technical schools, and workforce centers, are currently using the system.

Kansas now ranks among the top states in the nation who are gaining collaborative support between government agencies and not-forprofit organizations to provide comprehensive career education and job planning resources to residents statewide.

FACING A MAJOR RISK ASSESSMENT

A

new report by Ernst & Young suggests that executives that fail to monitor HR risks with the same scrutiny as other traditional risk issues are being left open to severe financial and reputational consequences. HR risks are fundamentally those that stem from people, program and process management, both inside and outside the walls of the business. The report, based on the results of a survey conducted among global finance, HR and risk executives from Fortune 1000 companies, suggests that if these issues are not properly managed, they may cause significant damage. Not least because of today’s economic climate, which already sees more and more C-suite executives contemplating newer ways to broaden changes to their business. The survey, which was to provide insight into global executives’perceptions of HR risks and the recognition they are given, highlighted that 43 percent of respondents see the area of strategic HR risk, where organizations have the ability to improve business performance,

gaining the most exposure in the next three years. Individual risks, such as talent management and succession planning, ethics/tone at the top and pay and performance alignment are all seen as having a ‘high or very high’ presence in terms of impact and likelihood of occurrence within an organization. The report shows that while respondents say they are aware of the need to focus on HR risk issues, there may be underestimation of the impact of these risks. Only 29 percent say their corporate risk budget will be increasing over the next 12 months, while another 57 percent say the budget will stay the same. Budgetary restraints may ultimately hinder efforts to identify and manage these challenges. While many organizations remain perplexed by the enormity of these issues and do not know how to solve them, or who should take ownership, experts suggest that these items are to be considered a shared responsibility. According to the findings of the report, HR should take the lead in identifying the strategic and operational risk areas that may help make the company more productive and globally competitive.

EQUAL OPPORTUNITY?

A

fifth of Canadian women believe that they are being paid less than their male counterparts according to a study carried out by CareerBuilder.ca. Women were also concerned about poorer career advancement opportunities than their male equivalents. 16 percent also expressed that they received fewer opportunities for training and development than male counterparts. When women were asked why they thought men were paid more, reasons included that men are perceived as needing to have more money to support their families and that men tend to schmooze more with the boss. The most concerning issue, however, is that as employers constantly look for ways to make their workplaces more balanced, this survey indicates that they still have some work ahead of them.

43% see the area of strategic HR risk gaining exposure in the next three years

29% say their corporate risk budget will be increasing over the next

12 months while another

57% say the budget will stay the same

www.hrmreport.com

23


UPFRONT HRM 10 NEW:12june

12/11/08

15:26

Page 24

COMPANY INDEX Q4 2008

24 AHIP 110 American Heart Association 122 American Lung Association 122 Attract HR 78, 80 Bersin & Associates 74 Best Buy 68 Camden Property Trust 136 CareerBuilder 14 Carol 88 Chesapeake Energy Corp 136 Chevron 138 Cigna 130, 134 Connexions 121 Conoco Phillips 138 CultureRx 68 Dell 14 Diabetes Association 122 Disney 20 eBay 136 ELI 72 Employee Transfer Corp 66 Erickson Retirement Communities 136 Ernst & Young 14 Ethics Resource Center 48 Exxon Mobil Corp 138

73% are satisfied with the performance of their line manager

2/3 say that they could do their boss’ job better More than

50% don’t see their boss as a motivator

24

www.hrmreport.com

Companies in this issue are indexed to the first page of the article in which each is mentioned 26, 38 FedEx 54 Ford Motor Company 26, 136, 138 Fortune 22 Four Seasons 138 Gallup 138 General Motors 37 Globoforce 22, 126, 128 Google 4, 122, 124 Gordian Health Solutions 14 GreenBiz.com 13 Guidant Group 8 Hallmark Tributes 16 Harlan Evans Inc 130, 133 HSA Bank 138 Human Rights Campaign Foundation 108, OBC Humana Pharmacy Solutions 64 IBM 64 IHRIM 57 ImageNow 2, 52 JWT 114 Kimley-Horn & Associates 15, 31 Laurdan Associates 88, 93 Marist College 126, 128 McKinsey and Company 26 Memphis Symphony Orchestra

Microsoft 64 Mobium.com 126, 128 Nordstrom 38 Nosal Partners 144, IBC OfficeMax 64 OhioHealth 32 PBMI 104 PenSoft 15 Pierpoint 83 Prepaid 6 Progressive Medical 116 Prudential Relocation 45 PSEG 60 Quicken Loans 22 Quinnipiac University 88, 91 Recognition Professionals International 118 Regent University IFC, 88, 96 Rideau 101 RPO Alliance 82 Rx America 113 SAS Institute 126, 128 Second Life 88 SHRM 26 Shumsky 126, 128 Southwest Airlines 38

SQ Box Solutions Starbucks TalentScope The Miller Company The Recruiting Roundtable The Top Banana Institute University of Illinois US Bureau of Labor Statistics Vangent Velocity Resource Group WSlash Net Wal-Mart Stores Inc Watson Wyatt Wellpoint Rx Wells Fargo Western Governors University Wharton School World at Work Worldwide ERC YMCA YWCA

59 126, 128 62 118 14 126, 128 88, 95 14 46, 103 76 85 138 14 107 129, 130 86, 88 54 26 48 122 122

JUDGING THE C-SUITE

T

hree quarters of all employees might think highly of their immediate supervisors, but senior management aren’t so admired, according to new research. Results of a new survey, polled on behalf of CareerBuilder, suggest that managers often focus too much on the operational side of the business and that they ‘forget’managing their workers. The comprehensive study shows that, of the 8800 employees surveyed, while 73 percent are satisfied with the performance of their line manager, two thirds say that they could do their boss’ job better. Over half of the respondents don’t see their boss as a motivator. Most interestingly, 23 percent of those who believe they could do their boss’ job better say their boss plays favorite. The same figure believe bosses don’t lead by example, 14 percent say their boss is never around and 13 percent say bosses don’t provide enough positive feedback. Experts encourage workers to see that the

most important statistic is that three out of four are satisfied with their boss’ performance and say employees shouldn’t get hung up on stats like the 45 percent of respondents who don’t feel secure about their organization’s C-suite leadership. While experts do admit that managementcangetlostintheoperationalsideofbusiness, they stress the importance of managing people, as that is the ‘grease that keeps the engine moving’. Greater communication from senior leaders and management,coupledwith accountability,rewards,opportunities and trust, are suggested for bridging the gap. In the past, what has proven to work in successful organizations is that the leader is relatable and trustworthy.


UPFRONT HRM 10 NEW:12june

12/11/08

15:27

Page 25

MAKING A POOR CHOICE

A

new study into the negative impacts These were that they over-rely on candidates of poor selection reveals that 50 describing themselves, rather than have them percent of organizations regret their demonstrate the skills they speak of; that they selection decision. The Recruiting don’t follow a consistent, evidence-based Roundtable, a division of the process; and that they fail to proCorporate Executive Board, vide the candidate with enough who published the survey, information and experience highlighted several contributabout what the job is really like. of new hires say the ing factors to these statistics. Based on detailed quantitainformation they These included that 40 per- recieved about the job tive analysis and over 100 interwhilst applying was cent of new hires say the inviews, the study also identified 10 less than accurate formation they received about key strategies that organizations the job whilst applying was should deploy to improve their less than accurate once they selection processes, with one recwere in the role. ommending companies should The Roundtable identilook to move beyond the tradified three important reasons organizations fail tional selection process to include an experiento consistently hire high quality candidates. tial component to the process.

40%

WHERE’S MY MONEY?

A

nalysts atWatsonWyatt, a leading global consulting firm, have revealed that many older workers do not expect to receive their full Social Security or Medicare payments after they retire. Reports show that confidence is especially low among those who are relatively younger, female or have a lower level of education. 61 percent of older workers, those between 50 to 64 years old, are unconfident of receiving promised Medicare benefits; 51 percent are unconfident of receiving promised Social Security benefits. Analysis shows how older workers’ attitudes differ by age, gender, education and income level. For example, workers aged 50 to 54 are much less confident of receiving their due than those aged 54 to 64 when it comes to both Social Security and Medicare, while women tend to be less confident than men about the government making good on its Medicare promises. Interestingly, the effect of factors such as income and marital status were mixed, seemingly having less impact than age, gender and educational background on retiree confidence.

NEWSBITES

61%

• The squeeze on the global economy is now so bad that even recruiting firms are cutting their staff. One US firm that had 27 employees has now had to cut down to just nine.

of older workers are unconfident of receiving promised Medicare benefits

• Four senior HR women have accused Dell – the world’s second largest computer manufacturer – of discrimination in blocking women across the company from breaking into the top ranks of the company. Vice President, Michael Summers, calls these attitudes ‘old boy networks in Dell’.

51% are unconfident of recieving promised Social Security benefits Workers aged 50 to 54 are much less confident of recieving their due than those aged

54 to 64 www.hrmreport.com

25


Judith Edge:feb08

13/11/08

08:46

Page 26

COVER STORY

“At FedEx, our people are our greatest asset. We truly believe that. Our founder and CEO rooted the company in this philosophy and we continue to stand by it” Judith Edge, Corporate VP of Human Resources, FedEx


Judith Edge:feb08

12/11/08

15:59

Page 27

T

o say that employee retention is big busiand opportunities for the company and taking action to adness at the moment would be something dress those items.” of an understatement. The war for talent HR has now become much more of a strategic partner to and the shift it is creating for recruiters and the business than it perhaps was in the past. It can be a driver jobseekers alike is everywhere you look, of profits and is something that really sets the tone for the and it’s sadly no longer commonplace to wider organization. “HR today has the capabilities to be that hear of an employee that has stayed with strategic partner whether it’s in recruiting, talent developthe same organization for more than, say, 20 years. But ment, performance management, employee relations or then, FedEx isn’t your average employer, and Judith Edge compensation,” adds Edge, “all of those functional areas isn’t your average employee. have the opportunity to realFedEx already ranks in ly help the business achieve Fortune’s 100 Best Places to its strategic objectives.” A CHANCE TO EXCEL Work and is currently 68th on As the company has the Fortune 500. In 1983, it grown over the last two Judith Edge explains the thinking behind was the first US company to decades, so that growth has one of the company’s newest and most reach revenues of $1 billion been mirrored by Edge’s innovative programs. within 10 years of start-up withsteady rise through the “Our world is complex and we found that we out a merger or acquisition. It ranks. “The experience has needed to strengthen perceptions and enhance was in that same year that been great,” she says about relationships that exist among our operating Edge joined the firm. At that her time at the firm. “I startcompanies and make sure our officers had the time, FedEx was just a US exed here while I was finishing right exposure to the world in which we operate. press company, but today it opup my undergraduate deBecause of this we created the Excel program for erates in 222 countries and gree and used the FedEx tuFedEx officers. A team of 19 officers were territories across the globe. ition assistance programs to immersed in the different areas of our business. And Edge, who began her help with that. And, since The pilot team spent 10 days in China to FedEx career as a call center FedEx has a promote from experience the Chinese marketplace and allow representative is today within philosophy, I was them to learn how to do business in China from a Corporate Vice President of able to move around the grassroots perspective. Human Resources. “Back in company and advance my The pilot was a great success and we will ’83 you didn’t have the technolcareer. Then, later on in life repeat the program next year. We’ve put a lot of ogy that you have today,” she the company paid for my investment into leadership and it’s really paid off says, remembering how the orMBA.” Edge goes on to state for the company. We feel that our frontline ganization looked when she that, at one point or other managers are the key to driving our commitment started out. “When I think she has been accountable to our customer and to our employees, and that back, it doesn’t seem that long for almost all of the funchas been one of our critical success factors over ago, but when I look at how tional areas of HR – from dethe past 35 years.” much has changed, it feels like signing sales incentive plans an eternity.” to establishing the infraWhile it used to be the case that HR tended to concenstructure for a new company, to overhauling existing protrate on administrative tasks, today, it’s totally different. grams and processes that drive a change in culture and the The focus now is much more technical and analytical. Edge change management that comes with that. It is in her currealizes that it is now the role of HR to be more collaborarent role that she not only reports directly to the chairtive and more proactive in its processes. “We live in a very man and CEO, Frederick W. Smith, but is also part of the litigious society, we have to protect the company and look firm’s strategic management committee. “We focus on out for our employees,” she says. “The way we do that is the strategic initiatives of the company,” she explains. by working closely with our legal, operations and finance “We have a corporate strategy of compete collectively, teams, analyzing data, noticing trends and identifying risks operate independently, and manage collaboratively.”

www.hrmreport.com

27


Judith Edge:feb08

12/11/08

15:59

Page 28

Edge, who herself has clearly reaped the benefits of the company’s attitude toward developing business leaders, says that this is something employees across the company take advantage of – with Smith in particular being highly supportive of the company’s emphasis on leadership development. Edge explains that every manager is required to complete a leadership principles and diversity course. “We have some unique programs,” she goes on, detailing the ‘Purple Pipeline’ as one major example. For the first six months of this program, managers who aspire to the next level of leadership are immersed in different leadership environments. During the next six months participants swap jobs to put their new leadership skills to the test. She pinpoints another program, ‘Leading from Every Chair,’ that was developed with the Memphis Symphony Orchestra using music to help participants realize they are part of a bigger team. “They each played a crucial role,” remembers Edge, “but unless they all came together, the music they produced wasn’t very good.”

Coming together is something of an obsession with Edge. Alongside her role at FedEx, she is also a passionate advocate for HR issues and encourages members of her team to be active participants in leading HR organizations such as the Society for Human Resource Management (SHRM)

“We have a core set of values that we honor throughout the company. The values are reinforced, with the aim of making every FedEx experience outstanding” and World at Work. “These organizations help our HR professionals develop a network and contacts within other major corporations. Their certification programs are wonderful and as we don’t have a CPA equivalent in the HR world, that’s probably about as close as we get.” Her belief is that organizations like these offer exposure to new products and services so that employees can stay on top of existing and new trends within the industry,

AT YOUR SERVICE – Highlights from the FedEx awards cabinet

28

■ FedEx has been honored as one of Fortune’s 100 Best to Work in 10 of the past 11 years and was added to Fortune’s 100 Best Places to Work Hall of Fame in 2005.

■ FedEx has consistently ranked in Fortune’s list of World’s Most Admired Companies and list of America’s Most Admired Companies since 2002 and 2001, respectively.

■ November 2007 saw FedEx Express Canada win the Best Contact Center World Award 2007 for mid-size call centers from ContactCenterWorld.com.

■ In July 2008 FedEx ranked #1 in the category of customer service in the esteemed Harris Interactive Reputation Quotient TM survey.

■ May this year saw FedEx ranking first in Customer Satisfaction among Express Delivery companies.

■ More than half of FedEx’s management team has risen through the ranks of the company.

www.hrmreport.com


Judith Edge:feb08

12/11/08

16:00

Page 29

while allowing them to ensure they are driving efficiencies that support their businesses’ strategies. In fact, the day before we spoke with Edge, the Human Resource Policy Association had been trying to draw attention to how the current economic situation is impacting pension plan funding rules. “These groups work with their connections in Washington to raise issues to the government. Issues that have a significant impact on HR,” notes Edge. After all, considering the extraordinarily busy times the government is currently facing – global economic uncertainty, an era-defining presidential election – these issues risk being forgotten. It has to be the job of organizations like those cited by Edge – and of HR professionals across all industries – to ensure these issues remain on the radar. “These are busy people and we need to make sure that they are hearing about these important issues so that the issues get the appropriate attention.” The economic crisis has become a thorn in the side of just about everybody in business, regardless of the sector they work in. It is no different with Edge, who is well aware that there is pressure all around during these difficult times. “But our company tends to focus on other avenues of cost-cut-

“Our values are reinforced through the ‘Purple Promise’, which is to make every FedEx experience outstanding”

ting,” she says, referencing the plethora of organizations who have seen job cuts affect their workforce. What’s more, with such a global organization, FedEx sees the added challenge of trying to keep a clear picture and a clear control over disparately cast employees and offices. Edge is keen to both acknowledge this issue and address it proactively. Firstly, each FedEx operating company has its own HR function and Edge speaks very highly of the job that every one of these HR teams do in managing the tactics and strategic elements unique to each particular operating company. She explains her role is to stay close to these teams and ensure they are pulling together on a collaborative basis so there is an enterprise view that runs through the entire corporation. She backs this idea up further by detailing how FedEx operates as a coordinated organization. “We have a core set of values that we honor throughout the company,” says Edge. “The values are reinforced through the ‘Purple Promise’, which is to make every FedEx experience outstanding.” Each FedEx operating company is unique in terms of products and culture, but they all have the Purple Promises in common. “That’s the concept we use to keep our 290,000 team members around the globe linked and connected to FedEx .” Additionally, FedEx has long adhered to a core philosophy of ‘peopleservice-profit’ or PSP. “The idea is that if you take care of your people, they will take care of the service and the profits will follow.” This is something that FedEx has remained very true to since starting out, and Edge notes that it has really paid off in terms of employee loyalty, customer satisfaction and strong business results. “At FedEx, our people are our greatest asset. We truly believe that. Our founder and CEO rooted the company in the PSP philosophy and we continue to stand by it.” Amongst all this change, there are certain things that remain constant in the HR world. People are still central to the core values of any industry. It is human resources, after all. This something that Edge is very much aware of, and is perhaps a further indication of why she has been at the same firm, building her career, for the last 20 or so years. “Our Purple Promise award recognizes and rewards employees who demonstrate exceptional performance achievements that enhance the customer’s experience

www.hrmreport.com

29


Judith Edge:feb08

13/11/08

08:46

Page 30

with FedEx. Those experiences become the stories we repeat to other employees to illustrate what it means to be a FedEx employee and live that promise. “Every one of our operating companies administers an annual employee survey and employees are able to give feedback on how to strengthen the organization,” Edge continues. “Each manager has to follow up on that survey with an action plan. We develop initiatives based on opportunities or suggestions that come up through that tool. In short, we have several initiatives that drive the culture, reinforce the culture and get employee engagement to a high level.” And while Edge’s personal growth within FedEx may seem monumental, in terms of the firm’s culture it is not that surprising.There has always been

a promote from within philosophy at FedEx. “This has been a really important part of building loyalty and ensuring our employees are able to pursue the type of growth that they’re looking for in their career and the job satisfaction that’s so important to them,” says Edge. The issue is highlighted even further when you consider the fact that the CEO of FedEx Ground started out as a driver, and that Edge herself began as a call center rep. These kinds of stories serve as an inspiration for every FedEx employee. As Edge notes, “Thinking that, ‘if Judy did it, I can do it too’ helps other employees realize the potential that exists at the firm.” Quite simply, that’s employee engagement personified, and something that will likely see FedEx delivering in the retention battle for some time yet. 

TECH RULES – Judith Edge answers some technical questions HRM. With the changes we have seen in technology over the last two decades, the company’s core business must have changed dramatically with the rise of email and digital communication. What sort of wholesale shift did that require? JE. It wasn’t a major wholesale shift as such, but more gradual over the years. Email came in and the websites took hold and it actually enabled us to communicate much more effectively with the employees that we have spread out across the world. We can now do very timely, effective communications and we can deliver it in words and video. It has really opened things up for us in terms of options of getting the message out to our workforce. HRM. How has IT revolutionized the concept of integrated human capital management and other HR technologies at FedEx? How are you employing these at FedEx to leverage the best in your people? JE. IT is certainly an enabler. It’s enabled HR jobs to become a lot more interesting and we’ve become a lot more efficient as a result. We’re now able to improve our compliance ratios and produce valuable analytics for our business partners. A good example of this lies in the space where we now have the ability to be a completely paperless recruiting system. We’re able to provide a portal so that employees can go in through our fedex.com career site, get a glimpse at what working at FedEx would be like and a feel for the FedEx culture. We’re also able to tap in through things like Facebook and LinkedIn to potential talent. We’ve done virtual career fairs where people didn’t have to travel in for interviews and have saved a lot of money in that regard. We were also able to hook managers and potential candidates up through technology so that they could build that relationship, and when a job does come available they’ve already got a relationship established. IT has allowed us to be very effective in terms of finding talent, landing talent and staying connected with that talent in a very cost efficient and easy to administer way.

30

www.hrmreport.com


LAudran.indd 1

10/11/08 09:06:03


DebraPloushaMoore:feb08

12/11/08

15:41

Page 32

FEATURE

Healing hands OhioHealth’s Debra Plousha Moore explains why people are the lifeblood of a thriving organization.

D

ebra Plousha Moore isn’t your average Human Resources executive. She is genuinely humbled to think that anyone could be interested in her story, querying why, before we even ask her a question, we have chosen to interview her. On several occasions, she references the “wonderful contributions of her human resources team,” as well as the support of CEO Dave Blom and the other members of OhioHealth’s senior leadership team. Put simply, she is just not prepared to take all the credit. However, this is the second consecutive year OhioHealth has featured on Fortune’s 100 Best Companies to Work For list and one magazine even called Plousha Moore a ‘Management Superstar’. Clearly, she is worth more than she realizes. “The ‘Management Superstar’ thing was a little bit of a surprise,” she laughs, “Really I think I’m just one of those people that doesn’t want to let anyone down. I want to work very hard to live up to the expectations of the people who surround me and continuously deliver in a way that people find to be exceptional.” Of course, at OhioHealth, exceptionality is something of a prerequisite. “Working for a high-performing organization like this allows you to create a solid structure that your associates can compare to other organizations,” explains Plousha Moore. “Our associates have a sense of pride, belonging and security in their work environment, where their contributions are valued.” The firm’s uniqueness continues right to the heart of the Columbusbased not-for-profit organization, as OhioHealth’s mission is to serve the communities that support it. The family of hospitals offers health and surgery centers, a home health and medical equipment service, insurance products and many other health services throughout its 46-county area. “We do the work because we live our mission – but its the external affirmation of being on a list like Fortune’s that allows our associates to verify their decision that this is both a good place for them to have decided to, and continue to, work.”

32

www.hrmreport.com


DebraPloushaMoore:feb08

12/11/08

15:41

Page 33


DebraPloushaMoore:feb08

12/11/08

15:41

Page 34

Of course, success in achieving these visions and goals can only occur if all of the organization’s employees can live that same vision. It is through an organization’s people that success can be driven. “If I look at my team, I'm really looking at how we are helping shape and frame the culture for our associates.” Only those associates who are respected and valued will feel committed to providing the service that enhances the organizational image and only then will they feel motivated to share new ideas and opportunities. “When you look at the core competencies of associate relations, education and benefits, it’s the importance of a strong HR team that is the key to success. When I talk about a strong team, I mean a team that’s intact. The majority of my team have been here since I arrived, we have grown together as professionals and enjoy the kind of interactions we have with one another, which makes our work extremely meaningful.” Plousha Moore, who herself has been with the company since 2001, is always looking to further define her role. “My focus has always been in all of the core competencies of human resources, associate relations, benefits, compensation, executive comp and employment,” she explains. “But what I am most pleased about are the additional responsibilities here at OhioHealth that are connected to the cultural shape of the organization in customer service and protective services.” It is interesting that Plousha Moore raises this issue. After all, many HR executives talk about the culture of a firm being more crucial to its employees than, say, the location; and cynics say there is a tendency for the word to be bandied about so much that, sooner or later, the whole concept of a firm’s culture could be lost to cliché. For Plousha Moore, that is a long way off. “We’re very blessed at OhioHealth,” she tells me. “We do have multiple facilities, and each one does have its own customers and traditions – but there is an overarching promise to the experience within the OhioHealth framework.” The key lies in being able to move an associate out of one facility and into another, creating a broader experience and encouraging associates to be more effective as employees. “What we've tried to create is an place where our associates can go from one place to another, but still have that promise of a workplace where they will be valued and respected, where they will be developed and nurtured, where we will provide them and their families with good benefits, and where they will work for an organization that lives up to and maintains a national reputation within the industry.”

Time to learn As a former educator, Plousha Moore sees the benefits of a well-balanced mix between education and HR. “I am a believer in learning organizations because an organization can learn from inside and outside the industry and from their own moments of brilliance,” she says .“The opportunities of failure allow us to stay on a journey of continuous improvement.” As Plousha Moore explains, learning organizations that value education and development will truly build leaders. “One of the things that we are concentrating on as we move forward is improving results for performance management and succession planning,” she explains. “Healthcare is becoming an industry where people really need to look at their talent and understand what kind of work experience their teams need to take on the next role.”

34

www.hrmreport.com

Q&A UNIVERSITY CHALLENGE HRM. OhioHealth Corporate University is widely respected as a best learning organization. Why is this? DPM. We’re absolutely thrilled with the recognition. OhioHealth University allows us to look at all educational platforms and create a learning environment, it allows us to create professional and personal development for the associate. For OhioHealth, and it allows us to communicate within the framework of our mission and then set the business strategy framework from within. The mission is to improve the health of those we serve. Our values are not only words. They create real meaning with our patients and our associates as they live and work within the framework of healthcare. HRM. What role does technology play in terms of OhioHealth University? DPM. Technology has been extremely important, and as a result we have been able to offer hundreds of classes online. We're a 24/7 shop, providing our associates access to professional and personal development from their homes, and we support their education. Technology, and the doors it opens, has been a key for success for OhioHealth University. HRM. What else can you tell us about OhioHealth University and the benefits it offers to associates? DPM. I think we've been very smart with OhioHealth University. It has many facets, and we are able to concentrate on diversity, wellness, leadership development, management development, clinical learning, accreditation and compliance. All of the learnings that take place formally – and even informally – throughout the organization find their portal through OhioHealth University. We are able to run leadership briefings for our management and our executive teams, and the learning it has created is invaluable. Every time we have one of our big OhioHealth leadership briefings, it allows our president to speak from this platform and align his management accordingly. We then use the same language as we cast messages or deliver messages to our associates, so we all understand the learning environment that has been crafted.


DebraPloushaMoore:feb08

12/11/08

15:42

Page 35

Plousha Moore is aware that it’s not just the healthcare industry that available. Perhaps if we were an international company, we would depend is changing, but the HR function as a whole. For one thing, the use of techon the technology more; but we need to realize that, just because one of nology within the HR space is much more prominent our closest facilities is only seven miles away, doesn’t today than it has been in the past. “While technology is mean a webinar wouldn’t be successful.” essentially used for our decision making, our goal is to be a paperless HR team over time,” she tells me. “We A healthy challenge know we will never get away from paper 100 percent, “We also have a intergenerational workforce,” she ofbut we want our associates to be able to access their fers as an example of the further challenges that beset an NUMBER OF own records, have an opportunity to view paychecks, organization like OhioHealth. “Often it isn't about proximANNUAL OUTPATIENT and be able to look at technology as a portal for informaity, but it's about preference.” As the Baby Boomers retire VISITS TO OHIOHEALTH HOSPITALS tion, learning and development, as well as a portal for and Gen Y begin to fill their roles, HR is going to be chalthem to be more prepared in their own careers.” One of lenged to look at preferences of intergenerational workthe new initiatives for OhioHealth is to start looking at forces and find communication tools to meet all needs. For blogs and webinars and discover new ways of communicating through Plousha Moore, the key is to keep focus on the diversity of the workforce and technology. “It’s a challenge,” she reckons. “Because of the size of our orthe patients and families being served and continue to be responsive and reganization we are sometimes actually blocked by the technology that is spectful. “It's got to be about stepping in the shoes of each member of your

1.5

MILLION

“If I look at my team, I'm really looking at how we are helping shape and frame the culture for our associates”

www.hrmreport.com

35


DebraPloushaMoore:feb08

12/11/08

15:42

Page 36

A SENSE OF PRIDE OhioHealthy: getting better together workforce and looking at their preferences,” says Plousha Moore. Adding, “We promote our strategy through personal and professional development. Every associate is engaged.” OhioHealth has consistently been viewed as an organization that has exceptional, continuous improvement. Once OhioHealth sets a mark for results, it either maintains that position or continues to excel. “That has really driven our values of excellence, integrity, compassion and stewardship into every experience at OhioHealth – whether internal or external.” With the current economic uncertainty, coupled with rising healthcare costs, many challenges still face Plousha Moore. “That’s why we have proactively adopted key initiatives to distinguish us as an organization. For example, through OhioHealthy, our associate wellness and prevention plan, we've looked at how to improve health, how to manage healthcare costs and how to be more transparent in the community with our costs.” Of course, that transparency also meant being transparent with OhioHealth’s own associates, which is a challenge in itself. “It’s taught us how to be competitive,” explains Plousha Moore. “For example, we had to change our whole internal pharmacy structure. By looking at what was happening outside of the healthcare industry, we've remodelled internally.” There is of course one remaining issue currently on the radar for both the HR space and the healthcare industry as a whole. I am keen to get Plousha Moore’s take on it. When we speak, it is a mere matter of weeks before the presidential elections take place, and the outcome is likely to have a real impact on both industries. “I think there are two critical points,” says Plousha Moore, adding, as an afterthought, “and it doesn’t matter who wins.” Regarding the workforce, Plousha Moore believes that HR needs to continue to find high-quality, smart, thoughtful, compassionate people in the talent pool. “We have to be able to respond to the local needs of the community, that’s true especially for workforces in the healthcare industry, which is such a localized issue, but also for workforces across the board.”

36

www.hrmreport.com

I’m particularly proud of OhioHealthy, where we have focused on the health of our associates. We understand that the quality of life for our people is as important as productivity, and that the investment in associate health and wellness is a long-term investment for the workforce. It allows us to have better-prepared associates who can serve our patients in this community. As an organization, in the last 18 months, we’ve lost over 16,000 lbs. We have walked around this world over 20 times. We changed the food in our cafeteria. We’ve changed the snacks throughout our entire organization. Our concentration as a healthcare organization is on the health of our associates and we've invested over $1 million in preventative care. These are the means cornerstones of health and for these cornerstones of health we will make a 100 percent investment.

In terms of healthcare issues, Plousha Moore believes the industry will see a change in process and that, as Americans, we need to make critical decisions about how we access healthcare and how the 50 million underserved or uninsured access healthcare too. “In this industry you have to believe that every individual deserves exceptional care,” she says, echoing the very mission at the heart of her own organization. “As a country, we have to be able to understand how we can afford to get there.” It comes as no surprise to hear Plousha Moore talk like this. After all, the really refreshing thing about her and her outlook at OhioHealth is pretty simple: when she talks about everybody, she means everybody; when she talks about her successes, she means success for everybody; and when she talks about making improvements to the health of those the company serves, you’ve guessed it, that includes everybody as well. And that’s something that should leave Ohio, at least, feeling very healthy indeed. 


Golboforce.indd 1

10/11/08 10:16:52


KeithDarcy:feb08

12/11/08

16:00

FEATURE

Page 38


KeithDarcy:feb08

12/11/08

16:01

Page 39

DO THE RIGHT THING? Keith Darcy tells HRM editor Huw Thomas that the state of business ethics is inextricably linked to the current financial meltdown.

Y

ou can find inspiration in the most unlikely places. For Keith Darcy, Executive Director of the Ethics and Compliance Officers Association, it came during the darkest experience of his life as the horror of 11 September 2001 unfolded around him. Then working in New York’s Financial District, he had a front row seat for one of most terrible events in American history, even losing his brother in the collapse of the north tower. He tells us of the normally bustling Manhattan streets becoming like a war zone, how the fires burned for four months and the stench of death hung in the air. But amid the devastation, the fear and the panic, Darcy perceived something else. As he drove a carload of stranded employees north out of the city he saw things that spoke to the essential goodness to be found in humanity. “We listened on the radio to the reports over and over again, watched the fires burn behind us in silence,” he recounts. “But as we were stuck in traffic people would walk over to us, and without saying a word, they would hand us wet towels so we could wash all the soot and debris off our faces. Others came over, and again, without comment, just handed us bottles of water so we could clear our throats. At one corner, we were stuck for 20 minutes and I watched a shoe store owner give away his entire stock of flats and sneakers to women who would have to walk tens of miles to get home that evening.” The following weeks saw similar scenarios being played out across the city. People just pulled together and helped share each other’s burdens. Darcy himself did emotional triage in the lobby of his building, helping those employees who had lost loved ones into one-on-one or group counseling. It was during this time that his essentially optimistic attitude to human nature was confirmed. “I saw something that I’ve never seen before,

a coming together of people helping other people,” he says. “I realized after a while, that nobody had to pass a company policy, or a regulation, or a new law to tell us what we knew was the right thing to do.” It’s fair to say that this optimism has had to endure a few knocks of late. The financial crisis rumbles on, gathering momentum and threatening to spill out into the wider market. Though its causes are far too complex to attribute to a single source, it is clear that a relentless pursuit of profit, coupled with a stark disregard for long-term consequences played a major role. Self-interest trumped responsibility and we could all be paying the price for years to come. Darcy is adamant that ethics, or more accurately an absence of them, are at least partly to blame for our current woes. It all comes down to trust. Take Bear Stearns, one of the credit crunch’s earliest victims. “The government had to step in and force a merger with JPMorgan Chase,” says Darcy. “That took place not because there was a lack of capital at Bear Stearns. There was a lack of confidence, a lack of trust.” According to Darcy, the inability of investors, depositors and regulators to believe in the good intentions of these financial institutions has had just as damaging an effect as the well publicized levels of toxic debt. In a climate where consumers are unusually attentive to any wrongdoing or uncertainty, the issue of trust takes on particular significance. “Any hint or rumor of an impropriety at your firm and your market capitalization goes down,” Darcy continues. “If there’s any substance to it, it goes down even further. At a time like this where there is such a crisis, I can assure you there will be an intolerance of those people who breach the public trust. It is an environment now that is filled with fear. And people who breach the public trust are going to be punished swiftly, both by the market as well as by public servants.”

www.hrmreport.com

39


KeithDarcy:feb08

12/11/08

16:01

Page 40

Keith Darcy is Executive Director of the Ethics and Compliance Officer Association, the largest association of ethics and compliance professionals in the world with over 1400 members across six continents. Darcy spent over 30 years in the financial services industry, is a director of E*Trade Bank, and teaches ethics and leadership at the Wharton School, University of Pennsylvania.

At the root of the problem is the approach many organizations take to ethics training, particularly in the financial sector. “When you look at the financial sector as a whole, it is a heavily regulated one. Therefore, the training and the monitoring that tends to take place is very regulatory and compliance focused,” Darcy continues. “What I think we’ve been missing in the financial sector is attention to ethics.” But this doesn’t only apply to the financial space. “It is incredibly important, not just to that sector, but to all companies. There is such a profound lack of trust in our institutions and in their leaders that we need to do much more to try and reassure all stakeholders, employees, customers, investors, suppliers and even regulators that we are going beyond just mere compliance.” A common complaint of those resistant to ethics training and legislation is that an increased focus on doing the right thing could have a negative impact on profits. With more than three decades of experience in the financial industry, it’s an attitude that Darcy is extremely familiar with. “When I would talk about ethics, especially to people directly in the Wall Street community, I would typically get a response, ‘What do you want, Darcy? Do you want ethics or profits?’” he says. “I would always say, ‘I want both. This is not an either/or proposition. I want the highest possible financial outcomes for our organizations at the highest possible standards.’ They’re not mutually exclusive.” On the contrary, there is strong evidence that a good company culture is a key differentiator for long-term success. Darcy references a 1994 book, Built To Last by Jim Collins and Jerry Porras, to illustrate the point. “They studied 18 different sectors over a period from 1926 to 1991,” he explains.

40

www.hrmreport.com

“If you had invested one dollar in the stock market in 1926 in a bread basket of stocks you would have gotten 415 times your money back by 1991.” On the other hand, had you invested your money in the second best performing companies in each sector, you would have made 973 times your initial investment. That might seem like a good return but, had you invested in the top performing companies, you would have made a staggering 6300 times your stake. The factor that ties these industry leaders together? “At the core, in every example, was a values-based culture embedded in those organizations,” Darcy continues. “Clearly, ethics, values and principles aligned to a culture are what builds and sustains great organizations.” This focus on culture continues to lead to success. Darcy points to a couple of organizations that embody this fact, Southwest Airlines and the retailer Nordstrom. “At Southwest Airlines, they know exactly the kind of person that they want to take into the organization,” he explains. “In fact, they have a provisional training program only at the end of which do you find out if you’re a permanent hire.” The results of this attention to detail are striking. The airline has a staff turnover of just eight percent compared to a 22 percent industry average and is virtually the only carrier that has consistently posted profits, year on year, for decades. For Nordstrom’s everything is constructed around customer service. “You go into Nordstrom’s and everybody wants to help you,” says Darcy. “If one of the salespeople is not as helpful as the rest think they should be, they’ll speak to that person. Strong cultures self-regulate.” The idea of self-regulation should not be underestimated, particularly in our current climate. “What emerges in strong cultures is, rather than trying to create a compliance based top model program which tells people what they can and can’t do, people self-regulate the organization,” he con-

HOLLYWOOD ENDING Lessons in ethics from the silver screen Darcy: Watch the Tom Hanks movie Castaway. It’s a twohour FedEx commercial. The plane is flying over the Pacific. The plane goes down in a storm. Tom Hanks grows a beard and long hair. Five years later, somebody finds him. He gets a shave and a haircut and what does he do at the end of the movie? He delivers the package. I always ask the question, who does he deliver it to? Well, in fact, the person wasn’t home, so he left the note with the package, and the note said simply, “Thank you. This package saved my life.” Metaphorically, work gave him meaning. It kept him alive. He even took a volleyball, called him Wilson and drew a face on it because he needed to personify something. He understood that we do not exist alone. We exist in relationship to other people. I realize it’s fiction, but the implications are huge. Everything we do is done with, by, for and through people, and so ethics has to relate to people.


KeithDarcy:feb08

12/11/08

16:01

Page 41

tinues. “When you think about it in the larger context, there’s only one alternative to self-regulation, and that’s more regulation.” It now seems clear that, particularly for the financial industry, more regulations are an inevitability. Darcy sees the roots of our current malaise in the deregulation-fuelled boom of the nineties when the NASDAQ jumped from 453 in 1991 to a high of 5132 in 2000. “Unfortunately, not only did we get the growth that came from that, but the energy deregulation also gave us Enron. The telecom deregulation gave us WorldCom, and we are today paying the price for banking deregulation,” he says. “I’m a free market economist by training, I would prefer to see the markets work in a free system. The argument is between idealogues who believe totally in the free market system and those who have seen the failings of it. We need an effective balance between the two.” But it won’t be easy. Despite Darcy’s professed faith in human nature, nearly two decades of erosion in ethical standards will take some time to repair. It seems the problem is at risk of moving outside the office and affecting other areas of life. “I like to be an optimist about the future,” he confirms. “My concern is data that says 54 percent of MBA students cheat their way through their degree, that 52 percent of engineering and masters students do the same, where 48 percent of law students cheat their way through their degree and 55 percent of high school students admit to cheating so they can get ahead. I am concerned that somewhere over time we began to feel like people who were entitled to something, that we wouldn’t have to sacrifice for getting ahead, that somehow life was there to pick from. With that kind of attitude comes a certain arrogance. I really do think that we need to make sure we understand the difference between acceptable profits and greed, that we understand that there’s no substitute for hard work and rolling up your sleeves to reach the next level.” Asked for a prescription to reverse our ethical decline, Darcy can provide no quick fixes. He talks about the need to remember what people are capable of achieving and how the positive human spirit must be given the opportunity to grow and express itself. On a more conventionally businessfocused level he outlines a requirement to get back to the basic fundamentals: positive cash flow, quality products, good customer service, being respectful of all stakeholders and rebuilding the trust that has been broken. “There is a mandate today,” he explains. “Companies have to understand the meaning of trust and the importance of ethical awareness in their organizations is a differentiator in the marketplace. It is a differentiator for building enduring great companies. None of this is a six-month rollout. All of this is a permanent commitment to the future. It’s ethics training. It’s ethics awareness. It’s raising the consciousness of people on understanding what’s the right thing to do and building cultures therefore that will self-regulate over time.” But even if all this hard work is successful, it will require constant vigilance for it to be maintained. Thinking back to the collective spirit that he witnessed following the attacks on New York, Darcy is clear that such a feeling can evaporate as quickly as it appeared. “I remember remarking about six weeks after 9/11 to a group that I was speaking to,” he recalls. “I said, ‘My biggest fear is that someday we will take this moment, leave it behind and go back to business as usual.’ And we did.” 

FOLLOW THE LEADER Looking up to a more ethical future Darcy: We need moral leadership, people who will stand up and bring voice and action to setting standards of behavior and conduct. Where are the great moral leaders today? I can think of two in my lifetime that stand out. I’m sure there are many more examples, but Dr. Martin Luther King Jr. was somebody who believed in something and gave his life for it. And another one that’s the most extraordinary example of leadership in my lifetime is Nelson Mandela. He was willing to be put to death and assumed he would be because the pain of apartheid was greater than the pain of death. In fact, he spends 27 years on Robben Island and somehow emerges from that not only as a free man but becomes president of the free republic of South Africa. He then has the audacity to create a truth and reconciliation commission saying, “We need to be able to tell the truth in South Africa and forgive ourselves because unless and until we do, we cannot take our seat at the table of nations. So we’ve got to get to the truth of what’s going on here.” It’s long been said that we’re only as well as our deepest secrets. That is true of families, it’s true of corporations and it’s true of society. So we need to address the truth of what ails us. And I do think at some level that we have to speak to the moral fiber of this country and get us back to the basics and the fundamentals that our founding fathers lived by. When they signed the Declaration of Independence, they said that they mutually pledged to each other their lives, their fortunes and their sacred honor. They were doing something enormously bold at the risk of failure. They had no real sense that they could succeed, but they did. But it was built on a foundation of values. We need to get back to that. We’ve got to get away from self-interest and promote the common interest and the common good.

www.hrmreport.com

41


JoeBenevides:feb08

12/11/08

15:52

Page 42

RELOCATION

HRM. How is the current economic crisis, in particular the collapse of of time and receive what we hope is the greatest value for it. The best the housing market, creating problems for companies seeking to reloway to do that is to utilize real estate agents that are trained in the cate employees? art of relocation transactions. Not all real estate agents understand Joe Benevides. It’s having significant impacts on many fronts, not least on the relocation transaction and the time constraints that are a part transferees. First of all, it’s taking them longer to sell their homes, and secof it. There’s a Worldwide ERC form called the Broker Market ondly, the values of the homes are declining so their equity position is much Analysis that helps the employee understand what the proper less than what they anticipated it would be or what it once was. You also listing price of the home ought to be, what the competition is have folks who are losing money on the sale of their home. If they bought in the area, what other listings are out there. We’re in a situthe house over the past several years, they’re actually receiving a value ation right now where there are many more sellers than that’s less than what they paid for it. Probably buyers, so it’s really crucial to just as dire if not more so are those who owe have the property listed more on the house than it’s actually worth. properly. It’s never been In addition to his role at Worldwide That doesn’t necessarily mean that they’re more important to make ERC, the global association for losing money on the sale of the house per se, sure that the initial list relocation professionals, Joe but that they may have borrowed against the price properly reflects Benevides is Senior Vice President house over the last couple of years for imthe market and is not of Global Relocation Services for provements or funding a college education. some ‘pie in the sky’ number Paragon Global Resources. He is a Now the proceeds and the value are actually that the transferee hopes or needs frequent speaker at industry upside down, if you will, where the proceeds to achieve. conferences and is a recipient of from the sale of the house are less than the ERC Meritorious Service Award what’s needed to extinguish the mortgage. HRM. Is that something that’s happening? in 2001 and the ERC Distinguished Those are major issues. People have got an idea of what their home is Service Award in 2003. In addition, In addition to the impact on the transferee, worth and they’re unwilling to look at the realhe is an SCRP and serves on what’s also happening is that the costs to the ity of the situation? ERC’s Board of Directors. employers are going up. If they’re covering any JB. Exactly, and that only exacerbates the probBenevides holds a bachelor’s of the loss that might be incurred, that would lem. If a property is over-listed and the price is degree in finance from the certainly drive up their costs. And because it’s too high when it goes onto the market, after a University of Massachusetts, taking longer to sell the homes, there’s the while it gets old and the showings drop. Then Dartmouth and an MBA from issue of duplicate housing where the transferthe likelihood of selling it for any price or for a Suffolk University Graduate School ee has to be in the new location, so they actureasonable price goes down pretty dramaticalof Administration. ally move in advance of selling their home. ly. From a corporate perspective, I think that’s There’s the issue where they have a mortgage one of the most important policy changes that at the departure location and still have an a company can make: to make sure that emobligation to pay rent or a mortgage in the new location. In many instances, ployees are using qualified brokers or agents and making sure that they are corporations are footing that bill, so that’s driving up the cost of the relocautilizing a broker market analysis to set the initial price of the home. tion as well. As a result of all that, we see that disaffection with relocation Some corporations are offering a condition allowance. People say the is certainly higher than we’ve experienced in quite some time. three most important things in selling a home are location, location, location. Today I think that’s changed a little bit and condition is the most imHRM. How are companies working to get around these problems? portant. We see companies offering condition allowances up-front in the JB. What companies can’t do is change the state of the real estate market. marketing phase, where they’ll provide some amount of money to the That’s just the reality. What they can do to help their employees is to impletransferee to dress up the home. Do those repairs that might need doing, ment policies that will assist them to sell their home in the shortest amount paint over that purple wall and basically just put the home in the most mar-

Grinding to a HRM sits down with Worldwide ERC President Joe Benevides to find out what impact the economic slowdown and the housing market collapse is having on employee relocation. 42

www.hrmreport.com


JoeBenevides:feb08

12/11/08

15:52

Page 43

“Relocations in general, will probably slow down as cost management becomes more of an issue for a lot of these multi-national companies�

halt? www.hrmreport.com

43


JoeBenevides:feb08

12/11/08

15:52

Page 44

ketable condition it can be. When you have more inventory than people to buy those homes, condition really matters. Buyers are becoming much more particular, and they’re going choose the home that has the least amount of work to do. The other thing that employers are doing, and something that we’ve found is one of the most effective strategies to sell homes, is to increase the commission to the buyer’s agent. Then you make the property more attractive to the real estate community by offering a higher commission. Again, there’s nothing in there that can necessarily improve the price of the property, but it can certainly help to get the best possible price in the shortest possible time.

see any of our clients that don’t have international moves or have an international footprint. Companies are globalizing to take advantage of cost differences in other parts of the world. People are moving IT jobs to India and manufacturing jobs to China, so there’s that component where companies are taking advantage of the cost arbitrage. Secondarily, they’re looking at markets outside of the United States as growth opportunities, as a new market for them to enter to sell their goods or services. Cross-border moves have been the fastest growing part of the industry.

$32 BILLION Annual spend on corporate relocation in the US

HRM. Are these cost crashes in the housing market going to have an effect on organizations’ ability to hire the best people? Do you think that’s going to be a problem in such a competitive business environment? JB. Well, yes, but it’s not so much the cost pressure. What we’re seeing is many more moves that are canceled or rejected because the employee can’t afford to sell their home to take the new job. That’s probably one of the biggest impacts apart from cost, is that employers might not be getting their first-choice candidate. In many instances, the preferred employee simply can’t afford to sell their home. It’s not so much that they can’t make the mortgage payment; it’s just that they can’t afford to sell and then pay off the mortgage. That’s probably the biggest impact from a talent perspective.

794,000

Annual average number of employee transfers within the US

$10,000 Average cost of shipping an employee’s personal goods

31 DAYS

HRM. Do these global moves present a different set of challenges for companies and individuals? JB. Absolutely. There are cultural issues; there are language issues; there are housing issues. Look at someone moving from the US to somewhere like the UK. If they were living in a 3000 sq. ft., four-bedroom, two-bath Colonial home in the United States, they will not find that kind of housing in the UK – at least not for an equivalent price. Even with a move to somewhere like the UK where there is no language barrier, people often underestimate the challenges. The costs are different, the culture and lifestyle is different. A lot of that revolves around housing, but probably the biggest challenges are the family issues. We pay a lot of attention to the employee, getting them to the new location, getting them settled in, getting them into their new job, but it’s crucial to make sure that the family is well cared for, to make sure that they’re assimilating into the culture properly. The spouse may be giving up a career or putting a career on hold; children are changing into a whole different schooling environment. I would say that the largest reason for a ‘failed assignment’ would be family issues.

HRM. So have you seen a drop off in successful relocations over the past year or so, or is the situation not really biting yet? JB.We haven’t really seen much of a decrease in relocations yet. It has softened throughout the HRM. Do you predict that we will see less of decade and volumes are down from where they these cross-border relocations as the economic were in the late 1990s and the early part of this situation worsens? decade, but we really haven’t seen anything draJB. I think relocations in general, both domesticalSource: Worldwide ERC matic over the last year or so. It continues to be ly and international, will probably slow down as cost relatively soft, but we haven’t seen any dramatic management becomes more of an issue for a lot of worsening. It will be interesting to watch that phethese multi-national companies. I’ve always said nomenon over the next several months, where clearly the financial markets the easiest way to control relocation costs is to move fewer people. And you continue to soften, especially here in the States and also in Europe, for that know it’s not the most strategic of approaches, but it is an effective approach, matter. I think it’ll be more of an overall economic slowdown, which typicalso I think people will look at doing that. I don’t think we’ve necessarily seen ly leads to fewer relocations as companies try to manage their costs. anyone putting a moratorium on relocations, but they’ll be just more strategic in the folks that they choose to move. There will be much more pressure to be HRM. Have you seen a rise in international relocation over recent years? absolutely sure the position can’t be hired locally. Companies will need to Is that something that’s on an upswing? know what the reason for that particular move is and make sure that it’s abJB. Most definitely. The economy has become more global. It’s unusual to solutely necessary for that assignment to happen. 

Average time to move once transfer opportunity is accepted

44

www.hrmreport.com


Prudential.indd 1

10/11/08 09:08:20


VangentATE:feb08

12/11/08

16:07

Page 46

ASK THE EXPERT

Buyer beware Critical trends are impacting the purchasing of talent acquisition solutions. Eric Hutchison shares practical advice on buying considerations.

A

s organizations seek to gain competitive advantage in this volatile market, their ability to attract and retain high-quality talent has become an area of intense focus. To support this imperative, businesses of all sizes are evaluating or re-evaluating their Talent Acquisition approach. As selecting both a bestfit partner and the best-fit application is a critical consideration, there are three important trends that organizations should note. First, the talent acquisition system industry continues to undergo massive consolidation, making it confusing and potentially risky as a buyer. Secondly, more and more vendors in this industry are attempting to sell talent management suites as opposed to talent acquisition systems. Lastly, with many vendors there is a greater focus on bolting on new system components rather than on the quality of the talent that is delivered. These trends are marketed as positive changes by the vendors in terms of greater service, reliability and wider reaching automation. But are these ‘benefits’ best meeting your requirements? It depends. For organizations that have the budget and time commitment required to implement a full talent management suite, or who desire to work with companies that own the largest market share, the answer may be yes. For many others, the answer requires further examination.

knowledge and expertise they possess. Many times the acquired component is added to a portfolio that is only marginally related to the vendors’ original core competency in the HR space. The trend towards companies offering integrated talent management suites is based on the perceived benefits of integrating multiple HR processes, placing the emphasis on software and not on utilizing the tools to focus on acquiring top talent.

Eric Hutchison is Vice President, Assessment & Hiring Solutions for Vangent, Inc., a leading provider of talent acquisition and development solutions. He has more than 17 years of experience implementing hiring solutions and he is responsible for business execution within Vangent’s Assessment & Hiring Solutions practice. He specializes in working with clients on strategic implementation and can be reached at eric.hutchison@vangent.com.

If your primary focus is Talent Acquisition, the buy side implications of these trends are clear. With increased consolidations there are less ‘brand-name’ options in the market. Players may change, product knowledge may be distilled, and support and migration options may be limited. Buying a fully integrated talent management suite will require more budget allocation towards that investment, and will result in

“The talent acquisition system industry continues to undergo massive consolidation, making it confusing and potentially risky as a buyer” As the industry consolidates, acquiring companies are looking to reduce cost structure, buy into a new market, and bolt on additional components to their talent management solutions. It is not uncommon for key solution and industry experts from the acquired company to leave the organization and take with them the

46

www.hrmreport.com

So what if your requirement predicates a talent acquisition solution to assist you in competing for top talent now? Are you truly focusing on how the solution helps you accurately identify the best talent? Fortunately there are viable options, but making the best decision requires careful consideration. Best of breed talent acquisition solutions focus on the optimization of the hiring process and quality of hire.

lengthy multi-phased implementation cycles. It may also mean pushing out the purchase to reevaluate priorities and cost to justify the larger application. If your goal is to effectively recruit, identify and hire top talent, you may be going down a long and winding road with no end in sight.

When considering best of breed talent acquisition solutions:

• Evaluate the configurability of the solution to support your workflow and meet your current and future requirements • Find out if the vendor utilizes validated assessments to ensure quality of hire • Ask questions about the organization’s expertise in driving measurable impact through better hiring decisions • Ask about potential mergers and acquisitions the vendor may be involved with, and their financial status • Hold true to your requirements and guard against being oversold on unneeded functionality.

Talent acquisition system purchases, like any other strategic purchase requires careful due diligence. Being aware of the key trends affecting this marketplace will help enable you to arrive at a well-informed decision. 


VAngent.indd 1

10/11/08 09:13:25


PaulaDesio ED:feb08

12/11/08

16:02

Page 48

ETHICS FOCUS

Are ethics officers and HR professionals kindred spirits? HRM spoke with Paula Desio to find out how deep the connection goes.

M

any years ago, safety in the workplace wasn’t considered to be anybody’s concern. If someone got hurt, that was just too bad. Workers were expendable. Certainly, at the turn of the last century, that was the general view. Today people realize that safety is everybody’s concern. In it’s simplest form, a safe workplace is a good workplace: the understanding being that if there is an accident, it has a negative impact on everybody, not just the immediate victim. Paula Desio, Chair for Ethics Policy at the Ethics Resource Center (ERC), believes the same thing needs to apply to workplace ethics. “Employees want to work somewhere that they feel has a good reputation, and is essentially ethical,” she says. “And people want to buy products from companies that they feel positively about.” Those two factors, research has shown, certainly affect employee retention, morale and recruiting. People pre-

48

www.hrmreport.com

fer to work in a place where they’re comfortable, and people tend to be more comfortable in places consistent with strong ethical values than not. “Employees will react to what their workplace culture dictates,” adds Desio. “If the ethical culture is strong and there’s support from leadership, there’s no fear of reporting ethical breaches. Put another way, if there’s trust, they’ll get honest answers when they go in with a question to try to put things right. Employees are much more likely to care about their workplace and try to rectify potential problems while they are still at the small stage.” Of course, those employees who work in an environment where they feel pressured to cut corners will do so, and an environment that discourages raising problems will see employees avoiding getting guidance on correcting them. Ethical issues simply won’t be addressed in a way that could resolve them at the outset with minimal intrusion. This situation contributes to ethical and reputational risk for the company and their employees’ situation as


PaulaDesio ED:feb08

12/11/08

16:02

Page 49

well. “If you have a small problem and you ignore it, it blows up and becomes than it may be perceived to be. “These professionals cover a lot of the a big problem,” says Desio, “It can do harm to the company’s reputation and same things, and understand a lot of the same problems,” she comeven provoke legal proceedings. It can affect morale and long-term job secuments, “its just that there’s a communication and ‘acceptance’ gap in rity. It certainly affects recruitment and the public’s perception and attitude some of the descriptive terms which are commonly used to measure reabout a company and its products.” sponsibilities.” ERC – a non-profit, non-partisan organization Essentially, she believes leadership of com– actually dates back to 1922: a time when ethics panies have to do more to get HR and ethics in the workplace, much like workplace safety, working together. As she notes, progressive was barely even on the radar. Funded by donacompanies often do this by involving all segtions and grants, its objective is to advance ethments of their organization including HR – in ical standards and practices in all sectors of the sharing their ethics and compliance expertise. workplace, whether that be the public, private “I think there could be a greater understanding or non-profit. The center’s current focus is on inof a company’s ethics program,” she adds, saydependent research to develop its objectives. ing that perhaps ethics officers themselves “ERC has conducted a national workplace ethics should take the lead in communicating with survey every two or three years since 1994,” extheir HR counterparts – along with added supplains Desio. “It’s a longitudinal research study port from management. that is made up of confidential surveys of employees throughout the nation. The National Workplace Ethics Survey then serves as a benchmark against which further analysis and studies can be done on particular sectors and demographics Paula Desio is the first holder of the and individual companies.” Ethics Resource Center Chair for Results Ethics Policy, which was created in Some of ERC’s most recent June 2007. Her work involves ERC research also showed that while HR research, which has been unfrequent interaction with local, state professionals believe they may be responsible dertaken in conjunction with and federal officials and business for handling a certain type of misconduct, ethics the Society for Human leaders to make them aware of officers are often exclusively responsible for a Resources Management ERC’s work and analysis. number of others. Of course, the reality is that (SHRM), looked at the relaBefore assuming the ERC chair, both groups share the resolution of ethical istionship between ethics and Desio served for 10 years as Deputy sues. “Typically, HR, and this is a reflection of its compliance officers and HR General Counsel to the United own historical function, resolves issues relating professionals and their underStates Sentencing Commission in to abusive or intimidating behavior, lying by emstanding of each other’s funcWashington DC. There, she was ployees, employees abusing their sick leave, tions. It made for some very responsible for policy analysis sexual harassment, taking credit for others’ interesting results. “Our rerelated to corporate and economic work, discrimination and health and safety viosearch shows that only 23 percrimes, and for the 2004 lations,” says Desio. “Ethics professionals tend cent of HR professionals are amendments to the organizational to be more heavily involved in potential probreally aware of all of the disentencing guidelines for business lems involving conflicts of interest, fraud and mensions of the ethics and compliance and ethics programs. gratuities issues, document alteration, lying excompliance programs within ternally to stakeholders and misusing insider their organization,” Desio tells information or organizational assets. Our surme, adding that much of that depends on how an indivey indicates both groups get involved in handling email or internet vidual organization is actually set up. “Most forward abuse, privacy violations and the provision of goods and services that thinking companies have these groups work in concert. fall short of specifications.” It seems there is actually a tremendous Most have teams and understand the key relationship amount of overlap in the issues that both groups of professionals, hanbetween HR and the ethics functions. It’s necessary that dle as well as in their necessary skill set. “It should be more a question the personnel in these two functions work together.” of emphasis, and less a matter of a turf battles between the two groups,” Desio believes that the relationship is actually better notes Desio.

“These two groups are sharing many of the same responsibilities and there’s an overlap that should be harmonized”

www.hrmreport.com

49


PaulaDesio ED:feb08

12/11/08

16:03

Page 50

ERC surveys have in fact indicated a great willingness by both sets of professionals to learn more and cross-fertilize their knowledge: “The message to management has to be to encourage this effort. It’s certainly in their interest in terms of efficiency and getting the depth of your values communicated throughout the company.”

not really well-implemented. “If employees are willing to seek advice in the ethics area then the next thing to explore is whether they are then getting positive feedback for ethical conduct and decisions?” continues Desio. “Are employees prepared to handle situations with their peers and supervisors that might invite misconduct? Do they have some idea of questions to ask and how to assess the situation? Can management be questioned without Risk fear? Are there rewards for following ethics standards?” Desio isn’t referAn ethical approach to business is obviously crucial. But this comes ring to financial rewards, but to real incentives and a positive environment with challenges. Desio says that there is a very basic research formula for for successfully following ethics standards. Whether the organization actulooking at what ERC calls ‘ethics risk’. ally encourages ethical conduct and whether “Ethics risk is not just legal misconduct, employees believe their organization is truly but it can be anything that will damage a comethical are further measures of a well-impleHOW ARE THINGS REALLY DONE AROUND HERE? pany or public agency,” she explains. “The mented program that factor into ERC’s research ERC’s way of looking at it is whether there are and analysis. “Ethical culture is really the unwritten code high rates of misconduct in a workplace. And And just as employees will be affected by that guides how employees think and act. if that’s coupled with a low reporting of miswhat the company culture dictates, so will they Everyone knows that culture exists. So conduct to management, then that workplace be influenced by the feedback of their superidoes ethical culture.” Here, Paula Desio has a high ethics risk.” ors. Ethics and related compliance criteria are outlines ERC’s four key components of ERC’s research reflects that US companies often omitted in employee performance reethical culture. are at the greatest risk in the following areas: views, which obviously has an impact on the abusive behavior, employees putting their own perception of workplace ethics programs. Ethical leadership. By ensuring this exists, interests ahead of the organization, misreport“Employee performance reviews, whether not only is there a good tone at the top, ing of hours worked, internet abuse and stealing they include reference to these things or not, there’s a belief by the employees that of company resources, and lying to stakeholders are getting renewed scrutiny by many of the leaders can be trusted to do the right thing. and colleagues and workers (see fig.1). forward-looking companies and institutions,” Empirical research demonstrates how says Desio. After all, if something is not adSupervisory reinforcement. Individuals companies can change the level of their ethics dressed in the review process, which for directly above the employee in the risk by focusing on reducing misconduct and many workers is the single time of the year hierarchy of any institution set a good increasing reporting. “This occurs through when they hear what they have and haven’t example and encourage ethical behavior. measurable markers. “If a company has a done well, the obvious message is that it’s Supervisors are really the most critical well-implemented ethics and compliance pronot important. “There are certainly a lot of piece of any ethical leadership and culture gram, this alone can double the amount of recompeting concerns,” says Desio. “Whether in an organization. porting to management.” Of course, we the word ‘ethics’ is mentioned or not, the espresume that management will act in a propsential thing is that the certain messages that Peer commitment. This is the question of er governance role and take further measures reinforce an ethical workplace are getting how you have reinforcement in your peers to stop the misconduct.” through.” This is where ERC’s research can in ensuring there’s group support of doing Desio also explains how the complemenhelp companies focus their resources. the right thing. tary aspect to reducing misconduct in the In addition to its national surveys, ERC workplace shows a strong ethical culture. This also conducts assessments for individual comEmbedded ethical values. The values of the reduces misconduct significantly, and if an panies and organizations to understand their company should informally promote ethical culture is paired with a well-impleown culture, programs and risk points. This can consistency with the formal missions they mented ethics and compliance program, the be accomplished through individual ethics surstate so that they aren’t walking different path to reducing ethics risk is well-paved. veys or through embedding ERC’s questions paths and breeding cynicism. “ERC has identified and measured criteria as into HR and exit surveys, another illustration of to what constitutes a well-implemented prohow HR and ethics functions can complement gram and what comprises an ethical culture,” each other’s strengths in work together. says Desio, explaining that a successful program and strong culture are Policy both gauged by observing certain behaviors manifested in the workplace. “HR definitely has a role to play in implementing ethical policy,” Crucially, ERC considers that this isn’t about descriptions that are just on says Desio. In fact, she thinks they already are playing that role, noting paper, but behaviors that can actually be seen and measured. “This is what that HR professionals are most likely already involved in writing the we measure in our surveys: Are employees willing to seek ethics advice?” basic codes of conduct and integrating ethical perspectives into many she adds, explaining that if a company says there’s a way to get advice but other company policies. nobody is using the mechanism or available channels, then the program is

50

www.hrmreport.com


PaulaDesio ED:feb08

12/11/08

16:03

Page 51

FIGURE 1

Source: 2007 National Workplace Ethics Survey

MOST COMMON TYPES OF MISCONDUCT OBSERVED ERC’s surveys of HR professionals and ethics officers – who were 22 Putting own interests ahead of org polled as separate groups – indicates Abusive behavior 21 Lying to employees 20 that the first group feel much more Misreporting hours worked 17 involved with formulating ethics Internet abuse 16 policies than their ethics counterSafety violations 15 parts realize. “What we have is a failLying to stakeholders 14 Discrimination 13 ure of communication. These two Stealing 11 groups are sharing many of the Sexual harassment 10 same responsibilities and there’s an Provision of low quality goods and services 10 Improper hiring practices overlap that should be harmonized. 10 Environmental violations 7 They certainly shouldn’t be competMisuse of confidential org info 6 ing, and they certainly shouldn’t be Alteration of documents 5 ignoring the need to co-operate.” Alteration of financial records 5 Bribes Indeed, further findings show that 4 Using competitors’ inside info 4 when asked whether they are involved in remedying ethics-related Personal lapses situations, just over half of the Misconduct that furthers the company’s agenda polled HR professionals said they are actually tasked to do this, whereas almost 65 percent of ethics professionals say HR professionals are very compliance symposia of the relationship between human resources and equipped to do this, again highlighting self-perception gaps that could ethics, and what was identified was to try to break down the silos and readily be bridged with some mutual outreach. look at a fuller integration.” After all, many ethics officers come from a “Our findings point to the fact that there’s a lot more talent and ability HR background. and common professional interests that the two groups can look to each “We can help bridge that gap by creating a better awareness of the other for,” admits Desio. “We’re seeing that trend get increased attencommonalities,” says Desio. “I think our data points to the fact that tion and there have recently been many more discussions at ethics and there’s an abundance of talent and interest, and it just needs to be mined a little better in various organizations. Even though some activities don’t always have the ethics label on them, many workplace funcPOLITICALLY CORRECT tions can imbed an ethical culture and can see it better communicated. HR can work to share those concepts, values and training so that it’s When we spoke with Paula Desio, two weeks augmenting this importance throughout the organization. That’s going before the presidential elections took place, the to make for more efficient use of resources and a sounder program and ERC had just written an open letter to both culture throughout that company.” candidates. Here, she explains the impact a new Within most companies there is plenty of opportunity for training and presidency will have on ethics in the workplace. communication and these messages can and should be incorporated into “When it comes to restoring public trust, the that existing framework. “It doesn’t need to be another layer of bureaugovernment should take a broader look at ethics in cracy,” says Desio, “it just needs to be integrated.” If businesses and its workplace. It has traditionally defined ethics by educators fail to devote sufficient attention to building an ethical cullaw and by statute. But having a strong ethical ture then there is a great risk resulting from this lapse. It clearly has to program and strong ethical culture goes beyond be integrated in the workplace to have any meaning, and as the war for those narrow constrictions, and whoever occupies top talent and market uncertainty rumbles on, it certainly already has the presidency could look to set some leadership meaning for recruiting and retention issues – or, as Desio puts it: tone in that regard. “Forward-looking managers are always seeking to foster greater interIn line with candidates’ pledge to bring about ethics dependence and improve workflow, especially when you’re working in reform in government, the ERC commissioned a new difficult markets and looking for economies of scale. There doesn’t national poll that found 88 percent of respondents need to be a reinventing of the wheel.” In its simplest form, it’s really a believed it is important for the next President to have a question of the resources that are devoted to the teaching of ethics and clear plan for ethics reform in Washington. business and building upon that. After all, if pooled and embedded reERC’s poll makes it clear that Americans will support sources devoted to a safe workplace make for a good workplace, suremeasures to restore ethical climate in Washington and the ly resources devoted to an ethical one can only do the same?  ERC stands ready to assist in strengthening ethics in the federal workplace.” For more information please go to www.ethics.org or contact Desio directly at paula@ethics.org

www.hrmreport.com

51


JWT2.indd 2

10/11/08 09:05:30


JWT2.indd 3

10/11/08 09:05:34


Stewart Friedman:feb08

12/11/08

16:04

Page 54


Stewart Friedman:feb08

13/11/08

08:47

Page 55

LEADERSHIP

Can leadership skills really help enrich other aspects of your life? Stewart Friedman thinks so, as HRM’s Matt Buttell found out.

L

ife often throws things at us to make us question our priorities. For some it could be a bad career move, while for others it could be the loss of a loved one. For Stewart Friedman, Director of the Work/Life Integration Project at theWharton School at the University of Pennsylvania, it was the birth of his first child. “I began to think very hard about what my role as a father was in making the world safe for my children,” he comments. “That was something I hadn’t actually thought about before I met him.” By evaluating what this meant to him, Friedman began to develop his hugely successful Total Leadership program. It was in 1984 that Friedman became a faculty member at the Wharton School, and following the birth of his son the approach really began to take shape. “I started to talk about it in the classroom,” he explains, “and the students reacted quiet strongly. Some were angry and thought it was inappropriate to talk about children and the responsibility of the private sector to nurture the next generation of people, not just as employees. Whereas others were very grateful to see the opportunity to cultivate the next generation into their companies and families.” The reaction of his students meant Friedman had to embark on a path of research regarding work/life balance. “Back then, it was mostly women doing research in this area. And there were very few business schools. Because I was a man coming from the Wharton School, I kind of stood out,” he jokes. You could say Friedman became something of a celebrity, at least in some circles. “I was an odd kind of duck in the conferences and gatherings about work/life,” he explains. “I ended up having a lot of visibility in the media.” Among others, he worked with Vice President Al Gore when he was in office, and the process became a big part of Friedman’s work. It was at this time, in the 1990s, that Friedman was focusing on how to develop the capacity of leadership within companies that worked in business schools, and everything came together at the Ford Motor Company when, among many programs there, one in particular was created. As Friedman explains, the purpose of Total Leadership was improving performance in all four domains of life – work, home, community and self – by creating value among them. The program walks participants through its three main steps and builds on the research and work that Friedman has completed in both the work/life and leadership development fields. The book, which accompanies the program, has been described as “Brilliant” and “Offering what most think impossible.” What’s more, when the program started with 36 high-potential managers implementing changes to their work and other parts of their lives, experiments not only produced impressive quantifiable business results, but also improved job satisfaction. It provided respondents with a deeper connection to their families and communities and many reported feeling healthier and less stressed. All were making better use of their leisure time and felt better about their company and more positive about tying their future to that of their firm. All this happened in the space of about four months. Clearly, Friedman was onto something.

www.hrmreport.com

55


Stewart Friedman:feb08

12/11/08

16:04

Page 56

a vision that inspires them and the people around them,” says Friedman. “Their everyday actions fit not only with their personal values but also with the values of the groups of which they are a part.” The second piece, “be whole,” is to recognize and respect that there are four domains of life and that they need to fit together in a coherent way. “That’s something we all aspire to, each in our own way,” says Friedman. “This comes to life by identifying the most important people in each domain, those that I call key stakeholders, and describing the performance expectations you think they have of you and the expectations you have of them.” This segment is about establishing deeper connections with the people who matter most to you in your work or career, in your home or your family, your community or social groups, and simply telling them how important they are and having conversations about mutual expectations. “It can be very enlightening,” says Friedman. “What you think people expect of you is often more than what Stewart Friedman is the founding director of the Wharton School’s they actually expect. This is a great insight for many, Leadership Program and its Work/Life Integration Project. He is the former and it’s quite liberating because it gives you some head of Ford Motor’s Leadership Development Center. Friedman has great discretion to experiment.” worked with thousands of executives, managers and community leaders Finally, the “be innovative” segment looks at conto strengthen their leadership skills and enrich their lives. tinually experimenting with how you get the job done. “In the third phase, you design and implement experiments that are intended to produce a four-way win,” “There are many different kinds of experiments and everyone does says Friedman. “That’s really a lot of fun when you try something new and something different,” says Friedman. “It’s all customized to the individual.” learn about creating sustainable change, which is, of course, what leaderThe things that people do range from exercising and changing their diet, to ship is all about.” Here the focus is not just performance at work, but in all turning off the Blackberry a few nights a week. People don’t just lose four domains of life. weight, but also improve sales performance and client satisfaction, as well as form closer relationships with friends and family; they create dedicated Take the lead time outside of work, which in turn improves performance at work as they It is obvious that Friedman thinks leadership is very important in terms are more focused. of human resources management. He details that having been a member

Step to it Of course there is an argument that no matter what you do, you can always become a better leader. This is something that is echoed by Friedman’s program, which maintains that leadership is something that can, and indeed must, be learned. “It involves three main steps: be real, be whole and be innovative, and the process of reflecting on these consciously designed experiments allows you to draw insight about your own leadership and how to bring the pieces of your life together in a meaningful way.” The first piece, “be real,” encourages participants to clarify what really matters in their life. “We ask people to describe three or four critical incidents that have shaped their lives and their values,” explains Friedman, saying that this means participants are acting with authenticity, which gives them the strength that comes from doing what they love, drawing on the resources of their whole life and knowing that they’re creating value for themselves, their family, business and world. “Effective leaders articulate

“The role of the HR executive is growing in importance and has become much more of a strategic part of so many businesses”

56

www.hrmreport.com

of the Human Resources Executive Committee at Ford 10 years ago, and having taught the strategic human resources management course at Wharton, he has felt that there is an increasing importance in seeing people as a distinctive asset. “The role of the HR executive is growing in importance and has become much more of a strategic part of so many businesses,” he says. “That’s why I think it’s a great career for young, talented businesspeople, especially because it has traditionally not been the sexiest option for many people.”


ImageNow.indd 1

10/11/08 09:04:32


Stewart Friedman:feb08

12/11/08

16:05

Page 58

FEEL THE SQUEEZE Stewart Friedman on how the current economic climate could be the perfect time for leaders to step up to the plate. This is a time when, contrary to the knee-jerk reaction that managers are likely to make, which is to turn up the pressure on their work force, it’s actually a smarter idea to let your people know the reality, give them information about the real prospects for your organization, and invest a bit of attention to their lives beyond work. This means that you are not burning your people out, and there’s a high risk of that right now because of the pressures that people are feeling. You can go a long way as a business leader to ensure that the people who are still with you are functioning at a high level if you acknowledge that, yes, there are pressures at work, but also that these pressures are felt in other parts of their lives too. Give them an opportunity to take a small step to experiment with how they get things done to make their lives outside of the office a little less stressful. Your business will benefit as a result.

And, as the consulting world moves toward issues of organization and people strategy, this offers another indication of how the concepts and tools from the HR field are being applied to real business problems. “Recently, the trend has been, and will continue to be, for HR to have a deep background in some other aspect of the business. Having early exposure in your career to another functioning area, or being a player on a business team where you have real day-to-day knowledge of the core business aspects, will increasingly be essential to the HR world.” Despite a recent focus on work/life issues, one of the trends that Friedman has observed over the years has been the excessive segmentation and differentiation in this field, so much so that it is often relegated to a lower status position in the hierarchy of HR issues. In contrast to this, it is Friedman’s belief that HR professionals need to see a natural convergence between both the work/life field and the leadership development field. He is encouraging human resources management teams to do the same. “If the work/life field can be directly connected to the leadership development people of the organization, we change people in the HR world and I think it serves both parties well to do that.” Friedman concludes by saying it is an exciting time for HR. “The impact that a smart HR strategy has on a firm’s competitiveness is absolutely huge,” he says, and he certainly offers food for thought – “The Total Leadership program is not an abstract idea,” he says. In fact, the program’s results show that it’s structured method produces measurable changes. “You become more focused on the things that matter and you feel more grounded and more like the person you want to be,” says Friedman. As Total Leadership generates support and helps participants feel more connected to the important people in their lives, Friedman believes the key to leadership success lies in offering more resilience to the unpredictability of today’s turbulent markets, and the turbulent world as a whole. By becoming open to discovery and feeling more hopeful and enthusiastic about our futures, Friedman’s program shows, in very practical and meaningful ways, how to get the power to shape them. 

58

www.hrmreport.com

WHEN FORD MET FRIEDMAN Back in 1999, then-CEO of Ford, Jacques Nasser, was looking to change. Ford had previously been recognized for its slow-paced, structured environment, and now it was time to embrace diversity and the firm’s talented people. But what the company really needed was someone to find this talent and train it. Ford needed a leadership guru, someone capable, an outsider, someone unburdened by corporate history – someone with credibility that could make the firm’s radical change ideas a reality. Fortunately, Ford found Friedman. By this time, Friedman’s work was already gaining a reputation for success, and his leadership program was beginning to be recognized as a defining experience for Wharton’s MBA students. At Ford, one innovation was that each year the manufacturer would take 36 of its brightest stars for a week of classes. Nasser himself would assign strategic projects to these executives, grouped in teams of six, which included members from diverse areas of the company. Six months later, the teams would report back to the CEO on their findings and their impact. It was Friedman's job to ensure there was leadership development happening on an epic scale. Friedman had to extend the firm’s principles deep into the organization. He says of this time, “I had an opportunity to combine everything I had done into something with a much broader scope and impact.” Already well known in human resources circles as a leading thinker on work/life issues, and having been noted by Working Mother magazine’s list of the top 25 men who had succeeded in improving the lives of working parents, Friedman’s work was clearly making change happen. At Ford, the changes were dramatic. Friedman remembers it being like “training legions of crusaders in the service of transformation.” He recalls it being, “a daunting task, but an exciting one."


SQsolutions.indd 1

10/11/08 09:12:21


PeggyPego:feb08

12/11/08

16:03

Page 60

WORKFORCE DEVELOPMENT

I

f you’re looking for an example of workforce development in action, and fossil plant operations and our people have knowledge that can’t you couldn’t do much better than Margaret ‘Peggy’ Pego. Currently be learned overnight,” continues Pego. “We invest a lot in our peopleSVP and HR Officer for New Jersey-based energy company PSEG, sometimes spending years getting them up to speed – so its important Pego began her career with the organization as a secretary some that we entice them to make a career of it.” 30 years ago. Since then she has risen through the ranks with the Under Pego’s leadership, PSEGs is devoting significant energy to constant support of her employer. “I completed my undergradunot only ensuring their existing workers are well trained but also to findate degree while I was working at PSEG and they paid my tuition,” she ing and attracting the next generation of employees. For those already tells us. “I completed my MBA and utilized the tuwith the company, there are many opportunities to ition benefit program that we still have in place. We develop skills and gain new insights on the business. have a number of employees every year who take “We have a supervisory academy and a leadership advantage of that.” academy to ensure that our supervisors, our manThe importance of workforce development is agers and our leaders are trained and have the tools perhaps more pronounced in the energy industry that they need to excel,” says Pego. “We have also energy workers than in other sectors. It’s a 24/7 business that delivmandated development goals for all of our non-union eligible to retire in ers critical products, and workers have to be ready employees. It’s one of the things that we measure on to respond to challenges as soon as they happen. our enterprise scorecard as far as what percentage of the next decade This requires an employee base that really knows development goals have been completed. Managers what it’s doing. Not only that but the industry, in work with employees throughout the year, and common with many others, is facing a looming criprogress on developmental plans is tracked in a comsis in staffing. “We have a lot of baby boomers who are planning to reputer system and measured on a company-wide scorecard.” tire,” Pego explains. “We need to find a way to fill that gap to ensure Key to the success of programs like these has been the increasing inthat we have workers to take the place of those who will be leaving.” fluence of technology. “We’ve been very focused on bringing in a more inSome statistics say that about half of the 550,000 power industry worktegrated HR system than we had in the past,” Pego recounts. “We now have ers, largely baby boomers, are eligible to retire within the next five to a system called ‘emPower’ and it’s the first time that we’ve ever had our per10 years. This would be a headache for any business, but for a compaformance management, our goal management and our succession planny with so many hi-tech, safety-critical positions, it is a major challenge. ning management in the same place and we are now implementing the “Our industry requires very specialized skills, especially in our nuclear compensation module tied together. In addition, it has an employee profile

550,000

THE POWER TO IMPROVE HRM sits down with Margaret ‘Peggy’ Pego of PSEG, to find out how the energy company is training to beat the looming skills shortage.

60

www.hrmreport.com


PeggyPego:feb08

12/11/08

16:03

Page 61

Margaret ‘Peggy’ Pego joined PSEG in 1974, and has held a variety of management positions in the HR department. She holds a Bachelor of Arts degree in business administration from William Paterson College, and a Master of Business Administration degree with a concentration in management and labor relations from Seton Hall University. She holds a certificate in EEO studies from Cornell University, and has also completed the Human Resources Executive Program at the University of Michigan. She is also certified as a senior professional in human resources.

where an employee can go in and view their profile and update it. Once we implement the compensation and variable pay modules, all of our major HR processes will be linked. That is a tremendous step forward.” Quite aside from the direct benefits to the company that this focus on development brings, it’s also extremely popular with the workforce. “We recently completed an employee engagement survey and learned just how much our employees value training and development,” Pego explains. “That’s an important validation, since we’ve long believed that development is one of the key components to retaining talent.” With skilled workers at a premium, such retention is immeasurably valuable. But Pego and PSEG have not focused their efforts solely on their own affairs. Realizing that the workforce challenge affects the entire industry, the company has taken a leadership role on the national level to ensure that the talent base will be wide enough for everyone. The company is heavily involved with an organization called the Center for Energy Workforce Development, so much so that PSEG CEO Ralph Izzo acts as chairman, while Pego herself is the chair of executive committee. “CEWD helps energy companies recruit and train prospective employees,” Pego tells us. “We focus our energy on sharing best practices and working on marketing materials aimed at getting young people excited about opportunities in the industry.” While Pego’s attention is clearly focused on the travails of her own sector, she is clear that her experience can be applied right across the business spectrum. “I think it can be useful to other industries,” she states. “We’ve placed a much greater focus on our workforce, both those that are coming in as well as those that are here and those that are leaving. We implemented a phased retirement program to help us with knowledge transfer and to keep some of our more experienced individuals engaged part time if that’s to their choosing. Any industry could do something like that. The key is convincing high level business leaders to make workforce development a high priority. With that, you’re on the right track.” 

GOING GREEN Pego’s thoughts on people planning for the future of energy We look at our workforce holistically. We want to be sure that we have a focus on ensuring the skills to power a green future, not just the current jobs that we need to fill but the green jobs that are coming down the pike. We’ve developed initiatives in several areas including developing a source of diverse, well trained and prepared candidates. We’ve done a lot to retool and retrain our current workforce, and we’ve looked at the other end of the spectrum, which is how we go about reinventing retirement. We launched a Green Energy Academy at a local vocational school. The program exposes high school students to green energy by combining classroom and experiential learning to equip them to follow a particular career path. Upon graduation, students can either enter the workforce immediately or go into one of the college degree programs we’ve helped to develop in partnership with various local schools. They participate in classroom sessions at the college but then they also come to our training facility and do hands on training and summer internships with us. That has proved very helpful to us to get a qualified group of students that we eventually recruit at the end of the two-year program.

www.hrmreport.com

61


TalentScope_ATE:feb08

12/11/08

16:06

Page 62

ASK THE EXPERT

It’s 3am, do you know who your leaders are? BY LYNNE MORTON

A

re you being kept up at night wondering if you have people ready to run your company? Do you even know what kinds of people you should have? These are the kinds of issues that are keeping many people up at night now. If you are in charge of human resources, these are the kinds of issues that should be keeping you up at night. The business world is under scrutiny to make better decisions, to generate better results, to embed accountability into its processes. And HR should be at the forefront of these improvements. You might be wondering if there is a dearth of people out there who can lead this way. I don’t think so. I think that there are plenty of individuals with the qualities required for outstanding leadership. I just think that HR needs to show its own form of leadership and find them. Right now, HR is not providing organizations with the processes and tools required to understand what makes an individual a successful leader in a particular organization, it is not having the courage to ask the tough questions that will define leadership and it is not engaging managers in the process of developing the next generation of leaders.

Lynne Morton, Chief Creative Officer, TalentScope, is a globally recognized thought leader in talent management. She has worked with prominent public and private sector organizations, helping them establish or manage talent and succession processes. She also held leadership roles at PISolutions and PricewaterhouseCoopers. Morton can be reached at lynne.morton@talentscope.com .

to use a ‘tried and true’ model, you can conduct your own assessments and create your own model. Cross checking the competencies against leadership values and behaviors is also required, since more leadership and fewer functional skills are needed at higher organizational levels. You need to tweak that leadership model as your business changes, or as the conditions in which you do business change. If you need leaders to take you through tough times,

“There is not a shortage of individuals with the potential to be leaders. There is a shortage of leadership identification and retention” There is not a shortage of individuals with the potential to be leaders. There is a shortage of leadership identification and retention. The good news is that this can be fixed. Follow these few steps and sleep better at night. First, there are outstanding competency models readily available to help you determine what capabilities will be most important in your organization, your special context. You need to know what you need to have. If you don’t want

62

www.hrmreport.com

you will want strong communicators and motivators. If you need leaders to take you into a new phase of growth, you will want visionaries and resilient individuals. Second, there are outstanding tools available to help you assess people within your organization against these leadership attributes. Such assessments ask questions that will help you determine if the person has what it takes, as you see it. Multiple responses, from many perspectives are

especially helpful here and can easily be held in knowledge repositories. If available to managers, these repositories can be used, with HR, to plan leadership development or manage succession. Technology can be incredibly helpful since it can make this information available to managers anywhere, at any time. Third, we know that leaders develop leaders, and we also know that managers block leaders. Therefore, it’s essential that managers be engaged in the process of identifying, developing and retaining leaders. Managers need easy-to-use processes for evaluating performance and determining potential. Managers need reasons, business and personal, to become talent spotters. If there is something in it for them, they will mentor others. If the impact on their business is clear, they will put top talent on new teams, give them special stretch assignments and know what will keep that talent onboard. If managers don’t know what teams/assignments exist, or what matters to future leaders, technology can connect them to such information. Three steps is all it takes. And it’s a golden opportunity for HR to provide the kind of business value that it has long been seeking to add. Seize that opportunity. There’s never been a better time for better leadership. 


TelentScope.indd 1

10/11/08 09:12:42


JacquelineKuhn:feb08

12/11/08

15:50

Page 64

IT has the potential to transform HR into a genuine strategic business partner. But only if those involved stand up and make their voices heard, says Jacqueline Kuhn.

T

echnology is affecting every aspect of business and HR is no exception. Here the central role is in helping HR understand what the workforce is, what they're doing, and being able to better leverage and manage that. We have gone beyond the basic of just tracking who the people are. Talent management is everywhere and applications are doing everything from screening people with assessments to tracking all their current and former job history. People are doing very thorough performance assessments and technology is allowing them to store it all in one place and report on it and get a really good picture of talent. Probably the biggest change is just how technology is helping HR manage the people assets of a company, which are the most valuable assets it has. Recruitment, performance management and compensation management are the three key areas being reshaped by IT. Web-based, self-service manager/employee access analytics are really on the forefront in HR. Not just pulling out reports, but really giving HR the tools to be able to analyze and create the kinds of charts and graphs and information that senior man-

64

www.hrmreport.com

agement is looking for. It's gone beyond just the report list of who you are and what job code you have. Technology aside, HR still has some way to go before it gets the kind of respect form management that other areas of the business command. It's getting better and the HR leaders that can talk business language are

“Too many HR people are doing things for HR’s sake, not for the business’ sake” definitely being seen as more bottom line. But unfortunately I don't think that HR overall really has a business mindset. Too many HR people are doing things for HR's sake, not for the business' sake. For example if you're looking at implementing a performance management technology, too many HR leaders are trying to justify implementing the technology because it will help them manage the performance process. It would be far better to ap-


JacquelineKuhn:feb08

12/11/08

15:51

Page 65

proach from the angle of helping business understand who their good performers are so it can make sure it’s leveraging the right assets. An area that is very much on the increase and one which holds great potential for HR is Web 2.0 and social networking technologies. These tools can be internal or external, but they give people unparalleled opportunity to connect with each other. People can find out what their contemporaries are doing and share tips that enable them to get a head start on projects they are planning. I hate to say it, being a consultant myself, but there's a lot of networking you can do with your peers that may help you reduce some of your consulting overhead. Internally too, this technology can really help the employees of a company. They can be much more efficient and effective and leverage some standards and best practices that much more quickly. I've seen a couple of companies doing this very effectively. Both IBM and OfficeMax are using these kind of technologies to create internal employee communities. Letting employees create their own social communities to feel connected has a big effect. Even if they are using company tools for things that are not necessarily ‘business related’, such as a company golf league, it gives them the opportunity to communicate with each other and really talk to each other and really feel connected. HR embracing those tools and embracing communities that way, will go a long way in employee retention and satisfaction, even helping diversity in some areas. It gives employee groups like LGBT communities a place where they can share experiences and advice. Those are the kinds of things that HR can do to help the employee have a better experience not just productivity-wise but personally as well. And of course that feeds back into the company itself: if you've got a happier workforce who are more engaged and connected with the workplace and their colleagues that has a positive impact on the company. That is really important to the younger generation of worker that is out there.

UNDERSTANDING THE HUMAN SUPPLY CHAIN t the root of it is a good understanding of exactly what your people costs are. If you can get even a broad brush understanding of what your human supply chain is, and then apply technology, that is going to help you manage the costs of that human supply chain. If you can improve that chain then you can definitely get real ROI. Let’s say you are a manufacturing company and you make a product. The human supply chain around making that product is the people who recruit the people to make the product, the people that market the product and the people who distribute and sell the product. You need to know what all the human costs of running the business are. Then you can identify what those costs are, and then show how technology will help you manage parts of that supply chain. Maybe you can and either – and if you may not be able to reduce costs, maybe you can reduce time and time may reduce costs. Maybe it's a matter of getting a better person in that can do the job better and – one percent instead of two. But what HR doesn't seem to take is a financial perspective on the human costs across the business, from an end-to-end cycle, and how much does it really cost us to do what we do with the people that we have. And that is what's going to take HR to be able to get real ROI from technology.

A

They don't want to work somewhere where they aren’t connected. They're used to being connected at all times and they want to work at a company where they feel that they're being treated well and that they're enjoying their work. If they're not enjoying their work they're just not going to stay. The real downside is that HR is not always on the forefront of bringing in technology. Often the impetus is coming from operations and HR is almost just along for the ride. You can see this in the communication area, with Web 2.0 technologies and things such as Microsoft Sharepoint. I see a lot of corporate communications departments IT departments actually owning some of those projects where HR would really benefit from being in the driving seat. They allow you to reach out to your people and there are so many ways HR can leverage those kinds of tools for employee retention, education, training and communication. But I don't see the trend where HR is leading those charges. They may be a part of it but it often happens because IT wants to upgrade its overall portal for the company and then HR gets a piece of it. 

Jacqueline Kuhn is Chair of the Board of the International Association for Human Resource Information Management (IHRIM). Kuhn has over 20 years in the Human Resources and IT professions with focus on delivery of HR solutions through technology enablement. Her scope of expertise includes HR technology strategy, software selection, implementation, application management, sales and account management. Kuhn has worked in management positions in HR and Technology for RR Donnelley & Sons, Computer Science Corporation (CSC), Moore North America, Sears and OfficeMax and is currently President of Kuhn Consulting Group, LLC a firm specializing in consulting services for HR Technology.

www.hrmreport.com

65


EmployeeTransferCorp:feb08

12/11/08

15:43

Page 66

INDUSTRY INSIGHT

How the mortgage crisis is really affecting your transferees By Frances Martinez Myers.

E

d Stewart is a rising star for one of the nation’s leading fast food chains. Recently, he was offered a promotion to head the company’s southwest region – an opportunity he has had his eye on for a while. There’s just one problem, however: Ed can’t take the job because he’s upside down on his mortgage to the tune of $90,000 and his employer can’t cover the loss. Ed’s circumstance isn’t unusual in today’s market. Like many homeowners, he cashed out his home’s equity through a refinance. When property values dropped, Ed found himself owing more on his mortgage than his home is worth and so wasn’t in a financial position to accept the job when the promotion came along. The plummet in the housing market has created financial woes for American workers like Ed and challenges for employers that need to keep their businesses growing. Until the market recovers, employers will have to accommodate employees they want to promote and move to other worksites. The highs of massive real estate appreciation in some areas triggered a spending spree as people used their home equity like an ATM. The access to easy money backed by Wall Street and 14 rate adjustments by the Fed over a three-year

Frances Martinez Myers is SVP for Employee Transfer Corporation and its affiliate, ETCREO Management. She has 33 years of industry experience both domestically and internationally. In 2005, Hispanic Business named her one of the top 100 most influential Hispanics in the US and in 2006, Realtor Magazine named her one of real estate’s 25 most influential thought leaders.

that tend to change jobs and relocate every three years, this trend spells trouble. Even if they wanted to accept job offers, most simply can’t. The housing crisis has claimed victims at every economic level, including successful professionals who simply leveraged themselves with too much of a mortgage. Many people have also racked up significant credit debt as they scramble to keep up with mortgage payments and living expenses. Would a candidate disclose sensitive private information like this during a job negotiation? And, if they did, would you still want them with all their baggage?

“The housing crisis has claimed victims at every economic level, including successful professionals who simply leveraged themselves with too much of a mortgage” period set the stage for an epic meltdown as adjustable-rate mortgages began to reset in bigger increments, causing many to default. People who bought at the peak of the market (between 2003 and 2006) or refinanced to an exotic mortgage are now ‘under water’ on their mortgages, owing more for their home than it is actually worth. For high value employees

66

www.hrmreport.com

Difficult as these situations are, employers must consider the shrinking talent pool, the competition for hires and weigh short-term solutions that bridge the hard times for transferees. One solution may include a relocation strategy that gives transferees alternatives to their real estate issues. Most employers can’t afford to foot the bill for real estate losses for their

transferees and in lieu of this, companies should develop a plethora of relocation options that fit transferees’ situations within reason. One option may be to lease their home long enough to bridge the sour market. A package may include property management fees, funds to cover the mortgage between renters, the assistance of a real estate professional to list the rental and property management services. A menu of services like this enables employees to make a choice that fits them and still preserves their privacy. This bridge plan should not exceed a twoyear term and would cancel other menu options once the term ends. This type of arrangement is a win-win for both parties because it limits the exposure for the employer, enables them to fulfill their employment needs, and frees the transferee to continue on their career path. Finally, this is a time for employers to look at problems with a different mindset. It’s vitally important to design a custom program that reflects the market. Those companies that innovate new ways to retain and keep their best people moving now will be in a stronger position once these difficult times are behind us. This too shall pass, and when it does you want to be sure your best people know their interests were always tops in your book. 


EmployeeTRansCOrp.indd 1

10/11/08 09:01:59


CultureRx ED:feb08

12/11/08

15:28

Page 68

MANAGEMENT FOCUS

Getting the

right results PART ONE

Jody Thompson and Cali Ressler are behind one of the most innovative and compelling initiatives the industry has seen in recent years. HRM’s Matt Buttell spoke exclusively with Thompson to find out more. “What happens in a Results Orientated Work Environment (ROWE) is, you focus on getting the work done, you have control over your time and you do what’s necessary to drive the outcome,” says Jody Thompson, CoFounder and Principal of Culture Rx – the company behind ROWE. “So if sitting in traffic isn’t necessary to drive my outcome, I don’t do it. If going in at 8:00 in the morning so that my boss can see me in the office doesn’t drive results, I don’t do it. That’s why people are more productive. They’re actually not focused on all that other stuff; they’re focused on getting the job done,” she adds, saying that it’s like every single person is the owner of their own business. Put simply, ROWE shouldn’t work. It literally takes everything you might think you know about company culture and flips it on its head. But, oddly enough, it actually seems to work perfectly. ROWE was borne out of co-founders Thompson and Cali Ressler’s own passionate belief that there is a better way for companies to work. “Cali and I were both employees at Best Buy,” ex-

68

www.hrmreport.com

plains Thompson when we sit down to speak with her. “We worked within the human resources area where we were tasked with taking flexible work arrangements and implementing them or bringing them across the organization. We knew that flexible work arrangements were old thinking, that they didn’t work and that they create hostility in the work environment. We also knew that they were really exclusive of people and only accommodate a very few.”

Fear Subsequently, what Ressler andThompson decided to do was something radically different. By experimenting with what the future of work could look like, based on where companies were all in terms of technology and by actually throwing out all the ‘old rules’, the ROWE environment began to take shape. “We started experimenting with teams and moving people away from the thought that work is a place you go, and instead, something you do,” says Thompson. “We’d have them talk about not tracking time, but actually focusing on work.” They add that non-exempt employees in a ROWE follow DOL guidelines for tracking time, but they do not have schedules. Today, while Best Buy corporate headquarters operates a ROWE environment in about 80 percent of its population, Ressler and Thompson work independently from their old firm and, with Culture Rx, are looking forward to implementing the same working model at other organizations across the globe. “We absolutely believe it’s going to be a global initiative,” notes Thompson. “There’s a lot of things about how the office operates across the world that’s the same, and we are hearing from countries all over the world who are asking us when we’re coming to their country. ROWE is very attractive to people. Anybody that does work is attracted to this way of thinking.” Though this may be the case, its certainly not as simple as waltzing in and changing things with the flick of a switch. “We are working with other companies, but companies are nervous about being named until they are


CultureRx ED:feb08

12/11/08

15:28

Page 69

sure that ROWE is working in their culture,” explains Thompson. “Companies are very afraid of ROWE, and are skeptical of whether it can work in places besides Best Buy. We know it can, and we’re watching it happen, but we also understand that they’re nervous about it.” They need not be. Evidence shows that teams who have adopted ROWE see productivity rise by 41 percent on average. In short, what’s happening is, companies are able to get more from less. Or as Thompson puts it, “they can keep their same employee base and get a lot more work out of them in this new environment, and that’s good for companies that are struggling right now with the amount of work that needs to get done and the fact that people are saying they can’t take on anymore.” Thompson explains how ROWE actually allows employees to take on more work because they are operating in a smarter way. In fact, companies who are interested in retention and looking to attract the top talent (and who isn’t?) should probably know that a ResultsOnly Work Environment sees voluntary turnover rates decrease as much as 90 percent within ROWE teams.

No ‘i’ in team The several references to ‘ROWE teams’ is beHOW ROWE CAME ABOUT cause, as was the same when the initiative was introduced at Best Buy, ROWE is implemented Having spent their careers as ‘agents of team-by-team throughout any organization. Cali Ressler and Jody Thompson change’ in the corporate environment and “People opt in if they want to do it. We don’t training related fields, CultureRx started as force this on anybody, and that actually makes the embodiment of Ressler and it more appealing,” says Thompson. “People often finds they have a hard time coming to Thompson’s own belief that there is a think ‘they’re not making me do this – I actualterms with that. better way to work. Coming home from ly want to’, and that’s why change happens all However, evidence shows that once a comdifferent backgrounds – Thompson from the more successfully, because people really pany’s people are ‘unleashed’ in this new environeducation, Ressler having worked at Best buy into it and want to make it work.” ment, they can give back a hundredfold. “They Buy as one of her first jobs – both women While employees might buy into ROWE, it can are so excited and they have much more energy,” were driven by an intuitive notion that often be managers that prove to be the biggest expresses Thompson, but managers often get results-focused environments foster challenge for Thompson and Ressler. “The people worried because they want to control where peoproductive employees and have a positive don’t have a hard time at all,” cites Thompson. ple are and when they’re doing work, and that’s effect on overall performance. “They want to work in a better way, they want to often what is bogging everybody down. Working together at Best Buy, they work more efficiently, they want to give back to “We have seen that when a team goes to a experienced a melding of minds. Largethe company, but they don’t want to be treated Results-Only Work Environment, there’s a lot of scale organizational change. Teaching and like children, and in the paternalistic way that tension that’s created because everybody wants working with teams to help them we’ve set up the office across the world, it often it. They’re not resentful of the team that has it; understand a new way of doing something treats people like they can’t make their own dethey’re irritated if they have a boss that’s holding proved to be invaluable preparation for cisions about how they spend their time, and them back,” explains Thompson. Often managers what became ROWE. they can feel robotic.” She says that managers of teams within organizations have certain beliefs today, particularly those working in what we about the way work should happen, and, explains would call traditional office environments, are Thompson, what makes the social change effecmanaging people’s time and monitoring the hallways. “What they’re tive is creating that tension so people continue to rise up and push against doing is showing that they’re under the assumption that if people are leadership. “And they can’t give up,” she adds, “They have to keep rising there and they can see them, they’re actually doing work,” explains and pushing, and saying, ‘We’re not going to accept this antiquated, Thompson. “When they think that way, they don’t get really clear about out-of-date way of working anymore’. That’s what needs to happen, measurable goals and expectations for their people. So when you start and that’s why this change will happen, because the people will conto talk about this radical new idea to them, their instant reaction is, tinue to rise up and ask for something better and it’s going to get ‘Well, how am I going to know if people are really getting the work done stronger and stronger.”  if I can’t see them?’ and our retort is, ‘How do you know they’re doing it Cali Ressler and Jody Thompson are also the co-authors of Why Work Sucks and How To Fix It? now?’” Put simply, managers need to get very clear with people about You can read the second part of this article in the next issue of HRM. To subscribe, please visit our website www.hrmreport.com what they need to deliver and stop tracking time and place, and ROWE

www.hrmreport.com

69


TRAINING STRATEGY

School’s out? Learning and development in an economic downturn. By Josh Bersin.

I

n this economic crisis, corporate training budgets are being tightened. Our research shows that in the second half of 2008 corporate training departments cut their spending on learning and development (L&D) by 12 to 18 percent. And that number is certain to grow as the crisis continues. When budgets are tightened and companies are forced to cut major costs, it’s important to maintain L&D investments. More than ever, you need performance-driven and talent-driven learning. Learning executives must be prepared to educate senior management about the shortand long-term impact of budget reductions that will impact strategic programs. The L&D budget typically represents a very small fraction of a company’s total revenue. Indiscriminate budget cuts can have a major impact on development plans and programs, and yet barely make a dent in the company’s bottom line. For example, if an organization eliminates or dramatically reduces leadership development training, it will see a reduction in the produc-

70

tivity and effectiveness of its leaders. During an economic downturn, leadership is more important than ever. Management looks to leaders to restructure their departments, improve productivity, find new ways to drive value and work even harder to rebuild the business. Does it make sense to take away that small amount of money spent on building their skills, capabilities and internal networks? We recently talked to a learning executive at a financial services company who told us that his organization was still recovering from a decision made more than five years ago to eliminate leadership development. The decision had left the company with underprepared mid-level managers and supervisors and had significant impact on the retention of key employees. We have studied thousands of corporate training organizations and how they react to various economic conditions. Our research shows that high-impact organizations do reduce costs, but they do so strategically. They do not cut long-term strategic development programs and they do not eliminate high value performance-driven training programs

www.hrmreport.com

HRM10_JoshBersin.indd 70

12/11/08 15:39:28


such as onboarding and sales training. Rather, they focus on improving productivity and use the downturn as an opportunity to fix and repair inefficiencies which inevitably build up in any bureaucracy. There are some specific examples of where and how you might be able to gain cost efficiencies without compromising strategic investments.

Reorganize and centralize As most companies grow, they develop pockets of employee development teams throughout the organizations. Sales, customer service, IT, manufacturing, finance and other business units hire training staff and build programs to facilitate the development of their workers. They license, buy or rent learning management technology and tools (such as virtual classroom and development tools). They license third party content in a variety of areas. And they build teams of instructional designers, trainers and organizational development people. Now is the time to look hard at how many of these functions can be centralized. High-impact learning organizations use what we call the federated model of L&D. In this model, some critical programs and infrastructure are centralized and others are decentralized, similarly to the federated approach to government. We are currently working with three different pharmaceutical companies which are each going through this very process. After several decades of continuous growth, the pharmaceutical industry is slowing because of market maturity, government regulation and saturation. Companies in this sector are realizing that they cannot grow at 30 to 50 percent any longer. Most pharmaceuticals have invested heavily in a wide variety of training programs: extensive sales training for field pharmaceutical reps, highly regulated certification and training for manufacturing processes, leadership development and formal compliance training, and all the other typical corporate training functions. At the same time, every one of these companies has built islands of inefficiency. They have multiple learning management systems, multiple training organizations with overlapping roles and extensive vendor contracts which often buy the same or similar content across different functions. By focusing on a more efficient federated model, these companies are now embarking on new organization models which will save 20 to 30 percent (and more in many cases,) with little or no reduction in real training hours per employee. You can probably do the same.

not. Often, operational training programs can be replaced with low cost, off-the shelf content. Does your project management, IT and financial training really drive strategic competitive advantage? If not, you should outsource it or purchase off-the-shelf content. Save your rarified resources for strategic operational training that is truly strategic. For example, we work with a Fortune 500 company in the middle of a global rollout of its new manufacturing system. Training to support this system is highly strategic to the business. Consequently, the company is outsourcing much of its other operational training in the interest of saving money for focus in this area. The second type of training, talent-driven learning programs, are what most companies need today. Examples include career development for sales and engineering, leadership development and mentoring and coaching for high potentials. During a downturn, you are likely to ask people to change jobs, take lower pay, or take on additional responsibilities. These types of programs facilitate such workforce flexibility. Even more importantly, given today’s aging workforce, they will build your leadership pipeline. In an economic downturn, you must strive to eliminate and rationalize the non-strategic operational programs and focus on talent-driven programs.

12 to 18%

Energize your informal learning programs

Finally, let me add a critical third way to save money. We all know that formal training accounts at most for 10 percent of workforce skills. Our research shows that nearly 20 percent of all training occurs from informal information sharing and nearly 70 percent comes from on-the job training. Your job also encompasses these informal sources of learning. Rather than building more expensive programs, start to spend more time facilitating and building informal learning networks, coaching programs and performance support systems. We call this new world learning on-demand, and it includes communities of practice, expert directories and corporate social networks. Our new research on enterprise social software identified more than 20 exciting, innovative new software tools that go far beyond traditional LMS systems to enable sharing of workforce data and information, blogging, virtual meetings and more. You can invest in these systems for a fraction of the cost of building and deploying a new training program. Your role will also expand in new and exciting ways. Organizations such as the Federal Reserve, the US Department of Defense, Cisco and Network Appliance are leveraging informal learning in highly strategic ways. The bottom line is that an economic downturn need not spell disaster for L&D budgets. If you apply these three principles, you can likely save money and increase efficiency – all while moving your learning organization ahead. Sometimes economic crisis is the mother of great invention. This is your opportunity. n

Cut in spending on learning and development in the second half of 2008

Focus on talent-driven learning Not all training drives the same level of strategic value. We categorize L&D programs into two types: performance-driven and talent-driven. Performance-driven programs are the typical operational training programs such as those that support new product launches, systems rollouts and other core functions necessary to run the business. Every company has such operational training needs. But do such programs add strategic value? In many cases they do

Josh Bersin is CEO and President of Bersin & Associates

www.hrmreport.com

HRM10_JoshBersin.indd 71

71

12/11/08 15:39:29


ELI_ATE:feb08

12/11/08

15:42

Page 72

ASK THE EXPERT

Bad behavior = bad business BY STEPHEN PASKOFF

H

ealthcare has gotten the message and is setting a standard that other industries will follow. Bad behavior, as opposed to illegal behavior, causes horrific patient risks. From medication errors to botched surgical procedures to fatalities, bad behavior devastates patients’ lives and erodes the ethics of healthcare institutions. This is a serious business issue in every workplace, though the harm may be less obvious in non-healthcare settings. Threats, demeaning behavior, a failure to tolerate dissent or welcome questions are too often viewed through the narrow lens of workplace illegality. When unprofessional conduct does not qualify as illegal, we sigh over its regrettable nature, throw up our hands in helplessness, and wish we could eliminate the problem. But seldom do we give it high priority, much less make it an organizational imperative. Healthcare, however, is taking a radically different, new and exciting approach. The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) recently issued an alert. Effective January 2009, healthcare institutions must have a series of standards and processes to identify and remediate unprofessional conduct, as distinguished from the narrower ring of illegal workplace conduct, such as sexual and racial harassment. JCAHO’s initiative explicitly recognizes that bad behavior creates dangerous patient risk, thus significantly raising the bar for acceptable behavior. Furthermore, tying conduct to accreditation creates powerful leverage to change the way organizations typically work – losing accreditation for bad con-

72

www.hrmreport.com

duct poses a larger strategic risk than losing a single claim of discrimination. Up until now, high-profile doctors have operated by an unwritten rule: they can berate nurses and others because that’s how they get results. At long last, that myopic view is changing. The following is a checklist to consider when implementing behavior standards. While these relate to healthcare, change a few words, and the message adapts to any employer. • JCAHO’s requirements demand a comprehensive cultural initiative, not a checklist of action steps. Unprofessional conduct stems from flawed thinking. Changing the way a healthcare community thinks involves the re-programming of attitudes in every level of the community, and this re-programming must be reinforced time and again if the initiative is to succeed. • Talking about respect, civility and professionalism will not change a thing. Instead, the initiatives should describe these values and their equivalents in terms of behavioral standards, which must be concrete and few in number; otherwise, they represent platitudes, not cultural change. • Medical and executive leaders themselves must act in line with the standards, or this initiative will fail. Altering entrenched patterns of conduct that are often unconsciously accepted will require a commitment at the very top.

Stephen Paskoff is president of ELI, a training firm that helps clients translate values into behaviors, increase employee contribution, build respectful and inclusive cultures, and reduce risk. Prior to establishing ELI in 1986, Paskoff was a trial attorney for the Equal Employment Opportunity Commission and partner in a management law firm.

• Workday behaviors and leadership skills must be measured with the same rigor as clinical outcomes. In the constant quest to ensure patient safety, the healthcare industry measures clinical results with numerical precision. If the new professionalism initiatives also increase patient safety, they too require strict measurement standards to prove and reinforce their effectiveness. • Consistency and accountability will determine the initiative’s success, but they will be painful to implement. The challenge lies in handling the high-profile cases. In healthcare, for example, it’s often prominent physicians, those whose practices generate the biggest revenue, who are the worst offenders. If healthcare organizations ignore their conduct or require only token counseling, JCAHO’s initiative will become a pointless exercise.

“Bad behavior devastates patients’ lives and erodes the ethics of healthcare institutions” Of course, while JCAHO’s behavior initiative requires the formulation of standards and processes, only individual healthcare organizations can determine whether the initiative actually transforms the way their work community thinks and operates. Accommodating the initiative on paper is a far cry from accommodating the initiative in practice. JCAHO is providing a window of opportunity for healthcare professionals and leaders to take a decidedly proactive approach. By setting standards for behavior and aggressively remediating bad behavior, healthcare organizations can divert the catastrophic results that often accompany outrageous behavior in the workplace. An ounce of prevention is supposed to be worth a pound of cure. 


Eli.indd 1

10/11/08 09:01:40


ToddRaphael ED new:feb08

12/11/08

16:06

Page 74

RECRUITMENT

RELATIONSHIP MATTERS What value is there in improving the relationship between recruiters and potential candidates? HRM speaks with ERE.net’s Todd Raphael to find out.

W

hen Lehman Brothers filed for bankruptcy in September of this year, recruiters were working the phones and contacting candidates almost immediately. Perhaps it’s a sign of the times, that it is now possible for recruiters to develop enough of a relationship with potential candidates that they can actually outpace their peers when something like this happens. Or perhaps it hints at just how deep the roots of the war for talent go, indicative of the sheer need for skilled workers who suddenly find themselves victims of cutbacks or – in the case of Lehman Brothers – inexplicable loss. Perhaps it’s both. One thing that is certain is that the recruiting world is not the same today as it was several years ago. It is no longer enough to let the candidates come to you. Securing the best of the best isn’t a passive activity – it requires a driven strategy that is both proactive and creative. Todd Raphael, Editor in Chief at recruiting network ERE.net, agrees: “Despite the slowdown in the economy, it’s still hard to find top talented people. A lot of the unemployed are people with the wrong skills for a lot of the recruiters that we work with. And with college graduates, who in many cases are the ones our people looking for leaders desire most, the unemployment rate is as low as 2.4 percent.” And for jobseekers, the recruitment process is just as competitive as ever. “Candidates often don’t know if their resume was ever received,” says Raphael. “They have a hard time figuring out whether the job was filled by someone else, or even if it was filled at all. The hiring process is simply a black hole to many.” Raphael certainly has a point; but does he think that it is a responsibility of potential employers to let candidates know this sort of information? “There are some companies out there who are starting to put a very good overview of their hiring process online,” he explains, saying he thinks this is a good idea. By allowing potential employees to see that the hiring process is now, say, at the second interview stage, they can see that if they

74

www.hrmreport.com

haven’t been asked back then they’re not in the game anymore. However, Raphael says that most companies are still not doing a very good job of communicating with jobseekers, despite the technology clearly being there to make this much-needed communication a reality. To say technology plays a crucial role in the recruitment process of today is something of an understatement. Just a quick look at the history of ERE.net itself tells you that much. Founded in 1998, ERE.net was created as a ‘personal mission’ when CEO David Manaster saw a need for a valuable online community, where best practices could be shared and recruiters could learn about the latest industry trends. What began as a small online community now has more than 95,000 unique visitors each month. 20 years ago, networking on this scale just wasn’t possible because the technology simply wasn’t there.

“One of the things our website does is give people a sense of perspective. It helps them not to freak out”

Raphael, who has been with the company for three years, works on, as he puts it, “a little bit of everything.” Having previously worked for the Workforce Management publication for eight years, at ERE.net he helps put together conferences, the print publication The Journal of Corporate Recruiting Leadership (which goes out to senior recruiting leaders at mainly large and medium companies) and the ERE.net email newslet-


ToddRaphael ED new:feb08

12/11/08

16:07

Page 75

the recent torrent of job losses is making the problem seem worse than it is. “One of the things our ERE.net has gone from being an website does is give people a sense of perspective. email-based forum with a few It helps them to not freak out.” He means that peohundred subscribers to a major ple can go on the site and see how many companies recruiting network with some are actually still hiring, allowing users to then feel a 58,000 members. Here are some little more optimistic. The reality is that there are highlights of its first 10 years. plenty of job opportunities out there. There’s a disJANUARY 1998 cussion on the website right now about how people Founder David Manaster feel the media might have overblown this crisis. creates ERE.net “There have been times when the stock market has gone way down on a Monday, but by MARCH 2001 the end of the week it’s been back up to where Hosts the first annual ERE.net it started,” says Raphael. “But I’ve overheard Expo Conference with over conversations about how the stock market had 600 recruiters in attendance. plummeted so much in that week. Those conversations are wrong. It had not. It’s because of SEPTEMBER 2003 the headlines: the day stocks went down, the ERE.net network launched as the first online professional headline was so much larger than the other network exclusively for brief, little stories about stocks going up.” recruiters and HR professionals. What’s more, while Raphael acknowledges the unemployment rate is by no means perfect, he ter. He is clearly a busy guy, regularly blogging and adding conNOVEMBER 2005 does believe that sites like ERE.net will allow tent to the ERE.net network. And with so many users and conHosts the first annual Global people to realize that there is still a plethora of tributors on the site, there is clearly a need for this sort of ERE.net Expo in Brussels, opportunities out there. dialogue. “One reason I think this space is so important is beBelgium For Raphael the focus remains on the value cause recruiters can often feel more of a kinship with those who of recruiters’ relationship with jobseekers. don’t necessarily work at the same company as them, but NOVEMBER 2006 Purchases the most widely read “Right now, just being able to find someone maybe work for their competitors. Our site often finds recruiters third party newsletter in the who’s valuable is great,” he says, “but as it gets commiserating with, debating with and sharing with one other industry – The Fordyce Letter easier and easier to find people online, that value in because many feel there aren’t places in their own companies just finding a name is likely to go down.” As Raphael where people understand them or their challenges.” FEBRUARY 2007 explains, a couple of years ago, if a recruiter wantResources and technologies that are at recruiters’ disposLaunches its free Webinar ed to find a candidate it could take them a lot longer al often dictate these challenges. Perhaps by utilizing these reseries than today. Now, if they want to find a particular jobsources to their full capacity, recruiters will see real ROI and be seeker they can see them all over the place – from able to leverage a degree of business success. “It’s funny, beSEPTEMBER 2008 personal social networking sites like Facebook, to cause I was thinking about it and I don’t actually get excited ERE has over 58,000 professional business sites like LinkedIn. “I think by the technology itself,” says Raphael. “I’m more excited members and contains the value in that contact’s name, or contact informaabout how a company is using the technology.” For Raphael, thousands of pages of content relating to recruiting. tion, is going to go down,” says Raphael, believing an example would be how a lot of companies are using that the value in the relationship between fellow videos on their career websites, where they discuss career jobseekers and their recruiters will go up instead. opportunities at the organization. “That’s not exciting to me “In the past, people have been more impressed that you have 5839 contacts because it’s a video, but it is exciting when a company is able to accurately, on LinkedIn, well, I think people are starting to realize – ‘Who cares?’Why do honestly and engagingly get employees excited about what it means to work I care if you email 5000 strangers and convince them to be your friend on there. That’s a great use of technology.” LinkedIn? It doesn’t really matter that much. But if you actually know them, There are also a number of companies that are trying to better match that matters.” jobseekers and employers. As Raphael notes, “Instead of just sifting When looking at the world of recruitment, taking a leaf out of through resumes, these companies are generating an algorithm that will Manaster’s book may be the correct approach: instead of waiting for a tell you how good of a fit the candidate is for your job. And those kinds of community to take shape around you, take hold of the reins and create technologies have a lot of potential.” it yourself. Raphael agrees that the key lies in getting involved and Lost and found adding value to the relationships of those you network with. Perhaps It goes without saying that, with the economic climate’s current state, then the recruiting game won’t be the black hole he speaks of, but a ‘potential’ is needed. However, Raphael thinks that the media’s focus on gateway to real opportunity. 

www.hrmreport.com

75


VelocityResourceGroup:feb08

12/11/08

16:07

Page 76

EXECUTIVE INTERVIEW

Resume sourcing in today’s changing economic climate HRM interviews Velocity Resource Group’s, John Fortino, about the growing importance of resume sourcing technologies and the importance of finding the right strategic resume sourcing partner. HRM. In the current economic climate, having the right people in place at the right time is essential. How can using a third-party resume sourcing service make this happen? John Fortino. As the economic climate continues to soften it is imperative that companies focus how they spend their budget dollars. When resources are short, companies need to act more responsibly in how they deliver services to the organization. Budgets are shrinking and corporate recruiters are being asked to do more and more within their organization with fewer tools and resources at their disposal. A thirdparty resume sourcing service can have a significant and immediate impact by eliminating this basic but essential, time-consuming work, allowing recruiters to perform higher-value activities, putting them a step ahead of the competition, at a fraction of the cost.

“A strategic solution provider should ultimately save its clients time and money, identify what the goals are and help their client reach those goals”

From a macro standpoint, it comes down to how companies are going to spend their money. A sourcing partner can identify strong, qualified and interested candidates for a fraction of a search firm’s cost and in a fraction of the time. In this time of economic uncertainty, utilizing the right strategic resume sourcing partner is definitely a smart investment. HRM. What are the key features and competencies a company should look for in a resume sourcing partner? JF. Companies need to look for a partner that has global reach, unparalleled professionalism, ex-

76

www.hrmreport.com

John Fortino is the Co-Founder of Velocity Resource Group. Prior to this, Fortino was a manager of Executive Search for Motorola, and part of the team of professionals who built Motorola’s internal search practice. Fortino has over 18 years of experience in staffing, delivering strategic recruiting services to clients.

pertise to consult with the client, and a history of delivering what they are committed to. A company should be scalable and have a track record of proven results, giving their clients confidence and consistency on every single project. HRM. What role does technology play in delivering accurate and timely information on potential candidates? JF. One of the first practical business applications for the internet was online recruiting. Technology has definitely helped reduce the cost of recruiting, but it has also created more work in other areas. In today’s economy, more

and more people are posting their resumes online and replying to advertisements – this translates into additional work for the corporate recruiter. Technology has allowed Velocity’s global offices in the US and Thailand to provide results overnight – an unparalleled industry standard. It has enabled us to reduce dramatically the cost and time factors in delivering resume sourcing and screening services to our clients, and allows us to communicate more effectively with our clients through our Candidate Manager System: Velocity’s system was developed by recruiters, for recruiters. The system allows us to understand what’s important for a recruiter and the recruiting processes and help recruiters leverage the system to drive efficiencies within their process. This technology helps reduce costs and it also reduces the time to fill a position. Technology has also allowed us to offer a blended approach to resume sourcing, while increasing our communications with our customers and working more efficiently as an organization, delivering those cost savings back to our clients. HRM. How can a third-party provider deliver real ROI for HR organizations? JF. Being client-centric, understanding and listening to the client’s needs, having the professionalism and the expertise to consult with the client are all ways to deliver the ROI organizations need. A strategic solution provider should ultimately save its clients time and money, identify what the goals are and help their client reach those goals. We do all of the above. With our global reach and industry expertise, we not only source resumes and qualify them, but we provide value by sitting down with our clients and understanding what their challenges are and help them build solutions to meet those challenges, thereby creating a partnership that is a win-win for all involved. 


Velocity.indd 1

10/11/08 09:13:49


ASK THE EXPERT

Reducing recruitment spend Employers are beginning to catch on to the benefits of being found online. Darren Revell, CEO of Attract HR, tells us how to exploit this recruitment revolution using LongTail search engine optimization.

I

n 2007 US employers spent the equivalent of $100+ billion with the recruitment industry. In addition $800+ million was spent with job boards. Around 90 percent of this amount was spent by recruiters, a figure totaling some $720 million. So how do employers gain a strategic advantage and also reduce their recruiting costs? We do not recommend competing with recruiters for job board advertising space, rather we recommend that you learn about how the internet functions for recruitment. 15 years ago, when the first job board came to market, it used word of mouth, existing customers and advertising in trade publications to promote business. Today, little has changed, they still largely rely on their biggest clients and, worse still, they use pay-per-click advertising on Google and the like. What few have done is fully exploit the ‘natural’ or ‘organic’ search, marketing based on recruitment-specific search engine optimization, to target traffic from jobseekers. Even fewer use LongTail search engine

“Research shows that 38 million people in the USA and over 40 million in Europe use career-related searches every day”

optimization (LTSEO). This is a ‘sleeping giant’ of a service, largely untapped by any one company or sector, but which has the power to cut recruitment costs by as much as 70 percent. Recruiters, job boards and employers work on a level playing field when looking to gain results from LTSEO. There are no barriers to entry and it is the equivalent of the recruitment gold rush.

What is LTSEO? At some time or other we all use the internet to search for a service, a product or information of some kind. Attract’s research shows that 38 million people in the USA and over 40 million in Europe use career-related searches every day. In the case of searching for jobs, this should mean jobseekers search Google, Yahoo or MSN for terms like ‘nursing jobs’, however while in the US there are some 100 million searches for ‘nursing jobs’ in Google alone, the LongTail examples lead into potentially billions of examples of searches.

78

Online recruitment myths Shedding light on some popular misconceptions We don’t have the volume of jobs required. The volume of hires you make in one year will have an impact on the way Google and its peers treat you for highly competitive markets. It is the combination of the search words used that holds the key. For example, in Google, at the time of writing this article, there were 9.1 million web pages for nursing jobs in the Google index but for ‘RN jobs Dallas’ there were 115. At this level of competition, even the smallest of hospitals or hospices could compete. By going online, we will receive many irrelevant job applications. This does not happen. By the nature of how people search for jobs using the exact job title, term or phrase in combination with specific location choices, we can demonstrate to you that optimizing your job descriptions will reduce irrelevant applications. We can’t compete with recruitment agencies and job boards. Why would you want to? Recruiters have their place in the market, as do the job boards. All we are suggesting is that you don’t waste money and time. Recruiters are essential for temporary hires, the law and time honored payment of the employee dictate this. Some job boards have such a high volume of accurate return that the fee is only charged at the point at which you receive a relevant application. We just ask that you look to your own website to build relationships with people directly, instead of passing them to an industry which will charge you a fee, and an environment where your needs are placed on display with endless competition.

Darren Revell is CEO of Attract HR, an international provider of end-to-end solutions and services for recruiters, HR experts and professional service providers. The development philosophy of Attract HR enables minimization of the risks that linking technology and business strategy together can bring. The company’s ultimate mission is to increase performance, enhance the functionality or improve the most advanced web tools to deliver measurable results to our customers. For further information contact rev@attract-hr.com or visit www.attract-hr.com.

www.hrmreport.com

Attract HR Ed P78,80.indd 78

12/11/08 15:44:24


Attract.indd 1

10/11/08 09:00:21


What do LTSEO results look like? The following results have been measured from recruiters’ websites, job boards and employer career pages. Trend one. 60-90 percent of people who use generic search terms don’t register for employment. Trend two. 70 percent of people who have used an LTSEO search register for work and the quality of the applicant is high. Trend three. LTSEO produces consistently higher levels of quality applications than other forms of web promotion. Trend four. LTSEO and normal SEO consistently produce results at the lowest cost/highest yield. Trend five. LTSEO will produce anywhere from 100 to 100,000 more times the results than generic web searching.

Moreover these LongTail examples give you the best return. Sound complicated? Well its not, in fact all you have to do is have the spiders index your jobs. It could not be simpler. No longer does the typical internet user need to get bogged down with page upon page of irrelevant results by using generic searches. What they have now realized is that by using more literal search terms, based on what exactly matches their needs, the quality of result has real value. As a result, most internet users are now only searching for exactly what they want, where they want it. Today’s jobseeker using the internet is now more likely to search for the job title and the relevant geographic location they wish to work

80

in such as ‘nursing jobs in Portland’, and it is these types of terms that are defined as LongTail searches.

Essential rules •O  ptimize your career pages. 99.5 percent of all employers’ career pages reviewed by Attract have no preparation and/or presence on the web when it comes to search engine recognition. • G ive them what they want. Showcase the vacant jobs so they may be found or at least encourage them to register now for jobs you will have later/next hiring cycle. • A llow all communication styles. Most career pages reviewed by Attract HR have limiting text-only files. We live in the media age. Access to video, audio, presentation tools and multiple communication styles are everywhere. One size does not fit all when it comes to communication. • B uild future talent pools. Encourage people to register with your recruitment team, not only for hire now, but in the future. When using tools like those on offer from Attract HR, you can then store, retrieve, communicate, network and ultimately hire people over the short, medium and long term. There is no valid reason not to promote employment within your company directly to those who are seeking employment. The power of the web makes it possible for you to achieve the balance of quality/quantity of talent upon demand. n

www.hrmreport.com

Attract HR Ed P78,80.indd 80

12/11/08 15:55:53


Spy games Going undercover with online recruiting tools for would-be secret agents.

LEONARD NOLAN

E

verybody who has been near a television, billboard or pretty much any reflective surface in the past few months will likely have seen plenty of publicity for the latest big-budget James Bond film. And if you’re anything like me you’ve probably always quite fancied the life of the international super spy. Fast cars, faster women, travel, adventure and excitement. What’s not to like? Unfortunately for a whole generation of men and boys, getting into MI6 or the CIA was a little more complicated than simply filling in an application form. The general rule was the job chose you. On the recommendation of a mentor or superior you would receive a tap on the shoulder and be invited to try out. For me and countless others, that shoulder tap never came. But as the war for talent rages on, even the intelligence agencies have to change tack. Just like many other recruiters they are turning to the internet to bring in fresh blood. Both the CIA and MI6 are now actively inviting applications through their websites and using interactive tools to help potential applicants test their suitability. So, despite the sneaking suspicion that the 007 movies are not an entirely accurate depiction of life as a spy, I decided to give them a go. Who knows, maybe I’d find I was suited to being a covert operative after all? I started with the CIA. Firing up the Agency’s online personality quiz I was presented with a slightly underwhelming

series of screens, each dispelling a popular misconception about working for the Service. It looks like I won’t be getting that car with mounted machine guns after all. Along with the fantasy-puncturing facts, users are posed a number of questions. Asked to choose my favorite form of transport from a list that ranged from horse and buggy to an amphibious sports car, I naturally opted for the latter. Old dreams die hard. Following queries require you to select a preferred super power, pick a perfect holiday and describe how you think other people see you. Upon completion I was informed that my personal-

“Just like many other recruiters, covert agencies are turning to the internet to bring in fresh blood”

ity type was ‘curious adventurer.’ While that sounds like someone more suited to working on a children’s TV show than at the sharp end of intelligence gathering, I was nonetheless informed that the CIA has room for all types and directed to the careers page. Moving across the Atlantic to see how I would fare On Her Majesty’s Secret Service, the initial signs were far more encouraging. A buff colored folder on a digital representation of a desk contained my cover story. I had two minutes to familiarize myself with this before being asked a number of tough questions related to its contents. The questions weren’t just a straight test of memory, but required a little lateral thinking. For example, the cover story told me that I was a vegetarian while a question instructed me to pick a favorite meal from a list that included only one meat free option. The whole quiz was excellently presented and thoroughly immersive, momentarily convincing me that I was deep undercover, rather than sat at my desk with my morning coffee. Though both of these online tests are only intended as a bit of fun, they offer a great example of how interactive technology can be used to engage and attract potential employees. It’s not hard to see such tests being tailored to any number of professions. But most exciting for me was that I scored an impressive eight out of eight on the MI6 test. Perhaps if I wasn’t so long in the tooth and soft in the midriff, I might have had a chance in espionage. 

www.hrmreport.com

CIA App Ed P81.indd 81

81

12/11/08 15:46:33


Berkowitz:feb08

12/11/08

15:27

Page 82

BUSINESS PERSPECTIVE

The future is now With technology moving into the RPO space at an ever faster rate, HRM asked representatives from the Recruitment Processing Outsourcing Association (RPOA) to share their thoughts on where we are and where we’re going. The foundation: building on a solid base Kim Davis: To date, technology has made a positive impact by lowering time to hire, lowering cost per hire, providing accurate and relevant reporting data, and improving the candidate experience. In light of these technology benefits, the rate of RPO adoption has accelerated – be it full lifecycle enterprise RPO or discrete RPO services such as research, sourcing and screening. One specific area where technology has made an impact is onboarding: automating and digitizing a process that is largely manual and paper-based not only helps organizations save millions of dollars, but also ensures records are accurate and that new hires become productive much more quickly. Anne Nimke: We have witnessed great innovation with recruitment technology and it shows no signs of stopping any time soon. Many recruiters may not remember the day when candidate resumes were mailed or faxed and had to be batched and scanned into an Applicant Tracking System, or ATS. How about when your candidates couldn’t be accessed remotely because the ATS was on your mainframe? Most technology is now built and sold in an ASP or SaaS platform, easily accessible through the internet any time, anywhere. Even the simplest ATS offers many great, core features for easily communicating with candidates. These include auto-interview scheduling, job agent/notifications for candidates, and auto-email communication based on status changes. John Younger: Recruiting is essentially about relationships, and technology’s transformative power is only beginning to take shape as an enabler for enhancing connections between individuals. Traditionally, recruiting was centered only around the company and its Applicant Tracking System – a need is identified, recruiters find someone, the hire is made and it’s all tracked in the system. Even with today’s technology, 94 percent of all ap-

82

www.hrmreport.com

ABOUT RPOA The Recruitment Processing Outsourcing Association (RPOA) is a special interest group of the Human Resources Outsourcing Association, dedicated to providing research, data and tools to enable the community of providers, buyers and other stakeholders to make informed decisions related to the evaluation, purchase, implementation and management of recruitment process outsourcing. The RPOA Panel includes: Kim Davis, SVP, Adecco RPO, the worldwide leader in HR services. Kim is a recognized thought leader on RPO and a pioneer in the industry. Kim was the founder of TalentTrack, which was acquired by Adecco in 2007. He has more than 30 years of human resources experience and has authored several industry articles. Anne Nimke, co-founder and executive consultant at Pinstripe, a leading human resources and recruitment outsourcing company. Nimke has 30 years of experience in human resources and staffing. A recognized leader in the RPO arena, Nimke is a seasoned veteran in the world of talent strategy and performance improvement. John Younger, CEO and founder of Accolo, a leader in RPO for small and mid-sized companies. John’s passion to dramatically improve how people and jobs find each other is rooted in his deep understanding of technology, the recruitment process and a core belief that everyone deserves courtesy and respect.


HOW MUCH TIME AND MONEY ARE YOU SPENDING RECRUITING IN AMERICA AND EUROPE?

WOULD YOU LIKE TO SAVE TIME AND SPEND LESS? ON DEMAND CANDIDATE SOURCING AND SCREENING FOR WORLD CLASS COMPANIES. CALL FOR INFORMATION 770-569-4847 INFO@PIERPOINT.COM www.pierpoint.com

PierPoint.indd 1

10/11/08 09:08:00


Berkowitz:feb08

12/11/08

15:28

Page 83


Berkowitz:feb08

12/11/08

15:28

Page 84

plicants never hear back about the status of their application and only 43 percent of hiring managers rate their recruiting support as acceptable or better (staffing.org). Despite the technological advances in recruiting over the last 30 years, the average recruiter’s productivity remains unchanged at supporting an average of four to 18 unique full-time jobs simultaneously. The technological foundation for the recruiting industry must think about applicants as people first, not as transactions. Individuals are predicted to change jobs 10 to 14 times before the age of 38 (US Dept of Labor). The future of recruitment-related technology and delivery models will rise above the individual company needs and address the needs of the other key stakeholders over time with equal or greater emphasis. Technology is driving transparency, and future recruiting technologies will recognize that applicants may also be hiring managers, consumers of that company’s product or service, shareholders, future hires and referral sources.

“Individuals are predicted to change jobs 10 to 14 times before the age of 38” The present: best of breed solutions Kim Davis: Today’s best of breed RPO solutions work on the front-end to develop a structure that empowers organizations to embrace technology. Organizations streamline technology implementations through business rules. As a result, a well-written statement of work is imperative; without a properly articulated, mutually agreed-to scope, RPO technology implementation can become unwieldy. Getting early buy-in from the IT department is also a critical success factor. Finally, a good governance model is required. More often than not, adjustments will need to be made during implementation. By starting with a well thought-through process, business partners can handle change orders with relative ease and minimal disruption. Anne Nimke: Today’s RPO solutions are built to improve the quality of the recruitment process through process efficiency, cost effectiveness, and improved candidate and hiring manager experience. None of this is possible without technology. It touches every candidate and hiring manager, and is critically important for recruiters. The ATS that is utilized for candidate and requisition management is the platform on which all relevant information is stored. However, there are many other technology touch points that become integrated into the RPO solution including: job posting, database searching, interview scheduling and pre- and posthire selection testing. Mobilizing these tools and integrating them to create a seamless high-tech/high-touch process is the ultimate value of a high performance RPO solution. The technology available to find and communicate with candidates has also become more sophisticated and is core to both active and passive candidate recruiting. This includes: job posting distribution (like Viper and eQuest); posting aggregators (including SimplyHired and InDeed); SEO (search engine optimization) offered by Jobs2Web; and candidate search and marketing technology like AIRS SourcePoint. These types of technology aids are in the portfolio of any proactive re-

84

www.hrmreport.com

cruiting department and RPO provider. Most integrate easily into many standard ATS’s. If they aren’t integrated, then a download/upload or import/export is available to connect the technology. John Younger: The Internet has transformed the recruiting industry, allowing hiring managers and people seeking work to connect outside the typical recruiting mechanisms like Linkedin. Thanks to the ascent of online candidate forums, social networking sites and tracking and reporting, the huge barrier of legacy businesses adopting technology has been removed. A few select technologies ride above all the others, effectively driving a best practice approach that makes even relatively junior recruiters produce as if they were 20 year recruiting veterans. This new technology will be a relationship management system and will establish relationships with the potential candidates over time, and maintain those relationships with or without the individual being hired.

The future: moving ahead Kim Davis: The DaVinci Code of recruitment technology will provide a way for employers and candidates seeking employment to connect for moments of truth – times when either side needs the other – but also to stay connected permanently. Today recruitment, and the technology that supports it, is largely an episodic activity with a few exciting exceptions, but tomorrow’s recruitment technology will make talent acquisition and management a 360 degree activity. It will enable true social recruiting, and geo-sourcing skills and capabilities. Anne Nimke: The marketplace is moving toward a comprehensive technology solution that creates a one-stop-shop for talent acquisition where integration is on one platform. HR management technology consolidation goes beyond talent acquisition to encompass a full suite of services for talent management that are available to the employee and manager on a self-service basis. These include workforce planning, talent acquisition, performance management, learning management, payroll and succession planning.

“Tomorrow’s recruitment technology will make talent acquisition management a 360 degree activity” John Younger: Thanks to technology, recruiters can focus more on those tasks that are the ‘art’ of recruiting while the bulk of routine best practices are completely managed by the technology. The biggest difference of tomorrow’s technology will be the focus on adhering to the Universal Hiring Best Practices for every job: being the path of least resistance for the hiring manager; treating every job as unique; driving referrals; adapting to different job types (executive, technical, non-exempt, etc.); driving diversity sourcing; giving everyone a genuinely fair and equal opportunity; tracking accurately; and maintaining confidentiality. With the above in mind, the next wave of recruiting technology platforms will be transformative and place the candidate, not the company, at the center of the equation. 


WSlash.indd 1

10/11/08 09:15:28


WGU.indd 2

10/11/08 09:14:54


WGU.indd 3

10/11/08 09:14:58


ONLINE ED RT:nov08 12/11/2008 15:07 Page 88

ROUNDTABLE

A

click way of learning

For many working adults there just isn’t time for traditional classroom learning. HRM gathers five leaders from the online education field to discuss the benefits of this learning method and how encouraging it can provide first rate business success. HRM. Online learning creates a lot of choice and enables student-centered teaching approaches. How important is choice when it comes to education? Josh Baron. Choice is essential and something that students have come to expect. Providing a variety of entrypoints to education, be that through traditional classrooms, hybrid models with residencies, or fully online instruction helps to ensure that students can select the model that is right for their learning needs and professional and personal goals. It’s also important to provide students with options in terms of how they choose to interact with course content. Online learning often includes the use of multimedia-based content that provides students with richer interactions than you typically find in face-to-face courses. Even something as simple as adding hyperlinks to Word documents allows students to select their own ‘learning path’ through the content, branching off to refresh their knowledge when needed or going more in depth on topics of particular interest. When traditional colleges like Marist provide accessible and flexible online programming, adults have educational opportunities that were not available to them 10 years ago. Cynthia Gallatin. Online education is now more mainstream and offers adult learners the ability to continue their education while balancing family and professional goals. With the number of higher education choices available, it is now more critical than ever to ensure that a chosen institution has a credible reputation. Key factors are a strong academic reputation and regional or national recognition. Choosing the right educational experience will help a student shape future professional opportunities. Every potential student needs to make sure they research the variety of educational choices. When considering different programs, the primary question students should ask an institution is whether the school is accredited and, if so, by what accrediting body? Different accrediting bodies provide oversight for higher education institutions and evaluate

88

www.hrmreport.com

the quality of the programs. While many choices remain students need to educate themselves about the value of each option in order to find the best fit. Tracy Stewart. Choice is very important to education since it empowers students. Students have diverse values, beliefs and communication patterns and providers of online education must be knowledgeable in how these differences can affect students’ learning styles. Online learning environments allow students to receive and process content in various formats: text-based, video-based, podcasts, group collaboration, individual projects, etc. As a provider of online education, we must continuously analyze our students’ learning preferences and improve our delivery methods in order to prepare

Josh Baron is Director of Academic Technology and eLearning at Marist College. He is a member of the Sakai Foundation Board of Directors and graduated magna cum laude from the University of Michigan with a BS in Aerospace Engineering and holds an MA (online) in Educational Technology Leadership from George Washington University.

Cynthia Gallatin is the Associate Vice President for Online Programs at Quinnipiac University, a private college in Hamden, CT, with approximately 7000 students. She launched the online learning division in 2001. Quinnipiac University Online provides instructional design, technical/administrative support and online admissions for all academic online programs within the University.


ONLINE ED RT:nov08 12/11/2008 15:07 Page 89

students for careers, job promotions, future educational opportunities or overall personal improvement. Lee Kantz. Choice is a powerful selling point of online education. When you consider that you can ‘attend’ a university on the other side of the country, or the other side of the world, without leaving your home, the entire universe of higher education becomes available to you. Students can be se-

Students can focus more on the opinions and knowledge of their peers without the bias that often exist in classroom discussions Josh Baron lective about the exact programs where they want to study and can shop around for the best fit. I recommend they focus on learning outcomes when selecting programs and talk to graduates about whether better jobs and higher pay resulted from the degree. Robert Mendenhall. We know that adult college students come to their education knowing different things and having different skills and that they

Tracy Stewart is the Vice President of Information Technology at Regent University and has more than 25 years of experience and an extensive background in management and software systems development. She has a proven track record of building strong relationships throughout organizations. She also serves as the Executive Director of the School of Undergraduate Studies.

learn at different rates. Yet the current higher education system generally requires all students to take the same required courses and dictates that all courses take a four-month semester. WGU was founded by 19 US governors to offer a different model of higher education: WGU’s online, competency-based education approach allows students to study only what they individually need to learn, and to do so at their own speed. Students earn degrees by demonstrating their grasp of the skills and knowledge required for success, as proven by a range of assessments. HRM. How can encouraging employees’ education help companies achieve their own goals? Does an investment in your workforce’s education always equate to business success? CG. In order to be competitive in today’s global environment, employers must continually stay focused on developing their workforce. An educated workforce is a key differentiator for any organization and it is the people within an organization who accomplish goals and objectives. The benefit of educational reimbursements is that it covers some or all of the cost that really benefit and motivate employees to continue to degrees and certifications. The organization receives payback for this benefit in terms of how an individual performs their job. An educated workforce improves productivity and is the engine for innovation in any organization competing in today’s world. Programs that embrace professional adult learners and organize the curriculum to meet the needs of this target audience will assist in the development of the workforce. When students attend an online program

Lee Kantz has more than 20 years of experience in publishing, interactive media and education marketing. Kantz began his career at Encyclopaedia Britannica, where he was at the center of the company’s transformation to CD-ROM and online reference products. He has worked in education marketing for eight years and prior to joining the University of Illinois Global Campus, managed the educational directories division of Monster.com.

Dr. Robert Mendenhall is the president of Western Governors University (WGU), a private, not-forprofit, online university founded by 19 US governors offering competencybased degrees. He served on the US Department of Education’s blueribbon National Commission on the Future of Higher Education. He has over 25 years of experience in technology-based education and higher education. www.hrmreport.com

89


ONLINE ED RT:nov08 12/11/2008 15:07 Page 90

through Quinnipiac University it is important that students bring their professional situations into the classroom. Many times the projects they work on in the classroom are issues they may be facing in their profession. TS. A deficient workforce is certainly not a strategy for success. In order to stay competitive, companies need not only offer cutting-edge products and services but they must also have a workforce whose education prepares them to think and address national and global issues with a critical and sharp mind. Providing an employee access to online learning is another formula for economic growth in business. An education allows an employee

The 24-hour asynchronous classroom means that the barriers of a fixed location for education are replaced by learning anywhere or anytime Cynthia Gallatin to grow, develop, and invest in themselves and the organization they are serving. An employee’s confidence can increase with education, thus leading to a more productive employee. Education is critical for a competitive and strong company; it is a critical element for business success. LK. Encouraging employees’ education provides measurable and immeasurable contributions to business success. One measurable contribution is the reduction of employee turnover and another is the reduction of onboarding new employees at higher levels when you can promote employees from within who already know your challenges and culture. On the immeasurable side, education provides the engine for solving business problems. Think about how much your corporation pays for consultants, and the cost of degrees for several of your employees may seem inexpensive by comparison. RM. American employers need a workforce comprised of highly competent individuals who have both specific expertise as well as general abilities such as analytical thinking, making smarter decisions and communicating effectively. When employees develop these kinds of competencies through higher education both the employees and employers benefit. The key is developing real-world competencies – not just earning a piece of paper that shows a degree was awarded. While there are no guarantees a particular individual will show dramatic improvement on the job, if the employee successfully completes a rigorous program of learning, the enhanced competence of the employee should translate into improved productivity. JB. Promoting education in terms of encouraging employees to gain skills and knowledge through specific coursework, undergraduate and/or graduate degree programs and formal certification programs helps to ensure that an organization’s workforce is prepared to meet future challenges and

90

www.hrmreport.com

demands. At Marist, the School of Computer Science and Mathematics collaborated with IBM to develop an online certificate program for the zSeries mainframe. By providing scholarships for the System z program, IBM employees, as well as employees at client companies around the globe, were able to take advantage of this training and maintain their competitive edge in the enterprise computing industry. HRM. With an online environment, class attendance is only evident if a student participates in classroom discussion. This increases student interaction and the diversity of opinion. What benefits does this offer to students and tutors alike? TS. Learning only occurs with the intake of knowledge followed by reflection. The online environment provides an excellent platform for reflection through interaction in discussion boards and group collaboration. Online learning provides equal opportunities for all students to participate. In a way, online education is perhaps one of the most democratic means through which to educate since it involves all students and provides opportunities for a multitude of perspectives. For instructors, such diversity is a great opportunity to tackle difficult questions and facilitate learning from various perspectives. Students can review the comments from other students and the instructor and take time to think about their response before actually responding. As a result of not having to respond immediately, the dialogue can go deeper. The students cannot judge each other prematurely, as we so often do because of gender, race, age or appearance. The online environment invites and challenges each student to actively participate in a refreshing new way.

In order to stay competitive, companies must also have a workforce whose education prepares them to address global issues with a critical and sharp mind Tracy Stewart LK. The fact that you can’t sit in the back of the class in an online environment puts the onus on the student to participate. At the University of Illinois Global Campus, we believe this environment is conducive to creating the knowledgeable workers that are most needed in the 21st century. Online students need to be self-paced. They need to be masters of their own schedules. They need to be effective writers, and they need to master a wide range of communication and collaborative technologies. These qualities make great online students and great employees.


Quinnipiac.indd 1

10/11/08 09:08:40


ONLINE ED RT:nov08 12/11/2008 15:07 Page 92

RM. This is an interesting question because it implies that online learning follows a ‘class attendance’ model that mirrors what happens in a traditional classroom. Not every online school uses this approach. At WGU, our emphasis is on personalized, self-directed learning under the guidance of an assigned mentor, with students using a wide array of learning resources to develop competence in each subject area. A student’s interaction with fellow students, faculty and a personally assigned mentor is much more continuous and fluid, with numerous online communities available to support the learning experience.

LK. All of these factors are important, but online course developers and educators need to make sure that technology is always at the service of an accessible and collaborative learning experience that puts humans at the center and allows the technology to recede in the background. We benefit most from technology when we realize it’s not there – when we lose ourselves in a song on our iPods, in a story on our Kindles (or the old technology of books), and in the lessons and experiences we take away from our classrooms, whether they’re real or virtual.

JB. Online education is a great equalizer. Many of us have had the experience of being in a traditional classroom setting where discussion revolves around a handful of highly-verbal extroverts or where a professor doesn’t get a chance to listen to all questions because class time ‘ran out’. Asynchronous discussion boards, which are prevalent in online classes at Marist, level the playing field and ensure that no question goes unanswered. Many stereotypes can be avoided or broken down through online discussions, as students’ age, race or ethnicity, and sometimes gender, are unknown. As a result, students can focus more on the opinions and knowledge of their peers without the bias that often exists in classroom discussions.

Online students need to be selfpaced. They need to be masters of their own schedules. These qualities make up great online students and great employees Lee Kantz

CG. In an online environment attendance equals participation. Students are not able to hide in the back of the class and quietly observe. Online education encourages and promotes a method of learning that requires engagement. Every student needs to engage in classroom discussion boards or chat rooms in order to be counted as a participant in the class. Students must take ownership for their learning. HRM. Students can ‘attend’ a course at anytime, from anywhere, and course material is often accessible 24/7 a week while spoken material in a classroom can pass students by. Given the increasingly mobile world we now live in, where accessibility is key, how important are these factors?

92

www.hrmreport.com

RM. Today’s working adult student expects flexibility and accessibility, but also is demanding better quality and personalization too. Additionally, online education allows students to continue full-time employment and meet family responsibilities while attending school. Even the employee who travels for work can often complete a degree program now. JB. Providing accessibility is paramount. The lives of students have changed considerably in the last decade. To expect that a working adult will fit into the educational model that was developed for 18 year old traditional undergraduates is shortsighted – and in some cases impossible. Not only does the accessibility of online learning allow working adults to engage with the learning materials when they want, they can also review the materials as often as they want. This facilitates deeper understanding and en-


MaristCollege.indd 1

10/11/08 09:06:25


ONLINE ED RT:nov08 12/11/2008 15:07 Page 94

sures better leaning outcomes. Students at Marist often comment that this quality is something that cannot be replicated in a traditional classroom and is a much-appreciated resource.

dents can perform virtual surgeries, or whether law students can conduct simulated trials where opposing counsel or judges are simulated personalities or real people on the other side of the planet.

CG. Students who participate in online learning do so because they cannot commit to meeting at a physical location at a fixed point in time. Online learning permits students to engage in their continued educational development whenever or wherever they are. The 24-hour asynchronous classroom means that the barriers of a fixed location for education are replaced by learning anywhere or anytime. Since students may learn anywhere and anytime, the definition of the classroom has significantly changed in order to provide a more open and flexible format for learning.

CG. Online learning is continually evolving due to the development of educational technology tools. As high-speed internet access has increased, we see more adult learners taking advantage of online learning opportunities. Multimedia tools such as videos and podcasts that we use to facilitate the learning process have improved online education and the proliferation of asynchronous and synchronous online collaboration tools offer exciting opportunities for students and faculty to work together. Technology such as blogs, wikis and chat tools enable student-tofaculty and student-to-student collaboration in order to develop higher level learning environments.

TS. Many adults have family, social and work demands that prohibit them from attending scheduled classes on campus. Additionally, they may not live in proximity to a university campus. The anytime, anywhere characteristics of online learning makes it more inclusive for our workforces. The online environment also allows employees to participate in just-in-time training when the need to learn or master a subject is right on top of them.

American employers need a workforce comprised of highly competent individuals who have both specific expertise, as well as general abilities Robert Mendenhall HRM. What do you think the future for online learning holds? How will new technologies continue to develop the popularity of this field and is there anything on the horizon you are currently excited about? RM. If higher education continues down the same path as always and continues to increase costs, we face an increasingly serious national issue of affordability and access for working adults and employers. However, new models of higher education, using the power of technology, can offer proven approaches to reduce costs, expand access and increase quality. Online, technology-based education should utilize ‘best in class’ learning resources to provide, not just an equivalent education, but an enhanced one. LK. The University of Illinois Global Campus has built an island in Second Life, and we are exploring ways to use this virtual world for collaborative learning experiences or just as a meeting place. With virtual worlds, the ability to replicate the real world in vivid detail, and to create simulated experiences, provides a powerful new tool to assist educators. As virtuality becomes more and more real, one wonders whether medical stu-

94

www.hrmreport.com

TS. Beyond the potential financial benefits to students and employers, the growing segment of online education allows greater educational access to a broader spectrum of employees. Education is the great social and economic equalizer. Technology has reached the point where the major challenges are related to course design and instructional methods. With Web 2.0, online students joined other students and their instructors in creating and sharing knowledge with tools like blogs and wikis. As education providers we must continually discover new ways to use existing technologies. Mobile devices and ultraportable netbook computers are new technological frontiers, not yet being fully utilized for online learning. Coupled with emerging citywide/countrywide wireless networks, such devices open new possibilities for students to be actively engaged in true anywhere/anytime learning. With the increase of mobile bandwidth, possibilities for larger scale integration of multimedia are increased for the online learning experience. Providers of online education must continually observe what technology is being widely used by potential students and evaluate these emerging technologies for use within online learning environments. JB. At Marist we’re incredibly excited about the future of online learning and the technological capabilities that future development will bring. When you look at the advances that are being made in academic technology in terms of 3-dimensional simulation environments, learning platforms for mobile devices and tablet and pen-centric computing, it’s tough not to get excited about all the possibilities. Web 2.0 tools will also have a significant impact on online learning because of their ability to extend the classroom onto social networks, where students can connect to others who share an interest in their field of study. In the current form of online learning, we’ve freed the student from the constraint of the traditional classroom. In the future, students will be freed from the constraint of sitting in front of a computer – education will truly become an anytime/any where, endeavour. n


Uniof Illinois.indd 1

10/11/08 09:13:04


complication or challenge?

10775_Regent_Ads_HRM_mech_10x.indd 3

10/11/08 09:10:44


Great leaders can tell the difference.

When your employees have leadership skills that help them evaluate obstacles and guide others, your organization thrives. With more than 30 graduate and undergraduate online degree programs, Regent University can help turn your entire workforce into valuable assets who succeed — no matter how deep the water gets. Learn how Regent can help cultivate great leaders at regent.edu/hrm partner with regent We maintain partnerships with various organizations across the country, offering beneďŹ ts such as tuition discounts, in-house workshops and training, and admission to leadership events. For more information, email David at partners@regent.edu

regent.edu/hrm

10775_Regent_Ads_HRM_mech_10x.indd 4

10/11/08 09:10:49


KEN DUDE:nov08 12/11/2008 16:21 Page 98

FEATURE

Keeping up with the Joneses As financial services across the globe feel the squeeze, Edward Jones continues to flourish. Ken Dude explains that growth is intrinsically linked to the firm’s people.

A

t a time when most involved with the financial industry are worrying about shrinking pay packets and disappearing jobs, brokerage firm Edward Jones seems in excellent health. Last year it awarded 70 percent of its head office staff a chunky 6.5 percent pay rise. It also jumped in Fortune’s annual Best Places to Work List from a respectable number 29 to a stellar number four. But any suggestion that this rise in the rankings is a result of cold, hard cash is given little credence by Ken Dude. “Our home office represents less than 20 percent of our associates,” he says when we catch up with him at the firm’s St. Louis headquarters. “So that pay raise only affected 70 percent of one fifth of our total staff. It’s a small number compared to our whole population of associates. And all of the associates are surveyed randomly for the Fortune process.” In fairness, the idea that Edward Jones’ popularity as a place to work hinged on one little pay rise was never going to fly. The firm has been a regular fixture in Fortune’s list for years, even grabbing the top spot in both 2002 and 2003. In addition, the company has picked up plaudits as an employer from a huge range of sources in the US, Canada and the UK. Asked to identify exactly what it is that makes Edward Jones special, Dude re-

sponds without hesitation. “I think one of the core values of the firm is respecting all individuals and the contributions that they make,” he says. “Another would be a real focus on working in partnership with each other. It’s a very collaborative environment with a lot of respect for the work that each individual does. It also helps that we are a private firm and more than 10,000 of our associates are owners of that firm.” Dude is in no doubt that culture is of vital importance in the firm’s success and a great deal of effort is made to ensure that only those prospects who correspond with it are brought on board. “We have a strong culture at Edward Jones,” he says. “During the interview process, it is essential to have that interviewee talk with more than a single person. You have to have multiple senior interviewers speak to that candidate and examine them for their fit with our culture as much as for their functional expertise.” That’s all well and good during the interview process, but with something like 10,000 offices spread out across vast distances, how is it possible to build and maintain a consistent culture? “We keep the culture of the firm alive through geographically organized regions of between 50 and 70 offices,” Dude explains. “People feel much more a part of a smaller region than they would if we had all 10,000 offices responsible simply to the head-

1986 1922

1922 – Company established by Edward D. Jones Sr. in St. Louis 1941 – The firm is restructured to comply with New York Stock Exchange requirements 1955 – First branch office opens in Mexico, Missouri

1974 – Partnership is expanded to give an opportunity for those who work at the firm to share in its ownership

1986 – 1000th office is opened in Stoughton, Wisconsin


KEN DUDE:nov08 12/11/2008 16:21 Page 99

quarters. Instead of being one part of 10,000, they’re one part out of the 70 offices in their region.” One of the biggest change agents in HR over recent years is the increased influence of technology. Dude tells us about the annual benefits period from his early years with the company. Forms were physically mailed to all associates and carbon copies were then sent back by return of post.

1994 – Edward Jones Canada begins operations 1995 – The Edward Jones Dome opens and is the home of the St. Louis Rams 1997 – Edward Jones Limited opens with operations in Canary Wharf, London, UK

1995

1994

It all sounds ridiculously arcane now, but this was happening only just over a decade ago. It’s a stark example of how things have moved on. Nowadays, Edward Jones avails itself of the full range of HR technologies, the better to manage everything from its recruitment processes to succession planning. “We receive over 250,000 applications and inquiries for employment each year,” says Dude. “The only way we can handle that volume effectively and efficiently is through automation. Applicant tracking and succession planning systems make sure we understand our people. It used to be that we knew everyone in the firm, but as we have grown, this automation and these systems help us keep an understanding of all of our associates.” While the human side of the recruitment process still remains vital, the improvements in efficiency brought by IT cannot be underestimated. Technology enables a huge volume of applicants to be automatically whittled down to a much more manageable number. So while all hires are made person to person, only prospects who look like a good fit for the company get as far as that stage. The ability to deal with much larger amounts of data also impacts on Edward Jones’ internal succession planning. “It comes down to having a system that allows us to keep track of associates and leaders with poten-

2002 – Firm tops Fortune’s 100 Best Companies to Work For list, a feat it would repeat in 2003 2007 – Ranked as a top company for training associates in Training magazine for the seventh consecutive year 2008 – 10,000th branch office opened in Southington, CT

1997


KEN DUDE:nov08 12/11/2008 16:21 Page 100

In a financial industry that is shedding jobs at an alarming rate, this puts Edward Jones at a significant advantage. However bad things are now, the cyclical nature of business makes it reasonable to assume that things will get better at some point. While their competitors are letting people go, Edward Jones can continue to build for the future. “As we’re able to maintain our employment and maintain our growth, we know that eventually a good time will come around the corner,” Dude explains. “And when that next good time that comes, our workforce is fully staffed and prepared and trained. Companies that have gone through those cuts, their first course of action will be to go back and rehire people to fill the jobs that they had.”

FROM THE ARCHIVES

Ken Dude tial for more responsibility in an organized fashion,” says Dude. “When we were a much smaller firm, you could keep a notebook of people that you met and thought had potential. As we’ve grown to the size we are today into the geographic distribution we are, we need an organized method to keep track of those folks.” While this technology is no substitute for a good understanding of the firm’s people and regular review meetings with its talent, it does turn a potentially insurmountable problem into something more manageable. Returning to the carbon copied forms that he had to deal with in the early days, Dude illustrates how streamlining these processes has enabled HR to become an increasingly valuable partner to the business. “Automation has reduced the workload and the time spent on those transactional activities,” he says. “It allows HR to now focus on these more strategic initiatives around talent.” But despite the function’s increased sophistication and importance, common concern is that in the current economic downturn, HR could quickly become a target for cost cutting. Though he acknowledges the seriousness of the situation, Dude remains confident that his firm will be largely insulated from such pressures. “We’re very fortunate in that Edward Jones is a partnership, and we may not have those quarterly pressures to report earnings,” he explains. “That allows us to treat all of our talent acquisition and training expenses as an investment, to think of them as an investment into the firm and to continue our growth during slower periods of economic times.”

100

www.hrmreport.com

Above Edward Jones Sr. and Jack Phelan pose in front of the VW van that Jack used to cover his territory in the rural midwest. Left Edward Jones Sr. and Ted Jones. Below Edward Jones Sr. poses with the Automatic Stock Quotation Board in 1956.


Rideau.indd 1

10/11/08 09:11:20


KEN DUDE:nov08 12/11/2008 16:22 Page 102

THE FEMININE TOUCH More than just getting a jump on the comDude. Roughly 65 percent of our petition, there are even opportunities to be exworkforce is made up of women but ploited while the crisis rolls on. “I think the only about 18 percent of our financial current markets provide opportunity to hire the advisors are female. That’s right people,” explains Dude. “The folks still something we’re working to change. need to fit the culture of our firm, but we’ve been Historically, financial services have able to bring in good people with experience in not had a high representation of the industry to support new products and serwomen, so we’re starting at a low vices here. That opportunity is increased at this point. But what we’ve done this year time because of the uncertainty.” is to organize role models, female The difficult times also have big implications role models that have proven in the war for talent. After nearly a decade of insuccess in our industry. We’ve tense competition for the best people, we could identified them for geographic areas suddenly see an influx a quality candidates into and have committed resources to the job market. Dude agrees that the next few recruiting more females into the years could see some major changes, but sugfinancial advisor capacity. We’re also gests that this new environment could bring working to retain the trainees that we challenges of its own. “What’s going to occur is do hire as this is a difficult industry that people will become more free agents and to start in. We now have committed will be looking out for themselves rather than resources to support those new having the commitment that they used to have trainees that are female. We’re also to a firm,” he says. “So I think the war for talent looking to increase the leadership is going to be to not only attract people but to redevelopment of our female financial tain people and to work with them over a career.” advisors and the development It is here that the Edward Jones culture and opportunities that are available to the firm’s reputation as a good place to work will them. So far, this year, we’ve be absolutely crucial. Asked about the defining increased our hiring of female FA’s to element of that culture, Dude quickly identifies more than 25 percent of our hires. one concept as absolutely key. “I believe that what keeps our associates with us is our respect associates are now on their own more than ever before with the knowledge for people,” he states. “We have an open communication with the leaderworkers. We need to give them the resources and the support that they need ship of the firm which is very clear about the firm’s goals, its performance and its plans for the future. I think that open communication and respect for all to accomplish their job.” With the recent failings in so many sectors of the fiassociates is what really draws people here.” nancial industry, the longevity of such a liberal management model remains With this respect come certain expectations, in the form of what Dude to be seen. For now at least, Edward Jones seems content to place its trust in describes as ‘responsibility-based management’. “We believe that the peoits people, viewing it as a vital element in keeping them engaged. ple who know best what work needs to be done are the people doing it. We “We’re an organization that’s all about relationships between financial advisors and our clients,” Dude continues. “If you’re going to have successful relationships, they need to evolve over time. Therefore you need to retain your associates to develop those relationships. If you’re constantly turning people over because they’re not engaged, they’re not happy, you’re simply not going to develop those client relationships.” And make no mistake, the Edward Jones philosophy is to build these relationships and buck the market’s general downward trend. Hitting an ambitious target of 10 percent annual growth is no certainty even in the best of place a lot of accountability on people, but we also give them responsibility times, so doing it now will require some very hard work. Dude explains that for their own work. They have the ability to get the work accomplished in the nurturing the firm’s people will be absolutely essential to these goals. “We’ll way they see best.” continue to focus on leadership development,” he says. “As we grow we’re It’s a concept that has been gaining traction over recent years, an attitude going to need more leaders. We have a desire to promote from within, so we that says, ‘we don’t care how you get the job done, just get it done the best need to develop those people. On the inclusion and diversity initiatives, we way you can’. “I believe the balance is shifting more towards having to have need to make greater efforts in the next few years to include a greater diverthat freedom in your associates and giving them the responsibility,” Dude consity of associates. And as we bring them into the workforce we now need to firms. “As we move away from the old command and control environments, move them through our leadership ranks.” n

“If you’re going to have successful relationships, they need to evolve over time. Therefore you need to retain your associates to develop those relationships”

102

www.hrmreport.com


VAngent.indd 1

10/11/08 09:13:25


Dana Felthouse ed:feb08

12/11/08

15:29

Page 104

PBM

Just what the doctor ordered? Innovation, obesity and the future of Pharmacy Benefit Management.

I

n a complicated and fragmented healthcare system, good information the pharmacy. Now we’re really seeing PBMs leverage the power of the inis invaluable. Set up in 1995, the Pharmacy Benefit Management ternet to help drug plan members learn more about their drug therapy and Institute seeks to make sense of the marketplace, providing research use some of those technologies to try and increase adherence with drug and education on the design and managetherapies. PBMs are using voice response unit ment of drug benefit programs. Representing technology, other outbound telecommunication payers, pharmacy benefit managers and vendors, and emails to help manage patients with chronic the PBMI aims to be a one stop shop for just diseases. The current innovation is now on the paabout everyone involved in the PBM space. The tient side of things, because the IT infrastructure of US population are obese task of leading this organization falls to President for the prescription drug benefit is state of the art Dana H. Felthouse, MBA. With a long career in and has been for 20-plus years. healthcare and extensive experience of the critiTo give you a specific example, probably the cal role that drug therapy plays, Felthouse had greatest thing PBMs have been able to do is give plenty to say when we caught up with her at patients access to drug pricing databases. If a PBMI’s Arizona headquarters. patient wants to check what a prescription might cost at a pharmacy near work, you can log HRM. IT innovation is having a big impact on the on and do that. Then if you decide before you business of healthcare. How is new technology afleave work you’re going fill it at the pharmacy by fecting the PBM sector? your house, you can check to see what the price Dana Felthouse. PBMs are on the cutting edge of American healthcare orwould be at that pharmacy. ganizations in terms of deploying technology. PBMs were the first sector of People want information in whatever medium they need when they healthcare to adjudicate a claim online in real time at the point-of-care in want it. So a plan member may like to have something come from their

104

www.hrmreport.com

30-40%


Dana Felthouse ed:feb08

12/11/08

15:29

Page 105

employer in paper such as a brochure that tells them how to use their drug benefit. If they’re sitting at their desk, they want to be able to access the information on the computer, and then when they get to the pharmacy, they want the pharmacist to help them. Deploying internet technology makes the information more accessible to more plan members, whether they are employees or retirees. HRM. Are there any particular areas where you see this transparency having a major effect? DF. We know that more information about the cost of prescription drugs helps consumers make better drug purchasing decisions. It’s helping educate them about the value of generic drugs, so that if the physician has indicated that it’s medically appropriate to use a generic therapy, they feel more comfortable with it. Consumers also are using the social networking aspects of the internet for all kinds of chronic disease management. The health care industry is seeing good results with people monitoring their blood glucose levels if they have diabetes and staying on top of proactive health strategies if they’re wrestling with heart disease or high cholesterol. There also are programs for weight management, with a lot of people logging onto a chat room or a blog to communicate with other people that are experiencing the same thing. Patients and health plan sponsors are finding all of those things to be helpful in the mix of communications about how to take better care of themselves.

agement and wellness programs. It’s not yet part of the core offering because the tools are being tried and tested in populations who have certain disease states. PBMs will continue to find ways to leverage social computing to help patients and to provide the type of oversight for drug therapies that helps improve patients’ health. HRM. You mentioned wellness initiatives. Is that an area that PBMs are looking into as well, giving information to people to perhaps even reduce the necessity for medication?

“PBMs are starting to understand that they play a critical role in the overall wellness of their patients” DF. PBMs are starting to understand that they play a critical role in the overall wellness of their patients. If patients can make the type of lifestyle changes necessary so they’re not getting so ill, then maybe a prescription medication is not necessary. You see this with weight-related conditions. Anytime someone can become more physically active or improve their nu-

HRM. Is the social networking aspect something that is actually being utilized by PBMs or is that something that people are finding themselves and using to supplement what they’re getting through official channels? DF. PBMs may be using social computing in different disease man-

Dana H. Felthouse is president of the Pharmacy Benefit Management Institute (PBMI). PBMI provides research, education, and publication services to help health care benefit executives work with pharmacy benefit managers (PBMs) to design and manage prescription drug benefit programs. PBMI provides a forum for health care purchasers to exchange ideas, advance best practices, and drive marketplace changes that improve pharmacy benefits and control costs. For more information go to www.pbmi.com.

www.hrmreport.com

105


Dana Felthouse ed:feb08

12/11/08

15:29

Page 106

RANGE IN NUMBER OF PRESCRIPTIONS PER MONTH PER MEMBER

0.47

DF. Managing specialty pharmacy therapies is a huge trend and challenge. The PBMs have three dispensing channels – retail pharmacies, mail-order pharmacies and now specialty pharmacies. Sometimes drugs are covered and reimbursed through the medical benefit, and sometimes through the drug benefit. The PBM industry will be working to manage across all of these variables so that the patient gets the right drug at the right time from the right distribution channel that provides the needed level of clinical oversight. If you’re taking blood pressure medicine that is an oral medication, you can get it from the mail-order pharmacy and see your physician regularly to ensure the therapy is managed correctly. But if you have multiple sclerosis and you’re taking Betaseron, this biologic therapy needs to be dispensed through a specialty pharmacy with physician oversight and patient case management.

Active employee 2.03

Lowest

Retiree

0.35

Combined

1.61 2.52

Average 1.29

9.00 Highest

3.00 5.00

0

2

4

6

8

10

RANGE IN GROSS COSTS OF PRESCRIPTIONS MEMBER PER 2 4 MONTH 6 8 10

0PER

$1.54

“There isn’t a magic pill for tackling the obesity-related issues. Sometimes the patient just has to get off the couch. It may not be the best sound bite, but it’s true”

$102.72

Lowest $11.21

$67.77 $138.36

Average

$100.67 $204.25 Highest

$174.00 $350.00

0

50

100

150

200

250

300

350

Source: PBMI

trition, it helps their cardiovascular system and lowers cholesterol. It’s a huge issue not just in the United States, but in all nations. The obesity epidemic is far reaching and everybody’s going to have to get on board. In the United States the incidence of obesity-related illness and disease is getting ready to overtake smoking-related illness and disease. PBMs will be looking at obesity more closely because all of their customers are impacted by it. Obesity is a market externality that PBMs and other health care organizations are going to have to address. There isn’t a magic pill for tackling the obesity-related issues. As my one pharmacist friend told me, “Sometimes the patient just has to get off the couch.” It may not be the best sound bite, but it’s true. A major benefit of a genuine wellness focus is that the side effects of eating less and being more active are always zero. HRM. Do you think there are any other key trends currently emerging in the design and management of PBM offerings?

106

www.hrmreport.com

HRM. With the presidential election and the ongoing financial crisis, the US is going through some major changes at the moment. Do you think external factors could have an impact on the PBM space? DF. I think the economic downturn has reminded everybody that the affordability of prescription drugs is a key issue in patients becoming or staying adherent to their drug therapies. We’re seeing a huge amount of advertisement and support for some of the retail pharmacy generic drug programs. These programs encourage people to take as many generics as are medically appropriate so that there’s money left over when there may not be a generic alternative. HRM. Do you think that the economic situation could directly affect patients’ health? DF. There won’t be any problems with the supply of prescription drugs, but people may not go to the pharmacy to pick up a prescription, or they may not refill a prescription. It’s a particular issue for asymptomatic diseases like high blood pressure, high cholesterol and diabetes, where patients feel fine so they don’t think they need medication. If they stop taking the medication, they may be putting themselves at greater risk for heart attack or stroke. The healthcare costs will be higher because then they’ll be an acute case. We may see over the next couple of years a lot of non-compliance with maintenance medications that increases medical utilization. But this is a hypothesis. We’re going to have to wait to see what happens because the economic downturn is unprecedented. In the Great Depression, you didn’t have all of these prescription drugs. People rarely even went to the doctor. Healthcare is a more complex picture now. 


Wellpoint.indd 107

10/11/08 11:34:13


HUMANA:nov08 12/11/2008 14:40 Page 108

EXECUTIVE INTERVIEW

The right chemistry Dr. William Fleming explains that a good relationship with a PBM can bring benefits for everyone. HRM. The rising cost of healthcare is a big issue for business. How can a PBM provider help companies manage and control this cost? William Fleming. First, PBMs can do a better job of aligning their business practices with those of their clients. Employers are concerned with understanding the ‘net cost’ that a PBM solution will provide, and the procurement process inherently focuses on surface level financial variables, discounts and dispensing fees, instead of the true cost of the solution. It is a primary role of the PBM to ensure that pharmacy and medical are no longer considered separate activities, but are understood to be interdependent when it comes to patient care. The PBM model is best utilized when it works in har-

Humana Pharmacy Solutions, that means continually striving to improve the interaction with customers by getting the basics done right, delivering unexpected value and quality, providing guidance on complex needs and building emotional engagement with those we serve. HRM. What are the key benefits that both employees and employers can receive from a PBM solution? WF. It needs to be about guidance. Unfortunately, the entire pharmaceutical industry is geared to drive higher utilization of higher cost drugs be-

“It is a primary role of the PBM to ensure that pharmacy and medical are no longer considered separate activities” mony with core clinical programs that leverage all available data. The PBM can then play a central role in informing and guiding members, in coordination with the medical community, so that evidence-based medicine is practiced. HRM. What are the key features and competencies that an organization should look for when evaluating a potential PBM provider? WF. An employer should look for a PBM that understands the financial risks that self-funded employers face when providing healthcare and pharmacy benefits. HPS manages 220 million prescriptions per year. Understanding the impact of the total net cost of medications on the cost of providing care, as well as the need for positive medical outcomes, should be a driving factor in the choice of a PBM. Employers should look for a PBM that has instilled a culture of providing perfect service. At

108

www.hrmreport.com

cause of things like direct to consumer advertising, aggressive drug detailing, rebates for drug list placement and market share and a procurement process that focus on surface variables vs. net cost. The PBM should play an important role in highlighting the differences in drug efficacy against drug cost. Many physicians, for instance, are unaware of the cost difference between drugs and the value of lower-cost generic products. One area where guidance can occur is between the PBM and the physician. Many of Humana Pharmacy Solutions’ clinical edits result in conversations with physicians about why costly second-line drugs were prescribed. Frequently, the physician did not realize the

member was not being compliant. We find physicians will switch a member’s medication more than 60 percent of the time when presented with information about alternatives and their costs. Guidance also is critical around adherence, safety and efficacy. Many members are prescribed multiple medications, with multiple interactions and side effects. The PBM can play a central role in helping them sort it out. When education is provided, adherence increases, generic utilization goes up and overall medical costs go down. HRM. How is technology reshaping the way PBM solutions operate? Do you predict any further innovations in the near future? WF. One of the biggest opportunities will come through increased adoption of electronic prescribing. Today, almost every management program used to improve the costs and effectiveness of prescribing happens after the prescription leaves the physician’s office. With widespread adoption of electronic prescribing, PBMs will be able to provide actionable information to the physician at the time the prescription is written. Another innovation that is reshaping the industry is using consumer segmentation in communications. A PBM’s membership base is not a homogenous population. Each member is different and reacts and responds differently to information. Communication and message can be adapted to elicit the desired response based on the member’s values, ideas and needs. n

Dr. William Fleming is Vice President of pharmacy and clinical integration for Humana Pharmacy Solutions. In his position with Humana, Dr. Fleming has developed innovative benefit designs that give consumers the information they need to make better decisions about their health and has testified before both the House and the Senate about important pharmacy issues.


Humana.indd 1

10/11/08 09:04:11


AMERICAN HEATH

A healthy product Healthcare reform is on the government’s agenda. But what does this mean for business and HR? Karen Ignagni of AHIP explains.

F

or Karen Ignagni, CEO of America’s Health Insurance Plans (AHIP), there’s no issue that she doesn’t find herself smack in the middle of. AHIP, a national association representing nearly 1300 member companies, provides a unified voice for the community of health insurance plans. Member companies offer medical insurance, long-term care insurance, disability income insurance, dental insurance, supplemental insurance, stoploss insurance and reinsurance to consumers, employers and public purchasers. And, as Ignagni notes, “healthcare is such an important issue for our country – whether it is cost, quality, access – that there’s

110

nothing that we aren’t very much a part of.” A major policy goal for AHIP is to expand access to high-quality, affordable healthcare to all Americans and the association has developed innovative solutions to promote this. Robert Zirkelbach, spokesman for AHIP, explains how healthcare reform is currently the top priority, and over the last two years AHIP has put forth several healthcare reform proposals – one on access, one on quality, one on the individual market and one on affordability – in an attempt to address the key challenges facing the nation. “We need to get everybody into the healthcare system, we need to improve the quality and

www.hrmreport.com

HRM10_KarenIgnagni 110

12/11/08 16:04:37


Karen Ignagni is President and CEO of America’s Health Insurance Plans, the national association representing companies that provide health insurance coverage to more than 200 million Americans. She brings a wealth of experience to this role and is consistently recognized as one of Washington, DC’s most effective lobbyists.

safety of healthcare that patients receive and we need to reduce the rate of growth in rising healthcare costs that are a burden to individuals, families and small businesses across the country. We recognize that the current healthcare system is not working for everybody and we stand ready to work with President-elect Obama and the next congress to achieve real healthcare reform.” From a business perspective, these issues raise some interesting discussions, not least about the responsibility that lies with employers to educate their associates about health and wellness. “Companies need to do this in a variety of ways,” explains Ignagni. “From the standpoint of offering healthcare benefits and giving people incentives and benefit packages – early intervention, care co-ordination, getting your kids immunized, getting flu shots – all of those things are integral to benefits package decisions. The first thing for a company to decide is what they are going to offer by way of healthcare benefits. The second decision is how do you, as a company, encourage individuals to use them?” And while companies across the US have certainly made tremendous progress in recent years – smoking cessation in particular has seen fantastic results – Ignagni believes that progress is relative to the size of an organization. “If a company has scale then it offers the opportunity for Weight Watchers programs, smoking cessation programs and bringing individuals in to talk about issues such as coping with stress,” she explains. “But what we really need to do is get to a place where we are matching public and private strategies and making sure companies have the opportunity and support in offering these kinds of programs.” In short, the government needs to support and stimulate these offerings and make sure public programs are aligned to support these objectives. Something the industry is discussing a lot lately is the shift from a reactive healthcare model to a proactive one, and Ignagni certainly understands this. “What we have seen in healthcare systems across the world is an awareness that if people wait until they are sick to seek healthcare services, that’s not the most productive use of resources.” It’s actually a tremendous missed opportunity from a personal perspective in terms of early intervention. Today there is much more of a focus within healthcare

practice on identifying risk factors. Ignagni explains that, what the industry calls, ‘predictive modeling’ is able to indicate which types of individuals are at risk within a particular worksite, public program or community by looking at whether they have, for example, genetic risk factors in the area of breast cancer, heart disease or asthma, or whether they live in an area where the environment is not as clean as it may be elsewhere. What’s more, the development of what a recognition program can do is synonymous with the rise in technology over the last decade. Advancements within the tech space have had a lasting impact on all industries, and healthcare is no exception. Not just in terms of practice, where enabling physicians so that they can communicate with patients through the internet deals with the issue of availability, but also through business. “The US devotes more resources to healthcare than any other nation,” explains Ignagni. “We generally have a broader access to technology, so that outcomes in the area of high-tech services are better than in other countries.” However, the challenge for the US is how to do as well as the UK and the rest of Europe in other areas. “We have challenges in the area of technology that European countries have addressed in different ways. We don’t have a place in the United States where we can compare a drug to a drug, a drug to a bio, or a drug to a device, and the question is how can we reorient the system so that we’re doing as well on the early interventions as the UK and Europe do.” The challenge lies in moving toward this model while continuing to give physicians and patients the information they need. Ignagni calls these challenges the specifics of the US healthcare industry. “There’s been quite a lot of discussion recently about how to do this,” she says explaining that while it’s certainly controversial, from the

“We need to get to a place where we are matching public and private strategies and making sure companies have the opportunity and support in offering these programs.”

www.hrmreport.com

HRM10_KarenIgnagni 111

111

12/11/08 16:04:47


WE BELIEVE Karen Ignagni explains why every American should have access to affordable healthcare coverage. The members of AHIP seek to advance policies that result in all Americans having access to health care through insurance coverage that is affordable to the nation and to individuals. We believe that the nation needs to develop a plan to achieve health insurance coverage for all Americans in stages. We propose a federal framework to reward states that make rapid progress in advancing health insurance coverage for children first and then adults in a fiscally responsible way. We believe that these goals can best be met by drawing upon the innovation of the private health care system partnering with the public sector. Moreover, we believe that federal and state resources can be combined to create incentives to build upon the employerbased insurance system and encourage individuals to purchase coverage. Our proposal to expand access to health insurance coverage is built upon fi ve principles that are designed to clearly delineate the responsibilities of the private and public sectors, avoiding duplication, providing a framework for complementary strategies and maximizing the effectiveness of a system-wide effort to improve quality and reduce costs.

Principle 1 The federal government should provide incentives to states to develop strategies that lead to—and sustain— coverage of children within three years and adults within 10 years.

Principle 2 The federal government should establish incentives for states to provide coverage through the Medicaid program for all adults with incomes under 100 percent of the federal poverty level (FPL).

Principle 3 The federal government should provide subsidies for the purchase of private coverage to individuals and families with incomes under 400 percent of the FPL.

Principle 4 The six million uninsured Americans with incomes over 400 percent of the FPL should be encouraged to purchase coverage.

Principle 5 Employers should be encouraged to facilitate, provide and maintain coverage for their employees.

Taken from AHIP’s Vision for Reform. View in full at www.ahip.org

112

standpoint of HR managers across industries, there is a lot of interest in having these discussions. It is not to say these conversations will necessarily affect the way an employer will structure their benefits, but they may well inform benefit development. What is certain is the active involvement in these issuses is proving promising. As Zirkelbach notes, in reference to the recent healthcare reforms proposals, “We recognize that to achieve real healthcare reform, it is going to require the buy-in of the American people.” In fact, to help with this issue, AHIP recently took to the road to get feedback from Americans across the country on healthcare issues that are important to them. “We hosted roundtable discussions where Americans from all walks of life told us about their healthcare stories and their priorities for healthcare reform,” he explains. “What has been very encouraging is how many people have been interested in being a part of this discussion, who have wanted to share their ideas, who have personal stories with the healthcare system that they want to talk about and have concerns that they want addressed.” And as AHIP continues to encourage people to join the campaign and be active participants in healthcare reform, Zirkelbach explains how the association want to build a ‘grassroots army’ of individuals who support the campaign’s objectives of achieving a workable healthcare reform that not only builds on the current system but ensures that everybody has access to coverage they can afford, even if they lose their job. Zirkelbach’s reference to job loss is particular timely, given the current state of the economy. “In times of economic uncertainty, health security becomes even more important,” he notes. “The current economic crisis only exacerbates the need to address healthcare reform to ensure that everybody has access to coverage and that we bring down the rising cost of care that is driving up the cost of health insurance premiums.” A huge burden for Americans is the worry that if they lose their jobs, they’re not going to have access to healthcare. Zirkelbach says that there needs to be a way to ensure that individuals aren’t staying in jobs just so they can keep their coverage. “We need to get everybody in the healthcare system, we need to shore up the healthcare safety net to ensure that nobody falls through the cracks, and we need to provide financial assistance to individuals and working families to be able to purchase healthcare coverage.” Ignagni echoes Zirkelbach’s thoughts. “We need to ensure that patients are getting the right healthcare treatments according to what the medical evidence shows is most effective. Right now there’s evidence of wide variations in practice patterns across the country. Individuals with the same condition are getting treated differently depending on where they go for care, and we need to align treatment with best practices.” She concludes by saying that the most expensive thing the US government could do in the healthcare system would be nothing at all. “We are spending resources very inefficiently,” she says. “Having 45 million people without health insurance coverage has a significant impact on productivity.” With such a lens currently aimed at the economics of the US, tackling this issue might be one of the best things the country could do. 

www.hrmreport.com

HRM10_KarenIgnagni 112

12/11/08 16:04:49


RXamerica.indd 113

10/11/08 11:36:45


BARRY BARBER:nov08 12/11/2008 15:05 Page 114

HEALTHCARE FOCUS

IT PAYS TO BE HEALTHY Barry Barber of Kimley-Horn & Associates tells HRM about the positive side effects of the firm’s decision to pay 100 percent of employee healthcare premiums. “I remember a conversation several years ago when healthcare costs had spiked dramatically,” says Barry Barber, SVP Human Resources at engineering firm Kimley-Horn & Associates. “We came together and said, ‘Should we begin passing a portion of this on?’ And the gentleman who was our chairman at the time said, ‘Well, why would we? We’re able to pay the full amount, it helps with recruiting and it helps with retention. It’s the right thing to do’.” He laughs, adding, “An hour and a half meeting was over in 15 minutes.” Of Fortune’s 100 Best Companies to Work For – which this year sees Kimley-Horn ranking at 38 – only 12 companies offer to pay 100 percent of healthcare premiums. For Kimley-Horn, this is a policy that has been in place since the company formed in 1967. That’s over 40 years of

114

www.hrmreport.com

fully paid employee healthcare premiums – quite an achievement. Barber, who has been in his role as Head of HR since 1999, agrees: “We certainly feel that being able to offer this to our employees is something that differentiates us from other firms and in a time when it’s difficult to find as many great people as we need, it’s very helpful to us from a retention perspective. It allows our people to see that our firm is trying to provide support and security for them and for their families.” Interestingly, Barber admits that the policy may not actually play a big role in the culture of the firm, but instead exists because of the culture that the firm has taken on. “In other words, because we have this policy, our culture doesn’t change but because of the culture we have. Our culture is to treat employees well, therefore,

our approach to healthcare is a logical extension of our culture.” Barber goes on to explain how healthcare programs and benefits are actually outsourced to third-parties as these administrators have access to networks and discounts that would otherwise be unavailable to the firm. Barber admits that there isn’t a ‘full-blown’ wellness program in-place, but he makes this point as a positive, not negative: “We do have several programs that provide education incentives to help employees and their families lead a healthy lifestyle. For example, our primary medical provider is Blue Cross, and they have what they call their Blue Points System, which allows employees and their families to get points for daily exercise. If you get a certain number of points you’re able to get prizes.”


BARRY BARBER:nov08 12/11/2008 15:05 Page 115

When we speak with Barber it is actually the day after leaders at Kimley-Horn have sat down to discuss the benefits approach for 2009. With the credit crunch raging on, it is certainly a challenging time for many companies. Healthcare costs are rising too. They may not have ‘spiked’ again, but there can be no denying that costs are increasing. Nonetheless, Kimley-Horn’s healthcare policy remains intact. “Obviously the economy is difficult right now,” Barber agrees, “but we, again, affirm that we’re going to have a healthcare offering that allows 100 percent payment of employee and family healthcare.” He goes on to say that there would be a lot of things that would change at the firm before they would change their approach to healthcare. “I think we would hold on to it until pretty much towards the end,” he says. “A lot of things would change before we’d change our support for healthcare.” Fortunately there’s no likelihood of Kimley-Horn becoming a sinking ship so that

perspective at least, are the two ‘biggies’ at the firm. Barber himself actually has an unconventional background for his role at Kimley-Horn, and is the first to admit it: “I’m actually an accountant by background, but had always been very involved in recruiting and training activities with my previous employer as well as at Kimley-Horn.” I would describe them, I guess, as my professional hobbies. It’s really what I enjoy doing.” Jokingly, he adds, “I hope that doesn’t mess me up too badly in terms of doing the job.” Quite the contrary. Focusing on recruiting, retention and development efforts, Barber is aware that he works in an industry where there are not enough people to do everything that needs to be done. “While things have subsided a little with the economic situation, in past and in the future the industry is in a talent war. Most of what I focus my time on has to do with helping us to be successful in terms

Kimley-Horn’s ace card and they know it. “By paying 100 percent of healthcare, as well as paying a strong retirement contribution, and providing other benefits, we’re communicating that the firm is putting its money where its mouth is,” reckons Barber. “When we say we really care about our employees and we really want our employees to be able to have a strong career and care for themselves and their families, we really mean it. The point is that that helps build employee satisfaction.” Satisfaction among staff has become much more of a firm’s focus lately as the ecomony continues to be plagued with uncertainty. In the US, there is the additional issue of the presidential elections that is causing further scrutiny, as Barber notes. “We’ve got this pesky election going on here in the

“Our culture is to treat employees well, therefore, our approach to healthcare is a logical extension of our culture” Barry Barber change is unlikely to occur. “Covering our people 100 percent does offer real ROI for the company because it allows employees to focus on their work and not worry about the healthcare issues that they or their families might face. It helps with recruiting and retention and it helps with the peace of mind of our staff. That’s an intangible that’s very difficult to put value on, but it certainly has an impact.” In addition to healthcare benefits, KimleyHorn also boasts a respectable retirement plan and a healthy firm contribution in terms of 401(k) and profit sharing. “We offer the long list of other benefits that many firms offer,” says Barber, “such as educational reimbursement, employee assistance programs, vision, drug, life insurance, short and long-term disability, flexible spending, college saving plans and those kinds of things,” concluding that it is really the healthcare programs and retirement plans, which, from a dollars and cents

of finding the right people, hiring the right people and keeping the right people. “We have significant recruitment programs and our recruiting tends to break into a couple of different categories,” he continues. “Our number one source is college recruiting, and we have a very active, vibrant college program where we hire several hundred people each year. Internships are a part of that, but ultimately it’s about hiring recent graduates.” This then relates to hiring senior people, or the more experienced roles within the company. “It’s a matter of positioning ourselves in the marketplace as a great place to work and making ourselves attractive to prospective and current employees as a great place to stay,” says Barber, “The healthcare and the retirement that we’ve talked about shows how we’re doing the kinds of things that allow us to be well positioned for that kind of activity.” The fact is, paying healthcare premiums is

States,” he jokes, “and whichever candidate wins, there’s no telling what’s going to happen and what is going to get through Congress.” Because there is so much beyond any firm’s control, there seems to be a wait-and-see attitude across the industry. This is true for Barber, too, who admits that the firm isn’t doing a lot of looking out into the future. “We have to play it in terms of what we know now and what we know for next so year,” he says. While changes in the industry landscape may not be easy for Barber to predict, one thing is certain: Kimley-Horn is going to continue to pay 100 percent of healthcare for the simple reason that it is central to everything the firm is about. If you take good care of your people then they will do the same for you. n

www.hrmreport.com

115


PROGRESSIVE MEDICAL:nov08 12/11/2008 15:08 Page 116

INDUSTRY INSIGHT

Cost effective Are workers’ compensation medication costs getting you down?

TRON EMPTAGE

A

ccording to The Journal of Workers Compensation, drug cost increases between 2005 and 2006 averaged 6.5 percent. Companies need to become sophisticated in the ways they manage their drug costs. Pharmacy benefit managers can help companies understand industry issues and put together programs that are going to maximize dollars. Pharmacy programs that manage issues with high utilization, physician behavior, overuse of pain medications and off-label use are essential to manage medication costs. Price inflation is projected to increase medication costs from $200.7 billion in 2005 to $497.5 billion in 2016. This represents an estimated 148 percent increase in 11 years. The number of prescriptions purchased between 1994 and 2005 increased 71 percent, compared to US population growth of only nine percent. These statistics are attributed to a rise in prescriptions, changes in the mix of medications being used (from older, less expensive medications to newer, higher cost medications), and manufacturer price inflation for existing medications. What’s more, brand medications can cost up to three times more than their generic counterparts. While 47 percent of prescriptions are filled with brand medications, they comprise 88 percent of the $250 billion spent on prescriptions in the United States each year. Brand medications are all too often used in place of generics due to the lack of education on the availability of new generics and the misconception that brand medications are more effec-

116

www.hrmreport.com

tive. Generic medications have the same components as branded ones, including intended use, effects, risks, side effects, safety and strength. The only differences are flavor, color, shape and inactive ingredients. Overspending also occurs when prescriptions are filled that are not related to an insured’s injuries. For example, an insured refills a high blood pressure medication, birth control pills, diabetes supplies, or antidepressants and passes those costs on to the insurer. These un-

Medication costs are predicted to hit

$497.5 billion billion by 2016 related or non-compensable medications cost the insurer hundreds of dollars each month and may result in court ordered coverage of unrelated medications.

The PBM solution A PBM has various programs that work together to reduce medication costs for the company. These programs include offering a vast national network that offers volume discounts on medications. They also encompass various processes to ensure that injured parties are using the program and accessing available discounts, leading to good penetration. PBM programs should offer additional savings through mail order and by enforcing the use of generic medications when they are available. By using a PBM, companies can receive savings of up to 25 percent on their overall pharmacy spending. While many companies partner with a PBM to minimize the impact of rising drug costs, they also realize administrative and injured party satisfaction benefits.

Satisfying injured parties is the highest priority for companies. A PBM can help assist with this goal by reducing out-of-pocket expenses for the injured party, making it easier for the injured party to get the medications they need through a vast national network and by offering a mail order program. Some examples of the administrative benefits a PBM provides to the human resource professional include less paperwork for medication invoices and reimbursement issues, easily accessible prescription history for the injured party and increased ability to detect utilization issues and potential problems. As medication costs continue to rise at a rapid rate, companies are facing increasing challenges in containing medication expenses. By using an experienced PBM that offers a comprehensive range of programs, companies can get control of medication costs while maintaining, or even increasing, injured party satisfaction. Ultimately, it is important for a PBM to have experience in the workers’ compensation industry, offer a vast national network, extensive clinical pharmaceutical experience in the DUR program, flexible and user-friendly technology and maintain strong reporting features. A PBM should be easy to work with, offer customized solutions and demonstrate its value to your organization through day-to-day activities and reporting. n

Since joining the company in 2000, Tron Emptage has been an integral part of the Progressive Medical team, moving the company forward to be a national player in the pharmaceutical managed care arena. Emptage is the visionary of Progressive Medical’s strategic initiatives. He has over 16 years of pharmaceutical experience, including expertise in all aspects of the delivery of pharmaceutical care. Emptage’s professional achievements include a Bachelor of Science degree in Pharmacy and a Masters of Arts in Counseling. Along with his education he spent several years using his skills in pediatric and adult hospitals. He also has experience in the home infusion arena, dealing with pain management and chronic disease states prior to his employment with Progressive Medical.


ProgressiveMed.indd 1

10/11/08 10:21:59


BEAT

RECOGNITION HRM’s Matt Buttell talks with Tom Miller about the relationship between recognition and reward programs and corporate culture.

118

www.hrmreport.com

TMiller Ed P118-120.indd 118

12/11/08 15:59:19


A

s President of both his own company and industry body Recognition Professionals International, Tom Miller has been in the recognition business for about 20 years. Despite designing and administering reward systems for a wide range of Fortune 1000 organizations, he is the first to admit that there is still plenty of debate about exactly what a recognition program should look like. “It looks different depending on the organization,” he explains, “I’m a believer that organizations are a bit like people; they’ve got their own DNA, a different heartbeat and a different spiritual core, and a recognition system needs to reflect that.” In the time he has been working in this industry, Miller has seen a real shift from product-orientated selling toward intellectual capital. He believes this has been a ‘true effort’ to understand what recognition and reward systems can do within an organization to impact the bottom line, change behaviors and align effort and talent with where an organization is desired to go. “It’s a fascinating industry to be a part of if you’re interested in people performance and how people relate and integrate to each other,” he adds, “It’s been a lot of fun.”

Communication Miller also believes that a recognition and rewards system can be used as a communication vehicle between an organization and its respective employees. He notes that if there is an alignment there then employees have a better idea of how to perform in a way that is benefi cial to the company. This communication is also essential in determining, as Miller puts it, the DNA of a company: “It’s not the only way to do it, but it is a very strong motivational tool and can send a very strong message to support that,” he says, before continuing that he is less of a believer in the relationship between recognition programs and counteracting negative impressions employees can have of their employers. “If there are negative impressions out there, there’s not really a way to recognize that away,” he says. “What companies need to do is make sure they’re dealing with reality in terms of the health of their culture, the health of their working environment and the value proposition that is offered to employees.” If things are wrong with any of that, a recognition program won’t help.

Where it might help, however, is with regard to the current turbulences we are experiencing within the economy. “Obviously we’re dealing with quite a difficult time at the moment,” says Miller, “and I think there are two directions companies can go as far as recognition programs are concerned. One is the way those companies go who look at recognition as an effective way to maintain employee engagement and continue to invest in the employee relationship.” In other words, difficult economic times shouldn’t mean companies should stop investing in their people. Difficult times don’t last, things cycle around, and when they do, companies will want their good people there, and they’ll want them engaged. The opposing side to this, and the other thing Miller see companies doing, is taking the view that recognition is nothing more than an overhead, believing that it is superfluous and eliminating it in an effort to cut budgets. He identifies this as a dangerous attitude and says it presents a plethora of challenges. After all, if a reward and recognition system is a means of communicating the heartbeat of a company to its employees – then by removing it, what are companies saying to their workforce? “If all you’re saying is, ‘We’re a good place to work when

“Organizations are a bit like people; they’ve got their own DNA, a different heartbeat and a different spiritual core and a recognition system needs to reflect that”

www.hrmreport.com

TMiller Ed P118-120.indd 119

119

12/11/08 15:59:21


things are healthy, but when the economy goes bad you’d better just be lucky you have a job here,’ then that’s going to breed cynicism.” Miller prefers the idea that we’re approaching a new trend within the industry. He calls it ‘the people era’, which he believes sees companies moving away from traditional trends such as technology and toward understanding that performance is all about the people. “Recognition is not the Holy Grail,” he goes on, “but it’s part of the mix of a company’s employee engagement strategy. The intellectual capital around it and thinking about how to use it is the era we’re now in.” In short, recognition is an indicator of what companies are doing in terms of corporate culture and organization. As Miller explains, “We’re through with the hierarchical era of 20 or 30 years ago when people did what they were told because their boss said so. Recognition looked different then. Now there’s a sense of entrepreneurial effort from people, a sense of owning your work, and recognition systems need to reflect that.” The smart companies are those that use recognition wisely. By creating as much flexibility and as much on-the-ground impact as possible, and integrating recognition with training and communication supervisors and managers can be successful. “There is some art involved,” notes Miller, “Management should be able to

use the recognition and reward system as a tool they can flex and bend into specific purposes, while at the same time getting the organization’s work accomplished.”

Technically speaking When Miller refers to technology as being ubiquitous with the industry, he’s not wrong. “Companies are pretty far behind the curve

“The rules are pretty expansive, but ultimately, a recognition and reward system has to align with the corporate culture”

if they aren’t already considering or aren’t already using technology and technological solutions in their recognition and reward system,” he says. “A few years ago, maybe it would be as little as a couple of years ago, there were some real technological advances and some ‘ah-ha’ moments in the operation of recognition and reward systems. These days, the technology is out there, and while not much new is going on, companies need to be thinking about how to use it.” Miller. It’s a huge challenge to design recognition Technology has become so important to the recognition programs for diverse workforces and come up with space because it creates a much more efficient delivery ideas that appeal across the board, especially in system: “It enhances communication and enables more today’s markets where so many companies operate efficient recognition. The most important thing techon such a global scale. nology has done for this space is give organizations I’m actually in school over in the UK and in the insight into what’s going on within their system, Paris and I’m learning a great deal about the various which then gives them insight into what’s going on cultures internationally, and they’re very, very different. If we within the culture of their company.” were to take a US-centric version of how we recognize people Miller goes on to talk about the key rules for designing and just wholesale and blindly implement that in France, it a successful recognition program, saying that the Recogniwould be a disaster. It would be a laughing stock, and you’d tion Professionals International (RPI) group, with which he create very cynical employees. is closely linked, has designed and developed a set of best There has to be a great deal of understanding about the practices for this. “They begin with the strategic and filter different cultures within an organization. Whether it’s different down toward the practical,” he says. “There’s a lot of science countries or not, you can still find different cultures. In the US, and research behind how to do it well. The rules are pretty exfor instance, the South is different from the North, so there has pansive, but ultimately, a recognition and reward system has to be an understanding. And there can be mistakes made. It to align with the corporate culture, so the corporate culture would be easy to take the technology and build one system and has to be based in reality.” Miller explains that the first thing very easy to scale that across an organization and say, ‘Hey, an organization needs to do is take a hard look in the mirror we’ve invested in the system. The system’s done. We’re going to ask whether what they are saying about themselves is to use that system come hell or high water wherever we have true. “From there, the recognition system should look at that employees.’ Well, that attitude is a mistake. truth, look at the reality and derive behaviors to say where Systems need to be made to be flexible. You have to the organization is trying to go.” understand an audience and an audience in the US is different Strip a recognition program down to its bones and, esthan in France, than in Asia, than in the UK and so forth. It’s sentially, it should enable every employee the ability to be more work and you have to invest in it, but you have to do that if recognized for what they can do to impact the organization. you truly want to reflect the character of the organization. “It doesn’t mean that’s a guarantee and that everybody will be, but that’s the effort,” says Miller. “That’s the hope.” n

SPEAKING THE RIGHT LANGUAGE

120

www.hrmreport.com

TMiller Ed P118-120.indd 120

12/11/08 15:59:24


Connextions.indd 1

10/11/08 09:01:14


Gordian Health Solutions’ Roger Reed dispels some myths about corporate wellness programs and tells us how they can play a role in attracting and maintaining talent. HRM. What are the challenges presented to organizations looking to keep health awareness alive in the workplace – particularly those with limited staff and resources? Roger Reed. This is a great question and one that may not have been on the radar a few years ago. Keeping employees and their families healthy has become a priority for employers who want to continue to provide health benefits to employees. We all want affordable healthcare. Challenges employers face typically include not knowing where to begin, not having enough money and, of course lack of staff and other resources. In addition, many employers find that employees are concerned about privacy and may be sceptical of the employer’s motive. Employers with limited resources should look to their local communities for assistance. Many non-profi t organizations provide community or worksite services at low or no cost and can help employers sort

“It is pretty clear that Americans are living in a time of uncertainty, anxiety and fear. We are worried about the economy and the affordability of everything” out health priorities. Some great places to start are the YMCA, YWCA, American Lung Association, American Heart Association, Diabetes Association and local hospitals and providers. HRM. Often, a company-wide cultural shift is required to really achieve improving the health of an organization’s employees. How can this be reached and what cultural benefits can this lead to?

122

WELL KNOWN

RR. Cultural shift begins in the corner offi ce with executives articulating the concern for the health and wellbeing of their employees and families. It’s also okay to be honest about the business case – continuing to provide health benefi ts means making them more affordable for everyone by controlling the demand for healthcare services. The employer must carefully outline the vision and the plan for health improvement, recognizing that employees themselves should help with this. Lastly, and most importantly, management must ‘walk the talk’. They have to be engaged themselves and demonstrate commitment. Cultural shift means ongoing success and program sustainability as well as long-term support for behavioural change. Overtime,

healthy behaviour becomes the norm, rather than the exception, and maintenance becomes the goal, rather than risk identification. HRM. Can wellness programs have an effect on worker satisfaction and productivity outside of the obvious health benefits? RR. Indeed, data suggests the affirmative in both cases. Reports from multiple employers such as King County in Washington, Agora, Inc. in Baltimore, the US Department of Energy's Brookhaven National Laboratory and a national literature review by Goetzel and Ozminkoski confirms that satisfaction and productivity can be improved as a result of worksite wellness initiatives. In fact, many employers are finding wellness programs to be integral to their recruiting and retention

www.hrmreport.com

Gordian Ed P122-123.indd 122

12/11/08 15:48:44


strategies. Younger generations are seeking employers who support healthy lifestyles and provide ways for them to engage in physical activity. HRM. We are seeing a shift from reactive healthcare to preventative wellness programs. What can you tell us about this change and the reasons behind it? RR. For decades, employers have been paying the bills for healthcare on behalf of employees. The cost of healthcare, much like the balance-of-payments deficit, is subject to Stein’s law, ‘if something cannot go on forever, it will stop’. Employers simply cannot continue paying double digit increases for healthcare and remain in business. Employers cannot raise their prices at a rate fast enough to cover the cost of healthcare. Instead, margins are eroded, equipment purchases are postponed and benefits are reduced or capped. Strategies such as provider discounts, managed care and plan designs that once held the promise of containing costs have proven ineffective. Employers have now turned their attention to the single largest contributor to healthcare costs – unhealthy lifestyles and habits. Estimates put unhealthy lifestyles as a contributing factor for about 40 percent of all disease, and in a 2004 study, obesity and diabetes alone were said to account for as much as 25 percent of health cost increases. Employers have identified wellness and lifestyle improvement programs as the next most viable strategy to hold down healthcare costs. They are moving to upstream solutions rather than downstream. HRM. Can well-implemented wellness solutions be a measure of company success? Can they be a factor in attracting and maintaining talent? RR. Gordian Health Solutions has worked with employers all over the country who are beginning to build wellness objectives into the corporate strategic plan and make management accountable for hitting these targets. More and more employers view worksite wellness and worksite clinics as powerful recruiting tools. A survey by Buck Surveys released in October found worksite wellness programs growing globally with

40 percent of employers in Europe, Asia and Africa now offering them. Generally, healthy companies are better at attracting healthy workers and are better run organizations with higher per capita output. Companies with low healthcare costs, low disability costs and low worker’s compensation costs are able to compete more effectively in the global markets by holding down costs and prices and have more money available for growth and R&D.

“Keeping employees and their families healthy has become a priority for employers who want to continue to provide health benefits to employees” HRM. Given the current market situation, what do you think the impact is likely to be on rising healthcare costs, employee health and corporate wellness solutions?

cern to most Americans. According to the October 2008 Employee Benefit Research Institute study, ‘The 2008 Health Confidence Survey: Rising Costs Continue to Change the Way Americans Use the Health Care System’, most Americans, who feel that the US health care system is broken and needs reform, know that they need to play a larger role in taking care of themselves and are willing to engage in programs that will improve their health. PricewaterhouseCoopers reported in a survey this month that employers would rather manage the health care cost problem with wellness and disease management rather than shift more cost to employees. No matter the outcome of the election, I would look for more tax incentives to employers who promote health at the worksite and new benefit plan designs that connect the dots between health and wealth. Health plans are already integrating wellness components into their offerings and more and more employers are asking for them. Look for more employers to implement wellness as a business solution. n

RR. It is pretty clear that Americans are living in a time of uncertainty, anxiety and fear. We are worried about the economy and the affordability of everything – food, gas, health insurance, utilities and home ownership. Healthcare, while perhaps not at the very top of the current list of consumer concerns, is near the top and will continue to be a con-

Roger Reed is Chief Advocacy & Engagement Architect at Gordian Health Solutions. He has more than 30 years experience in the healthcare industry and is a nationally recognized leader and strategist in health promotion and wellness. A registered nurse, family nurse practitioner and physician’s assistant, he was author and project director of two W.K. Kellogg Foundation studies that are considered benchmarks in the field of health promotion. Prior to joining Gordian, Reed was a partner in SLR Ventures Inc., a healthcare venture company that founded five successful healthcare-related companies during a span of seven years. His previous experience includes family practice, geriatrics, substance abuse treatment, health promotion management and research, healthcare administration and healthcare network development.

www.hrmreport.com

Gordian Ed P122-123.indd 123

123

12/11/08 15:48:45


GordianHealth.indd 2

10/11/08 09:02:46


GordianHealth.indd 3

10/11/08 09:02:48


It’s a new world and everyone is paying attention By Evan Scott.

M

aintaining and attracting the right workforce is ever more critical in a globally competitive economy. Two forces are hard at work in this arena and it’s important to pay attention to both. The first is the changing nature of the knowledge worker and the second is the subsequent changes needed in the workplace to deal with new attitudes and behaviors about work and life. Several books in particular speak volumes toward understanding these changes – Richard Florida’s book The Rise of the Creative Class defines a new generation of workers and delves into what drives their decisions. This book and Florida’s subsequent work, while focusing on regional economic development, go a long way toward helping us understand the recruiting and retention issues we face on a recurring basis.

We’ve turned the corner with a new corporate culture. It’s not shifting – it’s shifted. Access to information and knowledge has made a tremendous impact on society and individuals. It’s changed how business is conducted, how people view education, and, in general, who we believe should be in charge. Seizing the opportunity to engage employees in ways that embrace these changes has the potential to positively transform corporate culture.

The new world of work The world of work has gone through some fundamental shifts, particularly in the area of employer-employee relations. For many reasons – the rise of the knowledge economy, the changing nature of loyalty,

Evan Scott is Chief Marketing Officer for Shumsky Enterprises and has more than 20 years of experience in integrated marketing communications. He has led the product development team for Boost Rewards, an online incentive platform designed to allow companies the ability to consolidate corporate incentive programs and offer new choices for how employees participate in and benefit from those programs. More information is online at www.boostrewards. com. Contact Scott at evan. scott@shumsky.com.

“We’ve turned the corner with a new corporate culture. It’s not shifting – it’s shifted” The Workplace Revolution, by Matthew Gilbert, also does a great job helping understand some fundamental shifts in employee expectations and how management can tackle the issues needed to retain and grow top talent. Finally, Barbara Brannen’s Office Peace, a groundbreaking fable about principles for behavior-driven management, offers a refreshing new look at common sense ideas for creating and sustaining a vibrant culture based around key behaviors.

126

www.hrmreport.com

Shumsky Ed P126,128.indd 126

12/11/08 15:50:35


SHumskyBoost.indd 127

10/11/08 14:29:11


and information technology to name a few – workers expect more from their employers than ever before. Employees are asking new questions from a generation ago. What sort of work culture do you have? What is your relationship with your community? Is your workforce diverse? These questions are very different from the previous generation’s questions related to salary and stability. It is Generation X prominently leading this new focus. They want a life in addition to a career, and they want a say in making it happen.

Connectivity and community Access to information has paved the way to a whole other level of connectivity. For the first decade or more, the internet was about access to information – and companies learned what it meant to put more and more information online. More recently, with the advent of Web 2.0 applications, we know that access to information has become exponentially more involved with millions of people taking an active role in pushing their own content onto the web. These aspects have created two interesting dynamics. For businesses, the shift has meant, as integrated marketing leader Gordon Hochhalter (Managing Partner, Mobium.com) writes, “Business products are bought, not sold.” This is a much bigger deal than that may sound. The shift has to do with who’s in charge. In this new paradigm, customers are in charge of what information they get, how they access it, and when they engage their prospective suppliers. The second dynamic is how this sense of ownership and self-reliance has moved into the world of employees. They, too, have their own ideas about what information they want and when they want it; they also want choices. The internet revolution is providing them with these by way of a growing number of social networks, evermore accessible blogging software (free, by the way!) and a host of other tools such as Google’s suite of products.

Everything matters In the workplace, this means everything matters now; how you educate and train your employees, what access they have to the

128

vision of the company, how well you engage them in meaningful work, and most importantly, how you reward them for a job well done. A generation ago, providing the security of lifelong employment and a pension was integral to the American Dream. Today, the American Dream has shifted. It includes doing good to do well, being recognized beyond years of service for contributing to the team’s success and feeling like one’s ideas and opinions matter to the organization. These new workers, and the companies savvy enough to keep them, are turning their world into reality. Creative companies such as Starbucks, Google, SAS Institute, and others have a host of ways they build and grow their cultures to reward their employees. At Shumsky, we’ve built our own rewards and recognition program around five principles developed by Starbucks CEO Howard Schultz – Make it your own, Everything matters, Surprise and delight, Embrace resistance and Leave your mark.

Show me the money The story of Cameron Crowe’s Jerry Maguire is, in fact, not about the money but about redemption from being greedy and

integration with email and being able to select your own rewards from the points you earn. In Barbara Brannen’s Office Peace, the author presents a fable of what an inspired work environment would be like. On the protagonist’s first day he enters the parking lot where every spot is labeled Employee of the Year. What we come to learn is that this imaginary company considers every employee ‘Of the Year’. What we learn throughout the book are 10 principles for creating a culture that honors what many workers want today – office peace. A place where they can justify spending the number of hours they devote to their employer because the employer devotes time to them.

Getting to the new world Michael Rennie, Principal with McKinsey and Company said, “The opportunities and challenges of the last 20 years in business have been driven by the application of information technology; the next 20 years will be driven by the application of consciousness.” Companies are learning to leverage technology to drive more than corporate efficiency. They are using technology to drive corporate responsibility and culture.

“Employees are asking new questions from a generation ago” empty. In today’s workplace, this ideal of ‘being inspired’ is real. And let’s be clear – with the assumption that an employer is providing industry standard compensation for a given position, the rest of what that employer offers is critical to building and maintaining a vibrant culture. Such a culture has the ability to retain its best performers and attract likeminded workers to join in. Recognition and rewards programs have been around since S&H Green Stamps (who remembers those?) and before. What has become exciting in the last couple of years has been the development of platforms that incorporate these shifts in the workplace and in the psyche of the worker. They leverage existing behaviors to encourage new ones – such as

Three resources you can explore to help embrace the new world of work in your organization are the Incentive Marketing Association (www.incentivemarketing.org) website to learn more about the latest thinking in employee-focused program; the Forum for People Performance Management and Measurement (www.performanceforum.org) – a Northwestern University think tank with research and services to help organizations leverage their organizations’ greatest assets; and Barbara Brannen’s website, (www.letsplaymore.com) to learn about her philosophy, services and books. Brannen has turned a stellar career in human resources into her consulting group, The Top Banana Institute. n

www.hrmreport.com

Shumsky Ed P126,128.indd 128

12/11/08 15:50:35


The Benefit Of

Experience.

While a number of health insurance companies offer Health Savings Accounts (HSAs) tied to their HSAeligible health plans—rarely do the HSA products offer the same level of customer support and financial service available through Wells Fargo.

Wells Fargo can help your organization cut rising healthcare costs while enhancing your employee benefits package.

With more than 150 years of financial service experience, we were able to design an HSA that is flexible enough to help meet your short and long-term goals—and our convenient and secure online administration tools make managing your HSA program easy and safe.

www.wellsfargo.com/hsa

For more information, call Wells Fargo Health Benefit Services at 866-449-9929.

©2008 Health Benefit Services, a Division of Wells Fargo Bank, N.A. All rights reserved. Member FDIC.

WellsFArgo.indd 1

10/11/08 09:14:29


HEALTHCARE SERVICES RT:nov08 12/11/2008 14:39 Page 130

ROUNDTABLE

Healthcare: where next? HRM gathers CIGNA’s Bill Riendl, HSA Bank’s Kirk Hoewisch and Wells Fargo’s José Becquer to discuss industry developments and gauge the potential impact of the economic downturn.

Bill Reindl has been at the forefront of the consumer healthcare movement since it began and is considered one of its thought leaders. As CIGNA Senior Vice President, Consumer Segment, he is responsible for driving CIGNA’s consumer strategy throughout its middle market and small business segments.

Kirk Hoewisch began HSA Bank’s initiative to offer Medical Savings Accounts (the predecessor to Health Savings Accounts) on a national scale in 1997. He was named President of HSA Bank in 2005 where his dedication to the strategic development and management of the organization yielded the industry’s most comprehensive HSA product.

HRM. Would you agree that healthcare is moving from a traditional reactive model to something more proactive and preventative? What impact is this having on providers and employers? Bill Reindl. Healthcare is clearly moving to be more proactive and preventive, which are at the center of CIGNA’s strategy to become a leading health services organization. Through our technology investments and proprietary work with the University of Michigan, we are able to identify up to 83 percent of future health risks as early as two years in advance of a significant medical event – even if the individual feels fine today. We are investing in early intervention, gaps in care, preference sensitive care and sophisticated telephone and electronic outreach. We are engaging the individuals in the ways they prefer to be communicated to and in a method that focuses on the “voice of the customer,” all designed to improve their health, personal security and wellbeing.

130

www.hrmreport.com

José Becquer is an executive vice president and group head of Wells Fargo Health Benefit Services (HBS), which specializes in the administration of Health Savings Accounts (HSAs) for companies nationwide. Based in Minneapolis, he manages a nationwide team of over 300 sales, service and marketing professionals.

Kirk Hoewisch. We are seeing a gradual shift to more proactive and preventative healthcare. In our HSA Benchmark survey conducted in April 2008, evidence showed a majority 57.6 percent of respondents receive annual physical exams. Additionally, people with an HDHP were more likely than those without an HDHP to ask about the cost prior to making an appointment (26.2 percent vs. 16.1 percent), ask about lower cost alternatives (32.9 percent vs. 25.2 percent), and ask about generic prescription alternatives (79.5 percent vs. 70.7 percent). As this new, more cost-conscious consumer evolves, providers and employers must take a closer look at price transparency and wellness programs. True price transparency allows consumers to view cost and quality information for healthcare. Sites, such as www.carol.com and other national health plan carriers, are starting to make this a reality, at least in some areas of the country. Wellness programs also play a key role in incentivizing and educating consumers on the benefits to healthier lifestyles. The most successful wellness programs tie results with incentives, rather than only participation.


HEALTHCARE SERVICES RT:nov08 12/11/2008 14:39 Page 131

José Becquer. We see HSAs as an important first step in evolving to a more proactive and preventative approach. With HSAs people have an incentive to be more engaged in their healthcare and spending decisions because they have the control. It’s their money. This certainly has an impact on providers and employers and it’s forcing many to move out of their comfort zones. People want to know about their options and costs and that means physicians are having more in-depth conversations with their pa-

cially to meet their daily medical needs, along with other good investment options. (Investments are not FDIC insured, may lose value and are not bank guaranteed.) Now more than ever it’s important to understand how diversified your HSA options are and to work with someone you trust. BR. Economic uncertainty always drives employers to look for alternative ways to manage costs. Properly designed consumer directed plans are a proven way to reduce overall costs on a multi-year basis without cost shifting to employees. Medical cost trends for CIGNA CDH plans are 30 to 50 percent less than comparable HMO and PPOs, and these savings compound over time, as documented by our multi-year CDH studies. Most importantly, these costs are reduced without reducing quality or care.

We are engaging the individuals in the ways they prefer to be communicated to and in a method that focuses on the ‘voice of the customer’ Bill Reindl tients. With the newness of these programs, employers have to provide more communications to help explain what’s available to their employees. HRM. We currently face a period of prolonged economic uncertainty. Do you feel that the credit crunch will have any impact on business’ approach to employee healthcare and wellness? KH. The current economic conditions are making employers more aware than ever of the cost of healthcare. While some employers may consider dropping coverage, most are looking for lower-cost alternatives. A high deductible health plan with an HSA provides a successful alternative. According to the 2008 Kaiser Employer Benefit Survey, enrollment in HDHP plans increased from five percent in 2007 to eight percent in 2008. The report also indicated that high deductible health plan premiums are averaging 16.6 percent less for individual policies and 20.2 percent less for family policies than the average premiums of all other health plans. Along with this shift towards HDHPs, employers are looking to make their employees more accountable for their health. Wellness programs range in complexity and, at first glance, can appear to add unnecessary expense. However, recent statistics show that they can have a three-to-one annual ROI. These statistics will help strengthen employer’s decisions to implement wellness programs and realize immediate savings.

HRM. If an organization is planning to take on an external healthcare provider, what are the most important features it should be looking for in potential partners? JB. Remember you have choices. When an organization is looking for an HSA provider they might be tempted to go with the product the healthcare provider recommends, but an independent product might be better for your company and your employees in the long run. Most employers change health insurance carriers every three to five years. That’s a communication challenge all its own. And as your employees’ balances grow, they will be less inclined to want to make a change. So it’s important to find an HSA

JB. As long as employers bear the bulk of their employees’ health costs, they will continue to look for ways to lessen and mitigate those costs. They want to find the best value for their limited dollars. Consumer driven healthcare and HSAs are a way to do just that. These are tough economic times, and with all the uncertainty in the market it’s even more important to work with a trusted financial institution in choosing an HSA provider. Employees need to feel comfortable that their HSA balance is safe with FDIC insured deposits, espe-

www.hrmreport.com

131


HEALTHCARE SERVICES RT:nov08 12/11/2008 14:39 Page 132

administrator who is flexible and can work with multiple carrier partners and changing employer needs. You also want someone who will make it easy for you and your employees to set up accounts and provide ongoing account management solutions. Look for an administrator who is constantly developing new tools and upgrading services to deliver an even better experience to you, their client.

costs upfront and have access to an auto-claim payment process that taps into funds of the individual’s plan, including insurance coverage so the physician does not have to separately bill the patient. In addition to our current auto-claim payment process, the new system will incorporate a credit feature. KH. Technology is affecting many aspects of healthcare programs. Two key areas include the payment structure and wellness benefits. Payment structures are changing rapidly with the addition of benefits cards that manage payment from multiple accounts, direct payment to providers and online claims authorizations. Over the next few years, this will continue to evolve as health plans and providers work towards point-of-sale re-pricing to require instant payment of services. Wellness programs and behavior-based pricing are growing as they become easier to facilitate. Some employers are taking wellness to the next step by incorporating biometrics testing. With this, a registered nurse administers a small test, including collecting a blood sample. Then, a personalized health report is created and employees are then given incentives, typically monetary, to improve their metrics over the next year. The key to these programs is progress and it doesn’t matter where a person starts. Employers also can point to quantitative results when justifying the costs of these programs.

The current economic conditions are making employers more aware than ever of the cost of healthcare Kirk Hoewisch BR. Two vital features organizations should look for are integrated health plan programs that demonstrably improve costs without sacrificing care, and an effective CDH plan design that is benefit-neutral (to the individual vs. their current plan) and includes a properly funded account (HRA or HSA) that delivers a true value proposition to employees. Too many CDH plans look good on paper but receive little enrolment and therefore, no savings. KH. Health plan providers offer many different options and alternatives. Based on an employer’s situation, the needs are going to vary. Typically smaller employers are looking for comprehensive coverage, controlled premium increases and low ongoing administrative costs. In these cases, it is beneficial to have a provider that offers various qualifying high deductible health plans which range from low-end deductibles to high-end deductibles. For larger employers, integration tends to become more important. A seamless enrollment experience between the health plan and other vendors such as the HSA administrator can facilitate a more positive experience for employees. Integration points may also include contributions, claims payment, single online access and one source customer service. HRM. How is technology impacting the design and management of healthcare programs? What innovations do you foresee in the coming months and years? BR. During the past several years there’s been a virtual ‘arms race’ of technology development making healthcare quality and costs more transparent for the individual, to make healthcare more accessible and proactive and to improve health plan transactions for physicians and employers. For example, next generation technology ties online transparency and healthcare information tools together in a comprehensive, consumerfriendly, physician, hospital and care decision support capability, by integrating health information, quality information, cost of care and questions to ask a doctor using simple, symptom-based searches. To make care more accessible we’re introducing online doctor visits as a convenient and cost effective alternative to an office visit. To be more proactive, we’ve linked our online health risk assessments to online wellness programs, our health advisors and health advocacy programs. We are also engaged in a multi-year launch of a comprehensive solution designed to simplify and improve the patient payment process, processing costs and reduce the risk of patient bad debt. Using a new system, both patient and physician will know the patient’s estimated

132

www.hrmreport.com

JB. At Wells Fargo, technology and innovation have always been very important, and with our HSA program it’s no different. We want to serve our customers when, where and how they want. Oftentimes, that includes being easily accessible online 24 hours a day. We see technology enabling greater levels of transparency for transactions and information on both cost and quality of care. For employees with HSAs, online access to manage their accounts is important, along with easy

People want to know about their options and costs and that means physicians are having more in-depth conversations with their patients José Becquer access to funds, greater level of customer service and advocacy for consumers. For employers administering these programs, simplicity and ease are key and technology will help them with greater efficiency. Paperless enrollment, online account setup and implementation and a simple secure way to transfer and reconcile HSA contributions are all important and promote ease and more accessibility. Which brings us back to healthcare moving towards a more proactive and preventative model. When the employer and individual have more visibility and more access, it makes everything easier. As we continue to move forward, these systems will only become more refined. n


HSAbank.indd 1

10/11/08 09:03:49


CIgna.indd 2

10/11/08 09:00:48


CIgna.indd 3

10/11/08 09:00:51


WORKING LIFE

136

136

Feeling perky? Offering perks are par for the course for Fortune’s Best Companies, even more so given the pressure to retain top talent. But every now and then, an organization goes above and beyond the call of duty. HRM takes a look at some of the more unusual perks on offer across the nation.

On-site dental visits

Meditation rooms

Scuba-diving lessons

More and more employers are looking at offering dental hygiene as a potential ‘perk’. Allowing employees to make advanced appointments and then getting a dentist to make on-site visits results in healthy gums and a white smile; and a smiling workforce is, apparently, a happy workforce.

Employers such as eBay are setting aside spaces that are decorated in earthy tones, with pillows and incense on hand, so staff can relax and pray or mediate, in an effort to de-stress from the pressures of the working day.

At Chesapeake Energy Corp. employees can obtain their scuba-diving certification by attending on-site classes at the firm’s Olympic-sized pool. Following this, employees can take the plunge in Oklahoman lakes while Chesapeake foot the bill for hiring the instructor and materials.

www.hrmreport.com

HRM10_Perks2.indd 136

12/11/08 15:41:25


Discounted rent

Wedding chapels

Murder mystery parties

Camden Property Trust offers 20 percent discount on rent to employees living in any of the firm’s 180 apartment complexes. What’s more, if employees fancy renting an apartment for vacation in hot spots such as Orlando or LA, they can do so for $20 a night.

At Erickson Retirement Communities, employees getting married can make use of the chapel on the grounds of any retirement village for free (or a nominal fee). In Charleston, for $750, lovers can say their vows in a marble basilica-in-miniature with a 68-foot dome.

Why not let your employees turn super-sleuth? Corporate dinner parties that incorporate a murder mystery, including costumes and props, are gaining popularity across America. Employees taking part are encouraged to apply some serious after-hoursbrainpower as they try to deduce ‘whodunit?’ whilst dining on the finest (pre-paid) canapés.

www.hrmreport.com

HRM10_Perks2.indd 137

137

12/11/08 15:41:43


MATT COLUMN:nov08 12/11/2008 14:41 Page 138

MATT BUTTELL

138

Working out On paper, Corporate America is more GLBTfriendly than ever before. But is this really the case?

O

ctober 12 of this year marked 10 years since the murder of Matthew Shepard. When he was killed, Shepard was a young 21-year-old student from Laramie, Wyoming, described by close friends as, “the sort of person who had a special gift of relating to almost everyone.” Chances are, you only know Shepard’s name because of the national and international attention his murder brought to the issue of hate crime legislation at both state and federal levels. Though his attackers were not actually charged with a hate crime, the disturbing and brutal nature of Shepard's murder prompted calls for new legislation, urged by those who believed he was targeted on the basis of his sexual orientation.

90% believe gay people should have equal work rights, but only 45% believe being gay is ‘morally acceptable’ In September last year, the Matthew Shepard Act – officially the Local Law Enforcement Hate Crimes Prevention Act of 2007 (LLEHCPA) – passed the Senate. The proposed bill would expand on the 1969 United States federal hate-crime law to include crimes motivated by a victim’s actual or perceived sexual orientation, gender identity or disability. However, President Bush indicated he would veto the hate crimes legislation if it reached his desk, and the amendment was eventually dropped because of opposition.

138

www.hrmreport.com

In terms of the workplace, it is argued that gay, lesbian, bisexual and transgender employees and their families are valued more than ever before. All I know for certain is that non-discrimination policies and benefits have become essential for businesses as they compete for talent and for customers. The 2009 Corporate Equality Index (CEI) report, which was released this September, provides deep analysis and ratings of the US’s largest employers and their policies pertinent to GLBT employees, consumers and investors. The report shows an unprecedented 259 major US businesses earning 100 percent on the index, an increase of one third from last year. Evidence shows that Fortune’s Global 500, which collectively employs nearly 25 million people, have made significant advances in equal protections and benefits for their GLBT employees too. The more successful the company (and the higher their rank on the Fortune list), the more

likely the company is to have these protections and benefits in place. The figures are pretty astounding, with nearly 90 percent prohibiting discrimination on the basis of sexual orientation, over 30 percent prohibiting discrimination based on gender identity, and over 50 percent providing domestic partner health insurance to their employees. However, of the top two employers, Wal-Mart Stores Inc. and Exxon Mobil Corp., neither provides domestic partner benefits or a comprehensive nondiscrimination policy. In fact, Exxon Mobil is the only US employer in the list that has ever repealed both a non-discrimination policy covering sexual orientation and domestic partner benefits. It is now the only Fortune 10 company without a non-discrimination policy on sexual orientation. And just because these policies may be in place, doesn’t mean discrimination isn’t happening. There is no federal law protecting employees and evidence shows

Number of employers with perfect ratings on the corporate equality index

259

Source: Human Rights Campaign Foundation

195 138 101 56 13 2002

26 2003

2004

2005

2006

2008

2009


MATT COLUMN:nov08 12/11/2008 14:41 Page 139

a disturbingly consistent pattern. More than 50 studies from the last decade show that as many as 68 percent of gay, lesbian, bisexual and transgender people have reported employment discrimination, and nearly as many heterosexual co-workers report witnessing sexual orientation discrimination in the workplace. Any organization that truly includes the GLBT community needs to go beyond policies and benefits, and into practices that ensure the work environment allows all employees to feel safe and comfortable. Researching for this article alone I was shocked by the sheer amount of testimonies I found from people who had left jobs because of an absence of sexual orientation in the non-discrimination clause. “At one point relatively early on, I was taken to one side and given a directive to be discreet about my ‘lifestyle’,” read one. “The director of the department met with me briefly to put the problem to sleep. The offenders were not given warnings, the request to be relocated was denied, everything stayed the same and the harassment continued,” read another. While some employers may prefer staff to keep their personal lives out of the office, the casual conversations that occur make it impossible to do so. Employees socialize by asking how their weekends were, or asking about friends and family, and employers often host events that families or significant

others are invited to. Openly gay myself, conversations about my weekend plans with my partner are a common occurrence come Friday lunchtime, and I suppose I am lucky that I have never experienced any discrimination from my colleagues. Though, it should never really be a question of ‘luck.’ Last year, a study by Gallup revealed that while 90 percent of Americans believed gay people should have equal rights in the workplace, only 47 percent of these same people believed being gay is ‘morally acceptable.’ It seems there is a belief that says, while the gay community deserves equal rights, many people don’t actually want to know that their colleagues, or bosses, are gay.

Policies of the Fortune 500 These companies may all feature in the top 10 of Fortune’s Global 500, but how do they rank on the 2009 Corporate Equality Index report?

Company Name Wal-Mart Stores Inc Exxon Mobil Corp Chevron General Motors Conoco Phillips

SO

✓ ✗ ✓ ✓ ✓

GI

DPB

✗ ✗ ✗ ✗ ✓ ✓ ✓ ✓ ✗ ✗

SO = Sexual orientation in equal employment opportunity policy GI = Gender identity in equal employment opportunity policy DPB = Domestic partner benefits offered

Thank goodness then for the group calling themselves the G-Suite. A play on the business term C-Suite, designating chief officer positions, the G-Suite is an ever-growing collection of high-level gay corporate executives working toward one objective: helping to place the first openly gay CEO at the helm of a major Fortune 500 company. They seem to have the right idea, as an out-of-the-closet CEO of any blue-chip company will certainly be a landmark for gay equality. In today’s market, HR serves many functions, not least offering confidential advice to employees. This has to include equal opportunities policies so that GLBT employees can speak up if they become a victim of discrimination. It is even more critical given today’s turbulent markets, where hiring and retaining talent is key to business success. And with the world’s top companies operating on multi-national levels, in multi-cultural environments, it is surely the responsibility of any HR department to expect, and respect, diversity. Only by facing up to this responsibility can human resources effectively help change the way GLBT employees are discriminated against. After all, with the results of this year’s CEI report and the actions of groups like the G-Suite, the road to making sexual orientation discrimination in the workplace a thing of the past may nearly be paved. And, I’m happy to say, not through Washington, but Wall Street. n

www.hrmreport.com

139


Spotlight

140

Coping with loss When faced with job loss, people often feel they don’t have control over their lives. They perhaps feel a massive void is left behind, giving no structure or substance to their day. It begs the question, where next?

Between January and July of this year, global financial services job losses averaged 14,400 a month. The squeeze on the economy has also seen astronomical losses in the construction and retail sectors and the amount of unemployed Americans now stands at around 10.1 million. Losing your job

140

is distressing at the best of times. Losing it in one of the most hostile job markets in living memory is devastating and dealing with such a seismic event can be an overwhelming challenge. HRM takes a look at some coping strategies which can help the recently unemployed through these challenging times.

www.hrmreport.com

HRM10_JobLoss 140

12/11/08 15:37:00


Grieve. Research shows that in a list of the 10 most stressful events life can throw at us, job loss is up there with the death of a loved one, personal injury and divorce. If nothing else, job loss provides us with a powerful shock, and it shows. People have to acknowledge and process their feelings before moving on, in a similar way to how you might react to the breakdown of a romantic relationship. Resist temptation. Being able to talk rationally about new opportunities is unlikely for the first 72-hours or so after termination. It is recommended that you should not to contact associates or search firms during this period. You don’t want to scare off those who could offer help when the time is right to get it. Be practical. The major issue most people struggle to deal with is not being able to provide for their families. Finding out if you qualify for unemployment compensation should be one of the first things you should take care of. The US Department of Labor’s website has information on unemployment compensation including links to individual sites of many local governments. Get over it. Losing your job is not the end of the world, though it may seem like it. Experts caution against holding onto your emotions as they’ll almost certainly trip you up later in the job search process. Continuing to feel ashamed about having lost your job may prevent you from appearing self-assured and self-confident in interviews with potential employers. Act now. Research shows that the longer you take to get back into employment game, the harder it can be to find work. Once you’ve dealt with your emotions properly, you are ready to begin outlining the plan for your job search. Evidence shows that the road to career success begins with self-assessment so it is essential you are honest about what you can do and what you have to offer employers. Stay positive. Think about other stressful times in your life and the things that worked best then. Different approaches work for different people, at different times, and experts suggest coming up with things to motivate you when the going gets rough. Draw on the information you gleaned about yourself during your self-assessment process to keep your motivation level high and include things that you can do in as little as 10 minutes along with things that take more time. The point is to take care of yourself; only by doing that will you ultimately flourish.

www.hrmreport.com

HRM10_JobLoss 141

141

12/11/08 15:37:04


IN REVIEW

142

A good read HRM takes a quick look at what this quarter’s business book releases have to offer.

The Secrets of CEOs

150 Global Chief Executives Lift the Lid on Business, Life and Leadership, by Steve Tappin and Andrew Cave In this fascinating, authoritative book, 150 of the world’s top chief executives share their advice for getting to the top, and, once there, how to be a successful leader and still have a happy life. The book reveals frank discussions with some of the West’s most influential CEOs and incorporates radical and thought-provoking comments from the heads of new corporate champions of India, leading companies in China and Russia and US corporate giants. HRM says: The Secrets of CEOs contains a wealth of strategies that individuals and organizations alike can use to encourage a new standard of leadership. It could well be an essential guidebook for those wanting to know what its really like to be a CEO – and the health warning that should come with the job.

The Halo Effect

How Managers Let Themselves Be Deceived, by Phil Rosenzweig Controversial and iconoclastic, Rosenzweig exposes the dangerous myths, fantasies and delusions that pervade so much of the business world today. Why do some businesses prosper while others fail? Despite massive amounts of research, many of the studies that claim to pin down the secret of success are based in pseudoscience. The concept of the halo effect is a product of this pseudoscience and one which Rosenzweig masterfully debunks. He suggests a more accurate way to think about leading a company, a robust and clearheaded approach that can save any business from ultimate failure. HRM says: The Halo Effect highlights the tendency of experts to point to the high financial performance of a successful company and use it to leverage success for all the company’s attributes. Steaped in skepticism: a powerful and feisty read.

Total Leadership

Be a Better Leader, Have a Richer Life, by Stewart Friedman The more you strive to win at work, the more you have to sacrifice performance and satisfaction in the other dimensions. Not according to Wharton professor Stewart Friedman. His Total Leadership program has shown that success at work is actually enhanced if you embrace a fulfilling personal life too. Friedman explains how leadership can – and must – be learned. HRM says: Applying a new method of thinking, Friedman offers a completely different guidebook to becoming a better leader. Total Leadership suggests both an innovative and sustainable model for leadership that can benefit every facet of life. To read more about the Total Leadership program and its author, you can see our interview with Friedman on page 54.

142

www.hrmreport.com

HRM10_BookReview 142

12/11/08 15:32:43


MTB MAG AD:Layout 1 12/11/2008 13:06 Page 143

Dedicated To Finance

20,000 Challenges. One Industry. 20,000 Executives. One Community. MeettheBoss.com membership reads like a financial services industry who’s who. CEOs, CIOs and other senior executives from the leading institutions are just two clicks away. But there’s more. Weekly interviews with industry leaders are webcast on the site’s dedicated channel. These are combined with live, moderated discussion groups, video conferencing, IM and secure e-mail in one easy-to-use app that’s dedicated to financial services.

New York 8:50 a.m.

London 1:50 p.m.

Dubai 4:50 p.m.

Tokyo 9:50 p.m.

John is upgrading some core banking functions. He wants to know how to ensure a smooth transition, so he calls…

Paul, who has seen the benefits of an upgrade and is now sharing project management tips with…

Georgina, the turnaround expert who’s moving on to a new project in Japan, where…

Ringo has the local knowledge. But he’s also planning for tomorrow, and that’s all about core banking…

If your network isn’t focused on your business, change it. Join now: www.meettheboss.com MeettheBoss.com is simple, intuitive, unintrusive and secure. It’s also free to use. Membership restrictions apply.


FINAL WORD NOSAL:bmus 12/11/2008 14:30 Page 144

FINAL WORD

144 A

Turning the tables How to evaluate an executive search firm. By David Nosal.

s a practitioner and leader in executive search for over 20 years, I have made note of a number of important yet littleknown challenges that can prevent clients from the search outcome they deserve. I will focus here today on two of the most critical, but frequently overlooked – access to talent and search leadership. Most clients know to validate a search consultant’s industry and/or functional expertise through past search experience. But I am continually surprised to hear about searches gone awry because a client didn’t realize that the firm it retained couldn’t approach the right executives or that the consultant who sold the work delegated project execution to someone less experienced.

Candidate access Even the most renowned search expert within a particular industry or functional area won’t be able to deliver the best candidates if they are off-limits to his or her firm. Candidate access is probably one of the most common reasons why search professionals can’t complete an assignment – and usually, to the astonishment of a client who purposely selected what he or she perceived to be one of the ‘safest’ brand names in executive search, because the firm was one of the largest. At the heart of the matter lies very basic arithmetic. Simply stated, the larger the search firm, the more client relationships it maintains and the smaller the universe of companies from which it can recruit due to off-limits restrictions. As a result, clients will sometimes spend hundreds of thousands of dollars in professional fees only to learn that the executive search firm retained can’t approach the most desirable

144

www.hrmreport.com

executives, because the latter are employed by current or recent clients.

Search leadership Benefitting from promised expertise is another common area of client dissatisfaction when a search consultant sells, but does not personally execute on assignments. People in the industry refer to this model as ‘leverage’, which involves passing searches off to junior associates for execution. Leverage tends to be most prevalent in the large search firms – and particularly those that are publicly held – who face substantial revenue growth pressures. When a search firm must drive more and more revenue each year, its search partners need to sell a greater volume of business and therefore carry ever larger search loads. The more successful a search partner is in selling business, the more difficult it becomes to complete the work without leverage, which can deprive the client of needed insight into candidates and the many nuances of executive leadership issues.

Recruiter’s tips for interviewing search firms To help ensure that the search firm you engage with has the ability to deliver the best outcome, companies should incorporate the following into their evaluation process: • Confirm candidate access by compiling a list of all target companies for the engagement in question. If the search professional cannot guarantee – in writing – access to all target companies, pass on the consultant and the firm he or she represents. • Incorporate into the engagement agreement a paragraph stipulating that the

lead consultant will personally contact, interview and reference-check candidates as well as manage compensation negotiations. If a more junior consultant will be involved in the project, the lead search partner should clarify who will be doing what. To validate whether the search firm lived up to its commitment, all a client needs to do is ask candidates coming in to interview who called and pitched the assignment and ask the selected candidate a few additional questions to confirm that the lead search partner played the agreed role.

“Candidate access is probably one of the most common reasons why search professionals can’t complete an assignment” Candidate access and search leadership seem like such fundamental things that many clients fail to scrutinize them. Caveat emptor. Take these few added steps to help ensure the search outcome you deserve. n

David Nosal is Chairman and CEO of Nosal Partners LLC and an industry leader in conducting board, CEO and president searches for the world’s mostrespected companies. Before founding Nosal Partners, he spent over 20 years at the world’s two largest search firms, Korn/Ferry International and Heidrick & Struggles.


Nosal.indd 1

10/11/08 09:06:47


Humana.indd 1

10/11/08 09:04:11

HRM 10  

Human Resources Management. Issue 10. November 2008. Check out our interactive edition to find out how FedEx manages a truly global workforc...

Read more
Read more
Similar to
Popular now
Just for you