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Human Resourc­e

Executıve ®

August 2012

Health Wake-Up Call  16

BY CAROL PATTON There is mounting evidence that sleep apnea is to blame for employee accidents and rising healthcare costs. Employers and their HR leaders should be paying heed.

HR Technology® Conference Update Keeping Pace  22


Recent ethical debacles—including that involving former Yahoo! CEO Scott Thompson—underscore the need for closer scrutiny and screening, and better hiring practices in general, throughout corporate C-suites. The cover story beings on page 10.


Experts share their perspectives on what it will take for HR professionals to become true strategic partners to top managers during mergers and acquisitions.

Employment Law Discrimination Deluge  40



Josh Bersin is slated to explore at this year’s conference some of the more dramatic ways technology is transforming today’s learning function.

With EEOC claims on the rise, one expert lays out the blueprint for knowing how to help your organization rise above them.

Social Media Buying into BYOD  26 BY TOM STARNER


Mergers and Acquisitions Taming the M&A Beast  32

A growing number of employers are finding that letting employees bring their own smart phones, tablets and laptops to work is actually good for business.

Innovation Disruptive HR  44 BY RICHARD J. ANTHONY SR.

The future of the human resource profession may well depend on the abilities of its leaders to adopt innovative and entrepreneur-like approaches to its practices.

44 26 Departments Editorial 4 HR News 6


Products 47 People 48 By the Numbers 49

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Human Resource




Kenneth F. Kahn President David Shadovitz Vice President/Editor & Publisher Rebecca McKenna Publisher Kristen B. Frasch Managing Editor Andrew R. McIlvaine Senior Editor Michael J. O’Brien Web Editor/Staff Writer Terri Garrison Administrative Assistant Sharon Staehle Assistant to Publisher PRODUCTION/AD SERVICES Nancy Sicilia Production Manager Suzanne Shultz Assistant Production Manager GRAPHIC SERVICES Lugene Moyer Publishing Technology Manager Jill Murphy Graphic Specialist Linda Dickson Senior Graphic Designer MARKETING Patrick Boyle Marketing Art Director DIRECT RESPONSE Worldata List Sales (561) 393-8200 or (800) 331-8102 Heather Everson Reprint Manager (610) 916-6291 (610) 916-6292 (FAX) CIRCULATION Dori Keith Manager of Circulation Operations ADVERTISING HEADQUARTERS Tim Jordan National Advertising Director Ste. 500, 747 Dresher Rd., Horsham, PA 19044 (215) 784-0910 ext. 6550 (215) 784-0870 (FAX) For a listing of sales offices, visit the Advertiser Information section of For subscription information, please call (800) 386-4176, email, or fax to (215) 784-0317. Send payments to: LRP Publications P. O. Box 24668, West Palm Beach, FL 33416-4668 All other written correspondence to: Customer Service Department Human Resource Executive Magazine P. O. Box 2132 Skokie, IL 60076

LRP CORPORATE EXECUTIVES Kenneth F. Kahn President Todd Lutz Chief Financial Officer Christopher Martin Business Director, Magazine Group HUMAN RESOURCE EXECUTIVE®Magazine is designed to provide accurate and authoritative information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in providing legal, accounting or other professional services. If legal advice or other expertise is required, the services of a competent professional person should be sought. The publishers have taken all reasonable steps to verify the accuracy and completeness of information contained in HUMAN RESOURCE EXECUTIVE®. The publisher may not, however, be held responsible for any inaccuracies or omission of information in any article appearing in HUMAN RESOURCE EXECUTIVE®. Entire contents Copyright © 2012, HUMAN RESOURCE EXECUTIVE®. All rights reserved. Material in this publication may not be reproduced in any form without written permission. Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by LRP Magazine Group, provided that the base fee of US$10.00 per document, plus US$5.25 per page is paid directly to Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, USA. For those organizations that have been granted a photocopy license by CCC, a separate system of payment has been arranged. The fee code for users of the Transactional Reporting Service is: 1040-0443/12/$10.00+$5.25.

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Disorder of Magnitude I

n the world of journalism, a writer sometimes needs to just go where the story takes him or her. A couple of months ago, we asked one of our regular contributors, Carol Patton, to pursue a piece on worker fatigue and its impact on worker safety and productivity. The story idea was originally triggered by a New York Times front-page article titled “Deadliest Danger Isn’t at the Rig but on the Road,” written by Ian Urbina. In his lead, Urbina reported on the tragic death of Timothy Roth, a rig driver who died 10 minutes from his home when he fell asleep at the wheel of his truck. Urbina noted in his story that more than 300 oil-and-gas workers like Roth were killed in highway crashes over the past decade, adding that many of the deaths were “due in part to oil-field exemptions from highway safety rules that allow truckers to work longer hours than drivers in most other industries.” True, we’ve explored the issue of worker fatigue before in Human Resource Executive®. But considering the huge impact fatigue can have on worker safety and productivity, we figured it might be a good time to ask Patton to revisit the issue and see what employers were doing about it. Eventually, Patton’s phone calls led her to some disturbing and yet-to-be-reported findings in the related area of sleep apnea, a fairly common cause of worker fatigue. In research conducted a decade ago, Allan Pack, professor of medicine and director of the Center for Sleep and Respiratory Neurobiology at the University of Pennsylvania Medical Center in Philadelphia, found that up to 28 percent of commercial drivers had some type of sleep disorder, such as sleep apnea. (Pack believes that figure is still accurate today.) Since then, a number other sleep-apnea studies have reached similar conclusions, including some mentioned in this edition’s story. As Patton’s piece in HRE’s first-ever digital-only edition points out, the issue of sleep apnea is especially relevant in industries such as transportation and security, where the consequences of not addressing the issue can be disastrous. But it also makes clear that its reach goes a lot further. According to one estimate, roughly 31 million Americans suffer from sleep apnea, including store cashiers, accountants who control their employers’ billion-dollar budgets and technicians who monitor global networks. Considering it crosses a wide spectrum of occupations, its implications can be huge— both in terms of worker safety and worker productivity. Very huge! It isn’t a surprise to learn, then, that many experts are puzzled as to why more employers haven’t recognized the problem and adopted more proactive approaches. Or why it isn’t on the radar of more HR executives. “I am frankly perplexed that this hasn’t gained more momentum than it has because the benefits are so clear,” says Don Osterberg, senior vice president for safety, security and driver training at Schneider National Inc., a firm that is now investing heavily in addressing this issue. Perhaps it’s simply wishful thinking, but I’d like to hope Patton’s story might help, even in a small way, to accelerate efforts on this front. No question, there’s a definite cost associated with addressing this issue. But I think Patton’s story also makes a very strong case that the price of “keeping your head in the sand” can be even greater.

David Shadovitz Editor e-mail:


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News HR

The Latest News & Trends in Human Resources Top Story

Study: OSHA Inspections Reducing Claims


any business leaders are of the opinion that Occupational Safety and Health Administration inspections are costly and undermine productivity. But a new study implies that couldn’t be further from the truth. In a paper published on May 17 in Science, researchers found inspections conducted in highly hazardous industries in California reduced injury claims by 9.2 percent and saved 26 percent on workers’ compensation costs in the four years following inspections. On average, inspected firms saved an estimated $355,000 in injury claims and compensation for paid lost work over that period and had no discernible impact on companies’ profits. The study, co-authored by Harvard Business School Professor Michael Toffel, Hass School of Business (at University of California, Berkeley) Professor David Levine and Boston University doctoral student Matthew Johnson, analyzed workplace-inspection data compiled by Cal/OSHA. A 1993 California mandate requiring Cal/OSHA to conduct some of its inspections randomly let them evaluate the effectiveness of OSHA inspections not spurred by complaints or accidents. “Going into the study,” Toffel says, “we figured there might be a small decline, but the effects are actually quite large.” The findings suggest inspections had a lasting, across-the-board impact on companies with both small (less than $2,000) and large (more than $2,000) workers’ compensation claims. There was also no evidence that inspections led to declining sales or affected companies’ survivability. Jim Johnson, group vice president of workplace safety initiatives for the National Safety Council in Itasca, Ill., believes the study demonstrates how OSHA activities are making a difference. Despite the presidential election results, he says, it makes a strong case for OSHA funding. —David Shadovitz

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An Ethical Double Standard In the C-Suite?


n light of the recent controversial resignation at Best Buy of both its CEO and chairman, and less-recent resignations of top leaders amidst other ethical quagmires, a question looms: Are members of C-suites answering to completely different sets of behavioral rules, or none at all? According to various news reports, former Best Buy Chairman and Founder Richard M. Schulze resigned May 14, two days after the Best Buy board of directors’ audit committee issued its report finding that he knew about former Best Buy CEO Brian Dunn’s affair with a 29-year-old female subordinate for months, but never reported it to the board.

Employers Shifting Benefits Costs, Choices to Employees


s healthcare costs continue to rise, companies expect to give employees greater responsibility for choosing their benefits and contributing to the cost, according to a survey of senior finance executives by Prudential Financial Inc. and CFO Research Services. The report, entitled The Future of Retirement and Employee Benefits: Finance Executives Share Their Perspectives, also shows that finance executives are increasingly looking at pension risk transfer and liability-driven investment strategies to reduce or eliminate definedbenefit-plan risks.

So was Schulze guilty by omission or commission . . . or just improperly trained? Despite the fact that he sat at the very top of the company, it was his lack of training and familiarity with proper protocol that most likely took him down, says Roy Snell, CEO of the Society of Corporate Compliance and Ethics in Minneapolis. He says “top leaders ... just talk” about zero tolerance and having ethical cultures without implementing reporting rules. Many firms with ethics officers also have yet to hire compliance officers, says Snell. Luis Ramos, CEO of The Network, a Norcross, Ga.-based provider of compliance solutions, concurs that a stronger commitment to the role of compliance officer is needed. Often, he says, “a compliance officer gets the title, but not the time or power to deal” with some of the problems appropriately when they arise. —Kristen B. Frasch

CFO Research Services surveyed 186 senior finance executives from U.S. companies with defined-benefit plans of $250 million or more to determine how employers deal with rising costs while still providing the best benefits possible. “CFOs can’t handle [the increasing volatility of healthcare premiums] because it’s not predictive,” says employee-benefits consultant (and HREOnline™ columnist) Carol Harnett. “So they’re ... moving the onus of coverage to the employees.” Indeed, 16 percent of respondents already shift a larger portion of costs for healthcare coverage to employees, 65 percent say they are likely to do so, and more than half of those say they are “very likely” to take this action. Fifteen percent also already describe their benefits as “employee choice” models, and 29 percent say they’ll adopt that model in two years. —Jeffrey S. Eisenberg

Rise Of the Middle Manager?


here used to be a time in America when the term “middle manager” was an aspirational position. Then came the great flattening of organizations—and the position became an endangered species in the jungle of business professionals. Reports now show the middle manager is making a comeback in importance. Indeed, in New York-based PricewaterhouseCoopers’ 15th annual global CEO survey titled Delivering Results: Growth and Value in a Volatile World, 50 percent of the respondents identified “recruiting and retaining highpotential middle managers” as their chief talent challenge.

Room for Improvement in Change Management


o execute change management, organizations must set up and develop systems, and focus staff on the change, according to experts and a recent study on the issue. Unfortunately, too many companies have failed to adopt this approach. A recent report from New Yorkbased Towers Watson, Change and Communication ROI Study, finds nearly two-thirds (65 percent) of companies with the best change-management results follow a formal, systematic process, compared with just 14 percent of companies that are mostly ineffective at change management. It also found that, when it comes to properly managing organizational change, “many companies have a difficult time getting it right,” says Kathryn Yates, global leader of communication consulting at Towers Watson. “In fact, our research

The survey—of 1,258 CEOs based in 60 countries—was designed to discover how businesses are preparing for growth in their priority markets. Talent is a major theme in the study, with two-thirds of CEOs saying it’s more likely talent will come from promotions within their companies over the next three years. Other U.K.-based research titled The Missing Middle: Exploring Learning Experiences of Middle Managers in the U.K. underscores a growing importance of middle management in retention and strategic leadership, yet woefully inadequate training and engagement at this level. Tom Davenport, senior consultant at New York-based Towers Watson, says “HR’s first job is to redefine the role so that managers [can] make the most of the learning opportunities organizations should provide.” —Michael J. O’Brien

shows that less than half stay on schedule, come in at—or under—budget or hold people accountable for deadlines. “[Given] the effect change management can have on the bottom line, there is plenty of reason for [companies] to learn how the best [ones] manage change.” —Kristen B. Frasch

Weighty Occupations A new CareerBuilder survey of more than 5,700 workers finds certain occupations have a higher incidence of workers reporting weight gain, often tied to more sedentary or high-stress positions. Among those most likely to report gaining weight are:

Snippets From:

Court Further Defines ‘Employer’ The U.S. Court of Appeals for the Third Circuit has established a new “test” for determining if joint employers cited as liable in class-action suits are, indeed, employers. The June 28 decision in In re: Enterprise Rent-A-Car establishes that Enterprise Holdings Inc. was not a joint employer because it did not pass “the Enterprise test”—having authority to hire and fire; authority to promulgate work rules and assignments and set employees’ work conditions; involvement in day-to-day employee supervision; and actual control of employee records, such as payroll or taxes. —Kristen B. Frasch

CEB Expands its Footprint Member-based advisory firm Corporate Executive Board Co. (NYSE: EXBD) has announced its definitive agreement to acquire U.K.-headquartered SHL, a leader in assessments for pre-hire and leadership assessments, for $600 million. Analyst Josh Bersin of Bersin & Associates describes the move as the latest in a series by CEB to become more of a data-driven provider of HR services. —David Shadovitz

Leading culprits behind workers’ weight gain include: 54% Sitting at their desk most of the day 37% Eating because of stress 23% Eating out regularly

• Travel agent • Attorney/judge • Social workers • Teacher • Artist/designer/architect • Administrative assistant • Physician • Protective services (police, firefighter) • Marketing/public relations professional • IT professionals Augu s t 2 0 1 2



News High-School Graduates Feel Ill-Equipped for Work More and more high-school graduates who aren’t attending college are feeling illequipped for the working world, according to a Rutgers University study. Human resource leaders can help, experts say, by enlisting their companies to provide internships and mentoring services to area high school students, to help them be more confident about preparing for future careers. In a national study of 544 high-school graduates released this month by the John J. Heldrich Center for Workforce Development at Rutgers University in New Brunswick, N.J., fewer than one in 10 say their high-school education prepared them “extremely well” to get their first job or to be successful at it. The study, Left Out. Forgotten? Recent High School Graduates and the Great Recession, also found only 27 percent have full-time jobs, and the current median wage for those employed full-time was only $9.25—barely above the

Not So Totally Rewarding poverty level. In fact, nearly one in three are unemployed and another 15 percent are employed part-time but looking for full-time jobs, and seven in 10 say that their current job is temporary. “This is the group that is really left out of the labor market—at the bottom, if you will, of the ‘American Experience,’ ” says Carl Van Horn, professor of public policy and director of the Heldrich Center. Companies can help alleviate these trends by providing both paid and unpaid internships, as well as mentoring programs, whereby their employees volunteer to mentor local high-school students, Van Horn says. “Corporations in their community service programs can also help kids still in high school by explaining to them how important it is to get a post-secondary education—not just to enroll, but to actually finish,” he says. —Katie Kuehner-Hebert

Is That Degree Really Necessary? Education requirements have long been a common, almost standard, part of job postings. But have you ever stopped to consider the lawfulness of this particular prerequisite? The Equal Employment Opportunity Commission has. A recent EEOC letter opines that, under the Americans with Disabilities Act, “if an employer adopts a high school diploma requirement for a job, and that requirement ‘screens out’ an individual who is unable to graduate because of a condition that meets the ADA’s definition of ‘disability,’ the employer may not apply the standard unless it can demonstrate that the diploma requirement is job-related and consistent with business necessity.” Further, the letter adds, employers shouldn’t list a high-school diploma as a job

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requirement if the job functions could be performed by individuals without one. The letter reflects the EEOC’s focus on “what it considers systemic discrimination, as opposed to isolated civil-rights violations,” says David James, shareholder and chair of the labor and employment practice group of Minneapolis-based law firm Nilan Johnson Lewis. “Consistent with this initiative, the EEOC has taken a particular interest in hiring criteria, from credit checks to arrest and criminal records to education requirements. [It] views such screening tools as having a disparate impact on minority applicants and other protected classes ... .” While it’s unlikely that including education requirements in job postings will become illegal, the letter may spur more employers and HR professionals to reexamine why they include them, he says. —Mark McGraw

Companies spend lots of money on their total rewards programs—the combination of pay, benefits and development opportunities that keep employees sticking around. Yet a recent survey from Aon Hewitt finds that, despite those investments, few companies seem to be getting much out of their programs so far. Aon Hewitt’s Total Rewards Survey of about 750 organizations reveals more than half (58 percent) use total-reward programs to foster employee engagement, while 48 percent want the programs to strengthen their ability to retain and attract top talent. However, 60 percent describe their employee-engagement levels as low and two-thirds say it’s either holding steady or trending downward. “Our studies suggest there’s a significant divide between what employers think employees want and what the employees actually want,” says Peter Gundy, a managing director at Towers Watson in Stamford, Conn. Companies tend to rank base pay, organizational mission and being rated as a “best place to work,” respectively, as the things valued most by employees in terms of what drives them to join and stay with an organization, he says. Conversely, employees tend to value job security, base pay and healthcare benefits most. Aon Hewitt analyzed the total-rewards programs of companies it identifies as “high performers”—having the highest levels of innovation, engagement and revenue—and compared them with the rest of the surveyed companies. According to the results, top performers distinguish themselves by articulating clear strategies and goals in their total-rewards programs, using data and input to drive decisionmaking, connecting the program to the business and employees, and defining the effectiveness of their programs differently. “The data suggests leading companies understand that attraction, retention and motivation ... should be disaggregated,” says Richard Kantor, senior vice president in Aon Hewitt’s human capital consulting division. —Andrew R. McIlvaine

Cover Story





racy McCarthy, currently the senior vice president for human resources at Chicago-based SilkRoad technology inc.—with a 20-year background in the HR field (including as a CHRO at a mail-order retailer and in HR leadership posts at other retailers)—says one of the worst pieces of advice she’s ever received came during an earlier job when her 200-employee company was searching for a new CEO. A leading and well-known candidate had emerged for the post and a board member told McCarthy there was no need to run a very extensive background check. “They said that we shouldn’t do that, that a background check would be insulting, that this is a known person,” says McCarthy, whose current employer, SilkRoad, offers HR services to high-tech firms. McCarthy says she went ballistic at the suggestion. “I said I think we owe it to ourselves, and our investors, to do an extra, extra deep background search—to look

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at everything that might be out there,” she says. McCarthy—and other human resource executives and experts—say double- and even triple-checking a C-suite job candidate’s resume, references and educational background isn’t just a way to spare the company from future embarrassment; it also offers career protection to the candidate who might be able to correct a resume error before it becomes an indelible stain on his record. And some experts argue that problems with the hiring of the very top executives run deeper than the resume, that candidates should be psychologically assessed and past co-workers should be mined better for information. Earlier this year, the business world learned, yet again, just what can go terribly wrong when candidates for the highest-level jobs are not properly vetted. In May, Scott Thompson had been CEO of the large but troubled Internet-content giant Yahoo! for just four months when an

activist investor challenged his educational background as listed in one of the firm’s filings with the U.S. Securities and Exchange Commission. The filing, and other public information about Thompson’s biography, said the new CEO held degrees in both accounting and computer science from tiny Stonehill College, but a simple check with the school revealed he only held the accounting degree. The disclosure not only cost Thompson his job (he has since taken over the CEO post at Conshohocken, Pa.-based ShopRunner), but gave a huge black eye to Sunnyvale, Calif.based Yahoo!—just as the Internet pioneer was struggling to rebuild its business model. It also led to some intense finger-pointing between the company; its wellknown search firm, Heidrick & Struggles; and another contractor. Human resource experts say the Thompson fiasco may have been headline-making, but it wasn’t isolated. Rather, it’s a striking example of deep flaws in the way CEOs and candidates for other high-level C-suite jobs are hired in the 21st century. Too often, these experts argue, job-seekers for top-level, highly visible posts are actually vetted with less stringency than lower-level hires, even in an age when the Internet can both magnify errors and increase the opportunities for puffery and fraud. “The more senior you get, the more it’s about relationships and less about filling out an application,” says Rusty Rueff, a former HR leader at PepsiCo and Electronic Arts who is currently a career and workplace expert with the Sausalito, Calif.-based jobs and career site Glassdoor. Rueff and other experts say C-suitelevel candidates are typically recommended by board members and are already well-known within an industry, which has the perverse effect of leading to lax background

checks. “But you have to have precautions,” says Rueff, “because the consequences are huge.”

Fixing a Big Problem The Thompson debacle at Yahoo! is just one of many cases—not just in business, but in academia, sports and elsewhere— in which poor background checks resulted in embarrassing and damaging episodes. The long list includes Food Network chef Robert Irvine, who falsely said he had cooked for the royal family; ex-Notre Dame football coach George O’Leary, who faked academic credentials and his gridiron accomplishments; and former Radio Shack CEO David Edmondson, also fired over falsely claiming college degrees, as was Etsy e-commerce founder Rob Kalin, and Bausch & Lomb CEO Robert Zarrella—among others. Experts say the lessons learned from the Yahoo! episode, however, should go beyond the most obvious one: that there should be a more comprehensive overhaul of the vetting of candidates for C-suite positions. They recommend background checks that are more thorough for top-executive slots than for mid- or low-level hires, not less stringent. They call for skilled and impartial third-party firms to undertake that the effort, but with the human-resource department involved and in charge throughout. They also say the Yahoo! debacle should inspire other changes in how references are used and should improve the profiling of candidates’ actual skills for a particular job. Here are some of the best recommendations: • Stick with a process—and avoid cronyism. A common pitfall and key reason that Yahoo!’s Thompson hiring went off the rails, according to experts, is that board members tend to get involved in the hiring of a new CEO, and these directors frequently not only make recommendations but make contact and even conduct

informal interviews outside any official vetting procedure. So what happened with Thompson—a board member recommended him, based on his track record at the Silicon Valley firm PayPal—is far too common. “People don’t want to offend,” says Christine Cunneen, CEO

of Hire Image, a nationwide background screening company. She says both HR executives and outside search firms are reluctant to press for too much information from well-established executives, fearing a pushback along the lines of, “Don’t you know who I am?” Experts say there’s a simple solution to this

A ugust 2012


Yodel Anecdotal/Yahoo! Inc.

Cover Story

problem: Spell out, in writing, a protocol of required background checks and other vetting measures and do not deviate—no matter who the candidate is, or how well a company director knows him or her. • Use an impartial firm to conduct a thorough screening. Most experts say the best way to catch resume fraud or other potential red flags is to use a third-party firm for background screening—in other words, independent not only from HR managers who are subject to pressure from above, but also from the search firm anxious to successfully fill the open slot. Screening companies should be solely responsible for an extensive background check. That’s because these firms are typically paid the same amount—regardless of whether the candidate is flawed or passes with flying colors—and its reputation rests solely on getting it right. “Have one person handling compliance verification,” says Greg Moran, founder of, an online employment testing and screening firm. “Let everybody else focus on the quality of the hire, but have one person with

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Scott Thompson, former CEO of Yahoo!—who lost his job over the discovery of false information on his resume—represents one in a string of recent debacles that point to questionable hiring practices in corporate C-suites.

one set of understandings [and verification duties]—who is not part of the executive search firm.” Additionally, experts say, companies that concentrate on verification tend to have a broader network of screening sources and contacts. A good verification firm will vet the candidate’s education and work history, as well as any criminal record or other blemishes—and it will know how to conduct its research without running afoul of equal-opportunity laws and other legal hazards. • HR executives must stay on top of the process: It’s vital that the company’s in-house human resource staff stay involved, ask questions and double back on what any hiring or background consultants are doing. Experts also recommend that all pertinent information uncovered during the outside vetting be shared openly with the entire board of directors, and not just a small circle of insiders. “It’s critical that HR realizes its function of due diligence,” says Jay Zweig, a Phoenix-based employment and labor attorney, who—like others—says it’s all too common for in-house staffers to

assume outside consultants are handling everything. Zweig— managing partner of the St. Louis-based Bryan Cave firm— also stresses the importance of a standardized procedure, saying applicants must understand that—just like filling out a W-2 form in order to receive a weekly paycheck—they must agree to submit to a uniform background check. • It’s time to rethink how references are used: A number of hiring authorities say references can be a highly useful tool for pre-screening C-suite applicants, both for objective verification of past work history— puffed-up claims about past projects or tasks, for example— but also for critical subjective information about the applicant’s leadership skills. Typically, an applicant provides the names of higher-ups and past associates who—either because of friendship or fear of the ramifications—are not likely to provide information that’s either critical or especially useful. “Ask the person, ‘Who else could I talk to that you could refer me to and might know something?’ ”

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Cover Story says Charley Polachi, the founder of Polachi Access Search Partners who once worked with Heidrick and Struggles, the firm at the center of the Yahoo! Thompson debacle. He says it’s often this second level of contacts—not hand-picked by the job seeker—that provides more judgmental evaluations. Other job-search gurus recommend another tactic: Seeking out applicants’ former subordinates, rather than the references they supplied or their higher-ups; often, these underlings have valuable insights into an exboss’ leadership skills, and they tend to be more candid and willing to share. They also have a different perspective. “When they’re dealing with subordinates, that’s when they tend to let it all hang out,” says Robert Hogan, president of Tulsa, Okla.-based Hogan Assessments and a pioneer in developing online evaluations of high-level corporate hires. Hogan says he believes in such interviews, as well as intense psychological screening of candidates, because—too often— the process fails to capture what he calls “The Dark Side” of would-be CEOs, traits such as narcissism and self-aggrandizement. He believes that’s why—according to his own research—as many as 65 percent of CEO hires end in shortterm failure.

Internet Takes Some Blame It may seem counter-intuitive, but most experts believe that the rise of the Internet over the last 15 years has made verification of job candidates harder rather than easier—for several reasons. For one thing, while it’s tempting for HR executives to use the web— especially social-networking sites such as Facebook and Twitter—as a way to screen applicants for problems, that’s not a good idea. That’s because company officials

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“The more senior you get, the more it’s about relationships and less about filling out an application. But you have to have precautions, because the consequences are huge.”

may inadvertently learn details about the job seeker—regarding religion or sexual orientation, for example—that is proscribed under fair-hiring laws. On one hand, the Internet tends to amplify false information about a job-seeker—sometimes unfairly, as it’s often not the candidate but someone else who is recording the inaccurate details. The flip side is that advanced technology has also created tools for a small pool of unethical job candidates to establish bogus credentials or even provide fake references aimed at covering up a firing or some other potential resume flaw. Cunneen, the backgroundscreening CEO, says her company and clients are increasingly on the lookout for the use of firms such as, a company that promises “to act as your past employer” by offering work phone numbers and live individuals to act as pretend past colleagues. She says this is not nearly as big a problem as gardenvariety puffery—that is, applicants overstating their job duties or their accomplishments—but it is a

growing issue, especially because sustained high unemployment since 2008 has made job seekers more desperate. But verification issues can extend beyond outside job applications. Experts say HR executives need to remember that even in-house applicants for a promotion to the C-suite, who’ve been with the firm for a long time, may have a background issue that went undetected at the time of their hiring and could blow up under the brighter lights of corporate management. Polachi, the executivesearch expert, says mandatory background screening for top jobs should be standard and it should be applied universally—to inside candidates as well as outside hires, to relative newcomers as well as industry leaders with decades of experience. The best advice, he says, is to obey the same motto Ronald Reagan used in arms deals with the Soviet Union: Trust, but verify. Send questions or comments about this story to

the talent landscape is changing: are you keeping up?

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Wake Employers should pay heed to mounting evidence that sleep apnea is to blame for employee accidents and rising healthcare costs. BY CAROL PATTON


on Osterberg, senior vice president for safety, security and driver training at Schneider National Inc., was puzzled. Nine years ago, he discovered that driver fatigue was the No. 1 factor in high-severity crashes at his trucking company. But what was causing the fatigue? Osterberg’s leadership team collaborated with the company’s registered nurse who worked in HR’s occupational-health division. Among her key responsibilities was to implement strategies that cut healthcare costs for the self-insured company, based in Green Bay, Wis. She suspected that a percentage of the drivers were afflicted with obstructed sleep apnea, a severe form of sleep apnea, says Osterberg.

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“While I had heard those words before, I didn’t know exactly what that meant,” says Osterberg, referring to sleep apnea. Neither did he realize the profound impact the condition was having on his employees and company’s bottom line. Sleep apnea is a potentially serious sleep disorder that causes a person’s breathing to repeatedly stop and start throughout the night. After waking up, the person feels tired, even after a full night’s sleep. Was sleep apnea the real culprit behind these accidents? Did it contribute to Schneider’s high healthcare costs? Not fully convinced, Osterberg started researching the topic and was shocked by the findings of one researcher, Allan Pack, professor of medicine and director of the Center for Sleep and Respiratory Neurobiology at the University of Pennsylvania Medical Center in Philadelphia. According to Pack’s studies, up to 28 percent of commercial drivers had some type of sleep disorder such as sleep apnea. Pack believes that number is still accurate today. Many other sleep-apnea studies have since been conducted, all reaching similar conclusions. The disorder has been cited as “an independent risk factor for high blood pressure and cardiovascular disease, and is strongly associated with insulin resistance, diabetes, obesity and mood disorders, such as

ke-Up Call depression,” according to the Washington-based American Sleep Apnea Association. Not surprisingly, OSA patients are also heavy users of healthcare resources. They incur medication and hospital costs that are two to three times higher than non-OSA patients and total healthcare costs that are more than twice as high, according to studies referenced in the ASA A’s booklet, Sleep Apnea: What Employers Should Know. Because of the disorder’s prevalence in the U.S. workforce, the ASA A is sponsoring a solutions conference in October for employers and health plans (, says Ed Grandi, executive director of the ASA A. Many human resource executives are not aware of the condition’s invisible impact on employee productivity, workplace accidents or healthcare costs. While an estimated 5 percent of adults are diagnosed with sleep apnea, another 5 percent may be unaware they have it and up to 15 percent may have mild sleep-disordered breathing, says Anne Wheaton, epidemiologist with the Atlanta-based Centers for Disease Control and Prevention’s division of public health. Considering that another risk factor for sleep apnea is obesity and that more than one-third of U.S. adults (36 percent) are obese—according to CDC figures—those percentages, she says, may actually be higher. These numbers reveal a disturbing picture. At least 31 million Americans suffer from sleep apnea. But who are they? They could be the store cashier, the accountant who controls his employer’s billiondollar budget, or the technician who monitors a global network. Sleep apnea crosses all occupational boundaries. Yet, HR and safety professionals within the transportation industry may be the only ones who are doing anything about it. Although screening for the condition is costly, sometimes as high as seven figures, some employers believe it’s an investment that will yield a high return, especially when adding up the collective cost of absenteeism, low productivity and serious workplace errors, accidents or injuries that may be caused by sleep apnea. Based on thousands of accident investigations over the last decade, the National Transportation Safety Board has made 180 employer recommendations for minimizing worker fatigue, some involving sleep apnea.

In many cases, it is up to HR to get the ball rolling. Either independently or in collaboration with the safety department, HR professionals at some transportation companies work with health experts to develop sleepapnea programs. Such programs typically involve designing employee questionnaires that screen for the condition, coordinating appointments at sleep clinics to diagnose those at-risk, distributing medical devices that help employees manage their condition and monitoring their use of those devices. Once the program is up and running, HR bows out, turning program management over to safety. (At most transportation companies, HR and safety are completely separate departments.) So far, employers have reported amazing results. The number of accidents has dropped. Healthcare costs have plummeted. And employees never felt better.

Hidden Danger Since 2004, more than 40,000 truck drivers at Schneider have been screened for OSA in both the United States and Canada, says Osterberg, adding that the company has about 23,000 employees worldwide. As a condition of employment, he says, each new truck driver completes a questionnaire that was codeveloped by the company’s occupational nurse and Houston-based Precision Pulmonary Diagnostics. “Commercial drivers, to some degree, are incented to deceive,” he says. “They’re very protective of their medical qualifications. So we had to develop a prescreening instrument that had a deception indicator for drivers who were reluctant to acknowledge that they had symptoms associated with obstructive sleep apnea.” For example, when completing the questionnaire, employees may deny they snore or feel tired after a full night’s sleep—both symptoms of sleep apnea. However, they readily admit they have common health problems, such as high blood pressure, heartburn or frequent urination at night, which are also affiliated with sleep apnea. These secondary indicators help predict the likelihood that employees have the sleep disorder. During the pilot phase, 339 truck drivers volunteered to be prescreened, then another 788 participated in 2006. Those at risk for the disorder were scheduled for a sleep study by HR, which also Augus t 2 0 1 2


Health gathered the results. If diagnosed with OSA, drivers were issued a continuous-positive-airway-pressure (CPAP) device, which involves wearing either a full face or nasal mask while sleeping that injects a continuous stream of air into a person’s air passage to prevent it from closing off due to sleep apnea. The company funded both the sleep studies and CPAP machines. Although all “I am frankly perplexed of the initial 339 that [taking a proactive candidates tested positive for sleep approach to sleep apnea apnea, Osterberg in the workplace] hasn’t cautions that the prescreening gained more momentum instrument was than it has because the roughly 90-percent accurate. benefits are so clear. “We also looked Almost anything [HR] does at their safety will be better than turning a performance 12 months prior to blind eye to it.” [CPAP] treatment and 12 months after treatment,” he says, explaining that employers can download reports from CPAP machines to monitor employee compliance. “We saw a 30-percent reduction in crashes and a reduction of 48 percent in the median cost of the crashes that the drivers were involved with post treatment.” Not to mention the dramatic drop in healthcare costs: While 17 percent of the company’s employees now receive treatment for OSA, their healthcare costs fell 50 percent, which translates into an estimated savings of $2 million each year, says Osterberg. “We looked at this three different times,” he says, adding that 95 percent of employees with OSA are compliant with their treatment. “We got comparable results each time between 2004 and 2006.” However, there was one benefit no one anticipated. While the company’s employee-turnover rate was 60 percent, 60 percent of drivers being treated for OSA stayed on the job. Osterberg believes their loyalty stems from their appreciation of Schneider for caring about their well-being. Considering all the research conducted on sleep apnea, Osterberg doesn’t understand why more employers haven’t recognized the problem and adopted a proactive approach. “I am frankly perplexed that this hasn’t gained more momentum than it has because the benefits are so clear,” says Osterberg, explaining that the program’s annual costs reach into the seven-figure range. “Almost anything [HR] does will be better than turning a blind eye to it,” he adds.

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If a company’s workforce is comprised of a large number of overweight, middle-aged individuals, especially those in sedentary jobs, HR should consider screening for sleep apnea, says Alison Smiley, president at Human Factors North Inc., a Torontobased human-factors-engineering-consulting company. Call-center operators, assembly-line workers, security guards and those operating heavy construction equipment, to name a few, could all be atrisk of suffering from the disorder. Smiley, who supervised a four-year study from 2005 to 2009 on sleep apnea involving truck drivers in the United States and Canada (see section below), says shift work can exacerbate the condition. “As soon as you have people with sleep apnea doing shift work, then you’ve increased the probability of [them] falling asleep while operating machinery or diagnosing patients, which might result in error,” she says. “The most important thing to know about sleep apnea is that it’s very treatable and that people experience an increase in quality of life—if they get treated.” According to the National Sleep Foundation’s 2012 Sleep in America poll, which surveyed 1,087 people, 10 percent of professionals holding jobs outside the transportation industry reported they had been diagnosed with a sleep disorder. Of those, at least seven in 10 had sleep apnea. Moreover, 12 percent stated they had made serious errors or experienced incidents at work because of sleepiness. Nineteen percent even admitted taking naps during work. “I don’t want HR professionals to be scared of sleep apnea,” adds Grandi of the ASA A. “There are solutions.”

International Concern Tom Kenny first learned about sleep apnea while attending a 2009 transportation safety conference in Alberta, Canada. During one session, researchers discussed a study that monitored 77 drivers—between the ages of 24 and 64—who were employed at one U.S. and two Canadian motor-carrier companies. Supervised by Human Factors North and commissioned by multiple organizations that included the U.S. Federal Motor Carrier Safety Administration and Transport Canada—a department in the Canadian government that develops federal regulations, policies and transportation services—the study revealed startling statistics: 71 percent of survey participants were diagnosed with sleep apnea and 39 percent had moderate-to-severe sleep apnea. “I was actually in shock,” says Kenny, CEO of RTLWestcan Group of Companies, an Edmonton, Canadabased trucking, construction and transportation company. “I cornered the guys from the FMCSA and

Health Transport Canada in the hallway and said, ‘You’ve got a small, skewed sample and can’t make comments like that.’ ” Kenny then challenged the officials. If they really believed the survey results, he added, when were they going to introduce legislation that mandated employee screening? Both sides agreed it would never happen because the topic is “too politically charged,” he says, adding that it would be a very contentious issue among labor groups. Kenny set out to prove that the study results were simply wrong. Out of his 1,100 employees, he says, 1,042 who held safety-sensitive positions such as truck drivers, mechanics and construction workers, volunteered to participate in his company’s own study, which lasted from August 2009 to March 2012. Initially, employees were asked to complete a questionnaire. Based on their responses, they were divided into three groups: red indicated high probability of sleep apnea, yellow meant fair probability and those in the green category had no sleep issues.

Employees labeled red were flown to an overnight sleep clinic. Those classified yellow were issued a Watch-PAT to determine if they had sleep apnea. The device, which would be worn on their wrist while sleeping, attaches probes to two fingers that monitors changes in their autonomic nervous system caused by respiratory disturbances. Kenny says his HR department developed and managed the entire program, which has since been turned over to safety. HR professionals collected the questionnaires, communicated with the sleep clinic, trained the company’s technicians to conduct WatchPAT tests and scheduled employees in different locations for sleep-clinic tests. Likewise, they also spent hours coaching, mentoring, encouraging and coercing existing employees to complete the questionnaire. The handful of drivers who refused to participate were not dispatched and, subsequently, quit. Considering the results, Kenny tells this story to anybody who will listen. Now a condition

High-Tech Tactics in Fighting Fatigue


mployee fatigue can be caused by many factors, including sleep apnea. Consider employees who work two jobs or long shifts several days in a row. Regardless of the reason, fatigue can create all sorts of workplace problems: decreased productivity, serious errors in judgment, accidents, and worker injuries or fatalities. To help HR professionals battle these problems, technology vendors have introduced fatiguemanagement tools that are attracting some attention. Most offer a scheduling component that tracks employee time and attendance, while others enable employers to observe workers in real time for signs of fatigue. In June, Chevron Phillips Chemical Co. began piloting EmpCenter Fatigue Management, an application developed by WorkForce Software that can be configured to support specific company rules and ensure compliance with industry requirements. Supervisors will use the software to schedule employee overtime, says Joe D. Pyner, HR manager in the U.S. manufacturing and industrial relations practice at Houston-based Chevron Phillips. He says a typical refinery or chemical-plant employee works three 12-hour shifts one week and four 12-hour shifts the next week, averaging 42 hours per week. So, over a two-week period, employees work seven out of 14 days, which creates ample opportunities for overtime scheduling. Employee fatigue grabbed the industry’s attention when it was identified as a contributing factor in refinery accidents or explosions, including the 2005 British Petroleum refinery explosion in Texas City, Texas, that killed 15 people. So, in 2010, the American Petroleum

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Institute established overtime guidelines, referred to as API 755, to help the industry self-regulate and prevent the U.S. Occupational Safety and Health Administration from developing “cumbersome” regulations regarding employee scheduling. “The scheduling software will allow supervisors in real time to know who can be scheduled for overtime without exceeding the API 755 hours-of-service limits,” says Pyner. “We hope to have [the software] up and running and in place by January 2013.” Like petrochemical employees, healthcare workers are also at high risk for fatigue. Three years ago, WellStar Health System started using Kronos Workforce Central software, says Lynn Alters, director of workforce management at WellStar, which employs more than 12,000 people at five hospitals in the Atlanta-metro area. While the system schedules employees and produces reports regarding their time, attendance and productivity, it also creates customized, daily reports that identify employees in clinical jobs, specifically registered nurses, who may work more than 60 hours in any seven-day period. “We’re starting with nursing as the primary place where [fatigue] can happen … and will roll across into other arenas,” she says, pointing to other positions such as pharmacists and phlebotomists. Each week, she says, nurses typically work 12-hour shifts for two consecutive days, then skip one or more days before working a third 12-hour shift. In addition to high-tech tools, WellStar also employs a buddy system. Alters says nurses work in pairs,

of employment for all new hires, he says, the questionnaire revealed that 60 percent of all employees who participated in it were sent to a sleep clinic to be tested for sleep apnea or were asked to wear a watchPAT device. Of those 60 percent, eight drivers were placed on short-term disability because they required further medical action for conditions that included REM-sleep-behavior disorder, a collapsed lung, respiratory failure, heart arrhythmia, extreme hypertension and low baseline oxygen levels. “Sleep apnea has never been in the forefront,” says Kenny. “Now I’m the preacher. I stand in front of my peers at conferences and say, ‘You boys better get your head out of the sand because this is an issue in our industry and you better do something about it.’ ” Still, he refuses to screen his company’s 44 pilots. He says legislation in both the United States and Canada mandates that, when pilots are diagnosed with sleep apnea, their licenses are automatically pulled. Kenny says he could not convince the chief medical examiner at Transport Canada to change

monitoring and encouraging each other to take a 30-minute uninterrupted lunch break and two 15-minute breaks during their 12-hour shifts.

Driving Results In recent years, some companies have installed video cameras—aimed at drivers—in each of their fleet vehicles. Matthew Kamensky, senior consultant at Towers Watson in Denver, points to a large waste-management company that installed cameras in its trucks linked to a GPS system as part of a pilot program. The videos, he says, offer a wealth of information. Are drivers nodding off at the end of their shift? Are some taking short cuts instead of established routes toward the end of the day because they’re tired? Do their eyes flutter? If so, when? “The potential of how [you] can utilize this data is huge,” he says, adding that HR can partner with safety or risk management to tackle worker fatigue. “There’s some potential to mine some information to get a sense

course by allowing companies to evaluate, diagnose and treat pilots without suspending their license. His conversations with the U.S. Federal Aviation Administration produced similar results. “We haven’t been able to find any bureaucrat [who] will say, ‘I’d rather know you have a problem, that you’re doing something [about it] and treating it, which is the common-sense approach,’ ” Kenny says. “They’d rather ignore it. Wow.” Meanwhile, his company spends hundreds of thousands of dollars each year on sleep studies, CPAP machines and Watch-PAT devices. While he doesn’t advocate that all employers go to this extreme, he says they must do something because the problem isn’t going to disappear. “It’s morally, absolutely, the right thing to do,” Kenny says. “Theoretically, you should have a more productive, happy workforce.” Send questions or comments about this story to

of [whether you] need to change the route or cut the day shorter.” Two years ago, Bill Torres placed a camera offering remote viewing capabilities in each of his 48 charter buses. As president and owner of DC Trails Inc., a charter and tour bus company in Lortin, Va., Torres employs 100 drivers along with 15 office workers who have been trained to spot signs of driver fatigue. As part of their job responsibilities, he says, they watch drivers 24/7 on several monitors placed throughout the office. If a driver starts nodding off, they immediately call the driver four or five consecutive times, which signals him or her to pull over to the side of the road and call the office. Still, Torres says, technology is only half the solution. He says his business culture encourages, never penalizes, employees to come forward with fatigue-related issues. A good example is the company’s annual, threeday training program. He says several hours are devoted to the side effects of common drugs such as allergy medicine that can cause drowsiness and the importance of developing healthy eating habits and an exercise routine. Torres credits all of these practices for his company’s low insurance rates. Compared to standard industry rates, he pays an estimated 40-percent less for insurance for each bus and employee-healthcare premiums have remained steady over recent years. “Fatigue is a concern… [that’s] been around forever,” he says. “How you choose to deal with it really makes a difference.”

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HR Technology® Conference


Keeping Pace At this year’s conference, Josh Bersin is slated to explore some of the more dramatic ways technology is transforming today’s learning function. BY DAVID SHADOVITZ


osh Bersin’s session at this year’s HR Technology ® Conference features a fairly straightforward title: Learning Systems: Where Are We Now? But, as those attending it will no doubt learn, the challenges facing HR leaders on the learning-and-development front haven’t been this complex and formidable in a very long time. During his 75-minute workshop on Oct. 9, Bersin, president and CEO of Oakland, Calif.-based Bersin & Associates, will—among other things—walk his audience through a few of the more notable changes that have taken place in the $13.6 billion learning-and-development market in recent years. Near the top of Bersin’s list is the proliferation of new types of content and learning approaches. The market, he says, is no longer just about e-learning and instructor-led training; it’s now about delivering and publishing videos, self-authored content by other employees and social learning experiences. “The amount of content has gone up in orders of magnitude,” Bersin says, adding that many companies today have way too much of it. “They have webcasts, they have documents, they have training materials, they have audiotapes and videotapes—to say nothing of the virtual classroom and all the content that’s there.” At the same time, Bersin points out, the universe of learning-management-system vendors has consolidated. Whereas there used to be 30 or 40 vendors thriving in that space, he says, today, there’s just a fraction of that number.

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First, he says, bigger vendors started to buy up small vendors; then, the talent-management vendors began to buy them up. So today, he says, there are very few stand-alone LMS vendors investing in new tools that support the large pool of learning content in existence today. Because of this, Bersin says, training departments have been forced to “lash together” their old-fashioned LMSs—which typically aren’t very good at leveraging these new capabilities—with tools from start-ups and their own IT departments; then, they need to try to get these to successfully work together. Bersin also notes that, as educational institutions start to “wake up to the concept of e-learning,” there’s more and

HR Technology® Conference more pressure on training leaders to respond with more robust and relevant offerings. “Employees are noticing what’s out there on the public Internet—and they’re looking at their own stuff and saying, ‘Wow! We’re really behind.’ So it’s dramatically increased the need for training departments to re-engineer their learning functions.” Bersin notes the market hasn’t been this tumultuous since the early ’90s, when technology couldn’t keep up with the market. “I think that’s where we are today,” he says. “Solutions haven’t caught up with the needs of corporations.” If it isn’t already the case, Bersin says, technology expertise has to be a core competency of training leaders. “Not only do you need to have a grasp of instructional design, assessment and training processes, you also have to understand video and video editing, simulations and gaming—and how to put all of these on an iPad.” Bersin also believes the emergence of new collaborative technologies are, in certain ways, changing the dynamic between training and IT. “If my IT department is buying, say, Chatter, Jive, Yammer or SharePoint, and I’m the training guy and I want to buy Adobe Connect or GoToMeeting,” he says, “I’m now going to have to fight with IT or just use what they’ve already bought, since training is just a small part of what the market [for collaboration].”

Vendor Response Collaboration, Bersin says, is one of several areas of learning and development in which innovation is very much alive and well. Much of the innovation is specifically coming out of the small start-ups, not the bigger companies, he says. Many of the larger providers in talent management, Bersin says, are focused on building an integrated platform and have therefore been slower to innovate in areas such as social learning and collaboration. Exceptions include vendors such as Saba, Silkroad and perhaps SAP and its SuccessFactors and Plateau units, which have “some cool stuff they’re working on.” At the HR Technology ® Conference, Bersin says, he’s going to educate attendees about the state of learning and development, explore various solutions that fit into different segments of the market and provide examples of companies that are successfully bringing an assortment of pieces together. If there ever was a time for training leaders to rethink their learning-technology architecture, he says, it’s now. “The old buy-an-LMS-and-let-everyone-use-it [approach] isn’t enough anymore,” he says. Informal learning tools, knowledge sharing, collaboration and video sharing have as much, if not more, impact on learning than formal training these days, Bersin says. “We’ve reached a point in everyday life where we, as human beings, have been conditioned to interact online,” he says. “As much as

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people like to go to classes, they are much more likely today to gravitate to things online.” In the early days, he says, technology-enabled training was simply an add-on to the instructor-led training. “Now, it’s the other way around,” he says. “Instructor-led training is just one of many interventions that includes a range of technology-based tools to get your jobs done.” Bersin points out that mobile technologies are helping to drive this transformation. “Five, six, seven years ago, if you wanted to do mobile learning, you had to take a bunch of training content, buy a bunch of tools and then re-author them for the BlackBerry, iPhone and all of the other devices,” he says. “But that’s no longer the case today.” If you’re not putting content on mobile devices, he adds, it’s 50 percent less likely people will get it these days.

Key Skills In light of these developments, Bersin says, training departments themselves must acquire a whole new skill set. First, he says, they need to get a better handle on the various roles of employees. “It used to be you taught a class on a certain date and people either showed up or didn’t,” he says. “Classes were developed around a topic, not a role, and people self-selected to be there. But now that content is being delivered directly to people on their jobs, we need to know what their role is.” Training departments, Bersin says, have to become very familiar with the people they’re training so they can put in place not just training, but the support tools and informal learning experiences that are relevant to them. According to Bersin & Associates research, he says, only 13 percent or 14 percent of the companies indicate they have a good handle on this. Nowadays, Bersin says, training organizations are essentially about capability development. “What are the capabilities we need in our organizations now to be successful? Which ones are strategic? Which ones are tactical? And then, how can I assemble the tools to build those capabilities in partnership with all of the talent management we’re doing? How can I do that globally? How can I do that with modern technology? How can I do that in conjunction with all of the new skills that are needed?” To be sure, none of these are easy questions to answer. But, that said, Bersin believes the ability for organizations to successfully arrive at meaningful responses to these and other issues can be a huge asset in today’s uncertain world. Send questions or comments about this story to For more information on the 15th Annual HR Technology® Conference and Expo, to be held at McCormick Place, Chicago, Oct. 8 through 10, visit

Socıal Medıa

Buying into BYOD More employers are finding that letting employees bring their own smartphones, tablets and laptops to work is actually good for business. BY TOM STARNER

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ringing your child to work for a day was all about creating a nice, warm and fuzzy way make the workplace a softer, nicer place to be. The concept of “bringing your own device” (BYOD) to work, well, that’s got some warm and fuzzy, and personable, connotations too. But what this fast-growing phenomenon really is all about—aside from dramatically changing the way people work and companies compete—is it has the potential to make both employees and employers while boosting productivity, according to experts in both the human resource and technology fields. Mobile devices—primarily smartphones and tablets—are

everywhere. According to ABIResearch, in Oyster Bay, N.Y., 1.2 billion smartphones will enter the global market over the next five years, representing about 40 percent of all handset shipments. On the tablet front, research firm IDC, in Framingham, Mass, reports that global tablet shipments in 2012 will reach 106.1 million units this year. Also, according to Enterasys Networks, a global provider of wired and wireless network infrastructure and security solutions in Andover, Mass., 74 percent of companies allow some sort of BYOD usage, and 81 percent of employees use at least one device for business use. “Today, there are hundreds of millions of devices and wireless connections, with most being used for both personal and business use,” says Mike Gold, president of Intermedia, a New York-based provider of cloud technology to small and mid-sized businesses. “It’s clear the lines between personal lives and work lives have blurred to the point that it is relatively difficult to tell where one begins and the other ends.” David Rosenbaum, CEO and president of Real-Time Computer Services, a technology consulting

firm in New York, says BYOD is absolutely a growing trend, fueled by employees who want to use their “cool” products rather than the company’s “stodgy” products. Also driving the trend are employees who don’t want to carry two separate devices. Finally, there are a growing number of employers who are happy to avoid the capital cost for devices (and, sometimes, also the monthly recurring usage costs). “Each of these motivators can represent real benefits both to the employer and to the employee, but there are real risks, too,” Rosenbaum says, rattling off corporate and personal data security as the most obvious. Joe Santana, CEO and founder of Joseph Santana Consulting, which specializes in diversity and inclusion assessments, diagnostics and solution development, says BYOD is also one way to attract, engage and retain the millennial generation. The new approach, however, calls for changes in HR policies that focus on maintaining required security, he says, while not owning or controlling the means to productivity. In fact, he says, a quick way to find the right wording for these new HR policy/ usage statements can often be found in the type of language seen in contract confidentiality and nondisclosure agreements. After all, high-level contractors need to access and use company data, but do so using their own devices and networks, Santana says, adding that confidentiality and nondisclosure agreements focus on the appropriate use and protection of information and not on the devices used to manage the information.

Troy Fulton, director of product marketing at Tangoe Inc., a provider of communicationslifecycle-management software and services in Orange, Conn., warns that HR executives, who should be engaged in helping create policies for BYOD, must consider more than cost savings in the decision-making process. “Allowing employees to connect their own devices to a secure corporate network could invite a host of issues that go far beyond the size of your telecom invoices,” says Fulton. To mange this growing BYOD reality, HR executives must consider the three critical factors: data security, work/life balance and, in the end, who rightly owns the data should the employee leave the company. “Our advice is proceed with caution, though BYOD is a hot trend because, from an IT perspective, these devices already are in play on an unplanned basis,” he says. In terms of setting policy, Shivesh Vishwanathan, senior solutions architect at Pune, India-based Persistent Systems, a global-software productdevelopment firm, says BYOD implementation and policy creation require coordination across multiple internal teams

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Socıal Medıa “Allowing employees to connect their own devices to a secure corporate network could invite a host of issues that go far beyond the size of your telecom invoices.”

including legal, HR and IT. Most of all, managers must clearly communicate the policy to employees. For example, employees might need to agree to conditions, such as having monitoring and security software on their devices, monitoring of data and their activities from their device, possible wiping of personal data from the device in case of theft or loss of device, and increased security policies including password protection, frequent password changes, etc. “Overall, companies need to be aware of three important implications of BYOD—legal, security and privacy—and have clear policies on each one of these aspects,” he says. To ensure a smooth transition to BYOD, Vishwanathan says, it’s best to create a crossfunctional task force that includes relevant stakeholders from the organization, and ensure that they get key stakeholder buy-in and preside over frank discussions on the issues that any BYOD implementation is sure to bring up. “The costs of implementation (including legal and security risks) should be weighed against the benefits that accrue from the relatively simpler deployments and management of devices,” he says.

Be Part of the Process While the nuts and bolts of data security and data ownership typically fall within the purview of IT, Brandon Hampton, director

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at wireless-technology consultant MOBI Wireless Management, in Indianapolis, agrees that HR must to be involved in setting policy for those considerations. In MOBI’s experience and research, Hampton says, the security risk on the policy and “human” side is typically greater than on the device/hardware side. “Frankly, there haven’t yet been a lot of [data leaks and security breaches] when it comes to BYOD,” he says. “The greater risk is that, legally, the courts have not ruled in BYOD environments about who owns the data. Is it the users’ data or the company’s data, or even the wireless carrier’s data?” Hampton believes the best path is for HR to create a policy and be consistent … enforce it and make no exceptions. Also, when companies make the transition from corporate-provided hardware to BYOD, there must be a clear change in policy to match that change. On the upside, Hampton adds, employers certainly are using BYOD as a recruiting tool with younger talent, people who expect

to be able to use their own gear when entering the workforce. “I believe you will see a blend, with some BYOD users and some corporate-owned hardware users within an enterprise,” he says. “If I were running a company, I would be very cautious moving to a BYOD-only environment. It makes sense to use both.” Regarding Hampton’s mention of BYOD as a recruiting tool, issues such as work/life balance and employee preference really belong to HR, says Elizabeth Cogswell Baskin, president and CEO of Atlanta-based Tribe Inc., an internal communications agency that advises HR for national and global clients. Cogswell Baskin, for instance, says new generations depend on their technology and, sometimes, employers lag behind. “These younger employees depend on the technology they use in their personal lives and, if the company doesn’t provide it, they’d rather bring their own,” she says. Cogswell Baskin adds that some employers have been slow to accept new technology in the


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Socıal Medıa

workplace, particularly where social media is concerned. But younger employees—and many of their older peers as well—are so accustomed to using these technologies and tools in their personal lives that they find it unproductive not to have them available at work. “Imagine if you’re used to drinking coffee all day and your office doesn’t have a coffee maker,” she says. “You’d bring your own, wouldn’t you? Well, magnify that ‘need’ tenfold with BYOD.” Cogswell Baskin says the trend underscores how important it is that employers respond to employee needs—which will naturally evolve over time and generations—in order to enable employees to do their best work. She says employees are going to bring their own devices anyway, so it’s best to set a policy, communicate it and stay in touch with employees so the policy can evolve with the needs of the business, the wants of the employees and the related complications, such as regulation and security.

Getting Comfortable Brandy Fulton, vice president of HR operations at Citrix, a technology provider based in Santa Clara, Calif., says that,

3 0   Hum a n Re s o urc e E x e cu ti v e ®

“Every HR organization [wants] the best and the brightest talent. Increasingly, they are coming in with several devices— smartphones, netbooks, etc. It’s a huge satisfier to tell folks they do not have to give it all up.”

despite any concerns about— or fears of— employees working with personal devices, Citrix, being a technology company, is very comfortable with its BYOD program. “It’s very compelling and a natural for us,” she says, admitting that being a technology company does give Citrix an advantage in going this route. “Most of all, we don’t have any huge hurdles from the IT perspective. Once we secured the devices, and were confident we had security under control, the company and our employees [became] quite comfortable with BYOD.” Fulton adds that Citrix is quite pleased it can “celebrate” the fact that it’s program and policy is part of the company’s employee-value proposition. “Every HR organization is looking to attract and retain the best and the brightest talent,” she says. “Increasingly, they are coming in with several devices— smartphones, netbooks, etc. It’s a huge satisfier to tell folks they do not have to give it all up.” Fulton stresses that giving employees the choice reflects the consumerization of IT, whereby people using technology in their everyday lives want to use the same technology in the workplace. “Employees get a stipend and buy whatever they want,” she says. “We definitely use BYOD as a marketing tool in recruiting.”

On top of it being a satisfier for employees, she says, it also fits the way Citrix does business, with smartphones, tablets and netbooks becoming an extension of the workforce. “We all are aware that the line between work and play is blurring, so when our people are working, they want to have their stuff too—their music and photos,” Fulton says, adding that a device such as a tablet can serve as an “in-between” tool if employees only need to do a little bit of work during the course of the day to stay on top of things. “At the end of day, the genie is out of the bottle regarding how people work today,” she adds. “You can work at any time, but setting the boundaries is even more important to manage resources. You need to have meaningful conversations with employees and try to reduce stress. Figuring out how to strike a balance is up to the employee. You can’t let the access and the machines control you.” As for policy and data security, Fulton says, it’s really not any different for BYOD vs. the company-provided hardware Citrix provides. “The security policies are really the same,” she says. “The beauty of a BYOD program is IT is not in the business of keeping up with every new platform. And for things such as disaster recovery, [if employees are] working from home, IT [professionals do] not have to manage personal-device use remotely, which reduces cost.” Send questions or comments about this story to

Mergers & Acquıstıons

Shari Yocum joined several other HR mergers-and-acquisitions veterans last year to form Tasman Consulting, a firm devoted to helping employers and their HR leaders through the difficult process.

Taming the   M&A Beast Experts shed light on what it will take for HR professionals to become true strategic partners to top managers during mergers and acquisitions. BY ANDREW R. McILVAINE

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o you think you—and your HR direct reports—will perform stunningly well during a merger or acquisition? Well then, consider this scenario, courtesy of someone who’s managed more than 50 acquisitions at a major company: The business leaders overseeing a

merger want to retain a superstar employee from the firm being acquired. However, the salary they want to pay this person far exceeds what someone in that role normally gets at the acquiring organization. What to do? The typical HR response, says Shari Yocum, would be to tell the people at the table “No.” And that, in a nutshell, illustrates why HR—despite the vital need to retain and engage talent during the M&A process—often fails to play a strategic role during these events, she says. (To see

what Yocum thinks is the better response, read further.) Yocum should know. At Cisco Systems, she spent 11 years managing the technology giant’s HR mergers-and-acquisition practice, helping to oversee Cisco’s acquisition of big firms, such as $3.2 billion for WebEx, and even bigger ones, such as $6.9 billion for Scientific-Atlanta. She helped ensure those companies were properly integrated after the agreements had been signed, helping Cisco avoid the massive outflow of post-merger talent that undermines most M&As. Last year, Yocum and several other HR M&A veterans formed Tasman Consulting, a San Francisco-based boutique firm that consults with HR leaders at acquiring companies. The goal is to ensure the process is smooth and successful, says Yocum, a managing partner at Tasman, while providing advice that large consulting firms fail to provide. ( Yocum says larger firms typically assign inexperienced associates to consult on mergers and acquisitions.) Much of that advice revolves around taking care of the employees at the company being acquired, while helping leaders at the acquiring firm work together effectively without succumbing to the political games that can render everything dysfunctional. An HR leader who can do this successfully, says Yocum, is one who’s equally adept at people skills and business strategy. Yocum and Niki Lee, also a managing partner at Tasman and a fellow veteran of Cisco’s HR M&A team, recently spoke with Senior Editor Andrew R. McIlvaine about what it takes for HR to be a key player in a successful merger or acquisition.

“Typically, when you announce the merger, [the acquired employees are] immediately online, looking for a new job, but if you can do a few things right, you can keep them.” To begin with, why do you think so many mergers and acquisitions result in an exodus of staff and/or staff turmoil? What can HR do about it, and what might stand in the way of HR doing these things? Yocum: I think there are two categories of employees who leave. The first group are those who really value being part of a smaller company and are reluctant to be part of a bigger, more-complicated company, with all the bureaucracy and politics that entails. They want to keep being able to think outside the box, and these are often the people you want. These are the creative, innovative people— many times, they include the founders. They’re the ones who will be important in helping you build the next generation of the company’s product, and so you want them on board. HR can retain those people; the problem is, HR tends to think they’ll be gone “because we’re a big company,” but don’t let that stop you. You can section them off a bit, give them more creative freedom. How does that typically work? Yocum: It’s about not overwhelming them with bureaucracy, not forcing them to deal with the processes of your big company. It’s not necessarily keeping them in a separate organization, but giving that team a little bit of freedom to help create the next product roadmap. And you want that, because they

created this company you’ve acquired; it’s part of why you’re buying it, so slow down a bit, bring them in and let them speak up and help drive the process. Give them mentors to help them adjust to being in a big company. If you acquire a smaller technology company, section that group off and fund it separately. Set aside a budget to help them get through next two years so they don’t have to go through the corporate bureaucracy to get funding. Ideally, you’ll also let them be part of the leadership team; not railroad them, but let them help drive, let them partner. Also, put a little money in there: Some of these folks will be so critical for your company that it’s wise to take some equity and lock them in, so you’re both buying time for the new company to transition into the larger organization and also giving them an excuse to stay. Who knows, maybe they’ll like it and decide to stick around for the long term. Who should serve as a mentor to these folks? Yocum: It should really be a partner who gets the company, who has the network in this big company to get things done. That’s the person they need to work with, someone with a lot of leverage. What about the other group of employees? Yocum: The mass of the employees in an acquired company tend to be the easiest to retain, I think. Typically, when you Augus t 2 0 1 2  


Mergers & Acquıstıons

announce the merger, they’re immediately online, looking for a new job, but if you can do a few things right, you can keep them. First, let them know what is going to happen—offer a timeline of exactly what is going to transpire, and then, on Day 1, focus on getting their personal questions answered: They either have a job or not, this is what will happen with their benefits, and so on. Get those done, because you’re not going to have an effective employee until they get those questions answered.

“ ... the fur really flies [among acquired executives around] things like compensation, span of control, title [and] what they’re really going to own after the deal is concluded ... .” — Niki Lee, partner at

Tasman Consulting

Where do mistakes tend to be made in this process? Yocum: A common mistake is when HR tries to throw everything into that first step. So you’re trying to do training, having IT setting up new systems and so on. Meanwhile, these folks don’t even know whether they’re going to still be working there. So let them know right away what’s going to happen, so they can focus on doing their jobs. It’s just a good framework to have to ensure you’ll get the biggest bang for your buck, rather than spinning your wheels. With an acquisition, the faster and cleaner you can do it, the more effective you’re going to be. In terms of skill sets, what do HR leaders need to be effective in this area? Yocum: I’ve always hired people on my team who weren’t just in HR. It’s nice if they worked in other areas and bring a broader perspective. In terms of skill sets, they need to understand the business. Now, we hear that all the time, but I do tend to see HR people looking at HR as being part of the business instead of actually understanding the business. Often, they’re not thinking from

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the business leaders’ perspective, which is what you need to be doing so you get where they’re coming from and can craft solutions that meet their needs. As an HR leader, it’s critical that you be a strong networker and influencer, because getting this done requires you to understand how things actually work in the company. You need to be a strong communicator, to be able to get out there and let people know what you’re doing. And flexibility: to me, this is so critical. This is where I get frustrated. Let’s say you’re working with a business leader, trying to get a transaction done—I’ve heard them complain so many times that they’re frustrated with HR telling them they can’t do this or that. Can you give an example? Yocum: Let’s say you’re working on a merger, and HR will say, “We can’t pay this person X amount, because it’s out of the pay range.” Well, why not work to understand the driving issue, the broader negotiation, and work to solve it? The merger team has other things it’s negotiating, so find out where you can give

a little here, take a little there, and go back with a different solution. You might offer a cash bonus in this particular example, so you’re solving the merger team’s problem and doing what makes sense for the deal without undermining long-standing HR policies. That’s a person I look for when I’m staffing my M&A team, because that’s the sort of person business leaders want to work with and will get along well with. During your time at Cisco, what were some of the most important things you learned with regard to keeping things running smoothly and successfully during an M&A? Yocum: One of the foremost things was really knowing my partners and what they’re doing, everyone from cross-functional partners in finance, legal, corporate development, along with my HR partners in comp and centers of excellence. It’s about helping them understand how the process is going to work, so the more they understand what each team owns and does, the more things will be kept running


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Mergers & Acquıstıons “It really comes down to adding value to the process. ... There are so many opportunities for HR to be helpful, but you have to take time to learn this piece of the work and you’ll be amazed how [senior leaders will] pull you in.” smoothly. You need to help people understand why things are being done this way. Terminology is another thing you need to watch out for. It’s important that everyone is on the same page with regard to terminology, so people will understand what they’re responsible for and what others are responsible for, and you won’t have folks tripping over each other. Lee: It’s important that everyone on the team, including the company being acquired, be clear about the meaning behind a word. It’s important that there be clarity on these things from the outset; otherwise, you’ll find yourself in meetings where everyone at the table nods their head as if they understand, when in reality one person may have a completely different interpretation from the person sitting across from them. Can you describe for me how a successful HR department operates during a merger/ acquisition? What sort of impact will this have on employees during such an event, compared to a department that is less adept at keeping things running smoothly during this sort of event? Yocum: HR should be using the leaders of the acquired

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company as its advocates and partners. Many times, it’s easy for a big company to come in and run the show, but it’s easier, long-term, if you can let existing leaders run the show and get employees on board, and let them drive big parts of the process. It’s really easy for people at a big company to fall into the trap of thinking you know everything and run roughshod over everything the acquired company is doing or, even worse, force everyone to go through an interview process in order to determine whether they should keep their jobs. Look, you obviously bought this company because it does something that you value, so give them some trust and find ways to lead and bring on their employees. I’m not a big fan of interviewing them—you can assess them, but force them to interview for a company they never asked to work for? You may lose the best people that way. Give people the benefit of the doubt. You’ll get a lot more in the long run.

a really good leader who came up with this idea and it’s not a good one. That’s not how you treat people; it will cause a lot of harm to the organization.

The emotional-intelligence aspect of this strikes me as interesting.

Yocum: Because we’ve walked in their shoes. We will not hire anyone to work with us who hasn’t done this sort of work within a company. Having done this for 11 years at Cisco, there are many deals you live with years later on the decisions you made … . So you want people who’ve lived and worked in that environment. You want people who have a direct understanding of the political organization, because mergers in big companies are very political.

Yocum: These people didn’t ask to work for you, you bought the company they worked for. So go talk to them and establish trust. One manager I once worked with, someone I had a lot of respect for, said, “Let’s just post a list of who made the cut [from the company being acquired] and leave it at that.” It reminded me of those times in school when tests results were posted on the bulletin board and everyone crowded around to see how they did. It was traumatic. I was dismayed, because this was

Why did you decide to start this consultancy? Yocum: I loved my time at Cisco; we built so much there in doing all these big and small deals, but when we were doing these really complex integrations, we had nowhere we felt we could go to get answers to questions, no one to call when we were doing something for the first time. We worked with these large consulting firms, but they would staff our projects with their new people, and I needed a partner I could call who had been through this, who’d failed and succeeded many times. I didn’t need another pretty PowerPoint presentation; I needed to get stuff done, and I couldn’t find a person like this. In starting this firm, we want to fill that role for other HR leaders. But there are lots of consulting firms out there to choose from—why you?

Why are large deals so political? Yocum: People will come out of the woodwork, wanting to

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Mergers & Acquıstıons

put their mark on it. There tend to be a lot of big egos involved. And you have to learn how to manage that process, to let people be part of it while keeping things moving. So it’s important to get out there and understand who the real decision-makers are, and then let other people know who they are. Lee: In my experiences with smaller deals, dealing with the executives at the company being acquired can be very difficult. A lot of times you’ll see the true colors of these executives, and that is so important for the people in your company who will end up working with and managing them. It’s why it’s important for the HR business partners who will be supporting this group to be a part of these conversations because that’s when the fur really flies and you really get to see the underbelly of the beast. “When the fur really flies”— what sorts of issues tend to trigger this? Lee: Things like compensation, span of control, title, what they’re really going to own after the deal is concluded, how they want their product integrated. They’re going from making all the decisions about expenses and so on to an organization like Cisco, where everyone flies coach; no one flies first-class. So an executive who’s owned the company might say “I fly first class and so does my team,” and then on Monday, they’re flying to India on coach. That’s a big deal for them. Whereas, for Cisco, we’ve got to maintain consistency.

3 8 Human Res o urce E x e cu ti v e ®

“Relationship-building and networking are going to be critical when it’s ‘go time.’ ”

People have been talking about the importance of HR during the M&A process for quite some time. Do you feel it’s sunk in among senior business leaders?

the eventuality of an M&A during their watch?

Yocum: Yes, I think the senior leaders get it. It really comes down to adding value to the process. An HR leader who just sits there and only focuses on the HR picture is not adding value to the process. HR gets this amazing opportunity to be influential, and there are so many pieces there that are HR components: How many people are you locking in, what are you doing with equity, how will employee benefits change? There are so many opportunities for HR to be helpful, but you have to take time to learn this piece of the work and you’ll be amazed how [senior leaders will] pull you in; they have confidence that this is your area and you know it. Don’t just think about the HR side. So much more could be involved.

Yocum: If they’ve done it before, they should go back and create a playbook. They don’t have to spend ridiculous amounts of money, but just take the time and put it together so it’s usable. Create a repeatable process so everyone will understand what their responsibilities are. Map out who your partners are and what they’re responsible for. Know that people in certain areas, such as legal and finance, are going to be critical, so build a relationship with them now so they know who you are and trust you. Relationship-building and networking are going to be critical when it’s “go time.” Also, if you’ve done this before, create some on-demand training that captures the critical knowledge you’ve gained so others can view it. Create templates that can be used over and over again.

What are some things HR leaders should do to plan for

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Employment Law

Discrimination Deluge

EEOC claims are on the rise. Discover what you need to know to help your company rise above them. BY MELANIE V. PATE


ast year was a record-breaker for the U.S. Equal Employment Opportunity Commission. But not the kind that culminates with high fi ves and chilled champagne. Are you sitting down? The EEOC had 99,947 discrimination charges fi led nationwide in 2011—the highest ever. Here’s the breakdown: Race filings, 38 percent. Gender, 28.5. Disability, 26 (its most to date, in large part due to the Americans with Disabilities Act Amendments Act of 2008). National origin, 12. And a staggering 37 percent of the aforementioned filings included retaliation claims (also the largest ever.) The statistics are sobering enough, but it is the trends that paint an even more alarming picture

4 0 Human Res o urce E x e cu ti v e ®

for employers. While race and gender charges have remained at basically the same levels over the last 10 years, there’s been a spike in the number of disability, age, religion and national origin cases— with the biggest increase seen in retaliation claims. The job market may be tough, but it seems corporate culture is becoming just as formidable. Now, the good news. As challenging as the times and labor relations may be, there are effective ways to overcome an EEOC charge levied against your organization. Here then, are strategies and solutions for responding promptly, thoroughly and effectively to such a claim, regardless of the allegation.


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Employment Law Summon Your Inner Sherlock Before you can respond to the EEOC, you need to figure out exactly what events transpired. This means conducting a thorough internal investigation. Whether you use legal counsel or not, the investigation should include extensive interviews with all relevant witnesses, including: managers, supervisors, decision-makers, coworkers and anyone in your HR department with knowledge of the situation. During the inquiry, you’ll also want to examine all pertinent documents. Not just the personnel file of the charging party (the person making the complaint), but also the files of others involved. Be sure to go over the applicable personnel policies and procedures and gather all signed acknowledgment forms since this builds credibility for your defense. Finally, collect and review any grievance files, internal complaints and other related materials involving the charging party.

A Winning Position Statement Preparing a well-drafted position statement that is clear, concise and complete should be your primary goal since it will be shared by all parties—such as upper management within your organization, the charging party, attorneys and EEOC representatives— and, if the investigation leads to litigation, could be used as evidence. Crafting a winning positioning statement consists of four key facets: a strong introductory denial statement, a chronological factual background, legal arguments and defenses, and a request that the charge be dismissed. Strong denial statement. Start with a strong introductory paragraph that denies any discrimination or retaliation and provides a brief summary of the company’s position. For example: “This letter responds to the charge of discrimination filed on (date) by (name of charging party) in which the charging party alleges he/she was discharged because of (sex, race, age, religion, etc.). The company strongly denies the charge and maintains that there is no evidence to support the allegations. As explained in further detail below, the charging party was discharged because of (stealing, excessive tardiness, poor performance, etc.), and not because of his/her (sex, race, age, religion, etc.).” Here’s an example of what you don’t want to say, as taken from an actual position statement submitted to the EEOC: “The company did not discriminate against the charging party. It was his co-workers.”

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While this may seem like a simplistic and comical example of what not to say, these are exactly the types of admissions that raise immediate red flags for an EEOC investigator. Factual background. Since the EEOC investigator probably knows little or nothing about your products and/or services, some background information will provide helpful context and build your case for the action that was taken. For example, if the company offers a courier service where delivery is expected at certain times and a driver was fired for excessive tardiness, the background information will help the investigator understand why excessive tardiness could not be tolerated by the company. Put together a comprehensive summary of your company’s EEO policies that are distributed to employees. This demonstrates your commitment to a workplace free of harassment and discrimination. We definitely recommend providing a copy of the policy acknowledgement form signed by the charging party. Explain the charging party’s employment history in chronological order, including all facts that are related to your defense of the charge. Describe the reasons for the company’s actions by addressing each allegation and leaving no questions unanswered. An unanswered question or issue leaves the door wide open for the EEOC investigator to request more information than the company may wish to provide. Legal arguments and defenses. Provide evidence of consistent past decisions that demonstrates non-discrimination. To disprove a charge of discrimination, explain why employees with similar situations or protected characteristics were or were not treated the same way as the charging party. Here, it is also helpful to include demographics of the company’s workforce. As you coordinate a response, remember that EEOC investigators are generally not attorneys. While they will pay some attention to legal citations that you or your attorney include in the position statement, it is likely they will be more receptive to references to the EEOC Compliance Manual as additional guidance. Request that the charge be dismissed. Wrap up your position statement with a firmly stated conclusion that the charging party’s claim is not valid and that the company acted fairly. Remember to request that the charge be dismissed. There you have it—the four pillars of a winning position statement. When you’ve finished writing it, make sure to carefully scrutinize what you have compiled for accuracy and completeness (and to ensure that you used respectful language when referring to the charging party). Lastly, before sending it to the EEOC, have key managers involved

with the events review the position statement to ensure it is persuasive, comprehensive and (above all) accurate.

involving discrimination are usually included in that category. Failing to inform your insurer could lead to a denial of coverage.

The Seven R’s of Success

Merits of Mediation

Beyond the four pillars of the winning position statement, we recommend following these seven guideposts during your involvement with the EEOC: Respond to the charge with confidence and courtesy. It’s no walk in the park to have a charge filed against your company, but embrace the opportunity to explain your side of the story. While a charge does not mean that the EEOC has determined your company or an employee engaged in discrimination, it does mean there is some basis for an investigator to look into it. Be firm on important points, but remember to always be considerate. Good relationships with the investigators and agency personnel can be crucial to the final determination or outcome. And remember, if EEOC officials ask for information and you don’t give it to them, they can (and likely will) subpoena it. Review all EEOC paperwork carefully. Make sure you understand what is asked of you and only submit what is required. You will likely be asked to respond to a request for information that could require you to supply copies of personnel policies or files and other relevant information. If you think the RFI is too broad, talk to the investigator about narrowing the scope of the request. He or she will appreciate that you are willing to talk about the request rather than refusing to provide a reasonable amount of information or otherwise disregarding the request. Request to preserve all relevant documents. Issue a litigation-hold notice to all of the relevant staff as soon as you receive the charge. This may require contacting your IT director to avoid routine purging of emails, voicemails and Internet-usage records. Remind supervisors about avoiding retaliation. If the charging party is still employed, ensure that no retaliatory action is taken. Remind managers, supervisors and anyone else involved with the allegation about the company’s anti-retaliation policy. Restrict access to maintain confidentiality. Sharing information about the charge should be on a strictly need-to-know basis. Instruct key personnel that they should only discuss the matter with you or the person coordinating the response. Recognize that you might need help. Consider whether to respond to the charge yourself or if you should consult with an attorney who specializes in employment law. Once you designate the company’s point of contact, share the information with the EEOC. React proactively by notifying your insurer. Policies often require prompt notice of claims and charges

At the start of an investigation, the EEOC investigator will let you know whether the charge is eligible for in-house mediation, at no charge to either party. Mediation is an informal resolution process and is usually completed in one session that generally lasts one to five hours. It is entirely voluntary and both parties must agree to participate. Early mediation can provide a faster and cheaper resolution by avoiding a lengthy investigation and possible costly litigation.

“[In] mediation ... you can retain some control over the outcome ... . If mediation leads to an agreement, the EEOC will close the file.” Another advantage of mediation is that you can retain some control over the outcome, including obtaining a global release of all potential claims against your company. If mediation leads to an agreement, the EEOC will close the file. So that’s the quick lowdown on how to respond to an EEOC charge. Our hope is that your company will never receive a charge. But as claims continue to grow across the country, so do your chances. If, indeed, an EEOC investigator contacts you for information, make every effort to respond quickly, accurately and thoroughly. Being helpful and professional from the start can make all the difference in the final outcome and will guarantee you a higher chance of having the EEOC say your favorite phrase: “Charge dismissed.” Melanie Pate is a partner at Lewis and Roca in Phoenix and works with HR leaders and in-house counsel to resolve complex employment issues. She can be reached at mpate@ Send questions or comments about this feature to Augus t 2 0 1 2



Disruptive HR The future of the human resource profession may well depend on the abilities of its leaders to adopt innovative and entrepreneur-like approaches to its practices. BY RICHARD J. ANTHONY SR.

4 4   Hum a n Re s o urc e E x e cu ti v e ®


ake a minute to search “disruptive HR” on the Internet. You won’t find a single reference to how the HR function or HR professionals are taking disruptive initiatives to add value to the organization, its constituents and to the bottom line. Hard to imagine, after all the years that HR professionals have been seeking the path to greater respectability as credible members of the management team, that someone wouldn’t have coined the phrase disruptive HR to describe

the solution. So, I’m claiming the right of first mover. Curious, too, that the most common synonyms for disruption are all negative: troublesome, troublemaking, unruly, disorderly, unsettling, upsetting and disturbing. In the entrepreneurial world, where I spent a good bit of my time, disruption is laudably synonymous with innovation, transformational change, displacement of the old with the new (products, processes or technologies) and creating new markets for goods and services. In that context, disruption is a virtue to be encouraged and rewarded. The standouts who win against the odds are those who execute strategies that take solutions to a higher level, out of the realm of the tried and true, conventional, safe options usually employed by most people.

Come a Long Way

Three-quarters of a century ago, what we now call human resource management, talent management or people management had the brawny title of industrial relations. It was the era of the emergent—and often strident—organized labor movement. Then came personnel administration, which garnered a bit more stature as a management function, but was used by many employers as a buffer between management and employees. I still recall, as a young consultant, the pungent smell of formaldehyde emanating from the basement research laboratory adjacent to the personnel departments of hospitals; the unremarkable personnel offices located in remote corners of manufacturing plants or otherwise sequestered on the sidelines of most businesses. Today’s human resource management function enjoys relatively more stature in the corporate hierarchy and is an amalgam of skills, functions and specialties that are gradually being transformed by technology. Indeed, in some cases, being replaced by technology. HR in a box. Given the challenges employers face today and for the foreseeable future, it’s time for more HR professionals to be disruptive—to replace the conventional ways of managing human capital with innovative approaches that are measured in outcomes, not just output. Over the past 25 years, I have pursued dual careers. As a consultant specializing in organization effectiveness and performance improvement, I have been retained by some of the largest and the smallest

companies in the land, across all major industries. As an angel investor and entrepreneur, I have worked with scores of aspiring and serial entrepreneurs and have partnered with many of them to push their fledgling enterprises beyond the gravitational pull of failure. The fusion of the two parallel careers has provided a special, if not unique, perspective on the caliber of HR practitioners many organizations need to compete successfully in an increasingly volatile, ruthlessly competitive environment.

Components of the Concept As with any venture, disruptive HR begins with an attitude, guided by keen judgment and enabled by core competencies applied to a set of processes to achieve specific, measurable outcomes. The requisite core competencies include: • Inquisitiveness and remaining open to new and better ideas, • Critical thinking and the ability to quickly discard irrelevant information, • Foresight to see the likely outcomes of various courses of action, • Communication skills and the ability to engender excitement and confidence, • Business acumen and a strong desire to continue to learn about the fundamentals of starting and growing a business, and • Attracting and collaborating with others to execute an action plan. The analogy for HR is the successful entrepreneur who is fanatically results-driven. Entrepreneurs live or die by their ability to create momentum and sustain it until they reach key milestones, whether it’s

developing and proving the concept, raising money or hitting revenue targets. Serial entrepreneurs see every setback as a learning opportunity, as markers on the path to eventual success. The word failure is not in their vocabulary. Disruptive entrepreneurs are agile because they have to adapt to changing circumstances quickly. They are visionaries because they have to foresee market trends and anticipate threats. They are courageous because they have to

“ ... it’s time for more HR professionals to ... replace the conventional ways of managing human capital with innovative approaches that are measurd in outcomes, not just output.” be prepared to bet everything on their instincts, even in the face of opposition from respected, well-intentioned nay-sayers. They have to be collaborators because they know they need the talent and dedication of others who have complementary skills and experience. And they are astute risk-takers who are able to quickly calculate the odds and devise a plan to manage—not necessarily eliminate—the down side risk.

Seize the Day The continual mantra that HR must shift from low-value transactions to higher-value strategy, combined with the nation’s obsession with entrepreneurialism, creates an exciting opportunity for HR professionals to apply the principles and techniques of Augus t 2 0 1 2


Innovatıon disruptive entrepreneurship to the management of human capital. In the truest sense, it’s time to partner with other resource managers to create a competitive advantage in a fiercely competitive, rapidly changing environment. The question is, Should HR professionals put themselves and their jobs at risk by adopting disruptive approaches to managing human capital, especially in a soft economy and a protracted period of cost reduction and cost control? I believe that, for many, the answer is a resounding yes, or face replacement or extinction. I am not advocating recklessness or vocational suicide. Not every organization is a candidate for disruptive HR, nor does every HR practitioner have the instincts or desire to be a risktaker. For those who are inclined, there is an approach successful disruptive entrepreneurs follow that HR professionals can emulate. First, plan the work: • Identify a specific need (causes or symptoms) within the organization requiring an innovative solution. • Gauge senior management’s willingness to invest in an innovative solution that addresses the cause(s), not the symptoms. • Define the resource requirements and assess the competition within the organization for the resources required to develop and implement an innovative solution. Don’t compete for resources. Be creative in thinking of ways to share limited resources. • Calculate the return-oninvestment using reasonable assumptions and accepted financial models. • Determine the probability of success and develop a contingency

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“I have found that the two most powerful sentences in building bridges and relationships are ‘Help me understand’ and ‘How can I help?’ ”

strategy if key milestones are not met. • Define success beforehand and get agreement on the metrics that, when met, will be accepted as a win. Keep an open mind about whether HR will continue to own the project, facilitate a handoff to another function or department, or outsource when policies and procedures are in place. Second, work the plan: • Prepare a concise executive summary using a format similar to the templates entrepreneurs use to introduce a concept and make the case for its viability and funding worthiness. • Prepare a business plan— again, using a format familiar to the other members of the management team. • Raise capital (i.e., build alliances with internal support/ investors). • Consistently monitor and report progress against milestones. • Be prepared to adapt to changes in circumstances and recalibrate based on new information. An important point made previously is that disruptive HR begins with an attitude. Here are some tips on how to develop and nurture a disruptive attitude. • Take the blinders off and get out of the human resource space periodically by attending meetings in your industry

unrelated to HR and by making a special effort to learn about other management functions (I have found that the two most powerful sentences in building bridges and relationships are “Help me understand” and “How can I help?”). • Follow the trends in healthcare, economics, technology, social sciences and world affairs. • Learn to use analytics to guide decision-making. • Create a learning environment by requiring your staff to keep learning. • Encourage and reward initiative and innovation. My hope is that some time soon, I will see a seminar, web cast, conference, book or keynote speech with the title How HR Can Take Its Seat at the Management Table: A Guide to Disruptive HR. Richard J. Anthony, Sr., is founder and managing director of The Solutions Network Inc., a Rockville, Md.-based company specializing in organization effectiveness and performance improvement, and author of Organizations, People & Effective Communication. He is a member of the faculty at Villanova University, where he is also Entrepreneur in Residence at the Center for Innovation, Creativity and Entrepreneurship. Send questions or comments about his piece to hreletters@

Products &


Compiled by Michael J. O’Brien

Social Feedback for TM

Halogen Software released Halogen Feedback Central, a new product enhancement to the Halogen Talent Management Suite. The enhancement is intended to combine traditional and new, more social methods for gathering employee feedback and aggregating it for use across all talent functions. It is designed to allow organizations to deliver and aggregate feedback from managers, peers, HR teams and customers and suppliers. It is also designed to address all types of feedback, including journal notes, coaching and observations. Halogen Feedback Central is also designed to link appropriate feedback to all other talent processes, including performance reviews, succession, goals, training and development, etc., as well as enable organizations to crowdsource employee feedback. Price varies. Halogen Software, Ottawa, Canada

Managing Tuition Assistance Plans

EdLink introduced EdLink Direct, a web-based tuition-assistance administration service to aid employers in managing their tuitionreimbursement plans. Features include: secure, cobranded tuition-assistance website for employees to access 24/7; administrative interface to administer program and monitor employee activity; comprehensive reporting package on program usage, education and courses of study. EdLink Direct also has configuration options designed to support tuition programs as well as regular and automatic updates to the service. Other features include: access to EdLink Learning Center resources and discounts on education and related services; and customer and technical support via email. Price varies. EdLink, Chicago


Expat Management

HRToolbox has released a series of new tools—Professional Toolbox, Total Toolbox and Enterprise Toolbox— designed to help HR leaders meet the challenges of managing a global workforce. The tools are designed to replace the spreadsheets used by many in global HR and solve common assignmentmanagement issues pertaining to global payroll accumulation and compensation and workflow management. The new tools include: Demographic and Assignment Management, a centralized database for tracking expatriate demographic and assignment data; Compensation Management, designed to allow users to create company compensation templates and employee balance sheets with direct access to a company’s data tables or those from a compensation data provider; and Global Payroll Accumulation, designed to automate common activities such as payment extracts and recurring payments. The new tools also allow organizations to track employee travel days in various countries via a webbased calendar, create custom reports and upload and store documents pertaining to employee demographics, assignment and compensation information in a global HR database. Free 30-day trial. HRToolbox, Atlanta and_pricing.html

A Wellness ‘Pebble’

FitLinxx, a provider of health and wellness technology, has released the Pebble, designed to be an all-day wireless activity monitor that motivates people to be active throughout the day.

Designed for use in corporate wellness programs, the Pebble is clipped to an individual’s shoe or waistband and uses patented algorithms to collect activity data. It’s designed to track the number of steps taken, calories burned, distance traveled and total activity time, and to work across multiple activity types. Price varies. FitLinxx, Shelton, Conn.

Training for ‘Crucial’ Conversations

VitalSmarts has released the fourth edition of Crucial Conversations Training, designed to equip learners with highleverage skills to improve dialogue and relationship-building. The two-day training course is based on approximately 10,000 hours of research examining thousands of opinion leaders in team meetings, highstakes discussions and face-to-face confrontations. Crucial Conversations 4 includes the following new features: 62 original videos including updated videos from previous editions and new videos that reflect today’s workplace challenges; an updated model that has been reformatted into a step-by-step process; Robust Skill Rehearsals, in which participants practice specific skills in the context of their real-life crucial conversations, while getting feedback from a coach; and streamlined and revised content through reduction of redundancies. The new VitalSmarts Instructional Platform (VIP) 2.1 is designed to enable trainers to train all four courses from one platform, suppress slides and create custom tracks. A new post-training tool is designed to enable participants to receive a free, one-year subscription to the online behavior-change platform, www. Price varies. VitalSmarts, Provo, Utah Augus t 2 0 1 2


People Kathleen S. Barclay, senior vice president of human resources at Cincinnati-based Kroger Co., was elected chair of the board of directors of the National Academy of Human Resources. She was inducted into the NAHR in 2000 and has been a director since 2003. As chair of the NAHR, Barclay succeeds Mirian Graddick-Weir, executive vice president of human resources at Merck. Before joining Kroger, Barclay was vice president of global human resources at General Motors Corp. from 1998 to 2009. The National Academy of Human Resources, Longboat Key, Fla., recognizes individuals in human resources for exceptional professional achievement by election as Fellows of the NAHR. Philadelphia-based Big Brothers and Big Sisters of America named Mary Flores its vice president of human resources. Prior to this position, she spent the past seven years as vice president of human resources at Big Brothers Big Sisters Lone Star in Texas. A certified Senior Professional Human Resources Professional, she began her career in human resources at The Nasher Co., a Dallas real estate-development and propertymanagement firm. She earned a bachelor’s degree in business administration from the University of Wisconsin Oshkosh. Dublin, Ireland-based XL Group appointed Eileen Whelley its executive vice president and chief human resource officer. She reports to XL’s Chief Executive Officer Michael S. McGavick and serves on the company’s leadership team.

4 8   Hum a n Re s o urc e E x e cu ti v e ®

Compiled by Michael J. O’Brien Since 2006, Whelley served as executive vice president of human resources for The Hartford Financial Services Group. Prior to her time at The Hartford, she spent 17 years at General Electric where she held a number of human resource leadership roles, including serving as executive vice president of human resources at GE’s NBC Universal subsidiary from 2002 to 2006. Before joining NBCU, she was vice president of human resources excellence for GE Capital. Before that she served in a variety of HR leadership roles at Employer’s Reinsurance and at GE’s corporate headquarters. Prior to GE, Whelley worked for Citicorp and Standard Oil of Ohio in a number of HR roles. She is a graduate of Potsdam College and has a master’s degree from Bowling Green State University. Donna Szarwark, senior vice president of human resources at Cincinnati-based FRCH Design Worldwide, was appointed a principal of the company. She is already a member of the company’s executive committee. Szarwark has spent the past 14 years with FRCH. She previously served as director of human resources at Pierre Foods. She is a registered corporate coach, is Myers-Briggs certified and holds a degree in psychology from the University of Kentucky. Inc., headquartered in Mountain View, Calif., appointed Michele Murgel as its new vice president of human resources. She most recently served as executive HR consultant for Zappos. com, focused on employee

engagement, leadership development and strategic planning. Prior to her tenure at Zappos, Michele was at Threewave Software Inc., where she served as an executive human resource consultant for the fastgrowing game-development studio. Before that, she held HR leadership positions at Macromedia and Alias Research. She received a graduate degree in retail business from Humber College and a bachelor’s degree from the University of Toronto at Mississauga—Erindale College. Charlotte, N.C.-based FairPoint Communications promoted Greg Castle to executive vice president of human resources. Prior to joining FairPoint in 2011, he was president of Castle & Associates for seven years, during which time his clients included U.S. Cellular, R.H. Donnelley, The Carlyle Group and McKinsey and Co. Castle’s past experience also includes positions as senior vice president, corporate human resources at Orius Corp.; vice president of human resources at Exelon Corp.; and vice president of corporate labor relations at Ameritech Corp. Castle holds both a Ph.D. and a master’s degree from Northwestern University in educational management, human resources and industrial relations. Sheryl Anderson has been promoted to executive vice president of HR and administration at Englewood, Colo.-based Starz Entertainment, a cable-television network. Anderson is a 20 -year veteran of Starz. She is also a longtime board member of the Cable Television Human Resources Association. Prior to Starz, she worked at TeleCommunications Inc., United Cable and United Artists Communications.

By The


Factoids from the workplace and beyond 359.1 million

Total number of Chinese citizens employed in 2011 among its working population of 764.2 million. Ministry of Human Resources and Social Security in Beijing, China


Approximate number of foreigners with


Job seekers ages 55 and older accounted for this amount of the employment gains since Jan. 1, 2010.  Challenger, Gray & Christmas Inc.


Healthcare spending in the United States is expected to grow at this historically low rate in 2013.  PricewaterhouseCoopers


work permits in China.   Ministry of Human Resources

Percentage of 450 workers with military backgrounds surveyed who agreed with the statement “People assume I will have problems with corporate culture.”  The Ladders

and Social Security in Beijing


The 2012 average pay-increase percentage for workers in the services industry, reflecting a slight uptick from 2.4 percent reported in 2011 and 2.2 percent reported in 2010.  Compdata Surveys


Percentage of 516 North American employees who answered “It’s who you know,” when asked “What does it take to get ahead in your organization?” This is higher than both job performance (39 percent) and tenure (4 percent).  Right Management


The Employee Confidence Index for May 2012, down from a four-year high of 55.5 in March.  Randstad

2.78 million

The average number of temporary and contract workers employed by U.S. staffing companies per day during the first three months of 2012.  American Staffing Association

Compiled by MICHAEL j. o’bRIEN


Men (20 percent) who are somewhat more likely to express concern for their boss’ health, compared to 15 percent of women.   Healthy Companies Intl.


Percentage of 205 unemployed workers who believe they can find a job matched to their experience and compensation level in the next six months—an all-time high since Q1 2009 and an increase of 6 percent compared to Q1 2012.  Glassdoor


In a survey of 4,000 employers, the percentage that say they will continue to wait on taking action regarding healthcare reform until after the November elections, even after the U.S. Supreme Court’s recent ruling.  Mercer

Augus t 2 0 1 2  


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