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Human resources industry group makes a difference Page 78
Prescription for profit
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The transformation of human resources
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ARIZONA SOCIETY FOR HUMAN RESOURCE MANAGEMENT
AZSHRM
makes a
difference for human resources and business leaders
T
he Arizona Society for Human Resources Management (AZSHRM) is an affiliate of the Society of Human Resources Management (SHRM). AZSHRM is strictly a volunteer organization comprised of the Arizona State Council in support of seven local state chapters with approximately 1,200 members in Phoenix (SHRM-GP), Tucson (SHRM-GT), Yuma (SAHRA), Casa Grande (CAHRMA), Prescott (PAHRA), Kingman (NWAHRA) and Flagstaff Sonja Talley (NAHRA). We are the Human Resources trusted resource to engage, 76
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educate and advocate for all Arizona HR professionals and the business community at large. We are the difference makers and leaders who support Arizona business and organizational success. The AZSHRM State Council and its chapters are engaged in workforce development, college relations, diversity initiatives, government affairs (both local and national), HR certifications, communications, awards and recognition of Arizona HR professionals; and educational scholarships through our foundation. Our workforce development initiatives partner with Junior Achievement (JA) and look to bridge the skills gap of our workforce. Our diversity initiatives partner with the Diversity Leadership Alliance (DLA) in collaboration with the Diversity Leadership Awards. Government Affairs is active with providing guidance and initiatives to both our Arizona legislators and
on Capitol Hill. Our college relations area supports our student chapters, developing our future Leaders in HR. Our awards and recognition volunteers drive recognition for three distinguished HR awards: the Judith Krebs Volunteer of the Year Award, the Ann Byrnes Professional Excellence Award and the Al O’Connor Lifetime Achievement Award. All three awards are unveiled each year during our phenomenal annual conference. In addition, AZSHRM partnered with the When Work Works institute (WWW) and hosts an annual When Work Works, workplace flexibility award breakfast. AZSHRM holds four educational events each year for our HR and business community. • The Employment Law and Legislative Conference is dedicated to helping HR professionals stay on top of recent court decisions, regulations, and newly enacted legislation that are critical to professional development and to company’s success. The conference focuses on the latest legislative issues pending at the local, state and federal level. • Advocacy Day at the Arizona Capitol provides a unique opportunity to learn about imminent legislation in our own state and also to meet face-to-face with our legislators to discuss and advise on pertinent topics affecting employment
Arizona Society for Human Resource Management Mission: AZSHRM is the trusted resource to engage, educate and advocate for human resources professionals. Objectives: • Prepare and educate practitioners and leaders • Recognize excellence in the profession • Act as thought leaders in HR and business strategies • Appropriately influence state legislation and legislators • Support and promote SHRM state chapters and memberships • Establish outstanding statewide HR conferences
2016 AZSHRM award winners: Al O’Connor Lifetime Achievement Award: Gail Perry
Perry, MS, SHRM-SCP, SPHR, ACC, is principal with Gail Perry Coaching and Consulting, LLC. In a career spanning 40 years, she has served as chief human resource officer in a variety of industries, including hospitality, healthcare, government and academia. Her dedication to advancing the human resource profession and the careers of Gail Perry HR professionals has been demonstrated through volunteer leadership at the chapter, state and
law and business operations. • AZSHRM’s annual conference, in its 22nd year, is focused on cutting-edge education and practices for HR professionals and business leaders. It is the largest HR conference in Arizona, drawing upwards of 1,200 attendees. • New in 2016 is our When Work Works Flexibility Awards Recognition Breakfast. This event celebrates local companies who practice workplace flexibility. We hope you will join us and learn how you can implement some of these practices. The event will be held at the Arizona Biltmore on October 12. Visit azshrm.org for more information. AZSHRM strives to be the trusted leader by providing HR expertise to achieve a sustainable competitive advantage for local chapters and the employer community. Human resources professionals touch on all issues that impact an organization’s most valuable asset – its employees. HR professionals provide administrative, business, and strategic support by partnering with business leaders to create a sound 21st Century workplace that is innovative, fair and competitive. Sonja Talley, MA, SHRM-SCP/SPHR, is the state director of AZSHRM and principal of CORE HR Solutions, LLC.
regional levels, including having been the only professional to have served as Arizona SHRM State Council director twice (1989 and 2014-2015). Perry has mentored countless HR professionals, especially students and emerging leaders.
Ann Byrnes, SPHR Award for Professional Excellence: Bruce Gardner
Gardner has always been passionate about human resources and has worked in the profession since 1994, all of it in the public sector. In 2007, he was selected as the human resources director for the Town of Queen Creek, but now serves as the assistant town manager. Gardner received his bachelor’s degree in business Bruce Gardner management and a master’s in public administration from ASU. From a volunteer basis, he most recently served as the Western Region president of IPMAHR, is active in the Boy Scouts of America and a staunch supporter of the United Way.
Judith Krebs, PHR Memorial Volunteer of the Year Award: Terrie Naylor
Terrie Naylor
Naylor is a human resources generalist for Kingman Hospital, Inc. At work, she enjoys working with her business partners as they find the strategies to address a variety of business and employee needs. After hours, you will find Naylor volunteering her time throughout the community. No task is too small, if it makes life a little better for someone else.
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AZSHRM
Prescription for profit Workplace wellness initiatives can improve morale, reduce turnover and absenteeism and boost your bottom line By MICHAEL GOSSIE
O
n-site running track. On-site fitness center. On-site health clinic. On-site personal trainers. It sounds like an Olympic training facility, huh? Think again. “As an employer, it’s important to make health a priority,” says Steve Bayans, vice president at Discover
HEALTHY BUSINESS: Discover Financial Services’ Phoenix facility includes a fitness center, health clinic, running track, personal trainers, exercise classes, fun runs and occasional workplace “stretch breaks.” PHOTO BY MIKE MERTES, AZ BIG MEDIA
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Financial Services, whose Phoenix facility boasts all the amenities mentioned above. “If employees see the company making health a priority, hopefully, they make health a priority. And since we’ve launched our wellness initiatives, we’ve seen attrition decrease and attendance increase.”
Steve Bayans
Doris Savron
Naomi Cramer
Jennifer Ward
Jim Darnell
Greg Wells
years,” says Greg Wells, vice president of human resources and employee development, Blue Cross Blue Shield of Arizona. “In recent years, we’ve accelerated our efforts. Like other companies, we face rising healthcare costs. A large portion of the rising costs are avoidable and are due to lifestyle choices. A culture of health requires accountability of both the employer and the employee. From subsidizing healthier food in our cafeteria to tying behavior modification programs
to incentive pay to getting our executives involved in leading (fun and competitive) employee health challenges, wellness is an integral part of being a great place to work.” Beyond wellness initiatives and on-site clinics, Jim Darnell, vice president of business development and sales, Vera Whole Health, says he’s seen companies let their employees leave any time of day to go work out for an hour vs. a traditional lunch break, pay for gym memberships, take out unhealthy vending machines and replace them with healthy options and other innovative initiatives. “I believe we are on the edge of this becoming more normal than unusual as employers innovate to create a healthy environment in the workplace,” Darnell says. The bottom line With illness-related absenteeism costing employers $225 billion annually in lost productivity, there is a strong business case for taking action to improve employee health and well-being, according to Doris Savron, executive dean of the College of Health Professions at University of Phoenix. “America’s competitiveness relies on better health for its citizens,” said Marc DeCourcey, senior vice president of the U.S. Chamber of Commerce Foundation. “The money we spend on poor health depresses wages, reduces profits and diverts money from other investments, further accelerating poor health outcomes.” But tying good health and good business is not necessarily a positive approach from a human resources standpoint. “One of the most challenging issues in HR is a lack
What can you do? What advice do experts have for a company looking to implement wellness initiatives? Naomi Cramer, senior vice president and chief human resources officer, Banner Health: “Create an employee-focused program that clearly answers the ‘What’s in it for me?’ questions and then focus on the business impact/value of that work. I would continue to broaden the definition of well-being as the next generations evolve into the workforce. “ Jim Darnell, vice president of business development and sales, Vera Whole Health: It depends on the goal of the company.
Some companies say the value on investment (VOI) is worth the expense to recruit quality candidates even if there is not a return on investment (ROI), or they just want to do something, even if only a small percentage participate. On the other hand, if launching wellness is to create lower healthcare costs with an ROI, the company should look for vendors with a track record of driving high engagement levels and ROI measured against claims, not soft costs.” Jennifer Ward, SPHR, SHRMSCP, attorney with the Arizona Regional Office of Mountain States Employers Council: “Focus on employee wants
and needs. For example, employees who don’t embrace technology won’t use wearable activity trackers. Most employee populations are diverse, with different ages, genders and fitness levels. Offer a variety of wellness options to include more employees rather than trying to design a single solution.” Greg Wells, vice president of human resources and employee development, Blue Cross Blue Shield of Arizona: “Start with the leadership team. When leaders from around the organization understand the “why” behind wellness and agree on a focus, change can happen quickly.”
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AZSHRM According to the 2014 Society for Human Resource Management (SHRM) Strategic Benefits Survey, employers report that their workplace wellness initiatives resulted in a 72 percent overall reduction in healthcare costs. But beyond lower healthcare costs, companies that make an effort to encourage their employees to live a healthy lifestyle are seeing a positive impact on recruitment efforts and a healthier bottom line. “Improved employee wellness can help reduce medical insurance claims and premiums,” says Jennifer Ward, SPHR, SHRM-SCP, an attorney with the Arizona Regional Office of Mountain States Employers Council (MSEC). “MSEC’s most recent Health & Welfare Survey of Arizona members showed that they spent an average of $7,604 per covered employee on medical costs. An effective wellness program can generate savings in that area.”
What’s happening? According to a 2015 SHRM Foundation executive briefing, research shows that the health status of employees directly influences their work behavior, attendance and on-the-job performance. Therefore, improving employee well-being will result in a more productive workforce. So, what are companies doing? “Programs that incorporate the latest technology and make wellness convenient are growing in popularity,” Ward says. “Some employers are offering wearable activity trackers and using them to create incentives for employees to get active and encourage each other. Others are bringing classes into the workplace (like MSEC’s Office Yoga program.)” Experts say wellness takes on a different meaning and wellness initiatives take on different shapes in every organization. “We have been cultivating a culture of health for
5 ways to cut healthcare costs According to a SHRM Foundation study, these are the five vehicles for strategically driving highperforming health and work behavior outcomes, thus containing healthcare costs: • Create an organizational culture that promotes health and wellness. • Ensure polices enhance employee health and productivity. • Offer incentives that motivate employees to engage in healthy practices. • Create wellness programming that includes customized employeecentric health programs. • Integrate HR functions with employee wellness and work-life quality initiatives.
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AZSHRM
of employee engagement, which can stem from the perception that the company only values employees for their effect on the bottom line,” Ward says. “A wellness program that meets employee needs can contribute to a culture that emphasizes individual employee value.” The “Healthy Workforce” panel at the University of Phoenix’s Health Means Business Forum identified three ways businesses can best incorporate a culture of healthy living and promote wellness initiatives within their organization: • Secure leadership buy-in, including showing the numbers that support taking action steps toward a healthier workforce. • Find ways to encourage workforce health. • Take inventory of what is happening in the organization and pick one thing to build upon while understanding that it can take several years to build a viable program. “If an organization embraces wellness in all its forms, it provides ways to diversify benefits in many low cost/ no cost ways, which differentiates one organization from another,” according to Naomi Cramer, senior vice president and chief human resources officer at Banner Health. “Millennials and the younger generations are drawn to organizations that embrace such a broad definition of wellness. Ultimately, you become a preferred workplace when the competition for great employees might be fierce.” 82
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What’s next? Whatever shape a company’s wellness initiatives takes, Wells believes wellness will force employees and employers to be more accountable in the future. “The company must offers programs, tools and resources to help employees, but employees must be responsible for learning about what is available, taking advantage of them and working toward better health,” he says. As the world continue to evolve outside of the workplace, experts expect wellness in the workplace to evolve and change with the world outside the cubicle. “As technology continues to erode the boundaries between work and private life, I believe people are looking for more creative ways to maintain a balanced and healthy life,” Cramer says. “In some progressive companies, wellness is part of their everyday interactions. It expands beyond health, it moves more actively into the community, financial, social and career aspects that holistically matter to an individual in different ways.” But experts insist the value of a healthy workplace cannot be understated. “A healthy economy thrives and grows when its population is healthy, and business leaders have an immense opportunity to promote health in their organizations and positively impact the intrinsic link between good health and good business,” Savron says.
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AZSHRM
The
transformation of HR
What are the issues and trends that are changing the way human resource professionals do business?
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By MICHAEL GOSSIE
T Jodi Bohr
Larry Hofer
Stephanie Quincy
Kevin Salcido
Jeffrey W. Toppel
he legalization of marijuana, technology, telecommuting, employee pay disclosure, whitecollar overtiem, the war for talent. There are countless issues and trends that are changing the way human resource professionals do their jobs. Az Business assembled experts in the HR arena for a roundtable discussion on what business leaders can expect and how business leaders should react to changes that are coming in human resources. The roundtable panelists are: • Jodi Bohr, shareholder, Gallagher & Kennedy • Larry Hofer, regional vice president-human resources, Cox Communications • Stephanie Quincy, partner, Quarles & Brady LLP • Kevin Salcido, vice president of human resources and chief human resources officer, ASU • Jeffrey W. Toppel, attorney at law, Jackson Lewis P.C. AZ BUSINESS: What trend or issue can we expect will have the biggest impact on human resources? BOHR: The biggest human resources issue in 2017 will be largely decided by the election. One push gaining momentum this year is for employers to offer paid sick and medical leave to employees. The Family And Medical Insurance Leave (FAMILY) Act – recently presented to members of the U.S. Congress – takes on this issue and, if successful, will place yet another cost on employers. HOFER: I believe there are several trends that will greatly impact the workplace, including: • Millennials, which constitute the largest percent of the workforce, will assume managerial positions as Baby Boomers exit the workforce. Are Millennials fit to lead? If not, how can HR help develop Millennials with the skills needed to lead? • Companies outsource, offshore or automate jobs or tasks is resulting in less people. Can HR be counted upon to retrain
existing workforce or risk downsizing? • As a result of the first two — increased Millennials and reduced number of (full-time employees) — part-time or contract work will increase. Are companies equipped to deal with a fluid workforce that is less loyal and committed to organizations? What about workplace, progression and compensation and benefits flexibility? • People analytics — more data driven HR decision making, using ROI to determine how HR programs impact on business performance, workforce analytics to predict workforce trends and target top talent. • HR is expected/demanded to be a business partner by client groups. That means more time to spend strategizing about leadership and talent, solving business issues and achieving annual business targets and less on traditional HR services and support like training, payroll and other transactional services. QUINCY: There is more and more attention on equal pay for equal work for women. We hear it on the presidential campaign trail — interestingly from both Hillary Clinton and Ivanka Trump. There have been Supreme Court cases (Lilly Ledbetter v. Goodyear Tire and Rubber Co.), corrections by Congress (the Lilly Ledbetter Act), and lots of follow-up litigation. Recently, the Equal Employment Opportunity Commission is looking at a more proactive approach. It announced that it will require employers to provide significant pay data to the EEOC. The agency’s goal is to have at its fingertips what employers are paying employees who hold the same or very similar positions and see how it varies by gender (as well as race, national origin, etc.). Employers are just beginning to look at this data and determine what proactive changes to make, if any, and how to make AB | September- October 2016
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AZSHRM those changes. This area will be a huge area for lawsuits for years including class actions and multi-plaintiff litigation. SALCIDO: The continued trends towards globalization and the ongoing occupational displacement caused by technology will continue to impact HR. There are some who think these trends can be reversed – but those people are wrong. We are firmly entrenched now in the knowledge economy, which means that those with no post-secondary education will be left further and further behind. It also means that competition will only increase for well-educated and well-prepared candidates. TOPPEL: Technology will continue to have a major impact on all aspects of the employment relationship in the coming years. It will be interesting to see how the agencies that enforce employment laws – many of which were enacted years and years before the advent of much of this technology – respond to these technological developments. This is particularly significant in a presidential election year. The outcome of November’s elections (presidential and Congress) will determine whether we will continue to see the pro-employee aggressive enforcement that we have grown accustomed to from the federal labor and employment agencies over the past seven-plus years. AB: What should the human resources industry’s legislative priority be for next year? BOHR: Arizona employers and employees continue to watch the cost of health insurance skyrocket. Arizona could intervene on a transparency level to ensure that consumers can figure
out, easily, what providers are in what health plan network and whether services are covered. The state could also do a better job incentivizing businesses to provide (Healthcare Alternative Systems) to their employees. QUINCY: The world has changed dramatically, but the law has not — at least with regard to the workforce of the future. Businesses like UBER and LYFT have huge competitive advantages by treating the vast majority of their workforce as independent contractors rather than employees, and therefore avoid paying workers’ compensation insurance, FICA and FUTA, overtime pay and other benefits such as health insurance, vacation, and sick pay. While UBER has been sued repeatedly on this treatment (and generally has not fared well), courts have never been adept at handling the broad and systemic change necessary for this type of shift. Human resources advocates are already working at the federal, state and even local levels to effectuate legislative change to address these new issues. Businesses with competitive advantages by seemingly disregarding the laws in this area have their very existences at stake and businesses following the laws are disadvantaged by being saddled with higher labor costs. This cries out for legislative action. SALCIDO: I think the priority should be little-to-no legislative activity. HR people have been consumed with implementing the ACA and now we are contending with changes to the Fair Labor Standards Act (FLSA) salary threshold. In higher education, we devote a great deal of time and effort to Title IX compliance. I am not saying that these are misguided priorities. I fundamentally support these changes. But they are coming hard on the heels of each other and HR – and their organizations – need time to catch our breath. TOPPEL: The human resources industry must continue to monitor the smattering of state employment legislation that is cropping up in a number of critical areas, such as paid leave and immigration. As we saw with the enactment of the Legal Arizona Workers Act several years ago, when Congress is unwillingly or unable to address certain issues, state legislatures are often quick to step up. However, a patchwork of state laws creates significant administrative challenges for multi-state employers. The potential upside is that states, such as Arizona, that do not highly regulate the employment relationship may be more attractive to larger employers. AB: What are the biggest legal issues facing the human resources industry? BOHR: Employers need to be ready to comply with the new Department of Labor overtime regulations and the EEOC EEO-1’s reporting requirements on pay. DOL and EEOC are gearing up for audits to ensure compliance in these areas, among others. Employers should also be prepared to address transgender issues in the workplace as these
Arizona employers and employees continue to watch the cost of health insurance skyrocket
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AZSHRM
It is important to keep in mind that Arizona’s medical marijuana legislation —which was the result of a voter initiative —has among the strongest antidiscrimination provisions in the country.
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issues become highlighted by the EEOC and courts. QUINCY: The biggest legal issues continue to be from wage and hour compliance. More and more of these lawsuits are filed each year either from: 1) The misclassifcation of workers as ineligible for overtime when they actually should be getting paid time-and-a-half for hours worked over 40; or 2) not correctly calculating and paying overtime. These lawsuits are usually filed as collective action (similar to a class action) and are very expensive. What seems like only a few dollars per employee or violation snowballs quickly. Employers must ensure that their employees are properly classified and paid. The new regulations from the Department of Labor increasing the amount a salaried employee must make to be considered exempt (more than doubling to $47,476 on December 1, 2016) will push employers to paying more of their workforce on an hourly basis. Human resources personnel must ensure that employees are accurately recording their hours — and managers are not subtly or not so subtly pressuring them to work off the clock. AB: What should companies be doing to prepare for the the potential legalization of marijuana? HOFER: Legalized marijuana is certainly a hotly discussed topic. Legalizing marijuana may increase the number of candidates who cannot pass pre-employment and random drug tests, as well as adding to turnover rates. Another issue for employers is the possibility of lawsuits if employees feel they have been discriminated against, especially for medical marijuana users. Employers can help themselves by being prepared in three areas: • Employers may need to revamp their HR policies that can include treating marijuana like prescription drugs and providing reasonable accommodations for marijuana use in the workplace. • Employers should look at their substance abuse policies to be certain it clearly states that
employees are barred from working while under the influence of any controlled substance or any drug, including marijuana, that could impair their performance. • Companies could be asked to adopt broader testing protocols and acquire more sophisticated drug screens. Because marijuana stays in the body longer than other drugs, it can be difficult to ascertain whether an employee is actually impaired or not. This will drive the cost of screening. SALCIDO: I think every employer should have a strong fitness for duty program to ensure that employees are not impaired at work. What people do in their off time has never been much interest to me — unless they work in safety sensitive positions. TOPPEL: The prospect that Arizona could join the handful of states that have legalized the use of recreational marijuana is an interesting one that will undoubtedly have an impact on employers — if and when it actually happens. It is important to keep in mind that Arizona’s medical marijuana legislation — which was the result of a voter initiative — has among the strongest antidiscrimination provisions in the country. This is one of the rare areas in which Arizona law is more proemployee than California’s pioneering medical marijuana legislation. Of course, unlike medicinal marijuana users, users of recreational marijuana will almost certainly not have any workplace protections. Employers should take steps to review their drug testing policies to make sure the policies comply with Arizona’s drug testing statute, which provides employers important protections from litigation. AB: How is telecommuting impacting the workplace? TOPPEL: In many industries, technology has made telecommuting almost too easy. As a result, employees in those industries expect the opportunity to telecommute. While there are obvious benefits to allowing telecommuting, such as lowered office costs and the
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AZSHRM promotion of increased employee morale, there are also significant risks. As a starting point, employers should prepare a written telecommuting policy that clearly sets forth guidelines and expectations. In implementing a telecommuting policy, employers must be aware of their obligations under various laws, such as the Americans with Disabilities Act and Fair Labor Standards Act. Additionally, employers must also consider technology issues (it all comes back to technology) and ensure their employees have the necessary security to protect the company’s — and potentially customer’s — sensitive information. HOFER: I am a big fan of telecommuting so I think there are many pros: • Employees can still work during emergencies, which keeps the organization running in case of inclement weather or other circumstances. • Employees like telecommuting. By offering the option, employees are happier, less stressed and more satisfied. • Higher productivity can come from having fewer distractions. Using services like Cox Home Life, employees can check in on their home and pets, know when their kids come home from school, etc. This gives employees piece of mind during the work day so they can be focused. • Improved retention rate for employees due to employees having a better ability to achieve work/life balance. Higher retention also lowers total recruiting costs. • Allowing telecommuting can give employers a wider geographic reach, especially for hard-to-fill roles. • Reduced relocation expense since relocation is no longer necessary. • More savings associated with capital expenditure (office space, equipment, utilities, maintenance, etc.). • Here are a few cons: • Tougher to track hours worked. Not sure if employees waste time or overreport hours when there is no one to actively supervise their workday. • Fear of loss of connection with other colleagues from lack of in-person interactions. • Telecommuting is not for everyone. Ensuring telecommuting employees aren’t left out or overlooked can be a challenge. AB: What can companies do to become more successful when it comes to recruiting talented workers? HOFER: There are a number of things companies can do: • Make the connections early – recruit for summer internships in high school or college. Provide a job offer before a graduate returns to school. • Leverage existing workforce to be recruiters. The best hires are from employee referrals. • Recruit within. Train and groom your existing employees for new jobs. • Cultivate a positive employment brand and develop a corporate social responsibility image. • Make your workplace fun, flexible and innovative — see Google, Starbucks, Zappos, etc.). SALCIDO: Pay attention to the basics. Realize that in a tightening job market, talent is no longer fungible. Make sure 92
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you treat candidates and new recruits the way you would like to be treated. Provide a safe and welcoming and highly functioning workplace. People like to play on a winning team and they like to be around ethical leaders. They will figure out right away if your organization cuts corners in customer service or in its treatment of staff. AB: How do you see the employment outlook in Arizona over the next several years? HOFER: Experts believe Arizona will add an additional 100,000 jobs over the next couple of year. Tourism is expected to lead job growth in Arizona, followed by employment in hospitality, construction, education and health services. TOPPEL: I think Arizona’s lack of significant employment legislation and regulation provides a welcome reprieve for employers that may be used to a much more highly regulated environment, such as those in California or in the northeast. I also believe that companies in a vast array of industries are continuing to recognize that Arizona is an attractive location to which they can recruit a highly skilled workforce looking for a balanced lifestyle. As a result, I think the employment outlook will continue to be bright for the near future.
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