HRM 16

absent a bsent: minded minded How H Ho w companies co omp mpan a ie an es are a e tackling ar tack ta ck klil ng g the the rrise ri se e in in wo w workplace rkpl rk p ac pl a e ab abse absenteeism se enttee eeis is sm

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workforce m workforce mobility ob i l i t y www.hrmreport.com • Q1 2011

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Are A re HR HR departments depar tments fully fully utilizing utilizing the the power power and and potential potential of of social social media? me dia?

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14/02/2011 15:05

FROM THE EDITOR 5

What’s trending?

Social media’s going nowhere but up, and it’s high time HR heads used it to their advantage.

D

escribed by one particularly observant wag as ‘the online equivalent of popping bubble wrap’, the recent ubiquity of Twitter has left millions of people baffled. How could this new, often arcane and unarguably narcissistic medium have caused such a flutter, particularly when nobody – or at least nobody you knew – was using it?

Many people don’t ‘get’ Twitter. To some it’s merely the Facebook update page minus the poking, snooping, flirting, quizzes and chance to ogle/judge the holiday snaps of that girl you met at that party the other week. To some, this is a utopian development for mankind, a kind of electronic friendmaker where the actual terror and awkwardness that sometimes bedevils realtime, face-to-face conversation is done away with – now you have semi anonymity and time in which to think up witty, cool or rehashed status updates.

Where were we? Oh yes, Twitter, and the whole social networking thing. See, it’s easy to get sidetracked when dealing with social media. That’s the whole point. To waste time and judge others. When done in a ‘social’ context, that’s fine. But increasingly, the world of social media is infiltrating the workplace, which is causing consternation for HR departments throughout the western world. Whereas it has always been fine – in a social sense at least – to make snap judgments on somebody purely from the image of themselves they choose to project to the world (even encouraged because, let’s face it, if it wasn’t for jealousy, smugness and schaudenfreude, Facebook would have died right there and then in Mark Zuckerberg’s dorm room), from a professional point of view, it’s dangerous territory.

Both ethically and legally, sourcing and screening potential employees via their social media presence is fraught with pitfalls. The temptation to just ‘take a

ED NOTE.indd 5

look’ is strong, but is it right? Surely it’s an invaluable tool for HR professionals keen on getting the right talent in? A social profile is the perfect ying to a resume’s yang, but are the extra curricular activities of a candidate as important as knowing whether or not their photocopying skills are up to scratch?

The answer, or at least a vague discussion around what that answer might be, is found in this issue’s lead feature about social media and HR professionals on page 34. It also discusses how your company might integrate social networks into your IT infrastructure to help aid and improve employee engagement because – make no mistake – we are entering the era of the Facebook generation, where information, interaction and communication is key.

So that’s the ‘trend’ of this issue: learning how to keep up with the ever-changing demands and whims of the American workforce. Whether it’s employee relocations, tracking increased absenteeism, working for the greatest technological company of the modern age or simply learning to incentivize your workers towards a greater output, HR Management has all your queries covered.

Now that’s something to tweet about.

“We have attempted to limit our number of interviews to between four and six, possibly eight as a maximum.

But the reason we have so many interviews is that we believe very strongly that we should hire through consensus.”

Liane Hornsey, Google’s Global VP of People Operations (p44) “If we are less engaged in our jobs, there is an increased likelihood we will call in sick even if we are not sick.” Joyce Maroney, Director of the Workforce Institute at Kronos (p66)

Ian Clover Editor

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CONTENTS 9

Talent. Search

44

Ian Clover caught up with Liane Hornsey, Google’s Global VP of people operations, and discovered a world where normal recruitment, retainment and talent management practices went out the window

Human resourcer, social butterfly?

Lorna Davies invites social media and industry experts to share their knowledge on the rise of social media and asks: can HR break free from its traditional stereotype?

34

Fit for work Workforces the world over are wonderfully diverse places, but if a company can tweak, nurture and encourage their staff to take better care of themselves, the benefits for health, fitness and productivity are well worth the hard work, as HRM discovered

58

80

Reap what you sow Steve Berger, Senior Vice-President of HR and Transformation at Canada’s largest grain handler – Viterra – explains to Lorna Davies the vital ingredients that make ever-increasing company mergers and acquisitions a less bittertasting experience

CONTENTS HRM16.indd 9

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CONTENTS 11

32 Keep it simple Denise Kehoe outlines the need for transparency in the pharmacy benefits management (PBM) marketplace

43 Service with a smile Managing 25,000 staff from 198 hotels across seven brands in 30 countries is no mean feat. Just ask Ben Bengougam

50 Same needle, bigger haystack TheLadders highlight why a bigger applicant pool doesn’t necessarily equate to easier talent filtering

to get to the root cause of employee disengagement?

72 Go on your way HRM explores Tom Ream’s path to becoming CIO of Sutter Health

86 Road to Zion Lorna Davies discovered how Connie Linardakis, Zion’s Chief HR Officer, is tackling the challenges facing the banking HR industry after such an unsettling time

GOLD SPONSOR

90 On the move?

The issue of sickness and absenteeism in the workplace is a thorny and expensive one, but can a new US scheme encourage workers to lead healthier, more active lives, and thus increase productivity and attendance?

The longstanding US tradition of moving vast distances for your career is no longer the easy and breezy decision it once was.

So what changed? Ian Clover looks at how a depressed housing market, the recession and better technology is impacting the workforce mobility sector

66 AWOL to remember

94 Unearthing the nuggets

Playing hooky from work is as old as business itself, but the increasingly sophisticated techniques employers use to snare their absent workers are enough to deter such behaviour. But do companies have a duty

HRM caught up with Misty Reich – KFS UK’s VP and global HR Director – and discovered her helpful hints on employee recognition, improving the company’s working culture and spotting potential talent and leadership

52 We can work it out

GOLD SPONSOR

100 When I’m 65 The UK’s default retirement age is being scrapped, but how will this decision help the country’s economy out of the doldrums, and what impact will it have on employers?

108 Good things come to those who…work?

HRM uncovers some of the best employee perks and incentives around and asks: what do employees really want?

94

S I LV E R S P O N S O R

EXECUTIVE INTERVIEW 89 Steven A. Lowisz, Qualigence

ASK THE EXPERT 56 Jamie McInnes, Prudential 70 Betsy Nota-Kitty, LifeSynch 76 Daryl Corr, Healthesystems 78 Dr Richard Weininger, Cigna Healthcare 106 Tom Kmak, Fidiciary Benchmarks 114 Maureen Paradine, 1800 Flowers

INDUSTRY INSIGHT 98 Venkat Tadanki, Secova

NEXT BIG THING 116 Peter Bruzzese, ClipTraining

PROJECT FOCUS 64 Lisa Kime, UMR 75 Michael F. Roizen, Cleveland Clinic 93 Jon Hile, CORT 112 Michael Levy, Online Rewards

DETAILS

100 CONTENTS HRM16.indd 11

116

120 Agenda 122 36 hours in…Brussels 124 Interview: Alex Malley 127 Books 128 Photo finish

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The HR Summit 29-31 March 2011 The Boulders Resort, Scottsdale, Arizona The HR Summit is a three-day critical information gathering of the most influential and important executives from across America. The HR Summit is an opportunity to debate, benchmark and learn from other industry leaders.

A Controlled, Professional and Focused Environment It is a C-level event reserved for 100 participants that includes expert workshops, facilitated roundtables, peer-to-peer networking, and coordinated technology meetings.

A Proven Format This inspired and professional format has been used by over 100 executives as a rewarding platform for discussion and learning.

Next Generation Pharmaceutical Europe GDS Publishing, Queen Square House 18-21 Queen Square, Bristol, BS1 4NH Tel: +44 117 9214000 E-mail: info@gdsinternational.com Legal Information The advertising and articles appearing within this publication reflect the opinions and attitudes of their respective authors and not necessarily those of the publisher or editors. We are not to be held accountable for unsolicited manuscripts, transparencies or photographs. All material within this magazine is ©2011 HRM.

Chairman/Publisher Spencer Green Worldwide Sales Director Oliver Smart Finance Director Jamie Cantillon Content Director Kelly Grant Design Director James West Editor Ian Clover Associate Editor Lorna Davies Contributors Lucy Douglas, Nicholas Pryke, Ben Thompson Print Director Andrew Hobson Associate Designers Dan Clayton, Élise Gilbert, Michael Hall, Crystal Mather, Cliff Newman, Catherine Wilson Online Editor Jana Grune Project Manager Robert Fishkin Project Sub Manager David Resnik Sales Executives Telina Pedro, Kellie Teixeira, Priya Sood, Jeff Sommer Production Director Lauren Heal Production Coordinators Renata Okrajni, Aimee Whitehead VP North America Jason Green Operations Director Ben Kelly IT Director Karen Boparoy Marketing Director Jake Mazan

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GDS International GDS Publishing, Queen Square House 18-21 QueenSquare, Bristol, BS1 4NH Tel: +44 117 9214000 E-mail: info@gdsinternational.com

18/02/2011 15:23

UPFRONT

With wages stagnant, inflation on the rise and the rich getting richer, just what will happen to the average American worker?

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And all the while, the richest 10 percent of America are cashing in. They can keep wages low thanks to the crisis ¬– a crisis caused by their irresponsible speculations on a whole plethora of untested financial instruments (such as the aforementioned subprime mortgages, credit default swaps and asset-backed securities), and they can use the crisis to increase this wealth disparity.

The government is currently ploughing through a budget of austerity, which is compelling the ordinary working American to carry the costs of the government’s imbalanced response to the crisis. By siding with AIG, Fannie Mae, Freddie Mac and GM, the trillions of dollars spent saving these conglomerates has been diverted away from the truly deserving, and much of these funds have been ‘borrowed’ from rich investors, left flush with cash because they were not taxed sufficiently enough when the crisis hit. So the whole cycle begins anew, and it is the average American worker who is paying the price.

Nationwide, every State is undertaking some sort of austerity measure and they are reinforcing this disease of falling wages, rising taxes and fewer government-funded benefits. Americans are becoming poorer and less secure in their jobs, even though the IMF has estimated that the US GDP will grow by three percent in 2011. At the same time, the Federal Reserve has warned that the USA’s unemployment levels are still too high – at around 9.8 percent at the end of 2010 – to effect an upswing in fortunes.

In December 2010, just 39,000 new jobs were created throughout the States, leaving an estimated 15.1 million people officially out of work, and many millions more working part-time hours and finding daily living expenses a constant struggle. With wages unlikely to rise for the next 18 months at least, and inflation set to push close to five percent, the majority of Americans will be feeling the squeeze in 2011. But the rich, as ever, are set to get even richer…an unequal society.

THE BRIEF

T

ravel the globe and the thing that strikes you – almost as much as how diverse and beautiful the world is – is the realization that much of mankind is tremendously homogenized. The English language is dizzyingly widespread; Coca Cola is universally recognized; Rihanna tunes can be heard pumping out of bars and cars from Manilla to Milan; denim is the unofficial uniform for vast swathes of the world’s population, and even in the seemingly poorest or most remote areas, pulling an iPhone 4 from your pocket will register barely a flicker of bewilderment among the locals.

We did this, the USA. With the help of the Brits (the language, the Beatles, the invention of TV and the Internet), the Anglicized world has spread faster, farther and more ferociously than any other cultural export in history. And it’s happened because, since World War II, the USA has had a clear run at global domination, catalyzed by economic exceptionalism that no other country has been able to even get close to.

Right up until the 1970s, Americans enjoyed year-on-year increases in wealth, wages and living standards. The harder you worked, the better off you became and the more you consumed. And yes, while the richest got exponentially wealthier than the middle classes or the blue-collar workers, nobody became poorer – the lowest levels were soon higher than what passed for ‘middle class’ elsewhere, even in Europe. This unstoppable beast of US capitalism meant demand was always running a few blocks ahead of supply; a situation that created jobs, attracted waves of immigration, kept wages high and kept careers on an upward trajectory.

But since the 1970s, the USA has been merely riding that same wave rather than creating new ones. And then in 2007, it all came crashing down. In the 1970s, the capitalists and free marketeers saw that profits could be increased if work was offshored and outsourced; as technology improved, machinery and computers began to do the work of the massed unskilled, and as women’s rights became more liberalized, the woman’s place was no longer the home, but the office, thus diluting the labor force further.

In response to these drastic changes to American society, wages ceased rising. Labor scarcity turned into labor excess, and since then most US workers have – in real terms – become poorer than their counterparts from the 1970s. However, it has only been in the past few years that this realization has begun to hit home.

Since the subprime crisis became the first flimsy sezment of the house of cards to fall, it has become more and more apparent that the past few decades were merely a bubble of false credit, inflated prices and a postponement of reality. Capitalism changed irrevocably during this period. Work was still plentiful, but borrowing and debt became unsustainable. In effect, the credit bubble delayed the crash for longer than could have reasonably been expected, but now people are discovering just how flat their wages are, how hindered their purchasing power has is and how difficult life might yet become.

With such high unemployment, wages are going nowhere but down. It is now extremely difficult to borrow, and we all have to work longer hours in jobs that, at any minute, could be offshored to cheaper destinations or made obsolete by technology. Expanding consumption will soon retract as inflation continues and take-home pay remains stagnant.

17 15

1970s During the 1970s, the income of America’s richest 20 percent rose by 14%, while the poorest fifth’s income rose by 9%

1990s In the 1990s, the wealthiest fifth saw their income increase by 20%, while the poorest fifth had an income increase of just 10%

Today Inequality is regarded by experts as one of society’s greatest threats, causing nations with greater income disparities to suffer immensely on a number of social indicators, including a higher murder rate (South Africa is one of the most unequal countries in the world – it also has the highest homicide rate), poorer national health, lower life expectancies and a greater propensity for debt-fuelled living, as evidenced by the recent financial crisis.

18/02/2011 15:58

Bonus time for the economy?

A

recent BLR poll suggests fewer organizations eliminated end-of-the-year bonuses in 2010 (9%) than 2009 (25%). There was also an increase in the percentage of organizations that paid out more than they did in 2009.

The poll asked respondents: “How will your organization’s end-of-the-year bonuses compare with those given last year?” The answers were as follows: • We don’t give end-of-year bonuses: 29 percent in 2010; 26 percent in 2009.

• We’ll pay out more than we did last year: 28 percent in 2010; seven percent in 2009.

• They’ll be about the same as last year: 19 percent in 2010; 26 percent in 2009.

• We’ll pay out less than we did last year: 15 percent in 2010; 14 percent in 2009.

• We had to eliminate them this year: nine percent in 2010; 25 percent in 2009.

On the up?

T

he Economic Policy Institute (EPI) jobs report for December 2010 has shown continued improvements in the U.S. job market.

This could, however, be an overenthusiastic view. The unemployment rate dropped to 9.4 percent during this time, but around half the improvement was due to 260,000 people dropping out of the labor force, leaving the labor force participation rate at 64.3 percent – a new low for the recession.

Payroll employment growth was just 103,000, and average hourly wages increased by just three cents. The U.S. labor force is now smaller than it was before the recession started, though it should have grown by over four million workers to keep up with workingage population growth over this period, EPI reports.

On the plus side, the December report caps of an entire year of job gains in the private sector. But three full years after the recession officially began, the gap in the labor market remains on the order of 11 million jobs, despite December’s modest achievements.

UPFRONT.indd 16

Home comforts

E

mployees who spend the majority of their time working from home experience less stress and greater job satisfaction than those who work full-time in an office environment, a new study by the University of Wisconsin-Milwaukee has found.

During the research, the advantages and disadvantages of both working arrangements – from home and at the office – were compared, and evidence revealed that a week where three days consisted of home-working proved the most satisfying, with a far better work-life balance achieved among the participants.

Working from home, or telecommuting, still carries a certain stigma within many industries, with business leaders said to be sceptical about the value this set up brings. Poor and infrequent workplace communication is often cited as a drawback, although the home workers studied for the research claimed that his lack of daily information exchange, while noticeable, did not hinder their ability to do their jobs, and that important, work-related information was always imparted to them in a timely fashion.

Conversely, remote workers found they were better able to focus on their daily duties with fewer distractions, with the home environment prov-

ing an effective buffer from the daily grinds of office politics, interruptions, needless (and endless) meetings and information overload.

“Our findings emphasize the advantages of restricted face-to-face interaction, and also highlight the need for organizations to identify and address the problematic and unsatisfying issues inherent in collocated work environments,” said Kathryn Fonner, one of the lead researches on the study. “With lower stress and fewer distractions, employees can prevent work from seeping into their personal lives.”

Fonner touts teleworking as just one inventive way to shake up the workplace and increase job satisfaction. Other tips include: • Limiting mass emails and unnecessary meetings • Streamlining communication by adopting collaboration tools • Designating time and space for uninterrupted working • Creating a supportive climate where employees can register concerns free from repercussions/retaliations • Encouraging employees to cease all work communications once the working day is over

18/02/2011 16:26

Ten-able employment

T

otal employment throughout the USA is expected to increase by 15.3 million jobs over the decade of 2008-18 according to the most recent employment projections from the Bureau of Labor Statistics (BLS), with job openings stemming from the need to replace displaced or retired workers projected to be more than double the number of openings created by economic growth.

Here are the top ten professions that will add the most workers this decade, according to the BLS:

UPFRONT

1

Registered nurses 2008 employment: 2.62 million 2018 employment: 3.2 million

2

Home health aides 2008 employment: 922,000 2018 employment: 1.38 million

Workplace pressures impacting employees’ sickness decisions

M

ost employees feel guilty when calling in sick, even if their sickness is legitimate, a new survey has revealed.

The research, conducted by CareerBuilder, has found that nearly three-quarters (72 percent) of workers typically go to work when they’re ill, and 55 percent said they ‘feel guilty’ if they miss work due to illness.

With the cold and flu season instill full swing, workplace pressures and ‘presenteeism’ may be impelling workers to head into work despite the obvious threats of contagion and prolonging the suffering. More than half of the 3700 workers surveyed nationwide from November 15 to December 2, 2010, said they picked up a bug from someone who was sick on public transport going to or from work.

“It’s important for employees to take care of their health and the health of others by staying at home if they aren’t feeling well,” said Rosemary Haefner, vice president of human resources at CareerBuilder. “Even if workers feel pressure to be at the office, they should talk to their managers about staying home if they are sick, or ask about other options such as working remotely. Most employers are flexible and understand that employees are more productive if they are feeling their best.”

In order to encourage a healthy workplace, nearly one-in-five (19 percent) of employees said their companies provided flu shots at their office. Nearly two-in-five workers (38 percent) said they were proactive and sought out a flu shot this year (2010). When workers were asked what other ways they attempt to avoid germs, 78 percent said they wash their hands often; 32 percent carry and use hand sanitizer; 30 percent regularly clean their office space; 15 percent avoid shaking hands with people and three percent skip meetings where they know someone is ill.

The survey was conducted online within the US by Harris Interactive on behalf of CareerBuilder.com among 3910 US workers (non-government, employed fulltime rather than self-employed); aged 18 and over between November 15 and December 2, 2010.

UPFRONT.indd 17

17 17

3

Customer service representatives 2008 employment: 2.25 million 2018 employment: 2.65 million

4

Combined food preparation and serving workers, including fast food 2008 employment: 2.7 million 2018 employment: 3.09 million

5

Personal and home care aides 2008 employment: 817,000 2018 employment: 1.19 million

6

Retail salespeople 2008 employment: 4.49 million 2018 employment: 4.86 million

7

Office clerks, general 2008 employment: 3.02 million 2018 employment: 3.38 million

8

Accountants and auditors 2008 employment: 1.29 million 2018 employment: 1.75 million

9

Nursing aides, orderlies and attendants 2008 employment: 1.47 million 2018 employment: 1.75 million

10

Post-secondary teachers 2008 employment: 1.69 million 2018 employment: 1.96 million

18/02/2011 16:26

TOP10 Relocation requirements

A

ll families that relocate for their careers have different priorities, but a study by IMPACT Group has identified a trend of the 10 most important pieces of research conducted by relocating families in 2010:

1 Demographic and crime reports

2 Employers in a specific industry /occupation

3

Breakfast meetings make long lunches toast

A

OnePoll survey in the UK has revealed that morning breakfast meetings have replaced traditional lunchtime meetings as the businessperson’s preferred get-together timeslot.

The survey found that 67 percent of polled workers valued breakfast meetings over lunchtime ones for the generally positive outcomes they generated, with the majority commenting that they felt much more alert in the morning. Additionally, 60 percent of those polled said that morning meetings were becoming more commonplace in the wake of the recession, as bosses try all they can in order to extract more productivity from their staff.

The poll also surveyed workers on their breakfast habits in general and found that 79 percent regularly eat breakfast during the working week, claiming that in doing so they felt more alert and productive at work. More than half of those surveyed said they were more likely to arrange an early morning meeting, and a quarter admitted they have cancelled an afternoon meeting because of fears over their own levels of concentration and fatigue.

Additional revelations from the 3000 workers polled in the OnePoll study include 42 percent of employees who regularly attend meetings over breakfast, 36 percent who believe it is easier to track someone down before 11am and one in twenty admitting to holding job interviews over breakfast.

UPFRONT.indd 18

Physician/Dental referral services

4 Recruiters/Temporary staffing agencies

5 School rankings

6 Company lists

7 Driver license/Vehicle registration facilities

8 School district reports

9 Preschools and day care centers

10 Fitness centers

18/02/2011 15:58

ILO predicts ‘weak jobs recovery’

T

D

espite women taking up almost 50 percent of management positions in professional industries throughout the US, a mere six percent of Fortune 500 companies have women as their top earners. And it’s not just at the very top of the pay scale that gender divisions exist – throughout every level of the employment tree women are either underpaid or under-recognized, reveals a report by recruitment giants Adecco.

The recent Adecco survey, conducted among British, American and German female workers, finds that a third of those questioned believed they were being underpaid by as much as 25 percent when compared to a male counterpart performing an identical or similar role. The same study also showed that a third of women are hankering after a pay increase of up to four percent this year, which is slightly more than the pay aspirations of men.

In contrast, men were shown to be more likely to know what they should be earning, and were more likely to bring the matter to the attention of their bosses should they feel their contributions were being undervalued. “It’s particularly disturbing that female workers have the perception that they are underpaid but are not confident in understanding what they may be worth in the jobs market,” said Andy Powell of Adecco. “We would actively encourage both male and female workers to understand what the market rate is for their role, taking a realistic view of their skills and experience.”

UPFRONT.indd 19

UPFRONT

Gender pay gap rears its ugly head

he International Labour Organization (ILO) has called on governments worldwide to prioritize job creation, as its latest trends report predicts ‘weak jobs recovery’ throughout 2011.

The ‘Global Employment Trends 2011: The challenge of a jobs recovery’ report from the ILO said that global unemployment has remained at record highs for the third consecutive year. This is a serious concern for the ILO as unemployment has remained high despite many countries seeing a sharp economic rebound.

In 2010 there were 205 million people unemployed around the world, essentially unchanged from 2009, and 27.6 million more than before the global economic crisis in 2007. Key economic indicators such as global GDP, private consumption and investment have all recovered in 2010, surpassing pre-crisis levels.

The ILO has predicted a global unemployment rate of 6.1 percent for 2011, the equivalent of 203.3 million unemployed. The 2010 figure is 6.2 percent down from 6.3 percent in 2009, but up from 5.6 percent in 2007. More than half (55 percent) of the total increase in global joblessness between 2007 and 2010 occurred in the developed economies and European Union region, yet these areas only account for 15 percent of the world’s labor force.

Don’t gamble with traditional wellness

19

H

ealthCheck360, an innovator in integrated wellness and population health management solutions, shows actual results with performance-based wellness and health management solutions. With the recent financial crisis and realization that slower growth is the new norm, business leaders are keen to only implement solutions that demonstrate measurable outcomes and a positive effect on the bottom line.

Wellness initiatives have been around for decades, but Americans are getting less and less healthy. The prevalence of obesity, diabetes and cardiovascular risks continue to skyrocket, along with other lifestyle related health issues. Traditional wellness has obviously failed. A recent Price Waterhouse Coopers study demonstrated that 71 percent of companies had some sort of wellness program… few of them said they were effective at lowering costs. Corporate leaders are demanding accountability and results before they implement another traditional wellness program and give away one more water bottle or tee shirt.

Performance based wellness and health management solutions allow a company to manage health care costs proactively. Rather than navigating by looking in the “rear view mirror” when it comes to health care costs, a company can have access to forward looking data that allows them to “look out over the horizon.” HealthCheck360 gives companies the ability to identify and address risks before they become costs. It also drives accountability and positive behavior change among members. When coupled with meaningful incentives, smart lifestyle decisions effectively turn into a “safe driver” discount for those who make the right choices. An April 2010 Towers Watson study demonstrated that the number of companies planning to implement performance-based wellness programs tripled from one year earlier. Clearly, fewer and fewer companies are willing to gamble on traditional wellness strategies and are looking to the favorable odds of performance-based wellness solutions to drive meaningful results.

For more information, please visit: www.healthcheck360.com

18/02/2011 16:27

International News

UK University leavers face slightly less daunting prospects in 2011 as the jobs market shows improvement for the first time since the recession, research suggests. A survey of more than 200 employers in the UK reveals an 8.9 percent annual increase in graduate jobs. Tough competition, however, means it is still an “employers’ market”, the Association of Graduate recruiters says. The survey shows that average starting salaries have not risen for three years, sticking at £25,000 per year. The report confirms an upward trend in job opportunities for graduates, after a huge fall in the aftermath of the financial crisis. The demand for jobs continues to outstrip supply and intense competition is allowing employers to freeze starting salaries.

UPFRONT.indd 20

Australia

Egypt A million protesters swarmed Tahrir Square in Egypt after a week of protests on February 1. President Hosni Mubarack responded to the protests, and the biggest challenge to authoritarian rule in 30 years, by refusing to step down before the election in September. It is thought that we will now transfer his powres to his deputy, Vice-President Omar Suieman. The country’s military, meanwhile, has said it will “support the legitimate demands of the people.”

Australian workers are more likely to change employers over the next 12 months compared to staff in 16 other countries, according to research by employee engagement consultants Infogroup/ORC. Based on responses from 9300 employees worldwide, the study found that 57 percent are engaged with their current organizations, with Australia placed 7th, narrowly behind the United States and Germany. The report

by Phil Pringle of Infogroup/ORC found that Australian organizations were more affected by a lack of employee commitment to stay in the medium to long-term, bedevilled by a current unwillingness to contribute, or perceptions of their organizations as a bad place to work.

18/02/2011 15:58

INTERNATIONAL NEWS 21

China

Japan Japan has seen a sharp rise in the number of foreign workers. A total of 649,982 foreign workers were employed by 108,760 organizations in Japan at the end of October 2010, up 15.5 percent and 14.1 percent from a year earlier. Chinese workers accounted for a third of the total, with Brazilians making up another sixth. In explaining the rise, the labor ministry said that Chinese, Brazilian and other workers who were laid off amid the economic downturn are being called back for short-term jobs in the Chukyo area in central Japan, where a large number of manufacturers operate.

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30 provinces in China increased their minimum wages by the end of 2010, a spokesman for the Ministry of Human Resources and Social Security has revealed, according to the Global Times.

The rise in minimum wages is expected to continue throughout 2011 as inflation builds. Tianjin, a province near Beijing in the northeast of China, is considering raising the minimum wage by 16 percent.

Jiangsu, the municipality of Beijing, and the municipality of Chongqing also indicated they will raise minimum wages as well as Guangdong, which is expected to raise minimum wages by as much as 18.6 percent. The debate among Chinese officials is between improving the purchasing power of the poor or keeping wage costs down for business, Global Times reports.

Israel Israel’s Oscar entry for Best Foreign Language Film, The Human Resources Manager, will be shown on March 27th at 7pm at the Philadelphia International House. Based on the novel by A.B. Yehoshua and directed by Eran Riklis, The Human Resources Manager won Best Feature Film, Best Director, Best Screenplay, Best Soundtrack and Best Supporting Actress, all from the Israel Film Academy. Described as a touching tragic comedy, the movie tells the story of an HR manager at Israel’s largest bakery who is blamed for not noticing that one of his employees is missing.

18/02/2011 15:58

Breaking boundaries

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eter Hobbs has widespread experience of advising investors across European, US and Asian markets. As Senior Director of Group Business Development at IPD (Investment Property Databank), he is focused on developing the commercial strategy of the company, overseeing IPDs client facing. This includes responsibility for three main areas of IPD: product development, marketing and overall research. FST asked him to share some of his expertise in heading up a successful company in this challenging time.

What would you say are the biggest trends and challenges affecting the research industry right now?

Over recent years, real estate has become established as the dominant “alternative” asset, driven by its performance behaviour and attractiveness to institutional investors around the world. But it remains an “alternative” and has been deeply impacted by the global financial crisis, so research continues to play a big role in helping the industry to mature. This revolves around improved understanding and better risk management throughout the industry.

UPFRONT

How has IPD tackled these challenges and grown throughout the global fi nancial crisis?

The financial crisis has generated significant stress throughout the industry. This stress has increased demand for better information and improved risk management, and IPD has responded to these trends by focusing its activities on those markets (such as US and UK) and industry sectors (such as banks and global real estate managers) with greatest need for assistance in these areas.

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What advice would you give to those in the fi nancial services industry wishing to succeed in a harsh economic climate?

The experience of IPD through the crisis reaffirms three important themes that have driven IPD’s growth through its history. First: strong technical development to enable the creation of innovative business tools and applications. Second: a focus on the needs of customers and the ways they vary through the economic cycle, from country to country and by segment. Third: the building of a well-co-ordinated and collaborative team straddling global markets, to ensure local innovation whilst preserving a strong global framework and brand.

Founded in the UK in 1985, IPD began by compiling data and developing benchmarking services for leading commercial property investors.

Building up its property-by-property information, IPD soon became the UK’s first reliable index of property returns, and the approach started to be deployed in markets outside of the UK. Today, with a staff of over 300, they operate in over 20 countries including US, Canada, Australia, New Zealand and Japan. Earlier this year they were awarded the Queens Award for International Trade, after already having received the award in 2005.

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Prior to joining IPD, Dr. Hobbs was Managing Director at Deutsche Bank, working as Global Head of Real Estate Research for RREEF, the real estate division of Deutsche Asset Management. He was responsible for leading the company’s global research coverage.

IPD is a global real estate information business with services related to the commercial real estate market, producing research and analysis for some of the world’s leading real estate investors, occupiers, advisors, lenders, analysts and researchers.

The company is the world leader in performance analysis for the owners, investors, managers and occupiers of real estate. To guarantee independence IPD do not participate in real estate investment markets and do not offer consultancy advice on investment decisions or other real estate issues.

IPD offer: real estate performance analysis; market indices; research and publications; and events and training in most of the real estate markets it operates in.

“The way we work is designed to give you clear, timely information and the research and the training you need to understand the world of real estate and performance analysis and making it work for you. In order to meet your evolving needs we are continually refining our services and adhere to the highest standards of real estate data collection, validation, processing and reporting.” IPD says.

Mind the gap

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arka Hansen, the head of Gap North America who oversaw the retailer’s attempt to update its logo, has quit. Gap abandoned its attempt to change its blue box logo last fall within a week in the face of a customer revolt. Ms Hanson has overseen recent falls in underlying sales.

After an unsettling sales year and a disappointing holiday season, the 24-year veteran of Gap – a chain that also includes Old Navy and Banana Republic – is leaving the apparel retailer. Ms. Hansen has been in the position for four years and was the third person to lead the brand in the last nine years.

Gap plans to name a successor from within the company. Gap brand North America, which accounts for roughly 27 percent of the company’s total sales, has struggled in the past decade. Sales at stores open at least a year have fallen each year from 2004 to 2009, and will likely post another decrease for 2010 when the company reports full-year earnings in a few weeks.

18/02/2011 15:58

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14/02/2011 15:09

Realizing the American Dream

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ver wondered how America’s billionaires came to be so successful? HRM takes a look at the first jobs of seven savvy business leaders to find out…

1. Who? Warren Buffet How? Buffet started a newspaper delivery business at the age of 13 before launching a pinballmachine business at high school. By the time he graduated from college, his various business ventures were worth a combined $10,000.

Now? Buffet’s net worth is estimated at $47 billion.

2. Who? Oprah Winfrey How? Now the queen of broadcasting, Winfrey came from lowly beginnings as a grocery store clerk next to her father’s barbershop in Nashville, Tennessee.

She later moved on to her media calling – newsreading for the local radio station at the age of 16.

Now? Winfrey’s net worth is $2.7 billion.

3. Who? Michael Bloomberg How? Bloomberg took a more traditional route to success – working his way through college and earning a master’s in business administration from Harvard University.

Now? Bloomberg is now the mayor of New York, with a net worth of $18 billion.

4. Who? Bill Gates How? Gates was a computer programmer for TRW in his senior year, before dropping out of Harvard to follow his passion for technology.

Now? Gates is one of the world’s richest men with a net worth of $53 billion.

5. Who? Steve Jobs How? During high school Jobs found employment at Silicon Valley pioneer Hewlett-Packard, where he met Apple co-founder Steve Wozniak.

Now? The bulk of Jobs’ fortune comes from the sale of digital animation company Pixar to Walt Disney for $7.4 billion, making his net worth a whopping $5.5 billion.

6. Who? Giorgio Armani How? The fashion powerhouse was an assistant photographer at Milan department store La Rinascente, and was quickly promoted to the store’s style office as a buyer.

Now? The designer and fashion magnate’s net worth is $5.3 billion.

7. Who? George Lucas How? The Star Wars founder had a humble career which began as a teaching assistant for Navy students who were studying documentary filmmaking.

Now? With a resumé that includes the entire Star Wars series, the Hollywood icon’s net worth is $3 billion.

Source: www.money.msn.com

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Obama offers hope

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he President is focusing on creating jobs and engaging the healthcare-reform law, offering positive signs for HR leaders.

In his State of the Union speech on Tuesday, January 25, President Barack Obama emphasized his intention to have government do more to help create new jobs. “We need to out-innovate, out-educate and out-build the rest of the world,” Obama said. “We have to make America the best place on Earth to do business.”

He spoke of investing in “biomedical research, information technology and essentially clean-energy technology – an investment that will strengthen our security, protect our planet and create countless new jobs for people.”

This news comes as the Labor Department reports a rise in unemployment in 20 States throughout December-January. While the national unemployment rate in December was 9.4 percent, it was as high as 14.5 percent in Nevada, followed by 12.5 percent in California and 12 percent in Florida.

Obama also spoke of increasing efforts to reform the nation’s educational system to help “train [people] for new careers in today’s fast-changing economy.” He then asked Congress to make permanent a tuition-tax credit of $10,000 for four years of college.

18/02/2011 15:58

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ew York has retained the title of most unionized state in the nation, according to new US Census Bureau data.

The Census Bureau reports that 24.2 percent of the city’s workers belonged to unions in 2010. This is the highest of any state, followed by Alaska, Hawaii, Washington, California and New Jersey.

New York plays host to 1.96 million union members, second only to California, which boasts 471,000 more union members. Union rates still dipped in New York however; a small part of a nationwide drop in union membership as the recession continues. The strain on labor will be heightened further this year as state legislators tackle an $11 billion deficit, with Governor Andrew Cuomo calling for limits on state spending as well as pay freezes for state union members.

In 2009, New York had 60,000 more union members, meaning 25.2 percent of workers in the state belonged to a union. Last year also marked the first time the US had more public sector union members than private. This trend continued in 2010, when 7.6 million public sector workers (36.2 percent of employees) belonged to a union.

There were 7.1 million private sector union members, which meant that only 6.9 percent of private sector workers were in a union.

Public sector workers earned a median weekly wage of $917 according to the Census Bureau. This is $200 more than the median weekly earnings of their private sector counterparts.

The South remains the least unionized part of the country.

North Carolina again had the lowest rate of union members, with 3.2 percent of workers in the state belonging to a union. Arkansas, Georgia, Louisiana, Mississippi, South Carolina and Virginia had the next lowest rates.

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How to manage the Facebook generation

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rom baby boomers to generation X’ers, generation Y’ers and now the Millennials –the workforce is being continuously labelled, re-labelled and compartmentalized, and now we have the next batch: the Facebook generation. And as with any new generation to enter the workplace, they bring with them a new mentality towards the world of work.

So how should HR departments begin preparing for this next wave of workers?

Here’s a few HRM tips…

Get your tech up to speed. The Facebook generation have not so much ‘grown up’ with technology as actually devoured more Apples than a famished Snow White. They’ll likely know more about iPads, Macs, social networking and video conferencing than your average office incumbent, so be sure to have the latest technology in place in order to keep them engaged and motivated.

Provide clear job descriptions. Instruction manuals for new pieces of kit are universally ignored, but Facebookers are accustomed to following direct instructions. Indeed, the clearer the directive, the more comfortable this generation feels, so spell out everything to them – from working hours to the explicit duties their job requires.

Make them feel valued. This generation are constantly connected to their peers, friends and families, so it makes sense to extend this level of connection and communication to their new colleagues too. Give them responsibility, but also invite them to meetings, ask for their opinions and generally involve them from the get-go.

Create a clear career path. The Facebook generation are used to instant access to everything: music, film, friends, information. And while they’ll not get to the top of the corporate ladder as quickly, make it obvious to them that hard work, innovation and dedication will eventually reap the rewards. If they can see an end result, they will be much more focused on reaching it.

Consider a dress code overhaul. This all depends on your industry of course, but the newest generation to enter the workplace is likely to be more image-conscious than ever, what with their endless Facebook albums, Flickr accounts and camera phones. So, if your younger members of staff are made to feel comfortable at work, they are much more likely to be productive and creative – which, if you’re honest, is the reason you employed them in the first place, right?

UPFRONT

New York is most unionized state

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14/02/2011 15:09

Managing conflict – an increasingly vital HR issue

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ew products, a new Incentive website, a new iPhone app – it’s easy to engage with Omaha Steaks this year and get a generous helping of exciting new things to try.

First up are the new products. Zingy and easy Italian Bites, a bold and beefy Top Sirloin Roast, the Ultimate Chicken Burger, deli delightful Old World Beef Franks, Red Velvet Dream Cake, and creamy and delicious Individual NY Cheesecakes. Omaha Steaks is always adding to its product line to ensure there is something to thrill everyone. And these latest additions are no exception.

Refreshed, renewed and ready for business, Omaha Steaks’ recently reinvigorated Incentive Website is perfect for helping you figure out how to most effectively use Omaha Steaks Incentives for your business needs. You can explore a wide variety of incentive programs, take quizzes to figure out what program would work best for your business, peruse gift programs or shop for a great deal. No matter what your needs are, this website will steer you in the right direction.

Looking for something useful today? How about an ingenious app that will help you cook the perfect steak for dinner?

Omaha Steaks offers that too, in a powerful and relevant new iPhone app that can help you cook multiple steaks, of multiple varieties, to various levels of ‘doneness’ all at once. Now that’s a handy tool to have!

But amid all this new excitement, the staples of Omaha Steaks’ exemplary Incentive programs remain the same. They make incentivizing employees, motivating sales teams, showing appreciation to customers and even holiday gift giving customized, unique and tailored to your budget.

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The CIPD also outlined a series of tips for dealing with workplace conflict, including: • Identifying an ideal end result – each party’s viewpoints, while at loggerheads at the time, might not actually be all that far apart; try to identify that middle ground.

• Allowing all parties involved the chance to clarify their position and perspectives about the issues raised – it is HR’s responsibility to make sure all participants feel supported.

• Finding a realistic solution that will come close to each individual’s goals – if action is taken, consider how this might affect other staff members, projects or objectives.

UPFRONT

New at Omaha Steaks in 2011

leading industry body has urged HR departments throughout the world to take greater responsibility in resolving workplace conflicts.

The UK’s Chartered Institute of Personnel and Development (CIPD) has announced the findings of its ‘Managing Conflict at Work 2011’ study, which revealed that the issue of workplace grievances takes an average of 14 days per case in management time.

The CIPD claimed that their findings showed that “HR professionals, line managers and those dealing with disputes and tensions in the workplace need to be able to manage conflict and tackle difficult situations with confidence.”

Employee relations adviser at the CIPD, Mike Emmott, further added that HR departments the world over need to develop ‘more positive strategies’ for dealing with workplace conflict.

“Once a disagreement goes down the path of formal action, it can become increasingly difficult to secure a satisfactory outcome and the legal ramifications can be both costly and time-consuming,” he said. “Organizations, therefore, need to manage workplace disputes better and seek to resolve them early on.”

HR has a fundamental role to play in the support of this process, and there is a responsibility on HR departments to ensure that all line managers within an organization are suitably trained and sufficiently supported to achieve these outcomes.

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• Providing appropriate training for all staff – teach everyone what to expect of them and the company, and inform all on good conflict-resolution skills and responsibilities.

18/02/2011 15:58

Boomers join social media at record pace

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s you probably know from the excruciatingly embarrassing Facebook comments your mom recently added to your latest snaps from a particularly drunken night out, the baby boomer generation (moms and dads to many of us) have begun devouring the joys of social media in record numbers.

Use of social media sites such as Facebook and Twitter among Internet users aged 65 and older increased by 100 percent in 2010, with one in four from that age group now fully signed-up members of the Facebook fraternity, according to research conducted by the Pew Internet and American Life Project.

The study also looked at the following generation, the soon-to-retire boomers aged between 50 and 64.

It revealed that almost half (47 percent) of Internet users in this demographic use social media, which is an 88 percent increase on 2010. In total, the number of Facebook users in the US aged 55 and over grew from an estimated 1 million at the beginning of 2009 to close to 10 million by 2010, according to figures published by istrategy.com.

Such research has prompted industry watchers to analyze what is driving this generation to adopt social media. Many believe that Boomers are simply opening

their mind to the possibilities that technology brings, attracted by the ease in which they can communicate with their children and grandchildren. Additionally, high-speed broadband in now much more affordable, widespread and universally accepted as a ‘must have’ in today’s society. Other possibilities for these increased adoption rates include good, old fashioned bargain hunting, business ventures, socializing among peers and even dating.

“The ability to reconnect with family and old friendships is the primary driver that encourages Boomers to start experimenting with Facebook,” says Brian Solis, author of Engage and new media expert.

“One of the things they learn almost immediately is that when their profile is public they receive plenty of inbound connection requests from other friends and family, and it takes on a new life form for them. It’s a baptism-by-friend-request, learning the value of social networking.”

Although Facebook is the dominant medium among Boomers, Solis reveals that his own research has found that approximately 15 percent of all Twitter users are aged 55 or over. For Facebook, that figure is closer to 10 percent.

UK workforce most disengaged in Europe

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ritish workers are the least engaged in Western Europe, according to a study by Engagement Matters, which found that one in four workers were described as ‘ineffective’ by management during the survey.

More than half of employees in the UK are currently regarded as ‘disengaged’: a description defined by staff who are deemed as unwilling to go the extra mile for their employers and are currently frustrated by their inability to rouse themselves from their torpor or conduct their roles effectively due to understaffing, poor resources or inefficient processes and procedures.

The widespread scale of this problem has caused consternation among C-level executives at some of the UK’s largest firms, with 82 percent of top-level management figures citing disengagement as one of the three greatest threats to their business. In response, employee engagement has become one of the top boardroom topics through-

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out the country, with 52 percent of C-suite executives discussing the issue regularly, compared with just 41 percent across the rest of the continent.

“Employee engagement is understandably vulnerable after two years of recession and uncertainty, and disengaged employees can have a detrimental effect on a business’s bottom line,” said Graeme Yell, director of Hay Group. “Companies must act to safeguard and maximize engagement levels among their staff or risk suffering financially and losing key talent.”

The study looked at employee engagement across Europe’s five leading economies – Germany, UK, France, Spain and Holland, surveying 300 C-level execs and 3000 middle managers. The Hay Group, which has analyzed the findings, estimates that top performing organizations – those with the highest levels of employee engagement – are able to achieve revenue growth that is 4.5 times greater than their rivals.

Employee engagement: A European comparison 1. Netherlands

89% 2. Spain

88% 3. Germany

86% 4. France

82% 5. UK

71%

18/02/2011 16:28

Movement in the workplace = a happy + healthy bottom line

More movement can lead to increased productivity, higher employee morale, reduced stress and better leadership

UPFRONT.indd 29

More movement – one step at a time.

We create customized programs to specifically meet the needs of your company. Here’s a snapshot of what we offer.

What’s the problem?

We sit too much: at our desks, at meetings, on airplanes, in our cars. To make matters worse, we do too many repetitive tasks, like typing, texting, and cradling the phone. This lack of healthy motion is giving us aching backs, stiff knees, numbness and tingling, slow thinking – and shortness of breath. Not exactly the ideal scenario for a productive workplace!

Step 2: Workshops – This is the next step. Experiential, interactive, and a whole lot of fun, these workshops teach employees how to make movement a daily part of their lifestyles – and, how to translate knowledge into action.

Time to get moving!

Movement keeps our blood circulating, our muscles tuned, and our brains firing. Studies show that “on the move” companies have decreased healthcare costs, reduced absenteeism, and increased employee productivity and retention.

Step 1: Presentations – This is the starting point. Through lively seminars, employees learn why movement is so important. With easy-to-use tips as well as before-andafter case studies, our presentations offer a basic overview of the benefits of living a life that’s infused with motion.

Step 3: Consulting – This pulls it all together and offers dramatic results. Through on-site evaluations, targeted instruction and our signature Peer Coaching Program, we help you to bring about long-lasting and systemic change to get your company “in motion.”

Make your move.

Want to find out more? Give us a call at 415-310-5505 or visit motioninfusion.com to set up a free consultation.

UPFRONT

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otion Infusion is a revolutionary company that brings motion into the workplace – in a positive and proactive way. Why does that matter? Because movement helps people get healthier, happier, smarter. And that’s good news for your bottom line.

In fact, more movement can lead to increased productivity, higher employee morale, reduced stress, better leadership, and a whole lot of teamwork. That is why Motion Infusion was created - a company that’s dedicated to bringing movement into the workplace.

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18/02/2011 15:58

Survey reveals interview mistakes

UPFRONT

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new survey conducted by CareerBuilder has exposed the most common interviewee mistakes prospective employees make – with answering a cell phone call during the interview and dressing inappropriately amongst the most common (and frankly unbelievable) slip-ups.

The nationwide survey of more than 2400 hiring managers exposed mistakes such as texting and answering a cell phone – the blunder committed most frequently – with 71 percent of managers reported to have witnessed this during an interview. Dressing inappropriately and appearing disinterested came a close second with 69 percent of managers complaining of these mistakes. Also on the list were: appearing arrogant (66 percent), speaking negatively about current or previous employer (63 percent), and chewing gum (59 percent). Not providing specific answers (35 percent) and not asking good questions were also featured.

With competition for jobs at an all-time high, such added pressure and stress may be attributing to the mistakes some jobseekers are making during interviews.

“The good news is that the number of open jobs continues to improve month over month. However, competition will remain high for some time to come,” said Rosemary Haefner, vice president of human resources for CareerBuilder. “The goal of any interview is to stand out from the other candidates and ultimately land the job, but make sure you stand out for the right reasons. Even though the job search process can be frustrating, candidates should stay positive, focus on their strengths and be prepared on how to best sell their skill set.”

Also revealed were more unusual gaffes managers have encountered, including one candidate who threw his beer can in the outside trash before coming into the reception office, and another who constantly bad-mouthed a spouse. One manager reported an interviewee talking about an affair that cost him the previous job, with another having a friend come in and ask, “How much longer?”

The survey was conducted online within the U.S. by Harris Interactive on behalf of CareerBuilder among 2482 US hiring managers (employed fulltime; not self-employed; non-government) aged 18 and over between November 15 and December 2, 2010.

UPFRONT.indd 30

doles out roles

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ust as you were losing all hope; just as your resume’s ‘recent achievements’ section was beginning to resemble that of a particularly bored stay-at-home-mom’s (highlights include: ‘baked a lovely batch of cookies last week’ and ‘made it to the store un-showered for the fourth day running…and still nobody said anything!’); just when that hitherto, previously-overlooked job scraping chewing gum off the soles of the desolate in return for a thimbleful of water began to look attractive…just then, at that lowest ebb you never thought you’d sink to – Google goes and announces that this year, 2011, is to be their ‘biggest hiring year in company history’.

Yes, as most corporations are still looking at ways to downsize without incurring the wrath of their redundant and disgruntled employees, Google is bucking the trend and planning for 12 months of massive growth.

“We’re looking for top talent,” said the official Google blog post.

“Across the board and around the globe, we’ll hire as many smart, creative people as we can to tackle some of the toughest challenges in computer science: like building a web-based operating system from scratch, instantly searching an index of more than 100 million gigabytes and even developing cars that drive themselves. There’s something at Google for everyone – from geo, to enterprise, to video – with most work done in small teams, effectively working as start-ups.”

To which the only sensible response can be: Yikes! One of the most innovative, creative, influential and, well, cool companies in the world is on the lookout for the best and the brightest, just as the majority of American jobseekers’ confidence is probably at an all-time low. Feel like applying? Thought not.

But wait, come back! It’s not all bad. It’s apparently a great place to work. Don’t just take HRM’s word for it – you can turn to page 44 for an exclusive interview with Google’s Global HR honcho Lianne Hornsey if you want – but also the thousands of ex-Googlers who are sad to no longer work there.

Sad because, you see, leaving Google is like coming down the mountain. The dark side of the mountain that is, where nothing grows, the sun don’t shine and jagged rocks underfoot draw blood at every step. A career at Google represents the pinnacle of achievement for millions. And it could for you, too: just think – no more working in an office sat next to that sweaty, mouth breathing Twilight fan who spends their entire lunchtime spilling soup down their blouse and chuckling at their crazy friends’ antics on Facebook.

Oh no, at Google, people have lives: actual, fully-fledged lives. Lives that mean something. Careers that they can care about, and attainable goals to aim for.

To get the juices flowing, here’s a choice excerpt from an exemployee re: the wonderful world of Google…

GoogleEmployee22k: “Google is a great place to work. These are the things I like about my job:

18/02/2011 15:58

COMPANY INDEX Q1 2011 1) Everyone is super smart 2) 18 different cafes

Companies in this issue are indexed to the first page of the article in which each is mentioned.

4) The food is gourmet quality (e.g. omelet bar, chefs that make custom sandwiches for you, sashimi, free drinks 24/7, free snacks of all sorts 24/7) 5) The seven-person conference bicycles 6) Every Friday, Larry, Sergei or Eric takes questions from us (in person), and we get free beer (e.g. Downtown Brown).”

Yes, this techie Nirvana, this php promised land, this den of geeks is great because…of the perks. Google staff members are treated like adults, particularly in terms of the way HR deals with them, but outside of the daily job duties, the entire company comes across as an overblown, worldwide university campus, complete with the prestige, frat clubs and sorority sideshows that can make or break a typical college experience.

Of course, this is just one opinion of a former employee, and the likelihood is all they remember is the extra-curricular stuff anyway. But with Google looking to employ as many as 6000 new staff members this year, it might well be time to dust off that resume, get it updated and fire it off to Larry, Sergei or even Lianne. You never know – it might well be the best career decision you ever make.

Ace Relocation Accountemps Bank of America Capgemini Cigna Healthcare Cleveland Clinic Clip Training CORT CPA Australia Deloitte Easy Small Business HR Fidiciary Benchmarks Google Healthcheck360 Healthesystems Hilton Incentive Marketing Association IPD IWS KFC Kronos LifeSynch Motion Infusion Omaha Steaks Online Rewards Penn Medicine Perform RX Prudential Qualligence SAS Secova Svm Gift Cards Sutter Health TheLadders.com UMR Virgin Viterra Wellness Partners Wellsource Worldwide ERC WTC Yackstar Zion Bank 1800 Flowers

126 108 42, 118 34 78, 79 38, 75 112, 116 8, 93 124 34 108 106, 107 44, 108 23,19 76,77 43 108 22 12 94 66 70, 71 10, 29 26, 27 112, 113 69 32, 33 2, 36, 56, 57 84, 89 108 98 111 72 6, 50, 51, IBC 65, OBC 52 80 62 60 90 58 34 86 4, 114

COMPANY INDEX

3) Free breakfast, lunch and dinner

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Google headquarters in California

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ASK THE EXPERT 33

Keep it simple Denise Kehoe outlines the need for transparency in the pharmacy benefits management (PBM) marketplace.

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ave you ever tried to explain something to someone who is unfamiliar with your work? As a pharmacist I find myself explaining how medications work using analogies that are easily related to, and I am always reminded by my sister to ‘keep it simple’.

The healthcare environment continues to change and we continue seeing changes that impact our budgets. We ask how can we to take care of our beneficiaries, our employees and their families – all while continuing to keep it simple.

Time and again we are faced with the challenge of evaluating benefits and juggling the need for certain services over others. It is easy to look at sheer numbers without correlating quality to the care our beneficiaries receives. Have you thought about ways your organization can be proactive and provide actionable collaborative care to your beneficiaries?

According to America’s Health Insurance Plans (AHIP), 13-18 cents of every United States healthcare dollar is attributed to pharmacy spend, while the rest of the healthcare dollar – the bulk of spend – is attributed to medical care. The small percent of pharmacy spend impacts overall medical

“Make sure your PBM is willing to do business with you by being transparent. Also, a strong account management team at the PBM should include a pharmacist, and is imperative for success with your program” care in several ways. By keeping beneficiaries on appropriate medications, presenteeism in the workplace improves and overall healthcare costs are reduced. Improving healthcare costs should not jeopardize quality. Quality alignment actualizes cost savings. It is vital to understand the importance of quality with a third party evaluation, from a provider such as URAC, and its impact on overall healthcare. When evaluating your pharmacy benefits manager (PBM), make sure this vital component is not overlooked. Other components include transparency in contracting and quality accreditation for services provided.

Amazingly, it is known on a national level that few prescriptions for chronic disease written by prescribers at an office visit are actually fi lled and refi lled by beneficiaries, and less than 15 percent of chronic medications are regularly refi lled at a pharmacy, after the third fi ll. Understanding disease and the importance medications play on overall healthcare impacts adherence rates – I recall working with an endocrinologist whose patients many

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times simply did not understand what the medications were for, why or how they worked, and when they needed to take the medications. Everyone wins when beneficiaries take their medication. Medical costs are lowered when appropriate medications are optimized and less unnecessary visits to the ER and healthcare system are utilized. When your organization is fi lling specialty medications and your beneficiaries are not taking medication as prescribed or simply do not meet the clinical criteria for the medication, avoidable costs are created and your budget suffers.

It is important for clinical evaluation programs to be in place for your beneficiary care. Here are some questions to ask your PBM: • Am I receiving monthly reports showing clinical interventions and fi nancial impact on beneficiaries for all disease states including specialty?

• Does my pharmacy benefits manager have a Clinical Center of Excellence allowing access to expertise and recommendations, by clinical pharmacists, for formulary changes, collaborative care and cutting-edge services?

• How can I ensure a holistic approach is taken for formulary and drug utilization review, fraud waste and abuse, and prior authorization?

• What ways are beneficiaries living with chronic disease or at risk for chronic disease, being cared for and made aware of the importance of daily living initiatives?

• What innovative technologies are leveraged that integrate data and allow better care for all beneficiaries?

As VP of Sales and Marketing at PerformRx, Denise Kehoe manages and oversees the expansion of the company’s growing base of clients across the country as a true advocate for the pharmacy profession.

Kehoe works directly with payers and realizes the great need for transparency and innovative solutions in the pharmacy benefits management (PBM) marketplace.

Upon evaluation of these question sets, keep in mind there is a way to ‘keep it simple’ and improve healthcare of your beneficiaries. When looking, realize there are options and several ways to consider working with the right PBM. Make sure your PBM is willing to do business with you by being transparent. Also, a strong account management team at the PBM should include a pharmacist, and is imperative for success with your program.

Overall, keep care of your beneficiaries simple. Enlist a PBM who shares your vision and believes in the clinical success your beneficiaries deserve. Working with PerformRx allows you the flexibility to tailor solutions that make sense for your organization. Why get caught wondering how you can save costs while improving quality? We look forward to hearing from you and showing you the best way to move forward. Let’s ‘keep it simple’ together. PerformRx is the next generation PBM.

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Social media participation is fast becoming an essential tool in business, but as its proliferation becomes ever more evident, can HR players keep up with this ever-expanding trend? Lorna Davies spoke to experts from Capgemini, Deloitte and Yackstar to find out whether HR is ready to leave behind its conventional cocoon and spread its social media wings.

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recent survey by Nielsen Wire showed that Americans spent nearly a quarter of their time online on social networking sites and blogs in 2010, up from 15.8 percent just a year earlier – a 43 percent increase. Th is is surely a case in point that businesses should – as many already are – utilize this potential audience. Although social media is being used by most organizations to enhance their brand (according to Econsultancy more than 700,000 local businesses have active Facebook pages), far fewer use it for their human resourcing purposes.

Ellison Bloomfield, an HR professional and leadership development consultant at Deloitte, agrees that HR is often thought of as a more customary part of the business, more likely to practise and embrace the tried-and-tested rather than push the boundaries of technological or populist development. “HR is generally quite traditional, and I know there has been a lot of fear around people using social media to say negative things about their company or colleagues,” says Bloomfield. “But fear of things being said shouldn’t be a reason to ignore what is a great resource.”

One argument rife amid the HR/social media discussion is that of internal versus external social media. Many

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organizatons, such as Zions Bank (as discussed elsewhere in this issue of HRM), choose to keep their HR operations on a more ‘professional’ level, using only internal social media resources to keep the company wheels oiled. Rick Mans, a social media strategist and social media lead at Capgemini, believes starting internally and then branching out to external methods is a good way for businesses to dip their debut toes into the effervescent social media pool.

“I think it’s wise to start fi rst internally to discover what the impact is in your organization, and then from there to start external activities because currently customers expect companies to be online,” Mans explains. “That’s not only in b2c, but also more b2b decision-makers are using social media to come to a decision.”

There is no doubt that using social media for HR processes is in its infancy. Traditional HR processes are soulless, where social tools are frequent, in real-time and connected to people, The question is, can HR leaders harness the social media movement and enable the type of revolutionary culture change that will transform organizations?

The Masons are two brothers who have realized the potential of social media in enabling successful HR on an internal basis. As the founders of Yackstar, the Masons have

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launched an internal social network that allows employees and managers to effectively engage and interact, making communication within a company more stimulating than the old email system, yet more productive than browsing through Facebook pictures. It was the fascination with keeping employees engaged and motivated that inspired Grant and Craig Mason to start up the site.

“It is clear that so many companies today fail to tap into the true potential of their workforce,” says Grant Mason.

“Talent lays untapped, people feel under-appreciated and under-utilized and great ideas lay undiscovered.”

The Corporate Leadership Council, a renowned research consultancy from Washington, conducted a study to determine what the factors are that motivate and drive team performance in the workplace. They conducted indepth interviews with 19,000 employees of many of the world's top companies, focusing on the question: ‘What matters most to performance?’ Mason describes the results as enlightening.

“Informal feedback was top of the list. In fact eight of the ten top factors related specifically to feedback, encouragement and interaction with leaders. A recent McKinsey survey also found that the key motivators for people are praise from immediate managers and one-on-one conversations with leaders. But the question remained: what kind of tools or systems could help companies bridge the performance gap, when the motivators were often soft and intangible?”

The popularity and widespread use of social media answered the Masons’ question for them. Sites such as Facebook and LinkedIn often spark discussions and idea sharing conversations. “Imagine if we could harness all the positive elements of a social network for business purposes, without all the time-wasting distractions?,” asked the Masons, and so they founded Yackstar.

THE EXPERTS Rick Mans Rick Mans is the social media lead at Capgemini, he also works for several of the Fortune 500 companies as a social media strategist on national and international cases. He started working for Capgemini in 2007 and now lives and loves all things social media, helping people and enterprises in using social media in a way that adds value for them. He also gives guest lectures at several universities to make student aware of the impact social media will have on their life in general and on enterprises in particular in the future.

Grant Mason Grant Mason is the director, along with his brother Craig, of Yackstar. Yackstar was started in 2009 and is a new business platform that enables teams and enterprises to communicate, collaborate, recognize and innovate. He is also currently a director at Coffee Causes in Australia and has led HR teams with Rio Tinto, GE, and Suncotp.

Ellison Bloomfield Ellison Bloomfield is an HR professional and Leadership Development Consultant at Deloitte in Melbourne, Australia. Bloomfield's role involves account management and development of the Deloitte Leadership Academy a blended learning solution which develops the capability and leadership skills of managers and executives. She also serves as Secretary on the Victorian State Council of Australian HR body the Australian Human Resources Institute (AHRI).

Internal innovation “Companies are now starting to see the benefits of using internal social media tools such as Yammer and Yackstar, which enable people to network, to solve problems and can often lead to higher levels of engagement,” Bloomfield explains.

Accounting giant Deloitte plans to hire 250,000 staff over the next five years as it seeks to profit from rising global demand for regulatory scrutiny and risk management. Approximately 40,000 people will be hired globally this year, said Deloitte chief executive Jim Quigley. Allowing for natural staff turnover and retirees, Deloitte will see its staff roster jump to 250,000 by 2015, from 170,000 at present. Bloomfield attributes much of the staff turnover success to internal social media such as Yammer. “At Deloitte there is virtually zero percent staff turnover of those that are frequent users of Yammer,” she confi rms.

Yammer, a similar network to Yackstar, is used by Cargill, Molsen Coors, Nationwide, AMD and Chevron, as well as Deloitte. It is internal networks like this that encourage collaboration and communication whilst maintaining a strategic nature and connecting remote workers.

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External social media such as Facebook and Twitter are often used by businesses to enhance the company brand. But can these most social of mediums help enhance a corporate culture? “It [social media] creates a certain sense of belonging and can enforce your brand or your culture,” Mans enthuses. “It can be a really great tool since it’s not a traditional top-down method and, if executed well, it can really strengthen the culture and the brand, and also help retention.”

In terms of HR, internal methods are better for collaboration, communication and keeping a strategic business angle in mind. But there are definite positives for public social media, especially when it comes to recruitment. Social media screening is often both a useful tool and a method that causes some concern when it comes to professionalism and security. Facebook now has more than 500 million users and there are more than 50 million tweets posted each day. Social media has taken the world by storm, and in the employment arena, it’s now a critical sourcing tool for jobseekers and recruiters alike. (Cont. P40)

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20%

of Fortune 100 companies use Facebook, Twitter, YouTube and blogs

56%

of online shoppers have ‘fanned’ or ‘friended’ at least one online retailer

75%

of U.S. small businesses have a company page on a social networking site

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But when jobseekers post information about themselves on sites, will employers review it? LinkedIn, Twitter and Facebook are all frequently used by companies in the sourcing process to find the best candidates, and by jobseekers to expand their network and be accessible to recruiters. However, the slippery slope begins when hiring professionals are tempted to not only use social media for sourcing, but also for screening, and how to use the information properly is a question that crosses on to shaky and undefi ned legal and ethical grounds.

Some companies are now offering social media screening as a service, but there are important legal and EEOCrelated pitfalls that must be considered before companies conduct these screenings. And while social media-based screening is still a rather limited process, it’s likely to grow over time, and individuals need to be careful about how they are portrayed online.

“I do have concerns about people’s personal lives and what they do outside of the office becoming part of a recruitment process or reasons for disciplinary action,” says Bloomfield. “It raises the question as to whether there is a statute of limitations on what can be used as evidence against someone. Is a photo or a comment posted five years ago going to be relevant to a hiring decision in the present day?”

Bloomfield raises the question that often keeps employers away from public social media. Mans, however, says it is about educating both the employee and employer on their limitations. “Security can be an issue, and what’s most important to prevent bad things from happening is education. Educate your employees and even your customers about what they can and cannot do online: not by policing them, but really by helping them preventing getting hurt,” Mans explains. Bloomfield echoes this view in other ways. “There are also other benefits to organizations who trust their employees to use social media, using the example of Deloitte again, the policy essentially boils down to one sentence: ‘what would your Mum say?’

“Employees are trusted to treat the company with respect and are given accountability for what they say and do online. The end result of this is that people don’t feel as if the company is watching over their shoulder and that they are valued as individuals. Deloitte actively encourages people to blog, to share their stories and to network with individuals and potential clients through social media.”

So what about checking out a prospective employee’s online presence? “I think it’s a good thing in general as long as the people who are screening don’t focus on that one picture on Facebook where the potential new hire is drinking a big glass of beer because, well, if that’s problematic to you, you probably won’t hire anybody under 30,” Mans admits.

“Everybody has such a picture in his or her profi le. I think it’s more important to get a 360-degree view of the person. What’s he/she saying on their resume? What is the external line and, maybe, more importantly: what are their friends saying about them? This provides you with extra input in the decision-making process.” Th is is especially true of candidates who claim to be social media whiz kids

86% of global 100 companies use at least one form of social media

or who are going for a role where this will play a big part in their duties. “Every now and then I get people who say: ‘I’m really great in social media. That’s my job.’ But you try to Google them and you can’t fi nd them. Well, something is wrong. I think that’s really important for most people to build a personal brand and to make themselves fi ndable online,” says Mans.

Employment competition To say the employment market is difficult right now would be putting it mildly. Although the U.S. unemployment rate fell by 0.4 percentage point to 9.0 percent in January, new jobs are still difficult to come by. Economists had expected at least 146,000 new jobs created at the beginning of 2011, so the numbers reported at the beginning of February by the U.S. Department of Labor painted a mixed picture of the economy, which has struggled for more than two years. In this climate jobseekers need to, more than ever, utilize and harness the tools around them to strengthen their personal brand. What advice can Rick Mans give to those seeking employment at this difficult time?

“What I think is most important is to be aware that everything you put online is public. You might fi nd that it’s not private because, for example, Facebook every now and then changes its privacy settings and suddenly content becomes public. So, think of everything that you publish online – even though it’s in a private environment – is being made public, where your potential employer is also present.

So, if that’s LinkedIn, make sure you have a presence on LinkedIn. For example, in the Netherlands, Facebook isn’t the biggest network, it’s Hyves. So you have to decide where your presence is depending on what kind of company it is.

Most important is to be sure that you portray a consistent image of yourself over all those different channels.”

The change in direction of the U.S. economy associated with the recession offers an opportunity to rethink where many aspects of business are headed. Perhaps no functional area has gone through more turmoil than

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human resources. From hiring and retention frenzies in the late 1990s to downsizing after 2001 back to hiring and retention issues combined with an intense focus on metrics and performance followed again by sharp downsizing in 2009-10, it’s been tumultuous.

The downturn has resulted in an influx of traffic into the job market, but also forced HR departments to think more strategically. “I think social media can really help at reducing costs,” says Mans. “For one project we did we achieved an email reduction of around 90 percent. We put a system in place where people could collaborate ideas on a document and everyone could see the changes, rather than going back and trying to find the original email.” Incentives such as this reduce time and cut costs – two valuable commodities today.

Ad hominem The lack of personal interaction is often what puts HR leaders off fully embracing and implementing social media tools. “I think for some products human interaction will

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The average number of social media platforms used by marketers 2006

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2008

x8

always be required,” says Mans. “I often conduct guest lectures in the Netherlands. Most customers said when asked that they’d rather see somebody in a suit with a tie in a building when say, going for a mortgage. That’s what they prefer.” For this side of business it is understandable customers would want face-to-face interaction. But for issues such as finding out where has the best cell phone reception in your area, this could be done online.

These initiatives – moving to a more digital customer relationship – will, in turn, impact HR. “I think human interaction will always be there for some issues. But social media will probably be better and faster, and for most companies, also a cheaper channel,” predicts Mans. It is also important to remember that, despite having a more robotic reputation, social media is just that – social. It provides a platform upon which clients and industry leaders can interact. This could be the ‘humanizing’ factor for HR. “I think that social media can be used as a way to ‘humanize’ HR; we’re often in the background of the business, and often only thought of as those that do the ‘dirty jobs’…it can often be forgotten that HR are people too!” says Bloomfield.

So what is in store for the blossoming relationship HR has with social media?

“What we will need to start to see more of is our national HR associations using social media to engage current and potential members,” says Bloomfield. “There have been a couple of instances where this has been done quite badly and has alienated members. However, if the associations want to be able to encourage people to start careers in HR and to feel that their association understands them, they will need to start doing this more effectively.”

For Mans, future trends are intertwined with cost reduction and employee retention. “Good employees are scarce, and there is a lot of social media effort regarding unity, creating a sense of belonging, but also making sure that while people can share their knowledge, they can develop themselves, but also boost community too. If there are fewer e-mails and fewer meetings, it will save time and so save money.”

Both internally and externally, ideation and co-creation are becoming crucial components of HR operations.

“So, internal communication and collaboration are important, but so are your customers in creating your next product or improving your next product,” says Mans. “It’s about asking: what do people say about us in the outside world, and how can we help people outside our formal customer service perspective or from brand or reputation management perspective? Those are the big trends I see now.”

HR managers need to stay ahead and abreast of the ever-expanding social media networks. By harnessing the tools internally, businesses can provide a new innovative platform for collaboration and communication whilst maintaining a professional, security aware operation. By using external sources HR operations can source talent from a wider field and seek out an all-round view of possible employees. With the social media trend showing no signs of slowing down, HR leaders need to spread their wings if they wish to keep up.

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INSIDE VIEW 43

Service with a smile Managing 25,000 staff from 198 hotels across seven brands in 30 countries is no mean feat. Just ask Hilton’s Ben Bengougam. By Sharon Stephenson

I

n the multi-faceted world of HR, the average leader must become an expert in keeping a balance of strategic business and employee organization skills. Ben Bengougam is a man who understands the importance of ensuring this equilibrium – and it’s all achieved with his beaming grin in place.

“My philosophy is to enjoy life and what you do, which of course involves smiling a lot,” says the Vice President of Human Resources at Hilton Worldwide. “I believe that whatever your responsibilities, there should always be a touch of lightness and fun in the workplace. Enjoying yourself while you are working means that you are likely to perform better and provide guests with those experiences they’ll never forget. And we all know that this is the single most important factor in the success of our business.”

There’s no doubt that Bengougam is well suited to the job of corralling 25,000 “team members” (staff ) from 198 hotels across seven brands in 30 countries: he’s as fizzy as a human Alka-Seltzer and aims to infuse his staff with a similar passion for what they do.

“Our global vision is to fill the earth with the light and warmth of hospitality. For me, that is the core challenge of HR in any organization and that’s certainly the case for Hilton Worldwide.”

Mention possibly the worst economic downturn in living memory and the smile barely leaves Bengougam’s face. The recession, he admits, hasn’t dented the hotel industry from an HR perspective. “We are actually undergoing an exciting period of growth around the world. We have more than 78 hotels in the pipeline across our portfolio of brands,

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“If people are important to a business then it follows that good HR must be too”

which are due to open between now and 2013. The core challenge from an HR point of view in this, or any climate, is to attract, retain, develop and engage the best people, which is something I think we do well at Hilton Worldwide and something we will continue to excel in as we realize ambitious growth plans.”

Managing such a diverse and geographically distributed workforce does, of course, present its own challenges. “Globally, we have more than 3600 hotels in 82 countries and more than 130,000 team members. Our challenge is to ensure that although we are a global company, we remain relevant for our team members in every country in which we operate.”

Training and professional development is a key strand of the company’s motivational strategy and Bengougam says it’s an area that has remained key throughout the recession to ensure that staff feel that they are progressing in their careers. The jewel in the training crown, however, is the Hilton University, an award-winning e-learning facility that is available to all staff across the world to access online learning and development. “Whether it’s management skills, personal development courses, learning a language, financial training or brand toolkits – it’s all there for team members to access and benefit from.” Complementing this is a range of incentive programs at all levels of the organization designed to focus effort and reward success, the key levers of which are customer loyalty, brand standards compliance, revenue per room, profits, customer service measures, market share and return on assets.

Such a diverse and scattered workforce naturally lends itself to a large degree of crossover between different regions.

But that’s only made possible by the common culture that’s underpinned by a common vision and set of values. “Success in globalization comes from a keen understanding of the differences in language, culture, ways of being and working, as well as social and labor frameworks. Each Hilton Worldwide brand has its own HR programs and offers team members different opportunities. Ultimately, it’s about finding the best person for the role.” To illustrate this, Bengougam says in 2010, around 95 percent of Hilton Worldwide’s general manager appointments were internal transfers or promotions. Many of these appointments were to a different country, although a few included entry into brand new markets for the organization.

When HRM spoke to Bengougam, he had only been in the role six months, but he was already talking about the strides made in repositioning HR in the business. “We have realigned our team to clearer sets of accountabilities and are now majoring on the value-add aspect of HR, including optimizing the talent agenda as a hard deliverable to sustain our growth and expansion. If people are important to a business then it follows that good HR must be too, but I will also concede that it must be good or even better. I have great ambition for the HR function and profession and I’m tremendously proud to work in HR. Let us just be concerned with being business focused, with delivering value and a return on investments which we seek, and with promoting professional competence and excellence in HR moving forward.”

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BIG INTERVIEW

44

Talent...

Companies spend their entire existence searching for the talent that can drive them forward.

Ironically at Google – the world’s leading searchers – the top talent comes to them, a phenomenon with its own set of challenges and opportunities, as Ian Clover discovered.

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lot can happen in five months. Winter can turn to summer, your weight can bounce around like a pinball, sports and fi lm stars can go from hero to zero and relationships can blossom, bloom and die. Your job application to Google might also reach some semblance of conclusion during this period, too. For a company that prides itself on being ‘bureaucracy free’, such a lengthy application process appears not only unnecessarily slow and plodding, but at odds with Google’s reputation for being visionary, fleet of thought and fast-paced.

“We are very proud of the culture we have here at Google and we want to protect it; we want to make sure that we don’t dilute it,” says Liane Hornsey, Google’s Global VP of People Operations. “We put a good deal of effort into making sure that everybody we hire will be accretive to the culture of Google.” Such efforts have resulted in legendary tales of multiple interviews, stretched across many months and locations, in order for an applicant to get their foot in the door at arguably the world’s most exciting company.

“When I was hired some five years ago, I had 14 interviews across two continents, and it really was a gruelling process that took several months. Since then, we have attempted to limit our number of interviews to between four and six, possibly eight as a maximum. But the reason we have so many interviews is that we believe very strongly that we should hire through consensus.”

As an example, Hornsey explains how even she, as the HR head, would be unable to make a hiring decision on her own; the process would still entail meetings with staff members from relevant departments, potential middle managers and even those who would be working directly underneath an applicant. If the stories are to be believed, then even Larry Page himself (Google co-founder) ensures he signs off every resumé before an applicant goes from aspirant dreamer to fully-fledged Googler.

Top talent Google’s Mountain View headquarters at the southern tip of San Francisco Bay represent something of the prom-

Google.indd 44

ised land for the world’s top tech heads, internet aficionados and innovative thinkers. Its campus-like atmosphere is an exclusive hub of creativity, and it is little wonder that Google receives more than 1000 job applications a day. Hence, sift ing through the mass of people to identify the talent that is going to be key in driving the company forward is an immensely time-consuming and difficult process. It is also highly important.

“We only hire people who we consider to be incredible talent, and part of that talent revolves around being an innovative thinker,” says Hornsey. “But we don’t only hire people who are innovative thinkers, although many of the company’s best ideas have come out of left field when people have taken time out to think about different things.

“For example, our engineers have something that we call 20 percent time. For four days a week or however they want, 80 percent of their time they work on a key product.

For the other 20 percent of their time, they are free to work on something related to that product, or something a bit different – G-Mail and Orkut both came out of that time we allow for innovation.”

For Google, staying still is not an option, so to be able to remain at the forefront of civilization – and let there be no doubt about Google’s role in furthering humanity throughout the globe – the organization is acutely aware of its responsibility to deliver innovative products and services that continue to push the boundaries. Taken in such a context, it is understandable that Google places so much time and effort in recruiting the very best talent. And once on board, retaining that talent becomes even more important.

“I think Google is, in my mind, closer to a university campus that it is to an organization,” reveals Hornsey.

“We try very hard to not be hierarchical, to be reasonably democratic in our decision making, to be very informal, but formal when it comes to how we do things in terms of our decisions. So we never make decisions on the fly. We always use data, we’re always very rigorous in our thoughts, but we are less rigorous and less formal in the way we dress, the way we eat and the way we act at work. If you walked around campus, for instance, you will see lots of bright

A google employee will have had an average 6 job interviews

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BIG INTERVIEW 45

colours, lots of soft areas, foosball tables, snooker tables, even climbing walls.”

Such accoutrements certainly add aesthetic value to Google’s HQ, but do these fluff y additions serve a purpose any longer, or are they merely a remnant of a bygone era, an age when Google was still a playful startup? “Th is is how the company began. The guys who founded Google were students at the time, so they hadn’t got the experience of the trappings of working for a bank for example.”

Hornsey reveals that Google conducts an attitude survey each year, and is happy to report that the feedback is overwhelmingly positive, with most employees stating that they have a very close affi nity with the culture of the company – an affi nity that Hornsey works hard to protect and nurture.

“The fundamental building block of Google’s culture is that we hire like-minded people,” says Hornsey. “Everybody here wants the same thing and wants to move towards the same thing, and the fact that we are not hierarchical helps to enable this. So if you have a great idea here and you’re sitting in engineering, it’s not unusual to be able to knock on Larry’s door and say ‘I’ve got a great idea, what do you think?’”

Fostering an atmosphere where every staff member knows that their ideas will be heard is a continuous challenge for Hornsey and her ‘people operations’ team. In a company the size of Google, a defi ned structure is extremely important, but the organization’s success has been

based on its ability to elicit innovation and inspiration from almost every pore of its being.

“We aim to be non-bureaucratic, so we don’t have a very heavy layered organization. So if people are thinking innovative things, they can act on them at speed.” Keeping teams in small groups helps too, says Hornsey. “If you walked around engineering, for example, you would see lots of little teams working on shared projects. We don’t have row after row of people, or lots of separate offices; we tend to work in clusters of eight or 12 around a big table so that ideas can be brainstormed more easily. It is the facility itself that lends itself to real innovative and creative thinking.”

Growth and innovation Aligning Google’s emphatic growth and expansion with its inherent creativity has been a challenging process. As any organization outgrows its original roots, it is inevitable that something is lost in the process. Hornsey is keenly aware of the potential difficulties Google faces as it continues its evolution from college startup to global behemoth. These days, a no-holds-barred discussion over a beer or two is no longer the appropriate forum for important business decisions. But neither, believes Hornsey, is a stuff y boardroom.

“We can scale to 50,000 people and still be innovative, but I’d be lying if I said this was easy to do,” she says. “You have to work at it. You have to make sure that you do not become bureaucratic by default. One of the things we look

Below: Liane Hornsey

“The fundamental building block of Google’s culture is that we hire like-minded people"

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46

BIG INTERVIEW

carefully at is the number levels we have in the organization. We try to keep that tight and light, and every quarter we have what we call ‘bureaucracy buster’, which is where anybody can write to our senior guys and say ‘look, this thing or that thing is driving me mad. It’s slowing things down. I can sense bureaucracy. I can sense lots of form fi lling.’”

The decision-making process, while not done entirely on consensus, is something more akin to a democracy, with top-down thinking meeting bottom-up ideas somewhere in the middle, says Hornsey. At Mountain View, this procedure has been carefully – and at times organically – cultivated since Google’s birth. How, then, does Hornsey ensure that other creative hubs in the Google world mirror this atmosphere of engagement, positivity and creativity?

“We don’t try to create an identikit Google office everywhere in the world,” says Hornsey. “We are much more cognizant of local needs. Each of the 20-25 offices I have visited all feel slightly different. Even if you’re sitting here in Mountain View and you go up to San Francisco they feel different, and that’s because the people create the offices and the people create the culture.”

While there are no strict Google guidelines on how to act, the organization does follow a loose set of guiding principles to ensure a collective atmosphere is fostered throughout the world. “I’m not a believer in having values that you stick

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BIG INTERVIEW 47

on a wall and everybody has to share corporate values. I think I instinctively know what those values are, and as a company we know what’s important, so we tend to be guided by those bigger, over-arching values, even though we allow an awful lot of local flexibility.”

One thing that is rigidly adhered to is Google’s TGIF. At 4.30pm each and every Friday around the world, all Google offices down tools for a spot of socializing. Nothing too revolutionary, admittedly, but the fact that this is a universal directive means a lot to the average employee, believes Hornsey. “We do lots of things to bring people’s lives into Google and Google into people’s lives, aiming to achieve a mixture between work life and social life. It is this environment that helps retain our special talent.”

Talent management Identifying Google-caliber workers and then making them happy and productive at work is only half the battle for Hornsey. Career progression for most individuals at Google is paramount, and it is a delicate area of the business that Hornsey is at great pains to get right, 100 percent of the time.

“My biggest worry at Google is managing talent,” she reveals. “Normal HR directors tend to work on the premise that approximately 10 to 15 percent of their staff are real high potential, and so they need to work with that 10 to 15 percent to really nurture them to senior executive positions.

“I have a very different problem. My problem is I hire brilliant people. So 95 to 99 percent of my people are high talent, so we are unable to use traditional methods for promotion. It would be wholly inappropriate when you have the talent pool that Google has to have high potential programs, for example. Instead, we encourage a great deal of rotation and mobility. For example, in the sales organization we have had roughly 1000 people move jobs over the last three quarters. They either move jobs permanently or they move jobs to assess whether, for a period of time, they would like to work in area X, Y or Z.” Google’s culture of nurturing as well as attracting the top talent is one of the organization’s sturdiest of foundations. Equipping whip smart, ambitious and ingenious individuals with the environment and encouragement they need in order to be most productive is a sure-fire route to success, but it’s a route that requires plenty of maintenance along the way.

“We work awfully hard on giving very bright people additional skills, additional learning and additional knowledge,” says Hornsey. “We also spend a lot of time preparing people for management. I’ve often said that I was a manager for about 15 years before I knew how to do it. It’s often when you get very good individual contributors who are used to doing it themselves who are highly motivated, it becomes difficult for them to manage people because that is a very big transition to make.”

As a coping method, Hornsey ensures there is a sturdy and approachable support network in place for all staff members – and it’s pretty much most of them – keen on

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furthering their career. “We have mentoring and leadership programs. We run what we call career gurus where we give advice to would-be managers. We also have lower expectations of managers when they’re fi rst in the job. We don’t suddenly drop them in and say ‘right, we expect you to be able to do the same job as someone who has been managing for ten years.’”

For Hornsey herself, she admits to having a ‘lightbulb’ moment when she realized that her own success was intrinsically linked to the progress and success of others. “I had always been an individual contributor who succeeded,” says Hornsey. “So my whole working life was geared towards what I did, but I had a lightbulb moment when I realized it wasn’t about me anymore and that my success was absolutely linked to the success of my team.

That realization changed the way I managed – it literally turned 180 degrees.”

HR’s value When a company labels its entire HR department as ‘people operations’, one can assume that the organization sees its staff as something more than mere workers or drones. Google has, since its inception, placed enormous importance on the value its people bring; an attitude that makes Hornsey’s job both easier and more varied.

“One of the reasons I so enjoy working at Google is the fact that you don’t have to persuade bosses that people are important here,” she says. “It’s a very different psyche to what I have been used to. My main worry is being overworked because the whole people thing is just so very engrained in what we do, and the founders really believe in making sure that the people agenda is taken seriously. So we don’t have to persuade, and that makes a big difference.”

Having what Laszlo Bock (Google’s VP People Operations) calls a workforce of ‘scary smart’ people makes Hornsey’s role that much simpler. Managing the daily working lives of committed, ambitious and highly intelligent people is not without its challenges, but the typical HR issues faced by many of Hornsey’s peers simply do not exist at Google.

“We treat our staff as grown-ups and believe that they will do the right thing at all times,” says Hornsey. “Which is why we don’t keep track of sick days, we don’t monitor their every move. I never look at what time they come in or what time they leave. I do look at their output. That’s what I’m interested in. How they get to that output.”

However, in a company where the people seemingly manage themselves, does Hornsey ever feel she has to justify the importance of her role to her equals in other departments throughout Google? “In other organizations I’ve worked in I’ve almost apologized for being in HR,” admits Hornsey. “But here, I don’t. I think it’s because there’s not a decision taken at Google that doesn’t have a people dimension.

“So it’s natural here for people to turn to me or my equivalents to help with that decision. We don’t have to ask for a seat at the table, which is quite extraordinary. It took me a little while to accept that I didn’t have to apologize for

“We treat our staff as grown-ups and believe that they will do the right thing at all times, which is why we don’t keep track of sick days, we don’t monitor their every move"

18/02/2011 15:44

BIG INTERVIEW

48

my existence. In fact, it’s so much so that people don’t make decisions without coming to us, regardless of who they are in the company. It’s just ingrained in the culture, because I guess that’s how the founders have always worked.”

Such respect for people and their ability to perform professionally and independently is something that underpins Google’s success, believes Hornsey. “I think Google is so successful because it hires such wonderful people. I genuinely believe that. Many other companies make it difficult for themselves by not really thinking about investing in that critical hiring moment. You have to have skilled people that are going to take your company to the next level; innovative people, creative people, people who feel supported. When you neglect to nurture this atmosphere you will have trouble retaining talent.”

When is HR not HR? The HR department at Google looks like a typical HR department, but its key difference – as outlined by Hornsey – is the greater emphasis people play in making the company great. There is a conscious, intentional effort by Google to attach a weightier importance to the value the staff bring to the company.

“We call ourselves ‘people operations’ because we are not just about HR, and it’s partly because of Lazslo’s

Google.indd 48

vision. He has a vision for us to be just as analytical and data-driven as every other function within Google. So if you take the people operations function here, we really have a third of our people who are deep, Ph.D. researchtype people who are fantastically analytical. Then we have about a third of people who are ex-consultants and a third who are traditional HR people.

“So the people operations title is really about signalling that it isn’t just that one-third; it’s those three thirds, and that those three thirds together mean that we can be much more capable when we’re looking at the people agenda.”

Busting misconceptions is another by-product of working for Google’s people operations. A traditionally staid view of HR practises is of organizing benefits, collating sick days and keeping an eye on staff holiday entitlement. None of this, says Hornsey, falls under her remit. “I’ve been in HR for 15 years and have never seen an organization where HR has managed benefits and admin.

HR can’t do that. It has to be a consultant to the business to be even vaguely successful.”

One example of the effectiveness of Google’s people operations is its key work in building functional small teams that create an atmosphere of success and innovation. “Building a team at work is no different to building a team of friends,” says Hornsey. “People gravitate towards

Above: Google UK Headquarters, London, United Kingdom

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BIG INTERVIEW 49

“Confl icts do arise, as they always will when you have groups of people working together,” admits Hornsey. “But confl ict at Google is brought out into the open in a very positive way. We are lucky because we don’t have a great deal of fear here. We haven’t suffered from lots of reductions in force; we’ve been excruciatingly lucky in terms of not having to deal with the economy in the same way that some companies have.

“So our employees do feel a degree of comfort, and confl ict tends to happen when there’s fear and concern, and there’s less of that here at Google. But if confl ict happens, it is important to bring it out into the open but not interfere. We never manage confl ict top-down.”

Helping Google grow

people like them, and if you hire people that you think are similar in purpose, similar in values and similar in intent, they will team well because they have the same interests and aspirations.

“So good people management is about allowing people to gravitate to where they want to gravitate to, and to put that into business terms. For example, we really encourage our engineers to work on the products and projects that they want to work on. We encourage them to gravitate into a team. Maybe they will work on search for a while and then just gravitate out of the team and maybe work on display or mobile or maps.

“We encourage them to self-form again around their own ideas that come up in 20 percent projects. So I think it’s allowing the people the freedom of movement to gravitate where they want to go.”

Such a fluid job description is perhaps unique to Google; it’s certainly unique to an organization of Google’s size and scope, particularly its product and engineering departments. To be afforded such responsibility at work has reaped enormous benefits for both the company and its staff, based upon the initial notion that if you hire great people, not only will they be self-motivated and driven to succeed, but they will actively flourish in an environment that affords them this freedom.

Google.indd 49

With the right staff on board, minimal confl icts, a harmonious working environment and low turnover rates, how much more can Google’s people operations add to the company’s continued success? Where else can the HR sector drive the organization in the future?

“We have a number of people in recruiting who actively look to fi nd the right people,” says Hornsey. “It’s my hardest challenge to fi nd enough of the right people for Google year on year, month on month, but we continue to do it because a lot of people want to work here.”

One of the attractions that Google tempts potential applicants with is the promise of working in a variety of exotic and interesting locations. Staff are encouraged to work for a month or two in offices away from home, in New York, or Mexico, or Europe.

“We allow for that movement,” says Hornsey. “Whilst it could be detrimental to the business because you have people moving around all the time, we allow for that and we manage it. We tend to believe that actually if we let you do that you will be more productive, and the feedback we get around people’s learning and the fact that they value and are grateful for the experience means an awful lot.”

With Google a paragon of all that is wonderful about the world of work, could it be that the company’s beautiful offices, laid back atmosphere and culture of individuality are merely a (admittedly alluring) mask to hide a fierce work ethic, where employees – once on board – are worked voraciously to the bone? No, insists Hornsey.

“I believe in a work/life balance, I really do, but I believe it is different for every individual. I actually think it would be parternalistic and wrong to tell people that they have to leave the office at 3pm, 4pm, 5pm or whatever.

People are grown-ups and they have to make decisions for themselves around how they work and when they work.

We concentrate on output, not on how many hours someone is at work.”

But in conclusion, Hornsey is adamant that the right people will know, instantly, that Google is the place for them, for the long term. “If you hire people who really want to work on shared goals and shared products, who you feel will be accretive to the culture of Google, it really impacts positively on how people feel about the organization.”

Liane Hornsey was speaking with meettheboss.tv

18/02/2011 15:44

50

NEXT BIG THING

Same needle, bigger haystack As unemployment rates continue to rise, recruiters are finding it harder to search the everwidening talent pools for the levels of talent expected by their hiring managers, as TheLadders reveals.

N

ew research has revealed that human resource executives and corporate recruiters – already caught between the expectations of their hiring managers and the challenge of fi lling key senior professional roles – are being squeezed tighter still by the ongoing high rate of unemployment.

The research shows that prolonged high unemployment rates have raised the expectations of hiring managers, who believe the talent they are looking for is now easier to fi nd. At the same time, however, high unemployment has created a cluttered labor market, where job openings generate substantially more applicants than they did three years go.

As a result, it’s the corporate recruiter who is left to sort through that increased clutter in order to deliver against hiring managers’ increased expectations – and fi ll the key roles that fuel advantage for their companies, according to Challenges in Sourcing Six-Figure Talent, a research report from The Aberdeen Group.

“The research shows that prolonged high unemployment rates have raised the expectations of hiring managers, who believe the talent they are looking for is now easier to find” Aberdeen’s research identified three primary factors that are making recruitment for key senior positions more arduous in the current business context. The first concerns itself with the imminent, en masse retirement of baby-boomers currently fi lling key positions; applicant clutter, as already mentioned, combined with the fact that highly skilled senior professionals are likely still employed follow a close second. Finally, the high-level nature of positions, which attract many ‘aspirational’ candidates who are less likely to qualify, comes in a strong third.

“Sift ing through the clutter becomes very inundating in our resourceconstrained function,” one survey respondent, a recruitment manager at a fi nancial services company, told Aberdeen.

Of note, the extremely high cost of poor-quality hires makes “sift ing through the clutter” more critically important than ever before. According to Aberdeen’s analysis, organizations estimate the cost of replacing a key senior position at about 86 percent of the position’s annual salary, and they reported an average 10 percent turnover rate within 12 months for such positions. Assuming an average annual salary of $120,000, an organization employing 50 such people would replace five of them in a year at a cost of $516,000.

Given all these factors, it is unsurprising that Aberdeen’s research also discovered accelerating deterioration in the effectiveness of online job boards. Online job boards were rated ineffective by 34 percent of re-

THE LADDERS.indd 50

spondents, second only to print classifieds (at 44 percent). According to the research, 70 percent of respondents said job boards delivered too many candidates. One third indicated less than 10 percent of job board applicants actually matched the qualifications in the job description. Fift y-nine percent indicated they didn’t have enough time or personnel to review all applications submitted through online job boards, and 45 percent asserting that they didn’t see the value in paying for job postings on the boards.

Importantly for recruiters fi lling key senior roles, the research makes clear that job qualifications and the effectiveness of job boards have an inverse relationship: as critical job qualifications go up, the effectiveness of job boards goes down. Worse, job boards tend to exacerbate the clutter problem already inundating corporate recruiters. “Without question, the best means of sourcing talent for us is networking and personal references,” another respondent told Aberdeen.

However, while the research shows very high “effectiveness” ratings for employee referrals and social networking, it also makes clear that they are not enough. Use of third parties specializing in sourcing talent for key senior positions was indicated as most effective. Further, using such recruitment solutions providers is likely to lower costs overall, despite the obvious direct cost being incurred by their use.

The effectiveness of third-party recruitment solutions is derived from their ability to use online technology to cast a relatively wide net, yet prescreen for matching qualifications using the “human touch.” In the words of one research respondent: “We don’t see automated fi ltering of resumes as a viable solution. If you’re too specific, you can weed out potential winners.

And it takes both experience and thoughtfulness to recognize the instances where someone’s resume just doesn’t do them justice.”

In fact, dedicated support from a recruitment solution provider that works hard to understand the unique needs of an organization and then delivers quality resumes, shortening time to source, was cited by 59 percent of the research respondents as a top factor for enhancing their sourcing ability. It turns out that technology, paired with the human element, is what’s most cost-effective.

In addition, third-party recruitment solutions lower costs by reducing bad hires. Organizations that enlisted recruitment solutions providers had significantly better new-hire retention, leading to real savings in replacement costs. Of those organizations partnering with a third-party recruitment solution provider, 63 percent reported less than 10 percent first-year turnover for their key senior roles, compared to 54 percent of those that rely on job-board postings.

The bottom line is, for key senior positions leading recruiters and HR executives are turning to recruitment solution providers (such as search agencies and online technology providers) to effectively source resumes of applicants that better match their geographic, industry and skill needs – all of which shortens time to fi ll.

Learn how TheLadders pairs technology with the human element to ensure your sourcing effectiveness. Visit recruit.theladders.com or call us at 866-292-7083.

18/02/2011 15:30

LADDERS PASSPORT AD.indd 1

16/02/2011 11:03

52

PERFORMANCE MANAGEMENT

With sickness and absenteeism costing businesses billions of dollars each year, Ian Clover looks at an innovative of scheme that has incentivised thousands of employees to get active, ďŹ tter and more productive in the workplace.

WE CAN WORK IT OUT

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18/02/2011 15:20

PERFORMANCE MANAGEMENT 53

W

e all know the facts. We have all heard the horror stories. Inactivity, sedentary lifestyles and bad diets are eviscerating the populations of the western world, causing chronic diseases, shortening life spans and drastically altering behavioral patterns. Obesity and ill health caused by the lifestyle choices of individuals were previously issues to be dealt with solely by that person, their immediate family and their family doctor. If a person chose to saunter, waddle or puff their way through life, fi ne; that was their prerogative. But now, the situation has become so problematic and universal that it has begun to negatively impact upon the lives of the majority.

In Europe, national healthcare services are stretched to breaking point throughout the continent due to increased occurrences of preventable diseases such as hypertension, diabetes, heart disease and many forms of cancer.

In the USA, health insurance programs – the majority provided by an individual’s employer – are becoming ever more expensive and restrictive. Th is epidemic of the west has become a responsibility for us all, from the individual themselves right up to politicians and medical and industry leaders.

Sickness and absenteeism from work cost businesses billions of dollars every year. In the UK, a study by Hewitt Associates estimates that sickness costs British companies more than £1000 ($1580) per employee a year, while absenteeism adds an additional £662 ($1047) per employee.

If you factor in the unquantifiable indirect costs of lower productivity, replacement recruitment and other issues, these figures can increase by as much as 60 percent.

Poor employee health is an expensive issue throughout Europe and the USA. But while most companies in Europe do little to monitor, address or rectify the situation – largely because of the free or subsidised provision of universal healthcare throughout the continent – a pioneering scheme here in the States is tackling the issue of staff ill-health head on.

Virgin HealthMiles provides incentivised employee health programs for companies eager to get a handle on the collective health, and consequential productivity, of their staff. The company has devised a Pay-for-Prevention model that measures the physical activity and healthy lifestyle changes of participants, and then devises a number of rewards for the employee, closely collaborating with the employers to ensure the incentives are in the best interests of both parties. So, workers on the scheme could earn days off

Virgin Health Miles.indd 53

work, cash prizes or contributions to their pension plans by simply signing up, working out and getting fit.

“What we’re doing is very straightforward,” says Sean Forbes, President of Virgin HealthMiles. “We’re creating a good drive discount for healthcare and it came about in a pretty straightforward manner. We recognized that there was a disease that was exploding across the developed world – obesity, and all of the chronic diseases that came with it, like diabetes, heart disease and a lot of forms of cancer, not to mention the precursors to those diseases like hyperlipidemia and hypertension.”

According to the Milken Institute, obesity in the workplace has begun to account for 75 percent of all corporate healthcare spending, amounting to approximately $1 trillion in lost employee productivity. The idea behind Virgin HealthMiles is to make it easier for both employees and employers to reach a happy medium; a medium that encourages personal fitness and involvement, allied to corporate reward and, hopefully, resulting in better work performance, fewer sick days and a reduction in unspecified absenteeism.

“Richard Branson is probably the world’s most pioneering social entrepreneur, and our thesis was that Virgin could bring the funds together to go where all the collective wellness programs of the past three decades have failed to go,” says Forbes. Investment has been instrumental in getting the scheme off the ground, but it is not just fi nancial incentives that have been the drivers behind corporate and worker participation.

“There are three factors behind the success of Virgin HealthMiles, and one of those is certainly the lure of the dollars,” says Forbes. “But it’s also the fun factor, and the trust too. We currently have approximately 650,000 people on the program, and we spend a lot of time talking to the ones who have been on it for some time now because we see renewal rates that are in the high 90-percents.”

Engagement and incentive Very few people would choose a life that is threatened by health concerns, blighted by shortness of breath and subject to the castigation and social stigma that comes with being obese. Yet millions make the daily lifestyle choices that set them sleepwalking down this path almost absentmindedly; whether they lack the will power, the motivation or the confidence to affect change, there exists a vociferous ticking time bomb of an obesity problem throughout the western world. Forbes has recognised why people perennially try – and fail – to lose weight, get fit, and change the habits of a lifetime.

“Engagement has been the number one reason why other wellness programs have failed,” he says. “People try to get excited about having a gym membership for the fi rst few weeks after their New Year’s resolution, and then we all know what happens. So we have recognized a way that keeps people engaged in the scheme.”

By aligning the workplace with one’s own personal health, Virgin HealthMiles has been able to elicit not only a greater take-up in participants to its health schemes, but

18/02/2011 15:20

54

PERFORMANCE MANAGEMENT

more regular participation too. The Pay-for-Prevention model treads the well-worn path of professional relationships, mining the same vein that dictates that colleagues work for, rather than against, one another, and fostering a healthy level of camaraderie and competition among the participants.

From a corporate perspective, such positive and quantifiable participation is a godsend. “The CFO of a company that is involved in the Virgin HealthMiles scheme can, for the fi rst time, inspect what they expect around the health of their workforce,” says Forbes. “So we take some simple measurements of employee activity, and then once a month some biometric measurements, blood pressure, weight and body fat, and we put this information together in the form of reports to employers that can be used in

Inactivity in action

Who would have thought that doing so little could cost so much?

• According to the Center for Disease Control (CDC), inactivity drives 40% of the cost of lifestyle-related chronic diseases.

• Treating and paying for preventable chronic diseases accounts for 75% of all business healthcare costs in the U.S. • In the UK, the total cost of sickness and absenteeism to business is £20 billion ($31.6 billion).

• In Ireland, absenteeism costs employers €563 million a year ($768 million).

• Obesity in Europe accounts for 7% of all healthcare spend.

• Peninsula Employment estimate that 17% of all sick days are not genuine • Employers typically see a return of $3 for every $1 they invest in employee health initiatives.

• A recent survey from National Business Group on Health found that two out of three workers whose employers offer financial incentives say it has motivated them to try healthier lifestyles.

Virgin Health Miles.indd 54

an anonymous format. The employer then dishes out the reward, which can be a cash reward, premium discounts, days off or HSA contributions.”

Virgin HealthMiles enters into a discussion with the employer in order to work out what type of reward they would like to bestow for each type of behavior. These ‘qualifiers’ are flexible; equipping the employer with the ability to accurately assess how well their staff is performing, and how best to reward this good performance. All of this is achieved through the utilization of some simple but effective technology that enables accurate reporting, recording and feedback.

“One of the most important parts of the program is a family of activity and biometric measurement devices that we use,” says Forbes. “From an employee’s point of view, they get three things when they sign up to a program. They get an activity measurement device, which is an accelerometer the size of a quarter; they get access to a personalized website that shows how much activity they have done over the days, weeks, months and year and what that is worth them in terms of money, days off work or HSA contributions; and they get a social network, that looks a lot like Facebook.”

While the accelerometer might sound very much like some frightfully futuristic ‘stick’ with which participants are beaten in order to attain better health and fitness, the personalized website and social network act very much as the ‘carrots’. There is a tangible sense of reward and progress viewable on the website, while the social network acts much like a cyber-version of the obligatory cheering, clapping crowd that line the course of marathons the world over – offering encouragement to those in the race. This cooperation, this sense of achievement and belonging is, cites Forbes, one of the key drivers behind the success of these programs.

“The social network is right there on the homepage.

Users are also taken there automatically whenever they plug in any of our devices. The site allows them to engage with other HealthMiles members, typically in competition but also in chat communication, feedback and banter. This all happens virally, and when we talk to the users for feedback, they all say that the thing that keeps them coming back to the program are the social connections they are making.”

Most communications are initially made within the boundaries of a single company, but can quickly expand externally, as Forbes explains. “There are no barriers with the scheme – there’s nothing keeping a HealthMiles member from, say, the American Diabetes Association from reaching out to somebody from a bank. And they do. Typically, individuals initiate competitions between themselves, or even form teams. So then, during the Olympics and the last soccer World Cup, teams began forming around their favorite countries, with cross-company competition occurring organically.”

Benefits to business So far, so good for the employees. Coupling personal achievement with financial or career reward is a masterstroke, while the sense of belonging and social interaction forged by the competitive nature of the programs has been the key driver behind Virgin HealthMiles’ impressive re-

18/02/2011 15:55

PERFORMANCE MANAGEMENT 55

About Virgin HealthMiles Virgin HealthMiles provides employee health programs that pay people to get active. The company’s Pay-for-Prevention approach, based on physical activity and healthy lifestyle change, attracts an average of 40 percent of employees who participate, which helps organizations reduce medical costs and improve employee productivity and satisfaction.

The program is offered by employers, government entities, and insurers. Over 120 industry leaders representing more than 600,000 employees across the U.S., including American Diabetes Association, Intuit, MWV, OhioHealth, Ochsner Health System, Protective Life, SunGard, SunTrust, and Timberland have selected Virgin HealthMiles’ program for their employees.

Members are rewarded for getting approximately 30 minutes of moderate activity five days per week. That is the same amount of activity the CDC recommends adults get in order to reap long-term health benefits such as a significantly reduced chance of developing type 2 diabetes.

“Virgin HealthMiles provides its companies with real-time data on what is happening, and also instigates conversations between the CFO and a dedicated Virgin account manager to discuss where the improvement areas lie for their population”

Virgin Health Miles.indd 55

newal rates. But what of the companies that get involved?

How difficult, time-consuming and rewarding is participation? How does the technology employed make it easier for companies to quantify investment, risk and return?

“The social component is facilitated by our technology – both the hardware and the software – in bringing people together around this unifying goal of positive behavior change related to activity and biometrics,” says Forbes. “For the company, we can get them up and running with 70 percent participation rates very quickly. This is incredibly important, because CFOs want to manage their population costs down, and if you do not have a large threat for the population using something that is beneficial, then you’re not going to see a large impact.”

With the majority of employees now equipped with their own smartphone, they are always connected to the Internet and, as a result, more likely to engage in and be

attracted by the social component of Virgin HealthMiles.

Additionally, there is a growing desire among the populations of Europe and the USA to get fitter and healthier.

How, then, is this desire and accessibility transferred into increased productivity and better performance in the workplace?

“Many businesses in the U.S. are reaching a tipping point,” says Forbes. “As self-insured businesses they are paying their employees’ claims costs. Those claims costs associated with preventable chronic disease have been increasing at double-digit rates for the last 12 years. So this has become the largest unmanaged portion of their income statement. There are other portions that are equally large, but these are generally associated with their sales force, which they have been managing for years.

But there has never been a way for companies to get independent, third party validated data about something that drove so much cost and had such a large impact on profitability as employee welfare. So we have seen a really big take up in self-insured employers wanting to figure out how they can get a measure on something that has traditionally been unmeasured.”

Virgin HealthMiles provides its companies with real-time data on what is happening, and also instigates conversations between the CFO and a dedicated Virgin account manager to discuss where the improvement areas lie for their population. Th is analysis and feedback is then translated into the company to provide more incentives for its employees to strive for.

“Th is is a very active conversation,” admits Forbes.

“We have a real-time reporting facility that we use inside of Virgin HealthMiles to keep track of our clients, so that we reach out to them proactively when we see, typically, certain departments or certain demographics heading towards risk areas, or not keeping up with what we see is either the pace of the rest of the company, or the industry benchmark.” How the company then acts upon this information is a decision taken collaboratively with Virgin.

Under the Pay-for-Prevention model, an employer can accurately work with its employees to assess where each individual needs to align its objectives with next year’s healthcare plan, and how to attribute a suitable reward parameter. “People can receive up to $2500 a year for doing the right thing,” says Forbes. “CFOs have the option of making that a zero impact to their income statement by balancing it against premium increases for people who either elected not to participate, or didn’t push their activity and biometrics in the right direction.”

Extending such a business model into Europe is Forbes’ next aim, a region where, he admits, businesses and healthcare policies are set up in a manner quite different to those here in the U.S. “Clearly, the U.S. has got its own, very defi ned way of doing things, especially in terms of reward schemes and self-insured companies,” concludes Forbes. “But you cannot lose sight of that $1 trillion worth of lost productivity. Businesses in the USA and Europe are going to be interested in hearing more about that, and how to – excuse the pun – eat into it.”

18/02/2011 15:20

56

ASK THE EXPERT

Changing the conversation: Going beyond costs and capabilities when searching for a provider Finding the right provider for a deďŹ ned contribution plan requires more than comparing costs and capabilities. James McInnes, Senior Vice President at Prudential Retirement, explain the key needs sponsors need to focus on.

M

any providers offer similar services and pricing, making it difficult to select one that is the best fit. Sponsors should focus on how well a provider meets these needs:

Sponsor A provider must assist the sponsor in fulfi lling its responsibilities – including those as a fiduciary – to provide a sound plan, and ensure participants have the tools they need. Sponsors should also look for providers that allow maximum choice in investment alternatives and suitable recordkeeping services.

PRUDENTIAL.indd 56

Participant Surveys indicate that participants want a plan that helps them better prepare fi nancially for life after work. A good provider must promote plan participation and offer a range of investments, asset allocation and the opportunity to create a reliable stream of retirement income.

Intermediary Intermediaries need to support their clients by providing choice and guidance in the investment selection process, help in fulfi lling fiduciary obligations and assistance with participant education. An effective provider presents inter-

mediaries with an array of investment choices, data and analytics to back the counsel they provide, and the ability to leverage an integrated participant education program.

By focusing solely on costs and capabilities, sponsors cannot be certain they are choosing a provider who will meet their requirements. They should consider changing the conversation and focusing their search based on a list of differentiators:

Institutional investing A good provider offers access to an array of institutional investment vehicles that provide:

18/02/2011 15:27

ASK THE EXPERT 57

An open architecture, granting access to a variety of investment managers and vehicles, including collective trusts, separate accounts and mutual funds; Recommendations based on the best interests of the plan; and advantageous cost structure.

Prudential’s investment strategists deliver access to quality investment vehicles plus analytical support and monitoring that meets sponsors’ need for choice and assistance.

Working with intermediaries, Prudential offers analysis, data and support, and administration of a range of investment vehicles. Th is collaboration helps solve the intermediaries’ need to advocate the investment mix most appropriate for their clients’ plans.

Prudential offers an asset allocation solution in GoalMaker, a program that suggests a properly-allocated portfolio created from the plan’s underlying funds and based on the participant’s years to retirement and risk tolerance.

GoalMaker enables intermediaries to set the allocation themselves, or to default to one provided by Prudential.

that offers a strong stable value portfolio can meet sponsor, participant, and advisor needs for a “shelter from the storm.” “Sponsors need to offer investments that include the safest options possible. A safe option should preserve principal and accumulated earnings, and generate steady returns,” says James King, Jr., VP Stable Value Markets Group Prudential Retirement.

Stable value funds also provide an appropriate investment for participants with a short investment horizon, a more conservative investor style, or the need to balance their more aggressive investments.

Income solutions Traditionally, defi ned contribution plans have only addressed accumulation, not lifetime revenue. Prudential’s IncomeFlex is the fi rst inplan income option to deliver: Protection against longevity risk with guaranteed lifetime income; safeguards against market risk with a stream of revenue that won’t decrease even if markets decline or accounts become depleted; upside growth potential; and flexible access to retirement assets.

For sponsors, IncomeFlex offers a complement to an asset allocation or target-date strategy that addresses fiduciary requirements and meets QDIA guidelines. IncomeFlex can also be embedded into GoalMaker for a complete asset allocation and income solution. “Sponsors should seek a provider who can help their participants translate their nest egg into a guaranteed stream of lifetime income,” says Brent Walder, Sr. VP Director of Institutional Income Innovations Prudential Retirement.

IncomeFlex also meets the intermediaries’ need to bring compelling investment solutions to their clients by complementing the plan’s underlying investments with income and allocation tools that are driven by the intermediary.

Safe investment solutions Sponsors should offer investment choices that deliver principal preservation and steady returns. These assist participants in constructing balanced portfolios. Choosing a provider

PRUDENTIAL.indd 57

Prudential’s Retirement Plan Strategies consulting team includes actuaries, regulatory consultants, and investment strategists, and focuses on delivering integrated solutions to help sponsors: Enhance the design and costeffectiveness of their plans; quantitatively assess retirement income; improve investment options and governance; and understand and manage fiduciary risks, including compliance with regulations.

Strong plan design is also tied to the participants’ need for positive retirement outcomes.

Prudential offers features that help do that, including: Auto enrollment – for improving participation among low-income and young employees; and contibution escalator – which follows through on participants’ best intentions by automatically increasing their contributions. “Sponsors face greater fiduciary risk as the regulatory environment changes. Th rough integrated plan design, legislative and regulatory compliance and investment strategy, we help sponsors reduce risks and focus attention on their core business,” explains George Palms, Sr. VP Retirement Plan Strategies Prudential Retirement.

Delivering tradition and innovation

“It is imperative that sponsors choose a partner with a track record of success and innovation, yet is nimble enough to modify its offering going forward” Prudential offers a range of stable value solutions, including general account, separate account and alternative options – as well as an FDIC-insured product – all of which provide: Guaranteed interest rates, protection of principal and accumulated interest, preservation of capital plus competitive intermediate-term returns and well-diversified fi xed income portfolios.

Ongoing risk management Choosing a provider that can help navigate the intricate regulatory environment is vital.

The provider should be adept at consulting on compliance issues, because risk management increasingly takes a prominent role in the success of today’s plans.

It is imperative that sponsors choose a partner with a track record of success and innovation, yet is nimble enough to modify its offering going forward.

Prudential has been delivering retirement solutions for over 85 years. An insurance leader for 135 years, our rock symbol is an icon of strength, stability, and innovation that has stood the test of time.

Meeting your retirement challenge It’s clearly no longer in a sponsor’s best interests to choose a provider based on capabilities and costs. Sponsors need to change the conversation and ask themselves: “Do I want a provider who reacts to yesterday’s problems, or solves for tomorrow’s needs?”

Prudential stands ready to meet your retirement challenge. We are a partner that puts a thoughtful approach and a visionary mindset to work for you.

Jamie McInnes is Senior Vice President of Product Management and Development at Prudential Retirement.

He oversees the management of Prudential’s fullservice and investment product suite, including defined contribution and nonqualified deferred compensation, Total Retirement Services, retail products, and sub-advised funds. Jamie holds the CFA designation and earned a B.A. in Biochemical Sciences from Harvard University; an M.A. in International Relations from the University of St. Andrews (Scotland); and an M.S. in Finance from Suffolk University’s School of Management.

18/02/2011 15:27

HEALTH AND WELLNESS

FIT FOR WORK

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Workforces the world over are wonderfully diverse places, but if a company can tweak, nurture and encourage their staff to take better care of themselves, the benefits for health, fitness and productivity are well worth the hard work, as HRM discovers.

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n this litigious land of ours, the issue of employee wellness is a potential lawsuit minefield. Corporations would love nothing better than to have a fighting fit workforce, where every staff member was rigorously self-disciplined, ailment immune and obsessively flab-free. Th ink about it: such a virtuous office environment might only ever wobble from its harmonious halo-laden trajectory at office parties, where testosterone, alpha male overload, alcohol and lowered inhibitions might make for an explosive atmosphere.

But for the rest of the year? It’s going to be more like a scene from iRobot – identikit workers each performing at the top of their game, day in, day out. For a CEO, such a scenario borders on the utopian. It’s also completely, 100 percent never going to happen, because the great thing about the workplace is the natural diversity that it attracts.

There’s your alpha males and your superwomen of course, but there’s also your techie geeks, your comely office managers, your sharp-suited upstarts, your scruff y geniuses, your stern-faced fi nance guys, your creative ‘thinkers’, your friendly secretaries and everything else in between. Successful workplaces need this hotch potch of characters in order to survive, but where there’s strength there’s also weakness. Some will be off sick more than others. Some will be less productive. Some will injure themselves pushing their bodies while playing sport and thus require time off… and your health and wellness program will continue to pick up the rising costs of what is merely typical human behavior.

There is no point bemoaning this state of affairs, and to do so would see a company rightly vilified as uncaring, politically incorrect and not to be trusted. However, it is understandable that most companies would be delighted to see an improvement in the performance of their staff, and if that performance can be tied to better health and fitness – and research shows it can – then it becomes an obvious area of interest for a company’s HR department.

Studies have shown that fitter people are more productive and engaged at work: they enjoy their job more, they are more ambitious, they work harder and they accomplish more. But not everyone can be a high-performing athlete.

We can’t all complete Ironman triathlons each weekend, or spend our free time at the gym. Conversely, employees also have a duty of care to themselves and a responsibility to their employers to keep their bodies in a state suitable for work. Th is is an unwritten rule, but it’s implied throughout

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the land – you don’t show up for work drunk, nor with a hangover (at least if you can help it, and you should be able to); you don’t partake in any personal activities that are seriously going to hinder your workplace performance the following day. In return, your company abides by strict health and safety procedures to ensure your day at work is as comfortable and safe as possible, with health insurance and wellness programs thrown in in an attempt to elicit maximum performance from their workers at all times.

Th is system has been based upon a mutual respect between employer and employee, but recent obesity scares and health epidemics have upset this delicate balance somewhat. And as wellness costs have risen in order to offset poorer employee health and shakier confidence, anecdotal evidence is beginning to suggest that a great deal of employees have now decided to take active control of their fitness levels in order to achieve more at work, enhance their job security and, almost as an afterthought, improve their own health.

Fitter = better?

Top-level execs are less likely to be the fatcats of old. That classic image of the balding, wheezy, short middle-aged guy with his Napoleon complex and rotund waistline leading the board at larger corporations could not be more outdated. Today’s execs tend to be less overwhelmingly male, and are more likely to be fit, healthy and focused high-achievers, in both their personal and professional lives.

Ben Fertic is one such example. As the President of the World Triathlon Corporation (WTC), he is both a successful businessman and a formidable fitness aficionado, having completed his first triathlon in 1985, before working as an Ironman consultant and then, at the turn of the Millennium, joining the WTC on a permanent basis.

Fertic believes that the twin feats of career success and personal enhancement are inter-linked, but mutually exclusive. “In business or in Ironman, you’ve got to set the goal of getting something accomplished,” he says. “And so at some point, you’ve got to make your mind up that this goal or that goal is the goal that you are going to pursue.

“You have to have a tremendous amount of planning and desire to succeed in your own career, and completing an Ironman or improving your fitness works in the same way. You plan your nutritional schedules. You plan your workout schedules. You plan out every instance of the event. Just like Ironman, in business it takes a lot of hard work in order to achieve you goal – building respect, infrastructure or contacts in your business is just like building your base fitness level for Ironman.”

Such focused, single-mindedness is a trait that employees can learn to adopt, even if they don’t feel naturally blessed with such proclivities. The intoxicating sense of achievement that comes with completing an Ironman triathlon is difficult to replicate elsewhere in daily life, but there are parallels between personal fitness accomplishments and professional successes. “Th ings don’t necessarily always go the way you want them to during an Ironman

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race,” says Fertic. “But you adjust, you overcome and you carry on – these abilities translate extremely well to the working world.

“Th is sense of culmination, of looking back at a completed goal, a job well done. In Ironman there’s a fi nish line, and for business it’s whatever particular project or partnership you were working on, and what that goal was.”

Fertic has spotted a great deal of parallels between his Ironman participants and successful businesspeople. Or in other words – a lot of CEOs and other C-level executives like to participate. “The Ironman ideal kind of aspires to a certain individual,” says Fertic. “We even have an event called the CEO Challenge, where CEOs and executives race. There is something about the competitive, self-improvement nature of these guys that makes them thrive in both fields of business and fitness.”

There is a danger that such self-improvement, such competitive outlooks and such a sense of drive and determination could lead to selfishness and a lack of solidarity among the competitors. The truth, reveals Fertic, is something surprisingly and refreshingly different.

“There’s something unique about the sport of triathlon in that everyone – all the athletes – come back to the line to cheer on the last person to finish. There is something very unique about this: it’s not just about the person who wins – it’s about every person who crosses the line, who completes the race. And this is something that I’m sure will surprise a lot of people, but it’s a hard fact of Ironman and, I think, high achievers in business generally. They work hard and know how hard you have to work in order to be a success. So there’s an immediate connection and it translates well to the business world.”

Optimal performance A worksite study by The Physician and Sports Medicine journal found that better fitness does indeed promote enhanced job performance. Their study took a group of commercial real estate brokers and encouraged them to participate in a weekly aerobics training program for 12 weeks total. Their sales commissions during this period were compared to fellow stockbrokers who were told to do no exercise and results showed that those undertaking the exercise program earned noticeably more for themselves and their company. A similar study looked at hospital workers and found that those involved in the exercise were performing better and more accurately at work, and selfassessed their job satisfaction in more glowing terms than those doing little or no exercise.

With every study unanimously reaching the conclusion that fitter employees are better employees, the next question for businesses and HR departments to ask is – so how do we achieve this? As reported on page 52 of this issue’s HRM, there are already a number of schemes and initiatives to encourage employees to take better care of their wellbeing, but a few gentle pointers here and there can also educate staff members on the importance of their fitness levels.

Overleaf are a few home truths that should help your staff give greater consideration to their overall wellbeing. 

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Fit employees experience less stress We all know that regular exercise is a great way of releasing the pent up emotional and physical tensions that exist in many people’s lives, but a fitter employee is also less likely to bring their worries and stresses into the workplace, and is more likely to manage their stress in a way that isn’t detrimental to the business.

Corporate fitness centers – onsite gyms, if you will – can be a great addition to any company that can afford/accommodate them because, by enabling employees to workout during their lunch break, studies have shown that workers return after lunch more focused and less stressed than before.

A ‘fit’ atmosphere is contagious Companies that not only employ fit employees but encourage healthy living and behaviors are more likely to enjoy better employee engagement and workplace relationships.

If a company actively demonstrates it cares about its employees’ wellbeing – through the provision of gyms, wellness programs, group days out and activities – it will be wellrewarded by its grateful staff.

Fit employees make better leaders Due to the mental and often physical demands required of a team leader, a middle manager or an executive, often the fitter they are the better prepared they are to deal with the challenges that such roles present.

In addition, fitter people’s innate positivity is likely to shine through during their time at work, which will cascade down to lower-level workers.

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Fit employees set and achieve goals

Fit employees are absent less often

In order to undertake and maintain an effective fitness regime, setting targets and hitting your goals are imperative attributes to have, so employees who regularly play sports or attend the gym are much more likely to be results-driven individuals who respond well to individual goals. In the workplace, such an attitude can prove invaluable for a company’s growth prospects and success. Any employee who has a proven ability to reach their personal goals is far more likely to transfer that winning mentality to the workplace.

An obvious one this, but one that – nevertheless – should not be underestimated.

Those staff that take care of their bodies take pride in the image they project will not only be more self-confident but also more productive when at work, requiring less downtime, less time to recharge and reduced susceptibility to minor illnesses.

Emotional or physical sickness are the primary causes of absenteeism, so the fitter you are, the more antibodies there are in your system, making your body more effective at fighting the harmful biochemicals in typical colds and flus that can cause short and longterm absences from work.

Fit employees are more positive Rather than a flu-like virus or de-motivation causing contagion in the office environment, how about the positive attitudes wrought by fit and healthy employees radiating around the workplace? The natural high that comes with regular exercise sticks around for longer in fitter employees, so they’re the ones more likely to bring joy, smiles and a ‘can do’ attitude to their surroundings.

Fit employees are more energetic With the human body releasing daily internal toxins from cellular breakdown, digestion and metabolism, individuals who exercise more regularly will find it much easier to ‘flush out’ the bad stuff, making their bodies – in effect – more efficient ‘engines’. The upshot of this is more energy and mental alertness – fit bodies are able to focus more clearly, move more freely and for longer, and manage stressful situations more easily.

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64

PROJECT FOCUS

Engaging membership Lisa Kime explains how a value-based program helped Greenheck Fan increase disease management participation and lower overall trend.

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reenheck Fan Corp. is a leading manufacturer of air movement and control equipment. Its fl agship ventilation products are typically found behind walls, in ductwork, or on the roofs of hospitals, office buildings, hotels, shopping malls, restaurants, schools, industrial plants and other commercial buildings.

The company prides itself on innovation – not just in the products and solutions it offers customers – but also in the design of the health benefits plan it offers employees and their families.

Like many employers, Greenheck offered a disease management program in order to help high-risk plan members more effectively manage their chronic condition(s).

Disease management programs are designed to save both employers and members the cost of major medical expenses down the road.

The challenge Greenheck and others have found, however, is in trying to persuade members with chronic conditions to participate in disease management programs. For many members, managing a chronic condition can cause fi nancial hardships. In fact, employees receiving care recommendations from their disease management coach may sometimes avoid seeking timely treatment because of the out-of-pocket costs.

Working with UMR, Greenheck Fan Corp.’s Jay Zastrow, compensation benefits supervisor, and Debbie Kasten, benefits coordinator, thoughtfully launched a progressive value-based program to help their plan members create a connection between their health and wealth while managing a chronic condition.

Recognizing the need to drive consumerism, Greenheck implemented a full-replacement health reimbursement account (HRA) benefit strategy, giving members a shared fi nancial responsibility to manage their health care spending. In addition, Greenheck introduced caretargeted benefits (CTB) to pair with its existing disease management programs.

The CTB program allows team members diagnosed with one or more of five common chronic conditions to access an additional pool of benefit dollars in return for participation in one-on-one coaching and disease management programs. Together, the HRA and CTB benefit strategies give members incentives to better manage their health with tangible fi nancial rewards.

“Greenheck chose to implement the CTB program to reward those participating in disease management by providing additional HRA dollars to help with the medical expenses for the chronic condition they are working to

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keep under control,” Kasten said. “When the illness is kept under control, the cost to the member and to the medical plan is reduced; the member becomes involved with his or her healthcare, making better use of the healthcare dollar.

Everyone wins.”

Participants can use earned CTB dollars to offset outof-pocket and member responsibility expenses incurred through treatment of their conditions as well as for hypertension and depression (two co-morbidities that often accompany chronic conditions).

CTB helps motivate employees with chronic conditions to take control of their health and reach out for help from knowledgeable coaches. Together, the coach and employee can set a specific, measurable plan for managing health issues.

Members can track their CTB dollars online. Earned dollars are automatically applied to out-of-pocket/member responsibility amounts through integrated rollover processing on eligible claims (with specific diagnosis codes).

With this proactive and innovative program, Greenheck has been able to help employees understand the tangible value of pursuing better health as well as the welcome side effect of enhanced fi nancial savings.

The results have been impressive with disease management participation surging from 21 percent in 2008 to 64 percent in 2010. Per member per month expenditures also dropped by 42 percent among CTB participants and overall trend for all members is almost 30 percent lower.

“Th is is a confidential program, but of the members that have contacted me with questions, they are appreciative of both the disease management program and the additional HRA dollars targeted to the condition they are working to manage,” Kasten said. “They are pleased to be able to have a positive impact on their health and in controlling the medical plan expense to the company and their own bottom line.”

Lisa Kime is Vice President of Account Management for UMR, the third-party administrator (TPA) unit of UnitedHealthcare.

Kime has over 20 years of health care industry experience, including the last 15 with UMR. Prior to joining UMR, she held positions at Kaiser Permanente, including patient advocate and account executive.

Customer: Greenheck Fan Corp.

Industry: Air movement and control equipment manufacturer Challenge: Persuade members with chronic conditions to participate in disease management programs.

Solution: A progressive value-based program, including a care-targeted benefits (CTB) component, to help plan members create a connection between their health and wealth while managing a chronic condition.

Benefits: Substantial increases in disease management participation and significantly lower per member per month expenditures and overall trend.

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HEALTHCARE

Going AWOL

Playing hooky from work is as old as business itself, but the increasingly sophisticated techniques employers use to snare their absent workers are enough to deter such behavior. But do companies have a duty to get to the root cause of employee disengagement, asks Ian Clover.

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inter’s hard. It’s long. It’s dark. It’s cold, windy, rainy, snowy and miserable. Yes, for you guys who live in the southern States it’s an almost insouciant nuisance that consists of a few ‘chillier’ months before the heat and endless sunshine returns some time around midMarch. But for the rest of us, it is a time to be endured, not enjoyed, especially once the festive decking has been packed away, the champagne flutes of New Year are safely back in their box and the fi rst week back at work has been faced down.

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There’s no spring in your step. You feel lethargic and depressed. Being rudely jolted into semi-consciousness by your alarm clock at 6.00am on a cold February morning to be faced with dark streets and an even darker mood does nothing to alleviate the grimness of the season.

There’s Valentine’s Day to look forward to (or not, if you’re a singleton/recently single denier), but other than that, it’s a long, hard slog towards the light and warmth of spring, and having to get up and go to work only makes the days seem longer. And longer.

It’s little wonder then, that so many of us are tempted

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to play hooky from work at this time of year. The comforter confi nes of your cosy bed are, after all, immeasurably more appealing than a cold bathroom floor, and hitting the snooze button requires much less effort than brushing your teeth, tying your tie or topping your toast. And anyway, we’re all deserving of a few duvet days in this current economic climate, right? Where we’re all working extra hard to keep the wolf from the door? Surely any employer would understand that, right?

Wrong. In today’s recessionary environment, employers are keener than ever to clamp down on employees who are seen to be taking advantage of a company’s sick leave policy.

And with jobs currently so hard to come by, you could be forgiven for thinking that employees would be doing all they can to attend work every day, irrespective of a few minor ailments. The truth is something altogether different.

“We have seen in research conducted by fi rms like Watch and Wyatt that employees’ engagement has actually been declining during the recession,” says Joyce Maroney, Director of the Workforce Institute at Kronos.

Between 2008 and 2009, Watch and Wyatt measured a nine percent decline in employee engagement across all employees, and a 23 percent decline in top performers based on a study of 235 US-based companies with 1000 employees or more.

“At Kronos, we conducted a survey in 2010 on the back of these fi ndings,” reveals Maroney. “What we discovered was that 57 percent of people surveyed indicated that they would be likely to take a sick day when they weren’t sick. So we have connected these two observations and concluded that, as people, if we are less engaged in our jobs, there is an increased likelihood we will call in sick even if we are not sick.”

The obvious correlation here is that employee engagement is falling because people feel trapped by the economic environment, and are staying in jobs they fi nd unfulfi lling rather than taking the plunge, and the risk, that lurks in the murky waters of the job market.

“There are fewer and fewer alternative job opportunities

trenched it is in everyday corporate life – is a practise that falls fi rmly in the unethical camp. But what can companies do to not only monitor such behavior, but actively tackle it? The answer is equally unethical, if not illegal.

Tackling absenteeism is now being taken extremely seriously by many corporations in the US, with a growing proportion of companies even going as far as to employ the

“Companies need to be able to audit and report on their behavior in supporting these kinds of regulations and, if they can’t, it can cost them big money if they are found out.” out there,” says Maroney. “As we begin to see signs that the economy is slowly beginning to improve – there has been a tangible uptick in hiring throughout many corners of the States – I believe that the industry will still see people abusing sick time, although perhaps they will be using their illgotten time off to conduct job searches and attend interviews rather than stay at home in bed bemoaning their fate.”

Ethical work practise It is no doubt unethical for employees to lie to their companies, and pulling a sick day – no matter how en-

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services of private detectives in order to spy on those they suspect are playing hooky. Such ostensibly underhand tactics can be traced to a breakthrough court ruling in 2008.

When Diana Vail, an employee tracked by an offduty police officer hired by her employers Raybestos Products, was fi red for abusing her paid medical leave, she took her former company to court. However, her lawsuit was promptly dismissed by the 7th US Circuit Court of Appeals, where a panel of judges roundly declared that, while surveillance ‘may not be preferred employer behavior’, it was not illegal. Such a landmark

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HEALTHCARE

case has since encouraged companies to follow suit and hire their own private investigators to track absent staff.

“I think it’s both legal and ethical,” says Maroney.

“Trust between employer and employee is a two-way street, and while I think that most employees show up for work and try to do a good job every day, there are employees who will take advantage of paid time off policies.

And as a result, I think that if a company had objective evidence that an employee was abusing that benefit, then it only makes sense for the company to examine that behavior. If an employee is, if you will, stealing time from the company, then I think it’s only appropriate for companies to follow up on that suspicion.”

Encouraging engagement Hiring detectives tackles the symptoms of employee disengagement, but has the recession placed greater emphasis on employers to get to the root cause of disen-

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gagement? Do HR departments and other management figures not have an even greater duty in these tough times to create a working environment that is conducive to togetherness?

“Recession or not, the basics of creating an environment in which employees feel engaged and loyal and more likely to be productive really do not change too much over time,” believes Maroney.

“Employees are going to feel that their contributions are valued both economically and from a perspective of people saying: ‘Thank you. I notice what you are doing; it makes a difference. Good job.’

“Being able to have open conversations with their manager about when they do need time off work is important,” continues Maroney. “Companies should make it clear that when you are legitimately sick, you should stay home because, frankly, when people come in while they’re sick, they run the risk of making other employees sick. And that, ultimately, is to the economic detriment of any company.”

Such decisive thinking is no doubt a defi ning factor behind the increase in corporations investing in wellness programs and flu shot clinics: there is a greater understanding of the responsibility a company has to ensure that not only is its working environment safe, secure and engaging, but is also supportive in both preventing illness and affording its employees adequate time to rest and recuperate.

Although trust is the two-way street that Maroney mentioned, it is still a delicately balanced and intangible notion; a kind of implicit relationship where many rules are written but an equal number remain unwritten. “When you look across the variety of employee engagement studies that have been conducted, a lot of them get at issues asking whether people feel they have had to take on more work in the wake of layoffs,” says Maroney. “Usually people do have to shoulder a heft ier workload, but is that extra contribution valued by the company? Do they end up putting in a lot of overtime? And is it even eligible overtime, or simply working longer hours for the same pay?

“So I think that the kind of implicit contract that existed between employees and employers for many decades around the world has changed significantly in the last few years. With companies competing globally, they are stripping their expenses to the bone and, sometimes, employees are part of the collateral damage of that phenomenon.”

“Technology can help companies detect unusual behavior in groups or individual employees. Very importantly, it helps employees comply with things like the Family and Medical Leave Act (FMLA).

There are companies that are legally bound to provide employees with certain types of unpaid time off under certain circumstances.”

Taming with technology If detectives are draconian, then data monitoring can at least be deemed both modern and ethical. “It is a very old cliché, but it’s a cliché because it’s true – you can’t manage what you can’t measure,” says Maroney. “And so technology can help companies employ and support time off policies in a way that is consistent and fair. And that, therefore, also gives companies the data to help them understand when there are seasonal or other fluctuations in time off.”

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ASK THE EXPERT

Happy engagement Betsy Nota-Kirby of Lifesynch explains how to make employee engagement and wellness program implementation work hand-in-hand.

The Question: We recently implemented a workplace wellness program in an effort to help our employees get healthier, and in turn, lower healthcare costs for them and for the company, but employees just don’t seem interested. How do we get employees engaged so our program will be a success?

The Answer: Companies of all sizes are turning to workplace wellness programs to increase the health and productivity of their employees, but the actual success of these programs hinges on the ability to engage associates.

The initial thought is that if you offer employees an array of health and wellness programs for free or significantly discounted rates, they’ll jump at the opportunity to participate. But, as you’ve most likely learnt, this isn’t the case.

The biggest challenge is that every individual has his or her own way they would like to engage in a wellness program, and the motivation to achieve health goals is going to be different from person to person. But whether you have 50 employees or 5000 employees, identifying those individual motivations typically isn’t the kind of thing a company can do on its own.

One method increasing in popularity that helps identify those motivations and engage participants is personalized health coaching. A personal health coach can work with employees on a one-on-one basis to help them set their health goals, lay out an action plan to reach those goals and achieve sustainable behavior change for a healthier future.

A successful health coaching program offers interactive options to best fit each individual’s lifestyle, be it over the phone, via e-mail or online chat, or through a web portal, but the key is that it’s personalized. A coach can direct employees to the right tools, cheer them on when they succeed and support them when they lapse. Plus, personal health coaches can work with employees on multiple goals instead of the employee having to do one program for smoking cessation and a separate program for weight loss.

So far, we’ve found that 70 percent of people who enroll in personal health coaching actually engage with their coach, and 60 percent of people who enroll achieve one or more of their health-related goals. Also, a recent study published in the Archives of Internal Medicine showed smokers who used telephonic coaching in addition to a web program had nearly double the quit rate of those who only used the web-based program.

In addition to enabling personalization of your wellness programs, there are several other things you can do to increase participation and success. For the most

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part, a large number of associates will be motivated by rewards, especially when it takes the form of fi nancial incentives. For example, employees can earn reduced health insurance premiums, accumulate points that can be used to select prizes, or be entered into drawings for cash prizes or gift cards for participation in the programs.

Just be sure the reward levels are realistically attainable, otherwise it could have the opposite effect and discourage participation.

Another important aspect to a successful workplace wellness program that is often overlooked is creating a supportive work environment. You should have healthy options in your cafeteria and vending machines to encourage healthy eating habits. Also, having an on-site fitness center is a huge bonus, but it’s not always feasible, so try to offer discounts to area gyms or exercise classes.

And don’t forget that the work environment often starts with the company leadership, so ensure executives recognize the importance of such programs. Our leaders have more influence than they realize on participation in wellness programs, so executives and managers should be openly supportive of these programs and will hopefully participate alongside their associates.

Finally, make your program fun. Encourage friendly challenges between departments or develop employee-led wellness groups for those interested in certain sports or activities. As you know, if you’re having fun, it doesn’t feel like a chore.

Betsy Nota-Kirby, wellness director at LifeSynch, a Humana company, has 25 years of experience in health management and wellness, focused on strategy, program design and operations. She holds a bachelor’s in exercise science from Eastern Michigan University and a master’s in kinesiology from the University of Michigan, Ann Arbor.

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72

LEADERSHIP

It’s safe to say that operational leadership is filled with metrics and guidelines to success. But what happens if you decide to follow your own path? Tom Ream, CIO of Sutter Health, tells Nick Pryke his story.

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reaking into the world of C-level leadership is never an easy task. For some, years of hard work and diligence translate into that elusive corner office, unprecedented opportunities and the chance to implement change. For others, it remains a pipe dream, quietly crumbling into obscurity as time takes its toll. These are our usual suspects, our staple business stereotypes. We’ve seen them come and go with the tides of change, but every so often that tide brings with it someone unique – an anomaly of luck and timing with the talent to succeed and a passion to do so. For these fortunate few, the usual clichés of ‘falling into it’ and being in ‘the right place at the right time’ don’t even come close to telling their story.

An epitome of this rare breed of leader, Tom Ream is proof that natural talent, the right timing and a sense of adventure can get you everywhere – quite literally. As current VP and Regional CIO of Sutter Health, a not-for-profit healthcare provider operating in over 100 communities, Ream’s professional life was born out of the inquisitive while still at university.

“Somebody urged me to run for some kind of office and I eventually became the student body president,” explains a laid-back Ream. “I’d been pre-med all the way through my junior year and had just arrived at that point where I wasn’t quite sure I wanted to keep doing that. When I got elected to the student body presidency, which is something I had never done before, it gave me a whole new set of insights about myself and what was personally possible. That was a great time for me.”

With no one in the Ream household having anything resembling prior business experience, there were foreign concepts aplenty to the budding Ream. So he did what any self-respecting student would do – he experimented. “Organizing people, getting them to work together as a team, helping each person feel like an integral part of what was happening; those were things that I experimented with and saw some great responses as a result. It got me thinking: ‘Th is is kind of interesting. I don’t know what it is, but I like it.’ I remember having that distinct thought, and then I went on to go to business school later. I had no way of connecting it to anything I’d ever participated in previous to that.”

Delving into his background, Ream openly admits that he didn’t come up through the traditional ranks of being a programmer or operator. While he was interested in the sciences, he never harbored an attraction towards the technology of the day, choosing instead to nurture an interest around information. However, soon aft er his inauguration as student body president, he realized where his true interests lay. “By the time I got an awakening towards leading things, I found that I enjoyed working with people and fi nding out what they could do and how you could form a team and work together. To me, that was very encouraging.”

His senior year was witness to the culmination of this realization, with a plan to get people from the margins of social inclusion engaged

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LEADERSHIP 73

GO YOUR OWN WAY

with the more ‘mainstream’ culture of the university. “Th at’s where a lot of the motivation came from,” confi rms Ream, “in terms of looking at the people and realizing that you need to have a place where you can pull people together and comprehend that everybody has something to give.

Find out what their passion is and get them ‘headed’. These days, you fi nd people’s passions and get them channeled and directed with the help of literature and training, but back in those days I was discovering this out without any help.”

From past to present Indeed, ‘these days’ have seen Ream foster an understanding of the dynamics of both leading a team and nurturing one. The fi rst to admit that he is far from a technologist – so doesn’t pretend to be – Ream has found his feet in identifying and bringing in the right people to encourage a more collaborative culture. “My job is to fi nd very good people in defi ned categories who like what they do. I bring them in and then spend my time getting them to play together in the sandbox. Help them understand what the general mission is and how they play together for the delivery of a result they couldn’t achieve on their own. The job is there to be all you can be in that context, which is all I enjoy doing.”

It comes as no surprise then that Ream sees himself as more of a facilitator than anything else. “In many ways, that’s all I can be,” he says. “I can’t do their jobs, so my real assignment is to get them to work together to see their individual possibilities and to understand why it’s important to have respect for one another.” His rather humorous sandbox analogy speaks volumes about his approach to leading a team and the importance of having different players in the game – a leadership principle that has served him well over the years.

“My job is to find very good people in defined categories who like what they do” “I try to not hire people who are just like me. I found out early it was hard not to do that, because you like yourself, you like your style.

It’s just so comfortable; it’s who you are. But somewhere along the line I figured that out. You need to learn not to be afraid of hiring people who are a little unsettling to you, whose personalities are at the opposite end to where you are is important.” Which is most probably how he ended up walking into the world of healthcare in the first place – the second turning point after his presidency-on-a-whim at university – with help from one of his wife’s friends a couple of years after commencing work with Citibank.

“He was the President of the Greater Cleveland Hospital Association,” chuckles a nostalgic Ream. “We spoke for a bit until he said, ‘If you’re so smart, why don’t you come help us? Be a CFO. You’re in finances. You know that.” I interviewed with a couple of local CEOs and one of them offered me a job to take a 400-bed hospital. They weren’t automated in anything and said: ‘You can go to Wharton and get your MBA and work for Citibank. You can do this with your eyes shut.’ Well, he didn’t know – and neither did I – but it’s one of those things you look back at and think, ‘There’s no way in the world they should have hired me.’ But I came and led them through fi nding our fi rst vendor and getting the place automated on some level. Otherwise, it was just Burroughs machines downstairs and everything was manual.”

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LEADERSHIP

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“The environment I’m in now at Sutter Health, for all the quality of healthcare and the size that it is, certainly in the acute setting, it’s running a good deal behind a lot of the other players that might be roughly

Seven qualities of a good leader

pi

Going full circle

the same size. We only have one hospital that has an EMR, and prior to my coming they also had two major failed attempts at trying to get any of the hospitals on such a product – so they’ve largely been a federation of affi liates.

“They didn’t control them, except that they came there for the revenue side of participating in managed care contracts that were very adeptly negotiated – so they made plenty of money as players who just hung around on the same team. But in terms of ever changing how they delivered their services and dealing with the cost side, they never paid attention to that until about three or four years ago when they began to recognize they had lost their price point in the marketplace, so decided they needed to change the governance of certain things.

“All the affi liates eliminated their boards, then reformed them around five regions, and only now are they beginning to deal with a lot of these things about what it means to standardize and consolidate to get on the same page with business practices.” Step back in Tom Ream, who – as these things tend to go in life – has returned full circle to his days at university, dealing with something new and uncharted. The only difference between the Ream of today and that of his youth is that he now has experience on his side.

“It will be messy,” he asserts with a sense of readiness. “It has been messy and it will continue to be messy for a good while, because people figuring out how to manage something like this with 28 hospitals that have never functioned alike have never needed to before. They made lots of money on the revenue side and always covered their excessive expenses with more revenue.

“Now they have to pay attention to that – so the whole notion of getting down to common solutions and technical standards is not pretty some days. When you talk about differentiating yourself, it mostly isn’t about differentiation – certainly not in terms of technology. It’s more about who you want to be.” And perhaps for Ream, that search for an identity is what it’s always been about.

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Of course, in today’s cutthroat executive arena, Ream’s story would have most likely ceased after the initial meeting. But the point remains that taking risks and throwing yourself into something you know almost nothing about is a leadership trait that cannot be taught, regardless of whether the subsequent result is success or failure. On top of this, it often provokes the splitting of opinion into those with respect and those with disdain. “If there was pushback, no one told me,” laughs Ream when asked about the reaction to his appointment as CFO. “But I was probably taking it to the next level of what I experienced with the student leadership role. I’d never done that before and this was a new version of it at another level. Certainly I had my paycheck now, but what do I do? I’d never worked for an IT company, so I immediately went to enroll in a master’s program in IT. If the team did catch on that I didn’t know much, they never said anything.

There was no comparison to be made, so I Tom Ream originally spoke to guess that helped. Their ignorance helped Padraig Hyland for EHM’s sister media channel, meettheboss.tv me get through.”

Ream jokes that “until you get caught, it’s a great way to live”, but the reality of the situation was that he never got ‘caught’. He never got caught because he didn’t afford anyone that opportunity – a survival instinct and a motivation to succeed were undoubtedly the overriding factors to this – plus the fact that employment attitudes were far more liberal back then. Ironically, his severe lack of technical know-how served to help him bridge the gap between the technical and business worlds.

“Because I didn’t know the technical aspect, it meant that I had to somehow figure out how to get the right technical people to the teams. I could handle the business talk with other leaders, making sure I would engage with them, understand, come back and figure it out behind the wall. They could live with that comfort. My job then became fi guring out what you put together behind that wall. I led with my strength, which is the ability to communicate with business leaders.”

The idea of a leader knowing his or her own strengths certainly resonates with Ream, even in the most negative of situations. He talks of a time when he – for want of a better phrase – was “let go” by a company after they had squeezed him dry of his operational expertise. Picking his jaw up off the floor, the well-versed, now former CFO, turned adversity into advantage and fl ipped the metaphorical coin to secure a job with a solution provider.

“One of the challenges in this new environment was working out how to forge partnerships that can last and make sense of things and learn how to read people in terms of who will shoot straight with you. Th at may not be the easiest thing to determine, but once you fi nd them it helps you get your environment going where it needs to go and gets things accomplished.” Ream went on to work for Siemens in a similar capacity for another 16 years before returning to the hospital setting and a host of new challenges, but he still continues to lead as he always has.

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Co m m i t m e n t

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When wellness works Cleveland Clinic seeks to shift the national focus from providing ‘sick’ care to promoting ‘health’ care – starting with its own employees.

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ealthcare spending is projected to reach $4.3 trillion by 2016, equal to 17 percent of the U.S. gross domestic product. Th is astounding increase in spending is primarily due to the rise in preventable chronic illnesses, including obesity and diabetes. Research has shown that 40 percent of all healthcare expenses in the United States stem from preventable chronic illnesses, which are most often caused by three lifestyle choices: physical inactivity, unhealthy eating habits and tobacco use. One solution that is gaining momentum is to reverse this through employee wellness programs.

Cleveland Clinic, one of the country’s leading academic medical centers, is proof that wellness programs work. With 40,000 employees, it is Ohio’s second-largest employer – and one of the healthiest. From designating the entire system smoke-free to no longer hiring smokers to banning trans fats and sugar-sweetened beverages from its menus, Cleveland Clinic has consistently sought to shift the national focus of providing ‘sick’ care to promoting ‘health’ care.

About 70,000 employees and dependents are insured through Cleveland Clinic’s Employee Health Plan (EHP) Total Care program. And as part of Cleveland Clinic’s commitment to wellness, programs were created to reduce healthcare spending and chronic disease development among employees. These wellness programs include a chronic disease management program, memberships in Cleveland Clinic fitness centers, memberships to Curves facilities and their weight management program, Weight Watchers, a smoking cessation program, and a voluntary premium rebate program called Healthy Choice.

Cleveland Clinic’s commitment to employee wellness began in 2005 with a campaign to decrease tobacco use.

Since then it has established additional programs to address exercise, nutrition, weight loss and chronic disease management. The chronic disease management programs target 21 chronic disease states, six of which are considered controllable through lifestyle modification – diabetes, hypertension, high cholesterol, asthma, overweight/obesity and smoking. The goal of the program is to help employees with self-management strategies to improve overall health and promote the best quality of life.

Nearly 20,000 employees have enrolled in at least one EHP-sponsored wellness program. Of these, 6705 employees utilize free gym memberships and 7075 employees have participated in weight management programs since August 2008, losing 110,029 pounds. 10,000 employees

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are enrolled in the chronic disease management program.

423 employees underwent smoking cessation treatment. In addition, 1086 employees who participated in a fi nancial incentive program and met their respective goals received $100 each in incentive payments.

Helping other employers promote wellness Michael F. Roizen, M.D. is a physician, anesthesiologist, international speaker, New York Times best-selling author and entrepreneur. As Chief Wellness Officer at Cleveland Clinic, he is responsible for implementing wide-reaching wellness programs that aggressively advocate healthy living and remove possible barriers to this end.

Employers are the largest source of healthcare coverage as they account for nearly 60 percent of the insured population. They are strongly positioned to share the healthcare model of the future, which should rest largely on disease prevention and reversal with lifestyle changes rather than through invasive medical intervention.

Recently, Cleveland Clinic began to work with other employers who want to evaluate the efficacy of their health and wellness programs. In this role, Cleveland Clinic provides true clinical insight into how companies spend their healthcare dollars and helps redirect those dollars toward programs that are shown to be clinically effective. Specialty areas include tobacco treatment, food strategy, and wellness-based counseling for businesses and employees.

In addition, the Wellness Institute at Cleveland Clinic can treat patients through its Center for Integrative Medicine and Tobacco Treatment Center, and through specialty programs including Executive Health and Lifestyle 180.

Complete, consumer-friendly wellness information is presented through 360-5.com, an interactive Web platform that offers fresh, inspiring and actionable wellness solutions for everyday living.

Cleveland Clinic has shown that with the right information, programs and support, people really can live healthier, longer lives.

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ASK THE EXPERT

Quality Rx Care Daryl Corr explains how Quality Rx care is maximizing workers’ compensation prescription drug savings and ensuring the highest level of care for injured workers.

W

hile the overall number of workers’ compensation claims has decreased over the past few years, insurance industry studies show medical treatment costs are continuing to grow at an alarming rate with prescription drugs being one of the major contributors. The impact, however, isn’t solely driven by the price of the drugs, but instead, it has been due to increased utilization — more drugs are being prescribed to more claimants, for longer durations.

In many cases there are more appropriate and cost effective treatment alternatives — but better managing this process requires more focus and expertise than what is provided in most Pharmacy Benefit Management (PBM) programs, especially when comparing workers’ compensation benefits to group health.

One of the major challenges workers’ compensation insurance programs encounter with controlling medication costs is ensuring injured workers are being prescribed the most effective and appropriate drugs to treat an injury or work related illness. Since the complexity of injuries and patient medication tolerances can vary so significantly, combined with the challenge of wide scale use of pain medications, treatments can’t be a one size fits all approach. Therefore, it’s critical to incorporate more clinically focused strategies to ensure prescription drug treatments are being managed appropriately.

At the most basic level, a clinical services program helps insurance payers design and maintain a pharmacy program’s medication plan, or formulary, around the specific medications or classes used to treat workers’ compensation injuries. These rules can help determine whether a drug requires a prior authorization before dispensing.

However, on a more targeted level, a successful clinical program can have a big impact when focused on the most complex cases. These complex cases may represent a small percentage of an insurance payer’s injured worker patient population, but they have a tendency to drive most of the cost. Typically, less than 10 percent of a payer’s claimants receiving prescription drugs are driving more than 70 percent of their overall drug treatment costs. So, focusing more attention on this narrow group of claims maximizes the opportunity to significantly reduce drug spend. However, it requires a lot more expertise and commitment from the PBM to achieve the best savings results. You need a highly skilled and knowledgeable staff of PharmD clinicians focused on examining individual cases, analyzing drug therapies and identifying alternate treatment options

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Daryl Corr is president of Healthesystems, a specialty provider of innovative medical cost management solutions for the workers’ compensation industry.

— subsequently interacting with physicians and claims professionals to provide education about more appropriate alternatives when they are available. Th is approach focuses on the higher dollar claims in order to maximize the potential savings impact.

The most successful clinical tools are highly integrated into a PBM’s overall program. The critical pharmacy program functions necessary to make this happen are powerful technology and proactive communication. The technology quickly and proactively identifies problematic prescription trends using systems edits and evidence based medical guidelines, while proactive communication facilitates interactions between the PBM, the prescribing physician and the insurer’s claims professional. A PBM’s team of PharmD professionals needs to actively interact with physicians to provide education and insight into the specifics about the prescribed drugs and the injuries they are treating. Frequently a physician may not even be aware of all medications being prescribed to an injured worker if they are being treated by multiple physicians. Clinical education and outreach is imperative and must occur quickly in order to be most effective.

There is also a need to proactively monitor the pharmaceutical industry to identify new drugs that are entering the market, which may impact a pharmacy program. The key is to help clients make the right decisions by factoring both treatment effectiveness and cost. It isn’t solely driven by the price of one pill. It’s about applying the right treatment to achieve the optimal outcome, which typically equates to lower costs over the life of the claim.

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ASK THE EXPERT

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Getting the most out of specialty pharmacy management Looking at the big picture, specialty pharmacy management with medical benefits helps manage costs and health. Dr. Richard Weininger explains the importance of specialty medications, and how a comprehensive Specialty Pharmacy and Medical plan can drive better health and better savings.

T

here’s been an explosion of modern drug therapies over the past decade. These new therapies have ushered in an era of optimism for a variety of debilitating, life-threatening chronic diseases.

In fact, many of these new therapies have changed the course of disease and health outcomes for thousands of patients.

However, along with the promise of better symptom and disease control, these new medications can bring a host of increasingly complex clinical and economic issues. How we choose to monitor and manage these issues is critical.

The successful management of specialty medications depends primarily on engaging knowledgeable professionals. It’s crucial that these professionals are available to dispense, advise and monitor the utilization of drugs that have complex indications and multi-system toxicities. I believe that the safe dispensing of many injectable and oral medications is often best managed by professionals who are specially trained.

“You want to ensure specialty pharmacy is managed holistically by combining it with your medical plan” It’s important to understand all aspects of specialty pharmacy management, such as health coaching, lab work and associated medical costs. For example, when specialty pharmacy benefits are aligned with the medical plan, it allows doctors to provide patient care in an environment that’s right for the patient. It eliminates any plan provisions that force patients to go to an alternate location for administration of their specialty medication, and allows doctors to administer medication wherever it’s most cost-effective and convenient for the patient.

Although these diseases affect less than two percent of the population, 60 percent of individuals taking specialty medications have at least one other chronic condition that is treated with medication. Working with a specialty pharmacy manager that is part of the patient’s medical plan provides a central source for the patient’s health information. Patients are able to receive health advocacy and coaching while working collaboratively with their physician to maximize treatment and care.

CIGNA.indd 78

Specialty pharmacies distinguish themselves by engaging and training staff with a specific in-depth knowledge of drugs. These include drugs that treat cancer, immunologic disorders, arthritis, genetic deficiency diseases and other illnesses. They bring skills to the dispensing of these medications that provide exceptional added value, both clinically and economically. From a clinical point of view, they ensure that members receive current drug-related information, reduce toxicity risk through smart dialogue, and employ management programs to help measure drug utility. Because this complex area is best managed by specially-trained professionals, it’s also best managed when all incentives are aligned to benefit the patient, plan sponsor and physician.

You want to ensure specialty pharmacy is managed holistically by combining it with your medical plan. With the medical and pharmacy benefits together, patients can receive integrated care that is cost effective. In addition, physicians are better aligned with a health plan that meets their needs. Working with one organization helps manage drug costs, ease drug administration and provides patients with seamless care to maximize their safety and well-being.

In an era of modern, complex drug administration and rising costs, the role of effective, efficient specialty pharmacy managers has never been more important. Savings, as measured by improved quality of life and safe administration, are the hallmarks of successful specialty pharmacy interventions. If managed well and holistically, plan sponsors can be confident that cost, employee productivity and quality of life are being optimized. All without compromising care and communication between the patient and physician.

Dr. Richard Weininger is a board-certified hematologist and oncologist with more than 20 years’ experience in managed care. He is the executive vice-president for corporate strategies at CareCore National, LLC. In that role he has overall responsibility for managed programs in medical and radiation oncology.

18/02/2011 16:10

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14/02/2011 15:06

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COMPANY ACQUISITION

Steve Berger.indd 80

18/02/2011 15:23

COMPANY ACQUISITION 81

At a time when employees are looking for job security and reassurance, company mergers and acquisitions can prove unsettling for any workforce.

Lorna Davies caught up with Viterra’s Senior Vice-President of HR and Transformation, Steve Berger to uncover his expertise in dealing with the transformation of organizations whilst simultaneously developing HR and communication.

Steve Berger.indd 81

I

n May 2007 the battle for Agricore United was won

by Saskatchewan Wheat Pool after the company boosted its offer and agreed to sell some assets to bidding rival James Richardson International Ltd. In August of the same year, executives were gleefully raising their champagne flutes in a toast to the new “I think we’ll start name of Canada’s largest grain handler – Viterra. seeing a lot more Despite this rosy glow, the merging of two companies of a changing can often prove unsettling. Employees at all levels may become insecure about continued employment, demoworkforce. How tions or decreased salaries. Completion of the acquisition we deal with the and integration – operationally and culturally – of Viterra required human resources to play a major role. multigenerational With a varied career spanning 25 years, Steve Berger has workforce, and seen his fair share of HR developments and changes. Prior this gets back to Viterra, Berger worked as a management consultant and for companies such as Accenture, A.T.Kearney, Booz Allen to workforce Hamilton and Capgemini America. The running thread planning, is through this assortment of organizations was for Berger to planning for the manage the overall integration and transformation of these companies and the big change programs they may experifuture. What is ence when merging with other organizations. the future After joining Viterra just over three years ago, Berger workforce going played a key role in the merger of Agricore and Saskatchewan Wheat Poll. It is during this integration process that to be?”

Berger says he ‘fell in love’ with the company. “I became infatuated with the strategy, the vision of the leaders and the future that could be possible,” says Berger. “And they offered me a great role which combined my experience and federal statistics, that workers 55 years of age and older will capabilities in HR and translikely constitute 17 percent of the workforce by the end of formation, and that’s how I the decade. With projections for mass retirements and low became the Senior Vice-Presbirth rates, more retirees will be called upon to fi ll the gaps ident of HR and Transformain the workforce. Berger understands the need to deal with tion at Viterra.” this trend whilst Viterra is in a period of growth. “We’re Berger’s responsibilities going into new markets and buying businesses,” he says. for Viterra are spread over the “And I think we’ll start seeing a lot more of a changglobal reach of the company. ing workforce. How we deal with the multigenerational “All things HR, from executive workforce, and this gets back to workforce planning, is compensation all the way down planning for the future. What is the future workforce going to regional HR delivery, payroll, to be? Companies are becoming more and more global, and all those kind of things at and you’ve got different cultures from all over the world the tactile level fall under my working together. remit,” explains Berger. But he is “It’s both the different age groups and the different also involved in transformation, generations, but also the different cultures working together, working on what Berger deand how HR is going to manage that. So we, as an HR funcscribes as ‘big change programs’ tion, need to be able to work together remotely and with difwithin North America, Europe ferent cultures in order to enable that in the future with the and Asia. “Any time we buy and growth of the organization and different business sectors.” acquire a company, my team go These are issues that underline the changing attitude in, manage that effort and work within the HR industry. Whereas in the past the role of a HR with the organizations.” leader within an organization would be the ‘people person’, now executives are taking a more strategic approach. For Workforce planning Berger, this is the best way to cope with the ever-changing Analysts have said that the environment of recruitment, employee retention and enbaby boomers – people born gagement within a difficult economic climate. between 1946 and 1964 – are “The secondary issue, I think, is making sure that our aging. Th is means, according to employees truly understand what our vision and strategy

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COMPANY ACQUISITION

is, and how they individually relate to the organization itself,” says Berger. In order to tackle these employee engagement challenges, Viterra has been putting a talent inventory into place for the past two years. The company uses the Lominger Model from Korn/Ferry. Founded in 1991

by Michael Lombardo and Robert Elchinger, Lominger’s range of products and services are known as the Leadership Architect Suite and are research-based, experiencetested, and internationally recognized tools that can be customized to fit individual organizations’ culture and operating style.

Lominger joined forces with the Korn/Ferry International family of companies in 2006 and now provides executive talent management solutions worldwide. Viterra has utilized the traditional nine-box approach from Korn/ Ferry for a potential versus performance perspective in identifying where its talent is. “We’ve rolled that out and actually completed that in North America,” Berger explains.

“We’re doing a refresh this year in Australia. First rolling it out through the acquisition of companies we bought down there so we can identify our talent where it sits.”

In terms of succession planning, Viterra also has a top-down planning model from two years ago that has now spread to other parts of the organization. “We identify critical roles and then identify people to be backfi lled,” says Berger. “The challenge we have there is we are willing to let someone go to do a new job in order to take on new challenges, so the plan then takes on a secondary role.”

Viterra Viterra is an agribusiness based in Regina, Saskatchewan, providing premium quality ingredients to leading global food manufacturers. It was formed from the takeover of Agricore United by Saskatchewan Wheat Pool and employs approximately 1100 people across its Australian and New Zealand operations. The company has operations and distribution capabilities across Canada, the United States, Australia, New Zealand and Japan.

Bountiful Harvest Viterra Inc. posted net earnings of $145 million for the 2010 fiscal year, up 28 per cent from 2009, thanks to a strong fourth quarter, which saw profits of $53 million versus a $1 million loss during the previous 12 month period, the company announced in January.

Viterra’s revenues reached $8.3 billion for the fiscal year ended Oct. 31, increasing $1.6 billion, or 24 per cent, from fiscal 2009, the company said. The increase in sales was mainly attributable to Viterra’s Australian operations, which contributed $2.3 billion to fiscal 2010 revenues, and to new food processing contributions.

Reaping the benefits Incentives often play a key role in keeping employees happy and engaged within an organization. Pay is often the most important staff motivator, but Berger believes money is not the sole tool for keeping employees at ease. “I believe that money is in compensation and total rewards.

You have to pay people fairly and appropriately for the work they do,” he says. “To me, what keeps people happy and engaged is the concept of belonging to an organization where you believe in the vision, where you believe in and trust the leadership, and where the company is going – the strategy of an organization.” For Berger, the next level from employee to employer trust and belief is learning and growing as an individual.

Diversity in the workplace is obviously a priority for many business leaders today. Berger appreciates that this is something Viterra may have to work on. “Wherever we go out to search, for example, I want to see diverse candidates on the slate. I don’t want to see the same people with the same experiences,” stresses Berger. “So for us, our business should reflect our constituents and the companies we do business with to the extent we can.”

The more remote locations of Viterra can often prove a challenge when it comes to promoting this outlook. “It’s really hard to drive diversity when you’re working in a rural community with 200 people living there and our company is the main employer,” he says. “So for me, where diversity makes sense, we absolutely support it, but we don’t force diversity where it doesn’t make business sense.”

Steve Berger.indd 82

“To me, what keeps people happy and engaged is the concept of belonging to an organization where you believe in the vision”

Regina, the capital of Saskatchewan, Canada, is a reasonably small town with a population of just under 180,000. Although the town is the cultural and commercial metropolis of southern Saskatchewan, the somewhat remote location can often be a barrier between Viterra and prospective employees. “It’s a fantastic city and a great place to live but in terms of attracting new talent, it becomes a blocker,” Berger says. “So for us, it’s less about more people in the job market, more about the issue of location.” Viterra is currently recruiting for its headquarters in its Calgary executive offices where the company is relatively unknown.

Berger understands the need to market the company to prospective employees. “Once they hear our story, our growth strategy and our future, they’re on board and they want to join us,” he says. “So really it’s about making sure we can get the talent to come and talk to us, because we’re not a known commodity.”

Introducing a coherent corporate culture often depends on the type of organization in terms of locations and differences within sectors. Viterra takes a unified approach to the overall culture. “In my opinion, I think a coherent corporate culture is very important,” says Berger. “It’s the glue that holds the organization together, especially in a growing organization such as ours.” This culture can be affected by the changes and unsettlements that take place during mergers and acquisitions, but Berger insists this is precisely why it is important everyone is on the same page.

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COMPANY ACQUISITION 83

“Each acquisition, you take on the culture of that company and what we need to do is either blend the two or help them come closer towards the Viterra culture.”

There are a number of golden rules Berger promotes when handling an acquisition within the company: transparency, fairness, openness, and clarity. The company try to be open and honest with employees when discussing the daunting idea of cutbacks and changes. “We make it very clear what our process will be so there aren’t any surprises,” says Berger. “And when we do exit people from the business we do so in a fair way. We don’t try to take advantage of people and we help them re-enter the workforce in any way they can.” Viterra follows the M&A Playbook as a template for good practise when going through an acquisition. Th is way the global workforce of Viterra can be reached and engaged through the same outline of steps.

So what’s next for HR trends? For Berger, it’s all about understanding the industry he’s in. “I think HR professionals tend to be very deep professionals. So, they know a lot about compensation. They know a lot about labor.

They know a lot about HR things, and the only way that HR people are going to get a seat at the table is going to be if they start relating to the business. They either have come from the business, or they’ve done a stint in the business, or they are strategic in nature.”

Berger would not describe himself as a ‘traditional’ HR person. The ability to think about the strategic business side of things is one of the reasons he states for his success at Viterra. “I’m able to talk about business strategy. I’m able to talk about where we’re going and how it relates. I’m able to look at how the business operates, and then bring it back to my team, who are deep experts in compensation, labor, and benefits, whatever they may be. And they translate that into the appropriate programs.” Th is is a trend that many companies are beginning to come around to, that – as Berger puts it – they need to be business people fi rst and HR people second, “and if they aren’t then they’re never going to be able to join up.” 

Steve Berger.indd 83

Grain Man Steven Berger, Senior Vice-President of Human Resources and Transformation is responsible for leading Viterra’s global Human Resources function, overseeing employee management and recruitment and retention initiatives, incentive and compensation programs, labor relations, career and personal development programs and succession planning initiatives.

In addition, he works with the company’s senior management team to lead all change and transformation related initiatives throughout the company, including the successful integration of Agricore United in 2007-2008 and the current integration of ABB Grain of Australia into Viterra.

Mr. Berger has over 23 years of management consulting and information technology experience across a broad range of industries, especially Agri-business and Consumer Products/Retail. He has extensive experience in the areas of mergers and acquisitions, transformation and change leadership.

Prior to joining Viterra, Mr. Berger was a Senior Executive (Partner) with Accenture, a global management-consulting firm, in their Corporate Strategy practice. In his role with Accenture, he worked with Viterra’s executive management team and other key individuals throughout the organization, planning and managing the execution of the integration program following Viterra’s acquisition of Agricore United. He helped to design Viterra’s operating model, and has been instrumental in identifying and tracking synergy savings. Previously, Mr. Berger worked with A.T. Kearney and Booz Allen and Hamilton.

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Zions Bank had a turbulent 2009, but managed to emerge from the wreckage at the end of 2010 listed as one of four regional banks with the best performing stocks. So how is the HR sidewalk navigated? Lorna Davies found Connie Linardakis to be an ideal candidate to lead the way to paradise city.

F ROAD TO

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rom the word go, Connie Linardakis knew she wanted to be in HR, maintaining a straight track from graduate school right through to her current role as Chief HR Officer at Zions. Previously, the role of HR officer has been thought of as a more personal link in the business chain, offering employees guidance and support rather than focusing on the organization’s future business prospects. It is her more strategic approach that fi rst attracted Linardakis to tread the HR path.

“I think it’s changed dramatically over the years, but before there were very few businessminded professionals in the HR arena,” says Linardakis. “Now it’s becoming more of a strategic function – having more of an analytical profi le in HR is important. I think that more and more we’re really needing to make sure we’ve covered the analytical aspects. So I’m trying to source myself and make sure we have more analytical interface there [within the company].”

Th is is not to say Linardakis is a hard-nosed, hostile interviewee – quite the opposite in fact.

Her warm, friendly attitude has no doubt played a huge part in her success in the HR pool and she chats away to me like a long lost friend.

A more strategic approach may be what the banking industry needs after fighting its way through the fi res of the vast economic downturn.

Zions is one bank that has managed to emerge

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FINANCE HR 87

“People on Wall Street, are very mobile and are now moving to the West. We’ve been able to tap into some really good talent”

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phoenix-like from the flames relatively unscathed. The uncertainty surrounding the industry now is a challenge for Linardakis, in both attracting new talent and satisfying current employees.

“We’re still coming out of the issues that we’ve had along in the way of banking,” she says. “But we’re starting to be a little more hopeful that it’ll change this year; exactly when, we don’t know. So banking is a little bit of a different industry than some of the others in terms of having to stay within the rules and regulations of how you can pay your executives, to really having the market understand the way you’re grading your credits and really calibrating that with what the regulators are looking at.

There’s a lot of people involved in the business these days that make it very challenging.”

The economic situation has resulted in a wider pool of potential candidates in the job market. Does this pose a challenge for Zions recruitment? “I think it’s made it easier. People on Wall Street, for example, are very mobile and are now moving to the West. We’ve been able to tap into some really good talent,” enthuses Linardakis.

So, what kind approach needs to be taken in this climate, I ask: is it a radical transformational approach, or back-to-basics traditional? “It’s a little bit of both I think.

From a perspective that we maintain efficiencies around payroll and some of our systems, we have to be very traditional in order to have the operational efficiency. But the way we do those functions is still on the transformational end. So, for example, we do have all of the self-service functionality of the employee and the manager. But the things we do to try to keep the organization in tune with its people – like engagement strategies – we mix in what the customer is saying, with what the employee is saying; that’s more on the transformational side,” she tells me.

Operating 500 banking offices in ten Western and Southwestern states: Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah, Texas, and Washington, and employing 10369 full-time equivalent employees (as of March 31, 2010), Zions must keep customers and employees on the same page. Linardakis, however, takes a more personal approach in displaying a so-called ‘corporate culture’.

“It’s different here in that we’re a holding company, so we have six different community banks that operate on all different types of cultures. So it’s very difficult for us to say that there is one corporate culture,” she says. “You have to think about the individual community banks and working in that way with the employees there.”

With diverse locations across the U.S., Zions must be attractive and approachable to a varying audience. But with increasing pressure on companies to make diversity a priority, is it a business benefit for Zions? “Yeah, I think diversity is always an important factor in any industry. For us it’s really trying to get different profi les into [our company],” explains Linardakis. “If you think about structure, credit seems to be the function that gets all the attention right now. So you have to have great people with credit skills. So there’s a focus for us to do that. Also beyond that,

About Zions Bank Zions Bank is a multi-bank holding company providing various banking and related products and services in the U.S.. The company offers community banking services – including small and medium-sized businesses and corporate banking services; commercial and residential development, construction, and term lending services; residential banking services, and treasury cash management services. It is a member of the S&P 500 and has over 10,500 full time employees.

of course, there are all the other different types of diversity that would be helpful. But we try to mimic more or less the markets that we’re in. So we’re in Utah, Nevada, et cetera.

So we really mimic and try to make sure we have enough diversity there.”

The demographic shift in recent years has been hitting headlines, posing a threat to organizations with a rapidly changing and diversifying workforce. Does this new kind of workforce require a new HR approach? For Linardakis, it does. “It requires very thoughtful planning around careers and assignments and exactly what the accountabilities are. I think you need a little bit of a different mindset when you’re employing someone that is say, generation Y and making sure that you fulfi l their job expectations,” she says. Th is new kind of workforce makes HR leaders who are adaptable and flexible to change a valuable commodity.

Th is view is not only true of the personal aspect of the job – with technology playing an ever-increasing role, the ability to quickly learn and utilize these new innovations is increasingly important. How does Zions employ technology to reinforce culture and training? “We’re just about to release a social media policy for our corporationthis is something we’ve been working on for a long time.

But we are a banking corporation so we have to make sure that the technology fits in with our practices,” Linardakis explains. “If you look at performance management, for example, we shouldn’t be creating our performance management around the technology but rather the opposite. So we always try to employ it where it supports our practices.”

Th is new policy includes four separate policies, one of which looks at where social media such as Facebook and Twitter can be used for the business. But Zions are treading carefully when it comes to using these sites for recruitment purposes. “We’re only going to use it for LinkedIn and allow the LinkedIn access to recruiters.

We’re also going to allow LinkedIn access for the global population. But other than that, we’re limiting the sites like Facebook.” Th is, explains Linardakis, enables a more professional approach and keeps a line between personal and professional.

Linardakis will be introducing a new department within her corporate responsibilities focused on the issue

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FINANCE HR

Zions Bank has over

$17,000 billion

in total assets

of incentives; and it will focus on customer-versus-employee cohesion. “We’re calling it affi liate knowledge services. And that’s going to focus on engagement, learning and reward recognition type of events that will keep that flowing. But for right now, what we’re doing is we’re comparing – what we call – customer pulse data to employee pulse data and making some sense out of that, whether there’s a correlation or not,” says Linardakis.

Th is is a theme that is recurring throughout Linardakis’s HR approach. The importance of reflecting the customer view with employee to create a coherent business strategy is high on her agenda and where her success stems from. Th is coherence is as important – if not more – than creating the more traditional cash rewards usually associated with the word ‘incentives’. “The new department is really pushing knowledge and knowledge services out to our affi liates so that they are able to share and gravitate to best practices that we have within,” concludes Linardakis.

“It’s really becoming very service-oriented in the corporate sense, but also a huge part of that is engagement and customer engagement as well.”

Connie Linardakis is the Executive Vice President and Chief Human Resources Officer for Zions Bank. She oversees all aspects of HR function for the efforts of 12000 employees in the Zions Bank footprint. She has held senior-level HR positions at Fortune 50 companies such as Amoco Corporation, General Electric, Raytheon Company and Compaq Corporation. She has also worked in consulting with Drake Beam Morin and had roles in academia at the University of Utah, where she served on the board of the Davies Eccles School of Business. Linardakis received her BA degree in finance from the University of Utah and her MBA from Purdue University, Krannert Graduate School of Management.

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Recent developments In January, on a seasonally adjusted basis, the Zions Bank Utah Consumer Attitude Index (CAI) debuted at 7.62, an increase of 15.6 points over the national Consumer Confidence Index (CCI), as reflected in Zions Bank and The Conference Board’s indices reported on January 25.

The CAI’s Present Situation Index, a snapshot of current business conditions and employment, debuted at 38.6: 7.6 points higher than the national CCI. The Expectations Index, a proxy for consumers’ expected changes in business conditions, jobs and personal income is 101.2: 20.9 points above the national CCI. Over the next few months the Utah CAI will be trended and compared to previous month’s CAI data and national CCI data.

The CAI is a gauge of the degree of optimism on the state of the economy that consumers are expressing through their activities of savings and spending.

National comparison will enable consumers, businesses, and policymakers to identify key economic trends unique to Utah.

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EXECUTIVE INTERVIEW 89

Stars of the big screen Hiring the right employees is more important than ever, making a good screening process one of vital value for your organization, says Stephen A. Lowisz.

Since the economic downturn, how are companies seeking to rebuild their capabilities as volumes begin to increase?

Stephen A. Lowisz. Although the economy seems to be showing signs of life, many companies are being extremely cautious with committing permanent resources to their recruiting organization. It seems there are two major trends occurring: 1.) Organizations of all sizes are looking at contract recruiters and other contract firms in order to have the flexibility to scale up or down as their hiring needs dictate. 2.) Due to the broad appeal of social media, companies are continuously looking for ways to leverage these tools as a way to attract a larger candidate audience. A number of larger organizations have even diverted dollars earmarked for permanent recruitment staff to social media initiatives.

Hiring the right person is mightily important, but how can an organization ensure they are screening their candidates effectively?

SL. Although there are many factors that affect an organization’s ability to hire the right candidate, the two main ingredients are the recruiter and the hiring manager.

The role of the recruiter is to identify, qualify and present the best candidate to their hiring manager. Too often, companies fail to realize the effect metrics have on this process. Quality of hire is usually identified as being most important, yet is seldom properly measured. Instead, the recruiter is held accountable to traditional metrics like time to fi ll, cost per hire, and positions fi lled. Bonus programs based exclusively on these measures often result in candidates that are the easiest to recruit, not the best for the role.

We need to remember that what gets measured gets done.

The hiring manager serves as the ultimate authority in selecting the right candidate for the right seat on their bus. Managers often rely only on ‘feel’ and their intuition without truly understanding the competencies candidates possess or lack. Without defi ning the specific competencies for each position, managers often compare candidates to each other, and not to the

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propriate pictures of themselves taken at their current place of employment. 2.) Candidate boasting about the number of office supply items they have successfully taken home that were the property of their employer.

Unless ruled illegal by a court of law, I see no problem with taking into consideration the non-discriminatory items, which may be found on a candidate’s social media presence to make a fi nal hiring decision – especially in the case of equally qualified candidates.

“Managers often rely only on ‘feel’ and their intuition without truly understanding the competencies candidates possess or lack”

requirements of the role. Comparing one bad candidate to another often results in picking from the lesser of two evils – missing the best candidate.

How much emphasis should a company place on a candidate’s social media presence? Is it ethical to make a hiring decision based on such information?

SL. Social media can be a double-edged sword in the candidate recruiting process. Obviously it is inappropriate and illegal to utilize information identified through social media or other means to discriminate candidates based on race, sexual orientation, religious views, etc. – much of which can be found on an individual’s Facebook page.

On the other hand, there have been many cases in which a potential candidate posts inappropriate content that may cause an employer to stop and question their integrity. Recent situations include: 1.) Candidate posting inap-

How will the recruitment process evolve throughout 2011? Are there any great trends on the horizon?

SL. 2011 and beyond will bring with it many trends that will impact the recruiting process.

A few of these include: 1.) Renewed focus on the ‘candidate experience’. With the advent of social media, the way you treat one candidate could impact the way your organization is perceived by thousands of potential candidates. 2.)

Location-based, preference-driven recruiting tools. How would you like to walk by an electronic billboard in your local mall that picks up your presence and displays career opportunities specific to your field and preferences?

Stephen A. Lowisz, is an author, educator and President & CEO of Qualigence International, a recruitment research & professional search firm he founded in 1999. With more than 18 years of experience in the recruitment industry, he has led both sourcing & staffing engagements for companies located throughout the world.

18/02/2011 15:29

90

WORKFORCE MOBILITY

On the move?

The longstanding US tradition of moving vast distances for your career is no longer the easy and breezy decision it once was. So what changed? Ian Clover looks at how a depressed housing market, the recession and better technology is impacting the workforce mobility sector.

I

t’s as American as warm apple pie, schmaltzy rom-coms and an impressive, irrepressibly positive outlook on life, but the practise of upping sticks and moving thousands of miles for one’s career is increasingly on the wane.

Ever since the days of the Wild West – when budding gold prospectors thought little of trailing the railways’ expansion into the deep wilderness in search of their fortune – Americans have been fearless relocators.

In the 1930s, people from the Dust Bowl states migrated in their millions to eastern and western cities in an attempt to escape the debilitating drought that had hit the Midwest. A few decades later, blacks from the southern states sought employment and diminished discrimination in the great cities of the north and east. And since then, the country has been a criss-crossed patchwork of employment opportunities and mobile employees. The current/recent (delete as applicable) great recession has, however, bucked this trend.

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Statistics from Brookings Institution’s analysis of Labor Department data show that the annual domestic migration rate has dropped from 20.2 percent in 1947-48, to just 12.5 percent in 2008-09, with the unemployment rate hovering at a record high of 9.8 percent. The reasons for such a shift in Americans’ collective mindset towards relocating are manifold, with better technology, more homeowners and a tougher housing market cited as deciding factors.

Despite the apparent pullback in workforce mobility, it is still an extremely important facet of American working life. For Mike Washbourne, Chairman of Worldwide ERC – the Association for Workforce Mobility – it remains an integral part of business in the US. “Our aim and intention is to help get the right talent in the right place at the right time, and it’s at the core of what we do at Worldwide ERC,” says Washbourne. “In our business and other businesses within our industry it is highly

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WORKFORCE MOBILITY 91

critical to have a mobile workforce simply due to the speed of business today – that speed has increased dramatically and so having the right talent in a position to move where the business needs it has always been something that is critical for us.”

The workforce mobility market has, admits Washbourne, evolved in recent years; a change that has made relocating seem slightly riskier than before. “In the past, a lot of mobility, relocation and transfers were done perhaps for developmental opportunities, whereas today I think what we see is really geared more towards meeting quick business needs and being able to demonstrate that there is a positive return on the investment to have a person relocate, purely because it costs to relocate talent.”

The benefits of mobility Filling skills shortages is ostensibly the reason for workforce mobility, but the entire industry is much more multi-faceted than that. However, fi rst and foremost, many organizations, and employees, need that opportunity to relocate in order to fi ll vacancies, expand into new territories and maintain a fluid approach to their own growth and synergy. “I can look to many of our member firms or multinational fi rms where, for instance, there are skill shortages in certain markets that our member firms operate in,” says Washbourne.

“Having a mobile workforce enables the companies to respond to those market needs. So whether it’s providing a product, providing a service, providing talent to build a factory or machinery – more often than not those things are not sourced in the US. Those projects need to be in any place in the world, and often times they need to be there immediately, because in our business, time is critical.”

Time is also money, especially in the stretched economic climate that has so far stubbornly refused to head for the hills. The recession has created an atmosphere where nervousness has usurped confidence – on both sides of the employment divide. “There are a number of impacts that have been felt from a corporation perspective which is the primary driver of the transfer of employees,” says

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Washbourne. “Certainly there has been a high degree of concern with the cost of potential moves, and so companies have become much more sophisticated than before, targeting their policies and programs to dictate who should be moved and who shouldn’t be.”

With the corporate housing industry losing value rapidly in the past few years, and employees unable to sell their own homes at a speed or price that is satisfactory, the entire dimensions of the workforce mobility sector are being remoulded and remodelled on a daily basis. Companies are increasingly keen on less expensive, shorter-term relocation assignments for their top talent, as opposed to the classic long-term expatriation packages that used to be the norm.

“Having a mobile workforce enables the companies to respond to those market needs. So whether it’s providing a product, providing a service, providing talent to build a factory or machinery – more often than not those things are not sourced in the US” “Nearly 50 percent of the employees that our member companies relocate are homeowners,” says Washbourne.

“So with the downturn of the US home market, that has certainly created a number of impacts as far as the timing of relocations is concerned. It has hurt the ability of colleagues or employees to accept a relocation. For those who have accepted, it has certainly elongated the timing.”

As a result of the high cost, high risk now associated with relocating or transferring an employee, companies have begun to focus more and more on favoring the transfer of the most highly skilled employees. “In general it is the highly skilled workers who are more likely to be relocated because, from a talent perspective, top talent is not always easily obtained in the market that they’re heading into.

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WORKFORCE MOBILITY

“So I think that one shift we might see is companies trying to source talent locally, where in the past they might just have easily relocated them and not put the energy into trying to avoid the transfer. But with highly skilled employees, it is almost a given that you need to do that.

You need to transfer them because they are not necessarily available in the new market.”

Reluctance to relocate?

In spite of the fi nancial constraints that companies fi nd they are increasingly subjected to, the contraction of the relocation market has been further exacerbated by a growing reluctance among workers to move vast distances for their careers compared to yesteryear. There are a number of reasons for this shift in attitude, believes Washbourne.

“While the situation is starting to get a little better from a recession perspective, the deflated home sales market has really crimped the ability of employees to easily relocate.

“It’s an interesting paradigm because while many people need to relocate because of various regional difficulties in the economy, historically what we would see is the free flow movement of talent. So if one part of the country had some economic issues or even locally if there were layoff s with a particular employer, people were somewhat mobile. People were willing to relocate for work. I don’t think that that willingness has changed on one level.

“However, the depressed real estate market has really hindered employees’ collective ability to actually accept the type of long-distance transfers we’ve historically seen. So on one level we’ve seen employees that were willing to relocate but now fi nancially perhaps cannot take that plunge without substantial assistance from their employer – current or new.”

It’s a simple conundrum – difficulty in selling one’s home and uncertainty over the future stability of a new job in a new location combine to make staying put the easier option. “Workers are opting for what they know, the community they know,” says Washbourne. “The emerging trend as the recession remains is an unwillingness to pull up roots for one’s career.”

And employers have noticed this reluctance, believes Washbourne. “Some of our member fi rms are starting to see that the employees no longer consider a transfer to be the career positive it once was. These were things that would trend towards your development and growth within the company, but now you see mobility decisions based on the economy. So if you’ve lost a position or you now need to relocate to a new position, your fi rst concern is ‘how steady is that new position?’”

Indeed, the current climate means that workforce mobility is more likely to become more concerned with intra-company lateral transfers and the ilk, rather than promotions or inter-company head hunts. “Whereas most relocation moves were as a result of promotional steps up the ladder and now they are more lateral moves, employees now think long and hard about whether this is something they want to put their family through. There is certainly more

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“Corporations are keen on reducing their carbon footprint and so their desire to be good corporate citizens is dictating their strategies on conservation, recycling and undertaking sustainable practices” re-examination of those considerations, but that’s not to say that if the economy kicks back up again and things start loosening up that some of those mindsets won’t change.”

Technology, ecology Back in the days of rust belts, dust bowls, bowler hats and opportunity, the job market’s whims had sole influence on where workers were needed. Agricultural regions attracted farming types, industrial zones were a magnet for blue collar workers and everywhere else the climate and geography of a location had a big say in who moved where, and why.

Today, the world is a smaller, more sophisticated place, with technological advances the primary source of such shape-shift ing. The result is a workforce mobility sector that has other options, and considerations, than simply moving people from one physical location to another.

“Because of cost concerns there are member companies who have opted to create teams that have the capacity to be more mobile, or are already spread out over a region, state or the entire country,” says Washbourne. “So there is more long distance managing of teams, made easier by technology. Being there, physically being with a customer or a team at a facility or manufacturing site is still critical, but clearly the dawn of video conferencing, smartphones, WI-FI and email has had an eroding impact on workforce mobility. The recession was probably the fi nal push that some companies needed to abandon their previous relocation policies and try to push the envelope in other ways.”

And it’s not just technology that is changing the industry – greater concerns for the environment are convincing many companies that previous workforce mobility programs were simply unsustainable from an ecological point of view. “We have seen an increase in the incorporation of green initiatives into our workforce mobility programs.” says Washbourne.

“Corporations are keen on reducing their carbon footprint and so their desire to be good corporate citizens is dictating their strategies on conservation, recycling and undertaking sustainable practices. A recent study by the National Association of Realtors placed energy efficiency as the third most important factor behind buying a house, with location and price taking the top two spots.”

Th is holy trinity – efficiency, location and price – is also a workforce mobility mantra, and all three are becoming increasingly paramount to the success of the industry.

“It’s critical to continue to build up and retain human capital and talent,” concludes Washbourne. “And still – though this might be surprising for some given the recessionary pressures around the world – there’s a relatively fi nite number of skilled workers in the world to do the kind of jobs that need to be done.”

Mike is Senior Manager of Global Mobility Operations for Pfizer Inc, is also a member of the Worldwide ERC Board of Directors, he has served as 2008 Secretary-Treasurer and 2009 Vice President, as 2010 Worldwide ERC President, and is currently serving as the association’s Chairman.

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PROJECT FOCUS 93

CORT furnishes ‘home’ for traveling nurses Jon Hile, vice president of sales and national business development for CORT, explains how the organization makes home comforts an everyday reality for travelling nurses.

T

emporary assignments for the mobile workforce have experienced significant growth in recent years as organizations turned to the practise in lieu of permanent employee relocations. The mobile health care staffi ng industry put temporary assignments into practise years before this trend took off, sending traveling nurses to hospitals with staffi ng needs across all 50 states. One industry leader in health care staffi ng has worked with CORT, a Berkshire Hathaway company that is the only national furniture rental company, to support their furnished apartment housing needs since 2003.

The challenge Approximately 50 percent of nurses deployed by this organization choose to stay in furnished apartments provided by the company while working on assignments typically ranging from eight to 13 weeks. As the largest health care staffi ng company in the country, this can represent as many as 4000 apartments at any given time.

Like many companies that must respond to fluctuating business conditions, this organization needed a furnishing solution that would enable them to maximize the efficiency of existing capital and human resources. Purchasing, managing and maintaining the large inventory of furniture required to support thousands of apartments can be a costly endeavor, particularly for employees’ temporary needs, so rental furniture was a clear solution.

The solution The company maintains apartment leases nationwide for a variety of lease lengths depending on local market conditions and the needs of the hospitals in that market.

In some cases, multiple nurses may each have a room in one shared apartment. Furnishing apartments with rental furniture frees the company from the management burden and expense of furniture inventory management, and ensures that nurses are consistently provided with highquality furniture. Rental furniture is also a flexible solution that allows for simple adjustment of inventory based on current demand.

CORT worked with the company to develop flexible solutions to meet their needs while delivering consistent service excellence. One such solution was a rebate incentive program based on the number of furniture leases signed with CORT. In late 2008, CORT expanded their national scope to the top 70 markets nationwide, a great benefit to its custom-

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ers. Th is expanded service reach also led to an expanded partnership between CORT and the organization as they signed a five-year agreement that guaranteed CORT 80 to 90 percent of the furniture business and housewares as needed. CORT nimbly responded to the increased volume, delivering on their reputation of unmatched customer service.

The staffi ng organization is committed to signing long-term furniture leases whenever possible, particularly in markets where there are hospital engagements nearly year-round and nurses rotating in and out of apartments.

In return, CORT continues to deliver, pick-up and maintain furnishings at an affordable cost with a high level of service that the company had not consistently experienced with previous vendors.

The Results The organization repeatedly evaluates their vendor relationships based upon a number of categories including general responsiveness and attention to service issues and, in the past, ended a relationship with a furnishings provider when nurse complaints were frequent and consistently unaddressed. Today, employees are thrilled with the service they can expect from CORT.

Jon Hile is vice president of national sales and business development for CORT, a Berkshire Hathaway company.

Previously, he was vice president of rental relocation services for CORT. CORT has led the nation’s furniture rental industry for more than 35 years. For more information, please visit www. cort.com.

“Furnishing apartments with rental furniture frees the company from the management burden and expense of furniture inventory management, and ensures that nurses are consistently provided with high-quality furniture” Recently, a consulting organization conducted an audit of processes throughout the company’s entire system including suppliers, pricing, systems and training. Th is analysis confi rmed that, when compared to other vendors, CORT consistently provided the best service and prices on rental furniture. Th is audit helped CORT’s contacts at the organization validate the value of the program to their internal constituents and explain some of the details of the supplier program.

CORT will have continued opportunities to serve the company as they expand their nursing staff and introduce new services including traveling physicians. While CORT and this company have developed a mutual respect that has benefited both businesses, all CORT customers can expect the same respect and level of professional service when managing temporary housing needs.

18/02/2011 15:22

94

EMPLOYEE RECOGNITION

UNEARTHING THE NUGGETS HRM caught up with Misty Reich – KFC UK’s VP and global HR Director – and discovered her helpful hints on employee recognition, improving the company’s working culture and spotting potential talent and leadership.

What is the best thing about KFC’s culture?

Misty Reich. When you think about the experience of having a job, and working, and what that feels like – which is what the culture is – it impacts your day-today performance; it impacts whether you want to stay there; it impacts how you feel about it and whether you want to invite other people to come to work there.

I guess in times like this, when you might be tightening the belt around pay, around rewards and benefits, or even training, for some companies you would hope that you have a culture that’s sticky enough, that makes people want to stay and has them engaged.

What would you say are your two or three most important components that make up that culture?

MR. Our employees tell us that recognition is one of the highlights of our culture. We believe that every human, no matter what country you live in or how senior you’ve become in your work career, likes to be recognized. And we do fun, silly, crazy recognition.

Every leader in our company has a personal recognition award that represents something that they hold as a truth. So recognition is a hallmark that people would defi nitely mention.

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EMPLOYEE RECOGNITION 95

“I always tell people that in the U.S. our recognition culture is like ‘RAH! RAH! RAH!’ In the UK it’s sort of ‘rah’”

As HR Director for KFC in the UK, what would you say your role is in defining and adapting and driving that culture?

MR. I think in our company, and it might be different for others, but our company culture is defi ned. We have what we call the ‘How we win together’ principles, and recognition is one of them, belief in all people is another, being customer maniacs. So we’ve got that defi ned. I don’t defi ne that; I really believe in it. I don’t adapt it, because it works.

The one caveat to that I would say is that as you go around the world, the recognition element, it exists everywhere, but the magnitude and the amplification and how it comes across is different. So I always tell people that in the U.S. our recognition culture is like ‘RAH! RAH! RAH!’ In the UK it’s sort of ‘rah’. So it might be that element.

So my role is really championing the culture and keeping it alive. I’m not defi ning it, I’m not adapting it; I’ve got the gift of a beautiful culture that’s really already been cascaded effectively in the business. So I’m the keeper of the culture; I think it is my role.

My top three priorities and the thing that I want my team to be famous for as an HR team is great recruitment, great people development, and building a culture that makes people want to come to work for KFC and stay. So that’s the piece of the culture that I’m most focused on.

Could you share with us a major HR challenge you have faced, and touch upon some of the solution that you employed to overcome them?

MR. When I moved to the UK arm of the business in 2007, we didn’t recruit as a business. We had outsourced our recruitment to agencies. We had 23 agencies that we were using to recruit, and we were spending a lot of money on those agencies. We didn’t have a recruitment team inter-

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nally, and one of the things that I know is that when you’re in a growth business, as a HR director one of the things that you have to be able to do reliably and very well is recruit great talent. And we weren’t doing that well.

So one of the things that I did, and it was a big challenge, was start to shift the mindset of the business around what the HR team is meant to be focused on. So we outsourced our recruitment at that time to agencies, we did all of the employee relations for our restaurants in-house, and what I wanted to do was turn that around. What we want to be famous for is great recruitment, people development.

We need to do employee relations well, but we don’t need to be famous for that.

So that was a big mindset shift , and I would say that my HR team, and even the business, one, didn’t necessarily believe that we could be recruiters, that we could bring that in-house. And two, from an HR standpoint they’ve grown up and been successful in their career being employee relations specialists. And they didn’t know what I was trying to ask them to do or why that was a big idea, and we needed to make a big shift . So I think the fi rst thing was winning the hearts and minds of the HR team and helping them understand that this journey of bringing recruitment in-house and that no one should be able to recruit people to our company better than we do, that that’s a journey that we could win on, and that they could be successful and grow and develop.

So really spending time and talking to them about it in emotional terms and helping them see what the end result might be very tangibly. I brought the best recruiter who was on my recruitment team in the U.S. business for an eight-month assignment to England, and her only job was to teach my team how to recruit. Today we’ve got a great recruitment team and we’ve brought recruitment in-house. It’s a signature differentiator for us two years later. We’re not perfect, but we see ourselves as great recruiters and people developers, and I think that’s been a big shift . It was a big challenge, particularly in the UK, where there was still a lot of agency use at that time. So I think we’re successfully coming through it; we’re not done yet, though.

Do you see any benefits in outsourcing?

MR. I think in one instance, if you’re in a business that is truly in decline and you have to do some maintenance recruitment, that might be a situation where you might employ an external professional. We use agencies to some extent, but from a business model standpoint. Wholesale outsourcing of recruitment would be one instance.

One of the things that has to be true and has to be in place for you to recruit well from the inside is you have to have people recruiting for your business who absolutely love your business. So if you don’t, you need to get yourself on a journey to get that, and perhaps on the way you need to leverage a heavier external outsourcing model.

The other thing is there’s some specialized niche roles that my team is never going to be great at recruiting for, and frankly, we don’t recruit for them very often.

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So we have great partners in place that we’ve strategically selected, who do love our business and have the passion and excitement about our business, engaged for those purposes. Therefore, it makes sense, I think, if you’re being thoughtful and strategic about it, but it doesn’t replace that being a core capability of an HR function.

In terms of leadership and development, do you think it is possible to teach leadership?

MR. In our business we value know-how building; it’s one of our cultural principles. And, you know, I think leaders can learn to be better leaders. One of the things that we believe is that in our company we have to all be focused on leading and developing and coaching leaders to be stronger. So for that reason we don’t use a lot of external coaches.

Do you think anyone can be a leader?

MR. One thing that I’ve observed, and I don’t know if this is true, but in my experience people who don’t have selfawareness probably can’t develop beyond where they are.

And so, you know, I think it takes someone who is ready to look in the mirror and say, ‘here are the things that I’m particularly good at doing and here are the things I’m frankly not so great at, and I’m ready to bring someone in or I’m ready to learn and develop in the areas that I’m not great at.’

I think if that’s not in place – that fundamental selfawareness – I wouldn’t spend a whole lot of time and energy trying to push that water uphill.

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How do you go about identifying those with potential leadership skills, and then how do you nurture those potential leaders?

MR. How do you teach a leader leadership? I think the first thing you do is you develop them. And one of the things that we feel very passionately about is leaders in particular, everyone in our business, but particularly leaders, having a very thorough onboarding process. Executives sometimes push back on that; they’re used to stepping in day one, trying to make an impact, demonstrate their value, and we’ve got a 90-day plan to teach and help them integrate into the culture and into the business. One, because that makes them more successful once they come through that onboarding; they know who people are, they know where things are; that’s helpful.

But the bigger thing, I guess to your point, is it teaches them the value and how important it is to us that we be an organization that values learning, and so much so that even the most senior executives in our business are going to pause for 90 days when they first join and just focus on learning.

And what that does is it casts a shadow, especially with senior leaders. Senior leaders who are learners, there’s a big shadow that people see of that. And people on their team, it’s a natural human reaction, they emulate those behaviors. I think the other thing that’s important is creating an environment and a culture that values learning, that makes it safe to not know the answers, and recognizes and rewards people who are know-how gatherers and know-how builders.

“I think leaders can learn to be better leaders.

One of the things that we believe is that in our company we have to all be focused on leading and developing and coaching leaders to be stronger”

18/02/2011 15:18

Famous fast-food faces

There may be some individuals reading this who harbor a very strong desire to get into the HR industry and progress. What advice would you give to those hoping to secure not just an HR role, but a senior HR role?

MR. If I’m going to be true to what I’ve said already I would say make sure you’ve got your own personal self-awareness, know what you bring to the table, know what you’re really, really good at and make those towering strengths.

And in the areas where you’re not strong, bolster yourself; make sure you put a team around yourself to augment that. But mainly just make sure that that doesn’t derail you. So that’s one thing – know yourself.

The second thing is – know the business. First you have to be a business leader and you need to understand what is it that the business is trying to accomplish. What is the core strategy? From that point, start talking about how the people resources in that business can drive towards that.

I think the other thing is try to avoid the bureaucracy of HR. You know, I think a lot of times as HR professionals we get caught up in our jargon and focused on the policies and procedures. I think one thing that’s important is that you’re most focused on the business and you do those things that have to be done, but not majoring in those, really majoring in being a business leader.

What are your own career rules? How have you got to the point in your career where you are at right now?

MR. Wow, my career rules – what springs to mind is I like to work with really, really bright people, and I like to work with really bright people who are not arrogant. And so as a rule for me, I know that that’s a great culture fit for me.

I like to try to keep pace with people; I like that internal competition. So making sure that I’m staying in a role and with people around me that challenge me is critical, and I think I get sharper and sharper because of that. I do constantly have that feeling that I’m not quite good enough, which keeps me pushing. So I think that’s something that’s been a bit of a formula for success for me.

I think the other thing, particularly since I joined Yum Brands [Reich’s former company] that I didn’t quite appreciate before, is the unbelievable importance of working in a place that has a great culture. I didn’t know before, but working for Yum was an amazing experience for me because this notion of belief in all people sounds very jargon-y and it sounds very corporate-y, but this idea in a corporate environment that when we have a business conversation my fi rst assumption is you’re doing the right thing. Then after that I start to peel it apart and we ask questions. But from that basis, that just makes a fundamental difference in how it feels every day to get up and go to work. So I think those are things that I have learnt that have become rules for my career.

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Famous fast-food faces In much the same way it’s always McDonalds that attracts the ire of disgruntled anarchist crusties when they embark on their biennial rampages through city centers the world over (KFC, Burger King and Starbucks – equally visible and prevalent symbols of the power of globalization and capitalism – always seem to get off Scot-free), so it seems that celebrities with a rags-to-riches tale to tell always recall themselves, at some point, toiling beneath those famous golden arches.

So while KFC’s alumni is content to remain steadfastly un-famous rather than infamous, HRM looks at some ex-McDonalds employees who have since gone on to bigger and brighter things…

Pink: For Pink it was more a case of ‘get the grill started’ than ‘get the party started’ long before she became a slightly troublesome household name at the turn of the millennium. During her teen years growing up in Pennsylvania, Pink endured a few years working at McDonalds, recalling the horror of actually having to do real work for a living in a recent Hollywood interview.

Fred Durst: The Limp Bizkit frontman used to work the morning shift at McDonalds during his early years growing up in Jacksonville, Florida.

One wonders exactly what kind of inspiration the experience had on the rapper/singer – his band’s name, perhaps? His love of bright red hats? His all-encompassing rage? Maybe we’ll never know…

Sharon Stone: Another Pennsylvanian, Sharon Stone also enjoyed a stint at McDonalds during her teen years. However, as an aspiring actress, she followed her Basic Instinct and got out as soon as she could. Maybe the uniforms were too modest.

Jay Leno: Famous for The Tonight Show, in his earlier years Jay Leno was more of a breakfast star at McDonalds – serving up McMuffins and coffee rather than the golden nuggets of scathing wit and scalding opprobrium he later became renowned for.

Shania Twain: Working at McDonalds evidently didn’t impress this young Canadian much – she didn’t stick around for long once the record deals began to roll in. However, rumors that she penned her 1997 global smash ‘You’re Still the One’ in homage to Ronald McDonald refuse to die.

Misty Reich is the current VP of HR at KFC UK. She has previously worked as VP Global Talent Management at YUM! Brands, and VP HR at AT&T. Interview taken from meettheboss.tv

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Corporate America’s view on Health & Welfare Benefits Administration “As a benefits administration and human resources professional, you bear a number of critical responsibilities,” says Venkat Tadanki, “including helping to maximize your organization’s investment in employee benefits.”

S

uch a task has become increasingly difficult over the past several years as internal resources have diminished steadily while employee benefits costs have escalated exponentially. Nevertheless, you are tasked with controlling, managing and even driving down costs while ensuring compliance.

Secova’s 2010 Benefits Administration Survey was undertaken in late 2010 to gather benchmarking data to support an organization’s overall benefits management and administration strategies. We surveyed more than 131 senior HR executives from mid-size to large employers who have well over 50,000 employees. The trends below demonstrate the pressures HR/benefits managers face while navigating through the complexities of providing high quality and cost-effective health benefits for employees faced with health care reform.

Cost continues to be a concern but compliance tops the list Respondents made it clear that their number one concern is compliance with the Health Care Reform Act. While many of the new rules and regulations will not take effect until 2014, employers must begin to act now to evaluate their benefits plans and ensure their compliance with the Act. Among the tasks employers will be faced with are revising the design of their group health plans, providing new summary plan descriptions, and communicating to their employees about the effects of the new rules and regulations on their benefits.

The communication of compliance-related information is helping to drive up concern regarding proper communication resources. There is growing belief in the HR community that organizations will implement call center models to a greater degree due to the continued need to reduce costs while still helping employees understand the implications of health care reform and make informed decisions.

There has been a lot of focus on dependent eligibility Even with historical compliance challenges looming, HR professionals haven’t turned their attention away from the need to continue to reduce benefits administration costs through Dependent Eligibility Verification Audits (DEVA). 70 percent of the respondents either have implemented or are in the process of

SECOVA.indd 98

implementing a DEVA and an ongoing dependent eligibility management process. While audits help employers save tens of millions of dollars, according to one survey respondent, the greatest advantage is that “they ensure compliance with eligibility rules for hundreds of thousands of employees”.

Online support for issue resolution is a missing link.

More than 55 percent of respondents’ organizations do not provide online issue resolution support. Again, this finding is made more compelling by the large percentage of respondents who cite administrative cost reduction and increasing the use of employee self-service technologies as top concerns.

There’s no denying that web-based systems will have to be given greater consideration as HR departments are forced to maintain high levels of productivity with static or dwindling resources. In addition to helping reduce costs and administrative strain, online support technologies are valued for giving employees the ability to perform tasks such as enroll in programs, update personal information, find the answers to frequently asked questions at anytime day or night.

Mediocrity appears to abound among benefits enrollment systems Forty-two percent of respondents rate their enrollment system’s ease-of-use poor to average. Fifty percent rate their system poor to average in terms of reporting and analytics and the system’s ability to be customized.

Nearly 40 percent rate their system’s response time poor to average. And more than 36 percent rate their system’s reliability poor to average.

These ratings help to explain why 40.7 percent of respondents say they have a high level of concern regarding updating and automating their benefits administration systems and why another 47.8 percent cite a high level of concern when it comes to ensuring the accurate and secure exchange of data.

Given these results in conjunction with the scope and complexity of health care reform, the increased intricacies of administering benefits, and the ongoing need to better manage costs, it appears as though many organizations need to move quickly to identify ways to enhance their benefits administration systems’ overall effectiveness and bridge crucial gaps in ease-of-use, reliability and dependent eligibility management.

“The communication of compliancerelated information is helping to drive up concern regarding proper communication resources. There is growing belief in the HR community that organizations will implement call center models to a greater degree due to the continued need to reduce costs while still helping employees understand the implications of health care reform and make informed decisions”

Venkat Tadanki the CEO of Secova, provides customized solutions that drive down costs for employers health and welfare benefit offerings for both the public and private sector, including many Fortune 500 Companies.

18/02/2011 15:30

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Corporate America’s View on Health & Welfare Benefits Administration “As a benefits administration and human resources professional, you bear a number of critical responsibilities,” says Venkat Tadanki, “including helping to maximize your organization’s investment in employee benefits.”

S

uch a task has become increasingly difficult over the past several years as internal resources have diminished steadily while employee benefits costs have escalated exponentially. Nevertheless, you are tasked with controlling, managing and even driving down costs while ensuring compliance.

Secova’s 2010 Benefits Administration Survey was undertaken in late 2010 to gather benchmarking data to support an organization’s overall benefits management and administration strategies. We surveyed more than 131 senior HR executives from mid-size to large employers who have well over 50,000 employees. The trends below demonstrate the pressures HR/benefits managers face while navigating through the complexities of providing high quality and cost-effective health benefits for employees faced with health care reform.

Cost continues to be a concern but compliance tops the list Respondents made it clear that their number one concern is compliance with the Health Care Reform Act. While many of the new rules and regulations will not take effect until 2014, employers must begin to act now to evaluate their benefits plans and ensure their compliance with the Act. Among the tasks employers will be faced with are revising the design of their group health plans, providing new summary plan descriptions, and communicating to their employees about the effects of the new rules and regulations on their benefits.

The communication of compliance-related information is helping to drive up concern regarding proper communication resources. There is growing belief in the HR community that organizations will implement call center models to a greater degree due to the continued need to reduce costs while still helping employees understand the implications of health care reform and make informed decisions.

There has been a lot of focus on dependent eligibility Even with historical compliance challenges looming, HR professionals haven’t turned their attention away from the need to continue to reduce benefits administration costs through Dependent Eligibility Verification Audits (DEVA). 70 percent of the respondents either have implemented or are in the process of

SECOVA.indd 98

implementing a DEVA and an ongoing dependent eligibility management process. While audits help employers save tens of millions of dollars, according to one survey respondent, the greatest advantage is that “they ensure compliance with eligibility rules for hundreds of thousands of employees”.

Online support for issue resolution is a missing link.

More than 55 percent of respondents’ organizations do not provide online issue resolution support. Again, this finding is made more compelling by the large percentage of respondents who cite administrative cost reduction and increasing the use of employee self-service technologies as top concerns.

There’s no denying that web-based systems will have to be given greater consideration as HR departments are forced to maintain high levels of productivity with static or dwindling resources. In addition to helping reduce costs and administrative strain, online support technologies are valued for giving employees the ability to perform tasks such as enroll in programs, update personal information, find the answers to frequently asked questions at anytime day or night.

Mediocrity appears to abound among benefits enrollment systems Forty-two percent of respondents rate their enrollment system’s ease-of-use poor to average. Fifty percent rate their system poor to average in terms of reporting and analytics and the system’s ability to be customized.

Nearly 40 percent rate their system’s response time poor to average. And more than 36 percent rate their system’s reliability poor to average.

These ratings help to explain why 40.7 percent of respondents say they have a high level of concern regarding updating and automating their benefits administration systems and why another 47.8 percent cite a high level of concern when it comes to ensuring the accurate and secure exchange of data.

Given these results in conjunction with the scope and complexity of health care reform, the increased intricacies of administering benefits, and the ongoing need to better manage costs, it appears as though many organizations need to move quickly to identify ways to enhance their benefits administration systems’ overall effectiveness and bridge crucial gaps in ease-of-use, reliability and dependent eligibility management.

“The communication of compliancerelated information is helping to drive up concern regarding proper communication resources. There is growing belief in the HR community that organizations will implement call center models to a greater degree due to the continued need to reduce costs while still helping employees understand the implications of health care reform and make informed decisions”

Venkat Tadanki the CEO of Secova, provides customized solutions that drive down costs for employers health and welfare benefit offerings for both the public and private sector, including many Fortune 500 Companies.

21/02/2011 08:40

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16/02/2011 11:10

WHEN I’M

65

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As part of HRM’s international focus, Ian Clover speaks with two employment experts for their thoughts on new British regulations that will scrap the country’s default retirement age and asks – how can such a move help the British economy, and what problems will it create for employers?

T

he Europe-wide battle against recession is currently one of the greatest threats to the stability of the continent, and it is being fought on many fronts. The issue of reducing national deficit is high on the agenda for most countries, and throughout Europe the prolongation of working life is being touted as a necessary move that will help prop up tax receipts and thus lessen the burden on stretched pension funds.

One inescapable fact is that the population of Europe is aging. People are living much longer than before, but are still retiring in their early- or mid-60s. It is a situation that has become untenable, particularly in the current economic climate, where a contracted workforce is ill-equipped to steer the continent’s various economies through the stormy waters of high youth unemployment and a top-heavy population of retirees drawing pensions, often for 20 years or more. The Organisation for Economic Co-operation and Development (OECD) estimates that just 39 percent of Europeans between the ages of 55 and 65 currently work. Th is age bracket is even larger than the 15-24 age group; a bracket that is also suffering from high unemployment – the Statistical Office of the European Commission (Eurostat) estimates that 21.4 percent of Europe’s under-25s are currently jobless.

These figures place enormous pressure on Europe’s current working-age population. The lack of jobs for youngsters is a complex issue with few quick fi xes, but governments throughout Europe believe they can at least assuage the problems caused by a capacious and burdensome retired population.

In an effort to aid economic recovery and ease the weight on an increasingly constricted workforce, the UK’s Department for Work and Pensions (DWP) has set plans in motion to scrap the country’s Default Retirement Age (DRA), which currently stands at 65 for men and 60 for women, by October 2011. The DRA was introduced by the then Labour government in 2006 as part of a series of employment equality regulations that have allowed employers to force their staff to retire at 65 without any need to justify their decision. Th is ruling has been welcomed by some bodies, but is seen by other campaigners as a highly principled, rather than practical, move.

Rachel Krys, Campaign Director at the Employers Forum on Age (EFA), welcomes the decision.

“On a purely principled level, the DRA is just wrong. It is age discrimination. It is highly unfair that individuals who, just because they hit a certain birthday, are basically sacked. They get no recourse. They cannot challenge the decision. All along, this has been a problem with the process of having a default retirement age. It is using a criteria based purely on age to make a decision on somebody’s career.”

Using age as a broad-stroke bellwether of somebody’s ability to continue working has become an outmoded and anachronistic way of managing staffing levels. People throughout Europe are living longer

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and healthier lives. Europe-wide, the current ratio between those aged under 65 and over is 4:1, but this is predicted to drop to 3:1 in the next ten years, and 2:1 within 30 years. In the UK, the Office for National Statistics indicates there are currently 1.45 million people over the retirement age still working, a statistic that suggests those who are well enough to continue in work, choose to do so.

“Lots of employers are doing very happily without the DRA,” continues Krys. “Th is proves that it is not necessary. The DRA sends the wrong message to both employers and line managers that there is a terminal point in someone’s career where they can go no further. Even within organizations that exercise the right to request to stay on past 65, the DRA still sends a very clear message that, at 65, it is a time to question your suitability to work and your appropriateness for the job.”

Since the DRA was introduced, it has been challenged on a number of occasions in courts throughout the UK by campaigners arguing this very suggestion. The new coalition government (made up of the Conservatives and the Liberal Democrats) was quick to identify the potential benefits of scrapping the DRA, with new Employment Relations Minister Ed Davey stating in September 2010: “With more and more people wanting to extend their working lives we should not stop them just because they have reached a particular age. We want to give individuals greater choice and are moving swift ly to end discrimination of this kind.”

Krys agrees that the current regulation is one of barely disguised discrimination against older workers. “There is currently a huge responsibility on employers to manage the staff they have got. They should be constantly questioning and assessing people’s capabilities to do their job, rather than using this kind of big milestone birthday as a way of discrimination to avoid doing their own jobs properly.”

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Introduction of DRA The DRA was introduced as recently as 2006. Prior to this, there was little in the way of a formal process, and this new process was challenged almost immediately, most infamously by the Heyday Challenge that argued the legality of the new regulations in 2009. Faced with such a tumultuous backdrop to the ruling, the coalition government has been more than happy to scrap it. “The new government is under enormous pressure to reduce Britain’s deficit, of which the pension bill is a huge part. If everyone simply worked a year longer, it would knock approximately one percent off the deficit, so you’re talking about a huge benefit for society and the government if people work that little bit longer,” says Krys.

John Cridland, Director-General of the Confederation of British Industry (CBI) believes that, despite the government’s best intentions, the scrapping of the DRA addresses the wrong issues. “The government has not thought about the real-world implications of what they are proposing,” he says. “They have looked at this from a question of high principle, of fairness and equality, and with the idea of expanding the size of the labor market.

I don’t have a problem with either of those approaches, but they are very macro and theoretical.

“They [the government] have failed to look at this as a workplace issue, with all the implications that flow from that in terms of dealing with poor performance, retiring with dignity and management of staff and succession planning, for example.”

Cridland dismisses the idea that allowing the workforce to work for longer will assist the economy as too simplistic. “I think people in the treasury have just looked at the size of the labor force and said ‘If you increase the size of the workforce you can increase the rate of economic growth’… but if companies cannot change staff in a team, then customer service can

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a reported 84,000 additional people from this age bracket deteriorate. If companies cannot bring on younger staff The UK has one of working now when compared to a year ago. However, this and give them more responsibility because somebody is the oldest average statistic is skewed by the fact that many of post-retirement holding a job that they would like them to do, you get less retirement ages in age have had little choice but to return to work since the innovation, and a whole series of individual blockages and Europe, at nearly recession in order to make ends meet. consequences that can damage the ability of the business 64 for men and to perform in the way that it needs to.”

Countering Cridland’s fears that extending the workWorking past retirement over 60 for women. ing lives of older employees has a negative effect upon the Not every employee approaching the default retireIn Poland, by job prospects of the next generation of young workers, Krys ment age is going to want to continue working, and under contrast, it is 57 argues that an experienced, committed and knowledgeable the new rules they do not have to. The greatest change for men and 55 for workforce, comprising a fair percentage of those beyond is that state pensionable age is going to increase to 66. current retirement age, is actually a boon for companies.

Therefore, if an individual wishes to retire at 65, they women.

“The market does not operate like that. It isn’t a onemust be able to provide for themselves for 12 months in, one-out market. The types of jobs that older people are before drawing a pension. doing are not the types of jobs that young people are trying “The government can get people working a little bit to get into. In fact,” continues Krys, “if you look at OECD longer by applying a carrot and stick method,” explains figures, in countries where they have a higher labor market Krys. “The stick is that you are not going to get your participation of older people, they also have lower youth unpension until you are 66. The carrot is you will not be employment. At EFA, we did some work with McDonald’s discriminated at work just because you hit 65. It has been – who have increased participation of the older age group a brave step by the government to remove this landmark – and then analyzed the impact that has had on individual date, and it places greater onus on employers to better teams within their organization. We discovered that teams manage people to become more productive. We need with a more diverse workforce were much more productive to take responsibility and ensure everybody we are emand higher scoring, and were actually creating more jobs than teams that ploying is delivering and producing. At the moment, if you have someone were manned purely by people who were younger.” coasting towards retirement, they might be coasting for ten years. Can we Figures from the UK’s Office of National Statistics back up this report. really afford to carry people who are coasting? Of course not. Also, we need The group of workers of post-retirement age, they claim, is the only one to to increase the availability of work options for people as they reach their experience an increase in employment since the economic downturn, with 50s and 60s.”

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Losing the DRA The UK’s Department for Work and Pensions (DWP) has produced a lengthy white paper on the benefits they believe scrapping the DRA will bring. Here are a few choice excerpts.

Benefits to firms The abolition of the DRA is likely to benefit employers in two main areas: • Cost savings following removal of right to request procedure • Increased profits resulting from increase in labor supply

Savings from abolition of right to request procedure Under the current DRA legislation employers incur costs when they retire an individual and when they receive a right to request to stay beyond the retirement date. The employer is obliged to take requests seriously, although no reason need be given to the employee if the request is turned down. Where requests are not accepted there is provision for an appeal stage and ultimately recourse to an external dispute resolution mechanism, which could be an Employment Tribunal.

Dialogue between employer and employee In many cases, employers and employees have constructive discussions about their retirement plans. These discussions can include consideration of an employee’s desire to change working pattern or role in the run-up to retirement.

It is argued that the current right to request procedure can provide a useful trigger for these discussions as well as enabling the employer to gain information that helps with workforce planning. We want such dialogue on retirement planning and alternatives to retirement (such as part-retirement), where this is beneficial to employer and employee, to continue. We are therefore seeking input from respondents on what the Government might do to support continued dialogue on retirement.

Employers using retirement ages under the DRA process have two choices: They can stop using retirement ages, though they can complete any retirements where the employee has been notified before 6 April 2011 and where the retirement will be complete before 1 October 2011. The Government will provide guidance on managing without retirement ages.

They can choose to continue using a retirement age. However, when the DRA is removed, employers using retirement ages can be challenged in the courts to show that their retirement age is objectively justified. It is not easy to demonstrate that a retirement age is objectively justified, so the employer should be confident that it can be objectively justified before deciding to use a retirement age.

Productivity assumptions The evidence on the productivity of older workers shows that they are no less productive than younger workers, except in a limited range of jobs. The findings from a review of the literature 41 were: • The evidence suggests that, except in a very limited range of jobs, work performance does not deteriorate with age, at least up to the age of 70. Since few people are employed beyond that age, there is virtually no evidence about work performance after the age of 70.

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It will take some time for the culture of the workplace to adapt and change, but Krys argues that the removal of preconceived notions of when somebody is ‘past it’ will help change the perception of what to expect of employees when they reach their 50s – from both an employee and employer perspective. It is human nature to wind down and ease off when the end is in sight (just think of your own attitude towards work as 5pm on a Friday approaches), but if the fi nishing line remains undrawn, productivity is more likely to persist.

“Currently,” says Krys, “the DRA means that people in their 50s are viewed as pre-retirees, so often companies will not bother with employing or training them. If the perception switched to ‘they might still work for us for another 20 years’ then not only is that a huge return on investment, but it can sometimes lead to more commitment and stability than you would get out of most 20-somethings you might recruit. Th is will also send a real strong message to employees; they will feel valued.”

Financial constraints have led to a gradual increase in the length of time that people want to continue working.

Currently, most people retire at the point they can afford to, or perhaps health reasons force them to cut their hours or leave the workplace entirely before they would otherwise be ready. Financially, the pivotal point of retirement for most people is when their pension peaks, their mortgage and other debts are paid off, or they no longer have to subsidize their children. To some, this pivotal point comes long before they reach the age of 60. For others, it arrives much later. It is at this stage, says Krys, that most people decide to retire.

“We are seeing that fewer people are getting to that position of financial stability by the age of 65,” she says.

“People have increasingly dependent children, larger debts, a decline in their pension levels and a decline in final salary pension schemes. There has also been a decline in the payouts people are receiving from private pensions and annuities. So people are opting to stay on. Not for very long – usually just for one or two years until that last financial hurdle has been overcome – but this flexibility makes such a difference. It will also make a big difference to the economy to have people working up to 65 and that little bit beyond.”

Krys calls for a more flexible approach to the types of working options available for those approaching the current retirement age. “If people can take a little bit of pension and also build up a bit more reserves into a new pensions scheme or their existing pension scheme and draw some salary from part-time employment, that can really meet the needs of both parties. The employer can retain the talent and the individual can boost their income to a satisfactory level – which also creates a little bit more revenue for the taxman too. Everybody’s happy.”

Or are they? Who is going to suffer as a result of this more open-ended policy to retiring from work? “Tackling age discrimination is an important labor market issue, but we need to tackle it in a way that has the intended consequence, which is more work opportunities for older workers,” argues Cridland. “However, it is the unintended

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consequences that I am worried about.” says. “But you can also have an older worker who is dyed-in-the-wool, lackCridland believes the unintended consequences will be manifest in ing in self-awareness, slowing down…businesses would want to keep the first more disputes throughout the marketplace. “The last thing we should be and do something about the second. At the moment, employment law is so doing is finding more work for lawyers, but that will be the consequence here. complicated and so difficult that to have a conversation about this is not as The DRA is achieving a positive result, because the right to request to stay on simple as ‘you can’t do the job’. You have to argue how maybe they can no after retirement is increasing the working age [currently, employees have the longer do the job so well or suggest they have become a bit stale. ‘right to request’ to continue working beyond 65 if they so wish]. Our CBI “Employers use retirement as a way to deal with those problems, and surveys reveal that as many as a third of employees at retirement age want so we are leaving employers without the ability to manage their workforce.” to continue working in some capacity. It might be shorter hours or reduced Managing these additional workers is not without its additional problems, responsibility, but they want to continue, and employers and Krys is not unsympathetic to the future issues this are able to accede approximately 80 percent of the time.” ruling is going to cause an HR department.

A healthy, happy and contented workforce comprised “But I would just throw their qualms back at them In the UK... of both old and young workers is not something Cridland and say that the employer has to employ people, and that is against, but he does argue that sentimental decisions means managing them throughout their entire workto prolong the working career of a much-loved colleague ing lives,” she says. “We cannot duck it or avoid it any have no place in a market that is still striving vigorlonger – we are not being productive enough. Therefore, In 2012 there ously to shake off the tepid torpor of recession. “There is organizations that have removed retirement age have put will be no denying the positive side of allowing older people to the onus back on to their line managers to actually start 772,000 continue to work,” he says. “But to accept that you have to intervening, to start managing people proactively and to people accept that there is another side too, which is every now no longer be shy about managing declining performance and again somebody wants to stay on who the boss, the and encouraging increased levels of performance.” aged 64 customer and the colleagues know is no longer up to the Using the current DRA regulations to dodge potenjob; they no longer understand it or are unable to carry tial work responsibilities is, believes Krys, leading to an out their tasks satisfactorily. This happens all the time, and atmosphere of age discrimination in many workplaces. other people are forced to carry that person’s work or get She argues that HR departments are shy to the problem frustrated or leave, and new ideas do not get introduced. of tackling declining work performance among employ45% of 60 to “This is only perhaps one in ten cases, and there are ees of any age, and simply rely on the easy get-out-clause 64-year-olds probably nine positive cases for every negative one, but the the DRA represents. Cridland counters this claim by are currently default retirement age enables businesses to say: ‘Sorry, in stating that it is not the responsibility of the employer to employed your particular case, it’s time you went.’” tidy the mess created by government action gone too far.

“The government has swung the pendulum to the Energizing the market extreme with this,” he says. “If the idea is to encourage Since the introduction of the DRA in 2006, there has people to work longer and make it possible for them to been, claims Krys, a stagnation of the British job market, do so, push the age of retirement up to 67, even 70. If with employers stymieing the sort of flexible working government had decided in principle that there wasn’t practises that enable older workers to make an informed and personal decigoing to be a default age any longer, then it should deal with the unintended sion about when, and how, they are going to retire. consequences, and that would have made it possible for businesses to deal One individual who has been fortunate enough to make up her own with issues of underperformance, which they currently tackle by using the mind about her retirement is Margaret Huntley, a 73 year-old telephone retirement age as a proxy.” operator from Yorkshire, North England, who currently works for NationCridland advocates changing employment law to make it easier for wide in the southern town of Swindon. Huntley has been employed at the companies to get rid of employees who are not up to the job. “Currently, it is company for the past 15 years and says that staying on was an easy decision very difficult, and companies use the retirement age to avoid an unpleasant to make. row. Now, those unpleasant rows will take place, but the law is not going to “I felt fit enough, which is the main thing I suppose. And Nationwide facilitate that; the law is going to get in the way of it.” made it easy for me – they made a decision a few years back to allow people Fear of creating more work than is necessary is understandable. The to stay on with them up to the age of 75 before the DRA was introduced.” current inflexibility of the law might well be exacerbated by the proposed With Nationwide’s continuing support, the decision on when to retire lies open-ended nature of the new regulations, but it will also hopefully lead solely with Margaret; a situation that suits her perfectly. to greater communication between employers and staff. A more open “I currently work 6.5 hours a day, three days a week, which is ideal. I discourse – arrived at through better performance management and the believe that if people are fit enough and able to carry on with the job that up-skilling of HR departments – will potentially result in a happier, more they were enjoying and doing well in the fi rst place, then I think it’s up to diverse and more productive workforce, which is no doubt the governthe person themselves to decide.” Margaret cites fi nancial stability as one ment’s intended outcome. of the other reasons behind her decision, stating that the additional income “Th is is about increasing opportunities,” concludes Krys. “People are allows her and her husband the fi nancial freedom to enjoy their retirement going to have to work for longer because they are living longer. They are to the full. healthier, which makes them more expensive, so they are going to have to Older workers like Margaret who can still offer something to an emwork a bit better. But we need to make sure that people are working good ployer are not the problem, argues Cridland. “You can have an older worker jobs, flexible jobs and jobs that suit them, and that is why we are creating a who is brilliantly creative, brilliantly innovative or brilliantly flexible,” he workforce and a jobs market for this future flexibility.”

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ASK THE EXPERT

Fiduciary benchmarking title Tom Kmak of Fiduciary Benchmarks talks to HRM about the importance of benchmarking.

There has been a lot of discussion recently about benchmarking of retirement plan fees. Please describe what that entails.

Tom Kmak. Benchmarking a retirement plan entails three important steps. The first is making sure you compare similar plans, or what the industry calls ‘making applesto-apples comparisons’. Second, once you have a similar group of plans, you then need to understand all of the fees you are paying for these plans. So there’s a dissection of the fee elements in the equation. Third, you need to make sure you understand what you’re getting for what you’re paying – a value component that has to be juxtaposed to those fees.

Why is it important for plan sponsors and service providers to understand the importance of benchmarking?

TK. There are three primary reasons. First, the law requires fiduciaries to make sure the fees paid to all service providers are reasonable per ERISA section 404(a)(1)(a). Th is requirement has been reinforced by regulation 408(b)(2), which will require fiduciaries to receive new detailed fee and service disclosures starting July 16, 2011. Second, the litigation environment surrounding fees is significant.

Several prominent fi rms have settled suits for amounts that run from $16mm to $19mm. And fi nally, it’s just good business practise. Nobody likes to overpay for a service and the right fee structure can mean thousands of extra dollars to participants come retirement.

Is this something all plans should be doing or is it really applicable and affordable only for larger plans?

TK. Traditionally, benchmarking really wasn’t affordable for a plan that had only a few million in plan assets. Today, really affordable tools like Fiduciary Benchmarks allow all fiduciaries and service providers to assess their fees and the value being received for those fees. Remember, ERISA doesn’t differentiate between small and large plans. In addition, the expense for benchmarking a plan through Fiduciary Benchmarks can be paid from plan assets since it is a qualified plan expense. For HR professionals, this means no hit to their budget.

at something that examines both fees AND value. In fact, the DOL recognizes this in the 408(b)(2) regulations where they specifically mention this is about reasonable fees, not low fees.

Tom Kmak is CEO and co-founder of Fiduciary Benchmarks, 2007 to current. Prior to founding FBi, Tom Started the JPMorgan Retirement Plan Services business in 1990 with American Century. Upon leaving in October 2007, that business employed 1100 people serving 200 large plan sponsors with over 1.5 million participants and more than $115 billion in assets.

Do you foresee any changes in fee analysis and benchmarking as a result of recent fee-related litigation?

TK. Absolutely. There is a very prominent ERISA attorney who said because of the Caterpillar suit, she believed there were several things that would become best practises for fiduciaries. Specifically, they should know their fees, they should compare them to benchmarks, monitor them on an ongoing basis, have real documentation regarding that process, and make sure they obtain an independent, thirdparty opinion. On this last point, some service providers give their clients their own benchmarking information.

Th is is a bit like having the fox in the hen house and should probably be avoided. But there is no doubt the litigation will increase benchmarking requests – in fact, we have already seen it in our own business.

Any final thoughts?

TK. It’s a pithy play-on-words, but I think it sums up the situation perfectly: “Let’s not lose sight of the forest for the fees”. There is no doubt that fees have to be reasonable.

The law requires it. It is a good fiduciary practice. It’s good business. It helps participants retire better. But if a service provider helps your participants save more, invest better and rollover more, you can mathematically prove they are worth an above average fee.

What impact do you think the new DOL fee disclosure rules have on fiduciary benchmarking?

TK. No doubt they’re going to accelerate it as it is part of an inexorably linked chain of events. The desire for transparency led the government to call for disclosure. Such disclosure will lead to questions of ‘are my fees reasonable?’ And that question can only be answered by looking

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EMPLOYEE INCENTIVES

Good things come to those who... work?

Lorna Davies delves into the lucrative world of employee incentives and discovers that there are some impressive perks on offer.

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of perks and benefits to attract and keep employees. Several offer on-site benefits, which have the added bonus of keeping the employee workforce in the office more often. Give employees enough reasons to stick around and you’ll likely see productivity go up.

Google is famous for its perks. The search engine giant is currently number four on Fortune’s ‘100 best companies to work for’ list. Some of the reasons why include: onsite haircuts free of charge, a state-of-the-art gym, swimming pool, ping-pong, foosball and video games all on site.

Google’s healthcare plan includes onsite medical staff, and employees can even treat themselves to subsidized massages. Another famous benefit of working at Google (as mentioned in our exclusive interview with Liane Hornsey – Global VP of People Operations at Google on page 44)

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ompany incentives can help employee morale and retention, but with budgets tighter than ever businesses must be creative when looking for the most effective and appropriate ways to reward their employees.

An incentive is a tangible award that is earned by reaching a predetermined goal. Sales representatives, for example, may receive a prize for reaching a particular sales goal. The most common award types are travel vouchers and merchandise like electronics and gift cards. Incentives can be used for varying business types. Many firms use them to recognize employees for length of service, birthdays or other contributions. Even in this economic climate, incentives play an important role in maintaining employee morale and shouldn’t be abandoned, according to Karen Renk, executive director of the Incentive Marketing Association in Naperville, Illinois.

“In good times or bad, organizations are well served by creating a culture of recognition for their employees as well as their customers,” she told the Washington Post.

In today’s competitive market most employees have come to expect bonuses, products, and trips, but what can businesses do to allow recognition successfully? Many tech industry experts, especially in Silicon Valley, offer a range

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Idaho lawmakers are considering ways they can stimulate job growth in the area to help spark the state economy after an employment drought. A group of Idaho chambers of commerce weighed in on Tuesday, February 8, introducing a measure that would give businesses more incentives to create new positions. Named the Idaho Chamber Alliance, the bill will now get a hearing in the House Revenue and Taxation Committee. The bill would allow an employer to receive a portion of their new employee’s income taxes – in the form of a four percent refundable tax credit of a new employee’s gross wage. Companies would have to hire new people earning at least $12 an hour with benefits to receive the credit. The chambers say that the money returned to companies would go into hiring more workers and growing their business, Bloomberg reported.

is the 20 percent program. Google allows its employees to use up to 20 percent of their work week at Google to pursue special projects. That means for every standard working week, employees can take a full day to work on a project unrelated to their normal workload.

SAS repeatedly tops Fortune’s list due to the company’s impressive employee perks. Employees of the SAS Institute, the world’s largest privately held soft ware company, are offered on-site healthcare, high quality childcare, summer camp for kids, car cleaning, a beauty salon and a 66,000square foot gym! Whilst most companies are a little too cash-strapped to offer the array of choice at SAS and Google, it is worth taking note of the successful employee retention of organizations that treat their staff. Last year, with revenue up more than 20 percent, Google sweetened this already rich pot of perks by giving every employee a 10 percent pay hike.

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EMPLOYEE INCENTIVES

Googlers can also award one another $175 peer spot bonuses – last year more than two-thirds of them did so. Whilst this may be a more difficult idea bring in on a small business basis, companies can still utilize the peer-to-peer awards with simple employee of the month votes and smaller prizes such as gift cards on offer.

Health incentives Fidelity Investments, a leading service provider of employee benefits, in conjunction with the National Business Group on Health (NBGH), have released a study that found financial incentives have taken on greater importance in the drive to increase employee participation in health improvement programs. The survey, which looked at the behaviours and offerings of 147 mid- to large- size companies in various industries nationwide, is a follow up to previous research by the pair in 2009.

According to the study, employers utilized several different types of incentives in 2010 to encourage employees to participate in health improvement programs. These included offering cash and gift cards and making additional contributions to health savings accounts, along with more punitive efforts such as reducing employer contributions to health plans if employees didn’t engage in any programs.

The incentives provided by employers averaged a total of $430 per employee in 2010, which was a 65 percent increase from $260 in 2009.

Half of all companies that provided such incentives in 2010 also offered them to dependants of employees, at an average value of $420. A small number of companies (12 percent) utilized negative incentives to encourage participation (reducing employer contributions to health plans for those not participating). More employers (62 percent) were offering incentives last year than in 2009 (57 percent).

Small business tips Providing Google-like perks may seem like a struggle in these dollar-stretching times. So what can small businesses or even larger cash-strapped ones do to encourage their staff ? Rewarding employees by improving their work/life balance can often prove a top incentive. Things like providing telecommuting opportunities can allow for productivity and freedom for employees. Another idea is to devise a flexible schedule plan such as offering a four-day working week.

Some companies allow this kind of schedule all year round while others offer it only during the summer months. Also, consider allowing flex scheduling which allows employees to, for example, adjust their working hours so they start and leave later in the day. Team-building, morale-boosting activities are also more cost-effective incentives that improve productivity by existing outside of the office space.

Often, it is a simple ‘thank you’ that employees need to feel appreciated. Gestures of gratitude such as giving an unannounced half-day on a holiday staffers don’t usually receive time off for, such as on New Year’s Eve or President’s Day, can be great morale boosters. Another incentive could be work-based, such as providing staff with the opportunity to work on a high-profile project, such as a task force or

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committee. This is one of the more creative ways to rewards employees as it not only gives the employee more visibility within the organization, it also provides him or her with valuable work experience. Gift cards to grocery stores or gas stations can be both convenient and economically more viable than larger presents, so try this for a money saving incentive.

Dianne Shaddock, the founder of Easy Small Business HR, Employee Hiring and Managing Tips, offers some further tips for cheaper incentives.

“Offer extra incentives for excellent performance during quality checks,” she says. This can be an asset to both employee and manager. “Recognize employee accomplishments publicly. You might publish it in the company newsletter, announce it over the intercom system, or applaud it at a corporate gathering. Also, try entering a recognition letter into the employee’s personnel file or hosting home cooked meals for staffers. Treat employees and their spouses to lunch or dinner and finally: be a good leader (this one, of course, is a smart way to retain employees no matter what your budget!)”

“As a small business owner or manager wondering how to reward employees, don’t fall into the trap of thinking you’re limited by a less-than-ideal budget. Retain your most valuable asset – your employees – by recognizing their hard work and boosting morale. Start finding ways to reward employees,” says Shaddock.

Through the Employee Hiring and Managing Tips podcast, blog, and weekly ‘quick tips’ e-newsletters, Dianne offers expert advice on how to make better hiring decisions, manage difficult employees, develop employee policies, motivate staff, and more.

Incentives can be an excellent way of motivating, engaging and retaining staff. But as not everyone has Larry Page and Sergey Brin’s budget – often smaller perks can provide just as rewarding and valuable. 

Accountemps, a provider of staffing services for temporary accounting, finance and bookkeeping professionals, conducted a recent survey that zeroed in on perks employees want. Conducted by an independent research firm, the survey includes responses from more than 1400 CFOs from a stratified random sample of US companies with 20 or more employees.

The CFOs were asked, “What perks, if any, is your company offering or planning to offer in 2011 in an effort to attract and retain employees?” Their responses included: Subsidized training/ education – 29 percent Flexible work hours or telecommuting – 24 percent Mentoring programs – 24 percent Matching gift programs – 13 percent Free or subsidized lunch or snacks – 11 percent Onsite perks such as childcare, dry cleaning, fitness center and cafeteria – 11 percent Subsidized transportation – 10 percent Subsidized gym memberships – nine percent

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PROJECT FOCUS

Employee engagement– new HR strategies In this period of heightened competition, employers continue to ask their employees to do more with less. Michael Levy, CEO of Online-Rewards.com offers some tips for sustaining productivity and engaging staff.

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hroughout 2010, companies clearly demonstrated they can achieve profitability and productivity goals after downsizing. To continue to benefit from increased productivity and performance, Human Resource leadership must fi nd ways to continue to motivate and engage their employees. Smart companies are fi nding ways to keep valued employees engaged while maintaining payroll and spending levels.

they know how their work helps make the company profitable, they know they are making a difference.”

Reward and recognize employees in ways that are meaningful to them. Employees struggled along with their employers through economic uncertainty, increased workloads, and higher demands placed on them. To keep your people operating at maximum output, recognize their effort. “When compared to wage increases, employee programs offer a significant opportunities for greater Sustaining Productivity through 2011 ROI,” Levy says, “You need to create a program that is Companies survived the economic downturn by relymeaningful to your people, whether that is cash, travel ing on greater output from their employees. They proved programs, restaurant outings, or something completely Michael Levy is the CEO of they could reduce headcount and keep productivity levels unique, like sky-diving trips.”

Online-Rewards.com, the technology leader in reward and the same. The results of these hard decisions helped many Celebrate milestones and achievements. Whether it is recognition programs. Online companies produce profitability results that exceeded celebrating their efforts on a new product rollout, or longRewards has over 120 concurrent reward and recognition expectations. term employment with the company, effective employee programs in operation with an The challenge facing HR Managers in 2011 is how to recognition programs help to celebrate the achievements estimated 10 million program participants. sustain the productivity levels, retain valued employees of your employees and reinforce a culture where tenure of and not increase payroll? rewarded and respected. “While the days of the five-year The most successful and respected US corporations are seeking finding pen are long gone,” Levy says. “The value and importance of peer recognition creative and innovative ways to engage their employees. Companies from has not diminished” The key is match the program’s format and personality AMR to Zappos.com are finding new and creative ways to engage their to the culture of the Company. Recognition gifts for tenure at Google comemployees. Studies by Hay Group Insight (www.haygroup.com) show that pared to Macy’s would be significantly difference.” Surprisingly, cash is not engaged employees can increase productivity by 30 percent, and that they are always the best incentive, when measuring actual outcomes. Most people 2.5 times more likely to exceed performance expectations. who receive cash as a reward or incentive spend it paying bills – when does Increased output is not the only benefit of engaged employees. Gallup paying a bill generate the sentiment of a reward?. research shows that engaged employees drive innovation, increase customer loyalty, boost revenues, and stay with the company longer. It seems logical “2011 will prove how successful companies maintain their that every company would strive for engaged employees.

Principals of Engagement Have a clear vision and goals for the company. Most employees want to do well in their job, but they must know the goals and defi nitions for success.

Spend some time reviewing your company’s vision and goals to make sure they are still relevant. Review the products and services to ensure they align with the company’s mission and goals. “We have already seen an impact on employee engagement based on bringing a structured program to life, recognizing distinctive customer service behaviors as a core Company objective,” says Annette Jackson, Human Resources Manager, State Farm.

Clearly communicate each employee’s role in making the company successful. Each employee needs to know how their work will help the company maintain profitability and reach new levels of innovation.

One insurance company implemented a performance recognition program and found that agents active in the program increased sales by at least 60 percent when compared to non-participating agents. “Employees want to succeed in their jobs,” says Michael Levy, president of Online Rewards. “If

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streamlined efficiency. The key to making it work is having your employees maintain maximum output. And the best way to reach that goal is with engaged employees”

Be consistent. “When creating a program to engage your employees, be certain the program is implemented consistently across the organization. We realized the added benefit of reducing corporate silos and facilitating crossdepartmental achievements once we implemented consistency in reward programs across the organization” – Wanda Ladd, Vice President of Human Resources, Bank of Oak Ridge. Ranked as one of the ‘Best Places to Work’.

Maintaining the program works best with feedback from the employees. They can offer suggestions on ways to make the program more successful and further enhance employee engagement.

2011 will prove how successful companies maintain their streamlined efficiency. The key to making it work is having your employees maintain maximum output. And the best way to reach that goal is with engaged employees.

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Human Resourcefulness In a difficult economy where compensation packages have been substantially trimmed, Maureen Paradine offers strategies that savvy HR professionals can utilize to attract and retain the best talent.

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he Great Recession has affected virtually every aspect of the corporate landscape, and with bonuses and the promise of large pay increases reduced or eliminated from many budgets, the ability to recruit and keep exceptional employees has been challenged.

Yet, as with any challenge, there are opportunities.

In terms of recruitment, the tough economy has prompted many human resources professionals to more actively promote their companies as career destinations offering long-term rewards. With that in mind, a company should look for team members who share the company’s view of corporate culture. Seek to hire people who come to you because they want to work with your company, they believe in what your organization is about, they want to grow with it, and they understand there’s a big mark they can make there.

Integral to that approach are the messages conveyed to potential employees - and it’s important to tailor those messages toward what is special about your particular company. When we interview people at my company, we talk about how we are an entrepreneurial organization that encourages ideas from people at all levels. We tell them: what you put into your career is what you get out of it here.

In some ways, a lot of companies tend to get away from such basic messages during good times and the dialog between recruits and a human resources department can sometimes center almost exclusively around compensation. In what I feel is a good way, the recession has prompted a renewed emphasis on the value of growth partnership between an employee and the company they work for, a sharing of common goals that benefits both parties.

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Concurrent with the economic downturn has been a dramatic increase in the use of online recruiting tools.

Social sites such as LinkedIn can be instrumental in recruitment, enabling extensive networking and allowing companies to target passive candidates instead of just active ones.

With regard to retention, it’s imperative to establish and constantly maintain open communication with employees. Managers need to recognize high-achievement employees and give those employees motivating reasons to continue achieving.

In keeping with that philosophy, our HR department recently rolled out our ‘Leadership Development Program.’

We are identifying top people below the vice president level so we can collaborate closely with them and help assure they get to their next career plateau. Those who are selected are exposed to executives across the company and they receive very specific training to pave the way for them to succeed. In essence, we’re communicating to those people who are chosen for the program that our company is investing in them.

Furthering our commitment to open communication are the steps we take if someone decides to leave our company. We speak with their manager and we conduct a candid exit interview. From this dialog comes crucial information that can translate to higher retention rates by encouraging managers to make their employees feel like they’re a vital part of the organizational culture. Concurrently, we’ve developed a retention report card identifying managers who are doing the best job of holding onto valuable people.

Another key recruitment and retention strategy during this economic downturn is the use of cost efficient added-value initiatives. Among these are employee wellness programs that include free cholesterol screenings and weight management strategies.

Additionally, many companies today are making business gift ing services a pivotal part of what is offered to potential and current employees. Th rough these programs, companies partner with gift providers to offer employeeonly discounts on a wide array of products and services ranging from birthday and anniversary gifts to expert advice on conveying appropriate sentiments and choosing thoughtful gifts for sympathy occasions.

Partnering with business gift providers also offers a great way for companies to thank employees on occasions such as Administrative Professionals Week, and, to recognize employees at special times in their lives or careers, such as on their birthday or when they reach a service milestone.

Maureen Paradine is Senior Vice President of Human Resources for 1-800-FLOWERS.COM. Her career in HR has spanned more than 20 years.

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NEXT BIG THING

Returning to Learning Management System roots It begins with good intentions but ends with a convoluted, unusable mess. It’s time to put a tourniquet on the evolution of Learning Management Systems, argues Peter Bruzzese.

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onsider the following journey of one company, ClipTraining, as we attempted to fi nd an LMS that made sense, but ended up having to create our own.

When ClipTraining fi rst considered online, task-based video training for computer users, we initially thought of two things: the standards we would adhere to for quality in our video series and the delivery mechanism we would utilize. That delivery mechanism morphed from an in-house Web server that hosted videos into an online solution that had a simple login process to control clients’ access. From that point on, we realized that managers needed more – more control over the training, methods of determining if their users were actually using it, and ways to gauge if they were benefitting as well. This realization led to our investigation of pre-built Learning Management Systems in the hope that we could purchase a solution for our clients and not have to create one from scratch.

The search reveals LMS congestion issues What we found is that LMS developers started simple.

The original focus was providing users with easy access to their training and providing managers with reporting metrics for easy administration. Before we knew it, however, LMS construction included more than documentation; it also included videos, podcasts, PowerPoints, and webinars – essentially anything ever created to train users was crammed into one solution. Then the features sprawled into SCORM compliance requirements and training scheduling snap-ins, combined with scores of unnecessary features.

I worked with one solution whose interface was so congested that I couldn’t even fi nd the training I needed, got frustrated and lost interest completely. Being an experienced admin and developer, I couldn’t imagine how much worse it would be for a user. I knew it was time to return to the basics. In the end, our search forced us to do what we had hoped to avoid – not reinvent the LMS wheel, but re-shape it back into its original orb-like roundness.

the training they needed. Most of all, we wanted users to enjoy the training and not feel exhausted navigating through the interface.

For administrators, we wanted it to feel like Star Trek – futuristic but not cluttered. We incorporated user management features and reporting without the added concerns over SCORM compliance. But would that make our product less appealing to those who had been drinking the SCORM compliance kool-aid? Perhaps, but we were looking for customers who needed training to increase users’ productivity and provide them with unlimited access to support. SCORM compliance had to take a bullet for that to happen.

Preventing futuristic LMS bloat We at ClipTraining are constantly reminding ourselves to hold true to our original vision and not buy into the idea that all-in-one LMS solutions are always best. We remind ourselves to hold true to the needs of the user. We remind ourselves that a user who doesn’t feel comfortable with their LMS will never use it, never benefit from it, and never become more productive as a result of it. These reminders prevent the creative flow from bloating beyond our already perfect framework. Instead, we continue to focus inwardly to further round out and fortify that framework for both users and admins alike. And it shows.

J. Peter Bruzzese (Microsoft MVP and Microsoft Certified Trainer) has more than a dozen published books sold internationally to his credit. He is a technical author for various tech magazines and online publishing channels, as well as a technical speaker for Microsoft, 1105 Media, Pearson and others. In addition, he is a technical journalist for InfoWorld and is their Enterprise Windows columnist.

The need for outward simplicity with inward intricacy At ClipTraining, we decided that users should feel like they were entering Disney World when they logged into their training portal. We wanted it to be visually appealing and easy to locate training. A consistent user experience was necessary to ensure people always knew where to fi nd

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Agenda

Travel

Interview

Books

What to see and do this spring

36 hours in Brussels

HRM uncovers Alex Malley’s HR strategies

New literary offerings reviewed

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DETAILS. AGENDA

Coming up…

May. 1 Kentucky Derby Horse Race The 136th annual meeting of the Kentucky Derby Horse race will be held at Churchill Downs racetrack in Louisville, Kentucky. Culminating a week of festivities, this horse race – established in 1875 – attracts a huge crowd for a grand weekend of partying. One of the classic American horse races, this event, along with the Preakness Stakes (run in mid-May) and the Belmont Stakes (early in June), makes up American horse racing’s coveted Triple Crown. The Derby is often called ‘the most exciting two minutes in sports’.

Mar. 20 Los Angeles Marathon

Mar. 14 Calle Ocho Festival This ethnic street fair held on Eighth Street is at the heart of ‘Little Havana’ in Miami, Florida. It features an assortment of festivities including Latin entertainment and an array of food and open-air street markets. Now the largest Hispanic heritage festival in the USA, Calle Ocho usually ends with the largest open-air dance party in the USA.

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The 26th running of the Honda LA Marathon presented by K-Swiss will take place along the nation’s most dramatic marathon course – from Dodger Stadium to the Pacific Ocean. The spectacular 26.2-mile ‘Stadium to the Sea’ race sold out early for 2010 and has been enhanced for 2011 to add new landmarks in the Chinatown and Little Tokyo district in downtown Los Angeles to better handle runner flow.

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May. 20 Pirates of the Caribbean: On Stranger Tides The latest instalment from the popular Pirates of the Caribbean franchise has lost Keira Knightley and Orlando Bloom but gained Penelope Cruz. The actress plays the daughter of Blackbeard alongside Johnny Depp in the fourth film of the sequel from Walt Disney Pictures. The first film pulled in $164 million worldwide; with the sequel doing even better – its $1.06 billion worldwide made it the highest grossing film of 2006. A third film brought in $961 million.

Jul. 23-25 Quick Chek New Jersey Festival of Ballooning

Aug. 28 MTV Video Music Awards

This annual ballooning affair in association with PNC is the largest summertime hot air balloon and music festival in North America. The event lasts for three days at Solberg Airport in Readington, NJ, and is the premier family event in the Northeast. The colorful event offers visitors the chance to enjoy a hot air balloon ride while taking in some of the entertainment and music on show.

The 28th annual MTV Video Music Awards will air live from Los Angeles on Sunday, August 28 at 9pm. (ET/PT). The 2009 awards caused a stir when rapper Kanye West burst on stage during Taylor Swift’s acceptance speech; the pair later settled their differences through the medium of song in 2010, when Lady Gaga dominated the night with a rather interesting outfit choice of a meatthemed outfit while scooping eight awards.

Aug. 30- Sep. 6 Burning Man Festival The isolated, barren Black Rock Desert of northern Nevada will once again host its perennial fantasy metropolis of Black Rock City. This huge counter-culture event usually features a full-blown city of improbable structures, fascinating art installations and strange events that attract thousands of participants and spectators to what is easily one of the wildest and most imaginative happenings in the USA.

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DETAILS. CITY GUIDE

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Brussels Time: +1hr GMT | Currency: euro | Language: French & Dutch | Population: 1.1 million Neither boring nor overly bureaucratic, Brussels is a beguiling and often boisterous city where, for every gray-suited politician you’ll find a hip young thing, and for every gleaming, modern parliament building you can gaze upon historic architectural wonders at every step, as HRM discovered.

About Brussels acts as the de facto capital for the European Union and is also the location of NATO’s main HQ, so the city is swamped all year-round with politicians, ambassadors, journalists and lobbyists; more, in fact, than can be found in Washington D.C. Despite (though some may argue because of) this, Brussels exhibits an atmosphere that may well surprise you. It is a city of fine-dining and high-class boutiques that also boasts a raucous pub scene, a lively African quarter at Matonge, quirky surrealist art and a charming array of districts that range from the delightful to the dilapidated.

Getting around See Le Grand Place is the beating social heart of Brussels and is sure to wow you with its eclectic clashes of architecture, vibrancy, sophistication and energy.

Slap bang in the middle of the city, this huge square is flanked by sumptuously regal and monumental buildings on all four sides, with tight, winding alleys snaking off into the depths of the old city at every corner. At ground level, a clutter of typical Belgian pubs serving typical Belgian beers sprawl out on to the square, vying for your custom with the simple offer of an al fresco seat, the world’s best The European District is only beer and one of the really worth seeing if you have finest people-watching spots found anywhere any interest in the machinations in Europe. Other of European politics. If so, it’s attractions include fascinating. If not, it’s all a little dull Laken Castle, the famous Manneken Pis (the small bronze statue of a boy taking a pee), the Royal Museum of Fine Arts and the pomp and grandeur of Cinquantenaire Park, with its impressive triumphal arch as the centerpiece.

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Seek out Brussels’ cheeky side by taking in a comic strip tour that reveals the city’s artistic past, most famously in the guises of Tintin and Asterix, who can be seen adorning walls throughout the city

If you are in Brussels on business, the swift underground system will prove sufficient for your needs, although most businessmen and women drawn to Brussels will most likely be dispatched to the European Quarter, which is home to one in four of all offices in the city and easily traversable on foot. Beyond here, tourists tend to find they are inexorably attracted to the ubiquitous open-topped buses that amble leisurely through the city, uncovering some of Brussels’ best attractions and covering a fair portion of the city’s main districts. If you are feeling active, bikes can be hired for a small daily fee from a number of rental outlets and prove a fabulous way of exploring the many side streets, parks, squares and avenues that make up Brussels’ patchwork landscape.

At Brussels Midi – the main train station – high speed rail links exist between Paris, London, Amsterdam and Berlin, and Brussels Airport deals with all European and international flights.

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Sleep Sofitel Brussels Le Louise

Eat Dining out in Brussels is an assault on the senses. The city is famous for its waffles, its moules frites (mussels and fries), its chocolate and its beers, and every corner of every street seemingly has something new, exciting and delicious to offer. If your starting point is Le Grand Place, you can begin an evening sampling one of the many hundreds of flavoured beers available at the numerous pubs on the square, before heading down the Rue des Bouchers and facing the onslaught of restaurants eager for your custom. Take in the sights, smells and sounds of this fabulous street and pick wherever looks the busiest.

The mussels in Brussels are divine, served in a steaming bucket and boiled to a tender and tasty finish, served with crisp fries and fresh mayonnaise, so be sure to order them. After dinner, a stroll along the Haringstraat brings you to the Maison du Chocolat, where you can sample some of the world’s best milk and dark chocolate before heading along the Beenhouwersstraat and ordering a cinnamon waffle with Belgian coffee to finish the night off in true Belgian style.

You can take a gastro tour of the city that starts at breakfast, through to lunch, dinner then evening drinks, taking you to some of the finest traditional Belgian establishments in the city

As a city of perpetually visiting dignitaries and politicians, Brussels can boast a wonderful selection of five-star hotels clustered largely around the European Quarter. Top-class service and comfort comes as standard in all of them, but if you want to combine your business trip with a bit of cultural and retail enrichment, the Hotel Sofitel Brussels Le Louise is the establishment for you. It is located just 200 meters from the shops and boutiques of Avenue Louise, a short walk from the Royal Museum of Fine Arts and close to the sleek offices of the European Quarter. Inside, expect 24-hour multilingual reception, Wi-Fi throughout, a contemporary design and state-of-the-art facilities.

Hotel Café Pacific This is a small and rather quirky establishment that perfectly captures the spirit of Brussels. There are only 12 rooms to choose from, but each is individually designed and decorated along its own theme, oozing personality and ambience from every pore. The Hotel Café Pacific is located a short walk north from Le Grand Place and so proves popular with couples and other sightseers hoping to discover the city on foot before returning to a warm welcome, a pleasant meal at the onsite restaurant and a relaxing drink at the cosy bar.

Relax Belgium is the most urbanised country in the world, with 98 percent of the population living in cities, which leads to a couple of challenges for the locals seeking respite from the madding crowd. One option is to head to the dense woodland of Sonian Forest – parts of which cover the south-eastern corner of Brussels – and stroll through leafy pathways which come upon hidden monasteries that are the home of contemplative monks and nuns. In the city itself, the brief summer weather that shows its face somewhere toward late June is best enjoyed picnicking in Cinquantenaire Park or supping yet more excellent beer at Le Grand Place or on any other square in the city – Belgians know how to embrace their city’s casual side in any way possible, so you will always find somewhere to sit back and watch the world go by.

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DETAILS. LEADERSHIP

Steps to success Maintaining a personal touch, adapting traditional business practices and inviting your staff on daily 5.30am walks – just some of CPA Australia CEO Alex Malley’s strategies for delivering effective leadership in business, he tells HRM.

“Make sure there’s a balance of relationships, because businesses these days poach people because of their relationships and quite often not because of their skills”

Managing your business is all about navigating a simpler approach to the makeup of the organization.

Every generation is convinced that it is the most dynamic and most relevant of all generations, so we allow ourselves to get carried away by our own important moments in time. I think one of the things that we need to constantly be looking at, no matter the pace of the world, is keeping the business model as simple as possible. That’s almost become a challenge in itself, whereas perhaps when the world started, simplicity was what it was built on. So I think navigating simplicity in organizations is a priority for a CEO. To do that, your personal communication with your staff and your key stakeholders becomes paramount, because if you have personal communication with your key stakeholders and your staff, you get a good sense of how they’re coping and how they’re dealing with the issues that you engage with them on, which enables you to have your own filter.

Traditional approaches to management have to evolve and adapt to enable greater assessment of the intangible assets of your business.

If you look at the reporting of business in financial reports, and the way in which they are managed, there still exist elements of managing an organization as if they had an abundance of tangible assets. So in the past, the majority of assets and resources in a business were tangible. These days, often some 70 percent of the business’s resources are intangible assets, and yet we still manage organizations from those traditional paradigms as if we will report on our reporting assets. But in fact our knowledge and our brand – our intangibles – are our strength, yet we don’t manage or

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report on them effectively, so it is really that the changing paradigm is about saying organizations these days have a great level of intangibility in their resource, and we need to access knowledge within our business and share it both at a cost level and at a free level.

It is important to identify the key relationships within your organization.

One of the things I advocate is for a leader to go through their organization and measure the key relationships that have been managed at staff level. This allows you to map your organization against the stakeholders that you build your business around. And when you do that for the first time, what you tend to find is that the organization isn’t really aligned to its stakeholders as well as it could be. Most leaders will find that you have some levels of your staff who have very strong relationships. So strong, in fact, that they can be considered dangerous to your business because should that staff member leave, those set of relationships are lost.

So what you have to do is map your organization staff to its stakeholder groups. Make sure there’s a balance of relationships, because businesses these days poach people because of their relationships and quite often not because of their skills.

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Direct communication and accountability throughout all channels of your organization is key.

At CPA, we have opportunities for staff to engage with each other through various software tools that we use. There is opportunity for people to speak to far more senior people in the organization and share their knowledge. In terms of my role, whenever we communicate with anyone externally, at the base of the email is a note to say that central to our proposition is the fact we have a valuable and meritocratic service. They can access the CEO at anytime in relation to that service and he is the contact point, so that everything we do is looped around ensuring that if something doesn’t work for us and we haven’t done the right thing, then there is a direct accountability back to me.

Despite great strides in technology, personal communication still has an extremely important role to play in business.

We have various periods during the year and through various quarters where we’ll have communication with the staff via a top-down and bottom-up approach. We are a large organization in a range of countries and I am a great believer in personal communication, so I will sometimes write to the organization and share my emotions about how we are going or what product we have produced and how it looks. Also, I walk every day of my life, and I invite my staff, whatever country I am in, to walk with me in the morning. This is always a 5:30am start, so there are people who avail themselves of that, and that brings an equality and a uniquely equal conversation that can take place. I have actually affected some quite dramatic change from people who have come for walks with me who are nowhere near who I would meet in my day-to-day activities. Quite honestly what I find interesting is that when you do something that is in my view just a human interaction, such as taking a morning walk with colleagues, these days people call it ‘unique’.

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I’m finding that my approach to life has never changed; I’m personal in the manner in which I deal with people.

And no matter what level of software exists in the world or the dimensions of my business, that’s what I seek to do whenever I can, this type of personal engagement.

If people know that of their CEO, even if you don’t get to speak to everyone, there’s a sense of respect and appreciation for the fact that that’s your approach, particularly if that’s who you genuinely are.

The business world would flow better if people were more honest and open with their thoughts.

If I could change one aspect of the business world it would be that people openly share their personal emotions and their personal views about their business and be very honest about where the business could be strengthened. The connection between the CEO and the staff is, I think, key. I see that quite often people are guarded in what they have to say. They litigate their views because they are concerned about implications either externally or internally. I think we have reached such an impasse on that front that those who actually speak openly have a decided comparative advantage. When you look at politics these days, you look at governments like in the US now and Australia where you’ve got a minority government, people are protesting. They want people to be straight with them.

They want them to tell them exactly what the scenario is and what they are going to do about it.

Being who you are and following your instincts will set you in better stead in the long run.

I’ve built my career on a personal sense of following my instincts. I’m very strong in speaking to my executive staff that the most valuable thing you can bring to your personal life or to your business life is instinct, and to rely on it and test it. In a world where there is a lot of sophisticated educational programming, that can sometimes detract from a person’s instinct. I believe a person should only do what they are passionate about.

The first address I gave to my staff was to say to them that as a human being I’ve never sought to do anything I wasn’t passionate about, and I would never expect them to do that either. I would like them to consider that in their decision as to where they work and how they go about it. Also, I have always had a wide view on things, with a capacity to open the minds of an organization to perhaps a broader level than when I arrived, and I have found that they have become integral habits of my life. Wherever I go, whether I like it or not, they are the implications I bring to the organization. But probably the most fundamental of all is that you really have to be who you are. You have to be yourself. I think it is very temping in your career to position yourself and almost become someone else in the process of trying to achieve your goals, and that’s a really dangerous issue.

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DETAILS. ON THE SHELF 127

On the shelf The HR Scorecard: Linking People, Strategy, and Performance

By Brian Bekcer, Mark Huselid and Dave Ulrich

Soup: A Recipe to Nourish Your Team and Culture

By Jon Gordon

The Talent Management Handbook: Creating Organizational Excellence

By Identifying, Developing, and Promoting Your Best People

By Lance & Dorothy Berger

The HR Scorecard argues that systems to measure the impact of HR departments must be based on a clear understanding of organizational strategy and the capabilities and behaviors of the workforce required to implement that strategy.

The book also introduces new methods for providing frameworks that focus on identifying where HR issues become performance drivers, and even hindrances, to strategy implementation. With recommendations, surveys and a measurement system providing reliable indicators of HR’s contribution to commercial success, this is an invaluable handbook for the HR professional.

Soup claims to offer an inspirational business fable that explains the ‘recipe’ to use in order to create a winning culture and boost employee morale and engagement. The story follows Nancy, the newly appointed CEO of America’s Favorite Soup Company brought in to reinvigorate and liven up the brand – a brand that that has fallen on hard times.

While eating soup at a local café, Nancy uncovers the key ingredients to unite, engage, and inspire her team.

A great little tale that will get the cogs of creativity whirring in any HR mind, Soup is a joy to digest, a must-read for all budding HR professionals and a veritable bible for those already fully entrenched in the industry.

The Talent Management Handbook covers all your talent management queries and concerns in one handy report. Written by experts in their field, this hefty tome takes some of the most profound research from within the industry and analyzes it through the prism of two of the sector’s most respected voices.

The book looks at how most organizations do not have a systemized approach to making the linkage between organization excellence and effective people management work for them, and investigates ways to alleviate this disconnect by identifying, developing and promoting an organization’s best and brightest.

HRM says: Both useful and insightful, The HR Scorecard explains that people are the core of business operations day in day out. It is a great tool for HR practitioners and provides some contemporary ways of dealing with HR issues that organizations face today, and in the future.

HRM says: A tale of a company being brought back to its feet seems apt for these economic times. Soup argues that culture drives behaviour, behaviors drive habits, and habits deliver results. If you have read any of Jon Gordon’s other bestsellers you will certainly enjoy his latest offering. The novel format makes it easy to read as the business model is built around an intriguing and uplifting storyline.

HRM says: Well, what’s new here?

Not much, really. The Talent Management Handbook takes the insightful research of others and runs it through the prism of ‘critique’ until a satisfactory message is reached, namely – good people are good at doing good stuff, but you’ve gotta find them and manage them in order for them to do their good stuff? Got that? Good stuff.

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DETAILS PHOTOFINISH

Star mangles banner Who’d be a Superbowl entertainer, huh?

After the ferocious furore and moralistic handwringing that followed Janet Jackson’s ‘wardrobe malfunction’ in 2004, the Superbowl’s event organizers have been keen to avoid controversy ever since. After all, this is already the biggest spectacle in the world, right? So why draw more attention to it?

Cue Christina and her passionate, heartfelt rendition of our fair national anthem. It would’ve been impressive had she not fluffed her lines, repeated herself and been forced into an unedifying apology, stating she ‘got lost in the moment’. Oh Christina!

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