HRM US 15

www.hrmreport.com | Q4 2010

How moving away from an ordinary office environment can spark creativity and improve employee engagement

PLUS Special health and wellness focus: why it pays to keep up with the latest health reform legislation Cover_HRM_FINAL.indd 1

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FROM THE EDITOR 5

Creative thinking How investing in an imaginative workspace can pay dividends in the long term.

I

f you’re reading this in the office, stop for a minute and look around. What do your surroundings look like? Gray cubicles, gray walls, gray co-workers? Or is it alive with color and variety, offering inspiration at every corner?

If it’s the latter, you’re one of the lucky ones. Most of us have learned not to expect too much from our workplace environment, even though it’s often where we spend the majority of our waking hours. But some companies go beyond the ordinary.

Google’s contributions to the ‘workspace as playspace’ movement are well known. Other advocates of this approach include DreamWorks Animation, which uses landscaping between its buildings to encourage people to slow down and enjoy the fresh air, allowing time for powerful new ideas to surface; Ogilvy & Mather’s Beijing office, which features merry-go-round horses, themed meeting rooms and plenty of mirrors; and Lego’s Danish headquarters, where primary colors and larger-than-life versions of its famous building blocks abound.

It’s not all fun and games, however. Informal, comfortable and inspiring workspaces can spark creativity in employees that will ultimately boost the profitability of the companies concerned. Design and innovation consultant Kursty Groves visited the offices of 20 well-known brands known for placing innovation at the heart of their culture.

In this issue’s cover story, we take a look at some of the spaces Groves documents in the resulting book, I Wish I

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Worked There!, which lend weight to the idea that the right environment can make all the difference to a company’s success.

Elsewhere in this issue, we examine another key consideration for employers: the state of their employees’ health. With 59 percent of Americans under the age of 65 depending on employment-based health insurance plans to look after them when they get sick, and with health reform rolling on at a rapid rate, HR managers have a lot to stay on top of. Our special focus on health and wellness will help you keep up with the latest on the Patient Protection and Affordable Care Act, and show you what you need to implement when to ensure both your company and its employees are covered.

Looking after the creative and health needs of employees may take some investment upfront, but the long-term payoff will be a happier, healthier workforce and a more successful company.

“The physical environment sends important cues to employees, and the degree of openness in the environment can send messages about the degree to which collaboration is an expected behavior” Tracy Brower, furniture design consultant (Page 76)

Rebecca Goozee Editor

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CONTENTS 9

32 Beauty contest For Geoff Skingsley, Executive VP of Human Resources at L’Oréal, staff is a strategic priority, particularly in today’s talent war

76 Grand designs

Arctic ski lodges, a fireman’s pole, fairground horses.

Sounds like a kid’s dream, but it could be your future office space

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Health and the workplace How will health reform affect your company?

42 72

Garden party HRM goes behind the scenes of one of the most famous arenas in the world – Madison Square Garden – to hear from the man charged with overseeing recruitment and talent management, Dwight Tierney

20/10/2010 11:50

Lost.

Found.

Retirement plan benchmarking done right.

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There are so many things to consider when evaluating your retirement plan. That’s why at Fiduciary Benchmarks we take the time to measure not just the fees you are paying, but the value you are receiving – from the services you enjoy to how well your participants prepare for their retirement.

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Because the right tool, used by the right people, can make a BIG difference.

www.Fiduciar yBenchmarks.com/plansponsor Independent - Comprehensive - Informative

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CONTENTS 11

40 Empower, extend and innovate Jeff Young addresses your questions on healthcare reform

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46 Pharmacy beneďŹ t management Health reform and PBMs

48 The new focus on prevention and wellness Employers face a greater burden to make the healthcare act successful, says Tammy Steele

50 Healthcare reform: what businesses need to know now David Pringle looks at how health reform will impact employers and the benefits it offers

52 The way forward with wellness Why attitudes to employee health must change from reactive to proactive, according to Dee Edington

56 The new world: everyone is a healthcare consumer Shawn Jenkins reveals how consumer behavior will change to incorporate healthcare decisions

58 A move in the right direction Barton Halling outlines the impact of healthcare reform legislation on employers

60 Healthcare reform and the wellness connections

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Dorothea Allen discusses the importance of building out preventative programming to help address healthcare reform

62 On the move The corporate housing industry undoubtedly suffered at the hands of the global economic crisis, but Adam Sherer believes that the recovery will start to take hold in 2011

68 Touring services support temporary assignment growth Mark Koepsell explains why employee relocation is a key talent management strategy

84 Cyber stalking: hiring based on Facebook?

Maddison Lake asks if it is ethical to hire based on information gathered from social media websites

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86 The engagement gap Why engaged employees are so much better for the bottom line

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CONTENTS 13

88 Is your talent acquisition engine scalable?

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Patrick Beharelle explains how companies are improving their talent acquisition scalability

90 Screening matters A look at the latest in employee screening

92 Secure screening Isaac Butler IV reveals why you get what you pay for in pre-employment screening

94 Cyber screening Using social media as a tool for screening job applicants has its benefits but the potential pitfalls for HR professionals cannot be ignored

98 The brand from within PricewaterhouseCooper’s Niloufar Molavi on the importance of a diverse workforce

102 Relative values Michael Johnson on the move from a tactical to a strategic recruiting function

104 Career ladder Huda Ghoson, General Manager of Training and Development, Saudi Aramco, explains why the company offers so much for her than simply an attractive salary

108 Paid for productivity No more late nights or early morning rush hours, your performance is based purely on your results. Sounds great, doesn’t it?

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112 Risk and reward Are incentives worth the money companies spend on them?

REGULARS 120 36 hours in…Los Angeles 122 Agenda 124 Tech

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126 Gadgets 127 Books 128 Photo finish

112 20/10/2010 10:33

The HR Summit 2011 29 - 31 March 2011 The Boulders Resort and Spa, Scottsdale, Arizona The HR Summit is a three-day critical information gathering of the most influential and important executives from the human resources industry.

The HR Summit is an opportunity to debate, benchmark and learn from other industry leaders.

A Controlled, Professional and Focused Environment

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 ©2010 HRM.

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

Chairman/Publisher Spencer Green Worldwide Sales Director Oliver Smart Finance Director Jamie Cantillon

To find out more, call (+1) 212 796 2000

Editor Rebecca Goozee Managing Editor Marie Shields Associate Editor Nicholas Pryke Contributors Ian Clover, Lucy Douglas, Julian Rogers, Stacey Sheppard, Ben Thompson Creative Director Andrew Hobson Design Director Sarah Wilmott Associate Design Directors Daniel Clayton, Élise Gilbert, Michael Hall, Crystal Mather, Cliff Newman, Catherine Wilson Online Director James West Online Editor Jana Grune Project Director David Resnik Sales Executives Telina Pedro, Jeff Sommer, Priya Sood, Kellie Teixeira

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 John Funnell

Subscription Enquiries +44 117 9214000, www.hrmreport.com General Enquiries info@gdsinternational.com (Please put the magazine name in the subject line) Letters to the Editor letters@gdspublishing.com

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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

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16

THE BRIEF

It’s all in your head Companies value emotion in their staff, but getting the balance right can be tricky and lead to frustrations and a reduction in job satisfaction.

W

e all have days at work when our emotions take over; it is, after all, part and parcel of being human. But for employers, and indeed HR, how their staff deal with emotions can have a significant effect on potential future successes and overall job satisfaction. Not dealing with that short fuse could prevent you from entering the world of upper management; likewise being too nice could be looked upon as a weakness. For 21st century recruitment, emotional intelligence is climbing the ranks as an important factor in assessing both potential and existing employees.

With this in mind, a recent study at the University of Haifa, Israel, has confi rmed that employees around the world with a high level of emotional intelligence (EI) are more dedicated and satisfied at work when compared to other employees. Divided into four branches, EI defines the conceptually related mental abilities of people, in the work-

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place or otherwise, based on their perception of emotion; emotional facilitation of thought; understanding of emotions; and how they go about managing those emotions.

Conducting the research project, Dr. Galit Meisler stated: “Th is study has shown that employees with a higher level of emotional intelligence are assets to their organization. I believe it will not be long before emotional intelligence is incorporated in employee screening and training processes and in employee assessment and promotion decisions.�

The study itself, which won the Outstanding Doctorate Award from the Israeli Political Science Association, surveyed over 800 employees and managers in four organizations: two public and two private. The study examined the effects of emotional intelligence on aspects of organizational politics, employee work attitudes, formal and informal behavior, feelings of justice and fi nally feelings of burnout.

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THE BRIEF 17

The results highlighted that those employees with a higher level of EI perceived organizational justice at a higher level when compared to their peers. In addition, higher EI employees were more satisfied with their job positions and more committed to their organizations, with undesirable work attitudes such as burnout, intention to leave and negligent behavior were all minimal factors for EI employees.

According to Meisler, the effects of EI are not limited to employees’ work attitudes alone, but also have a potential impact on various aspects of organizational politics.

Employees with a higher EI level, as a whole, perceived organizational politics at their workplace as being significantly less severe than their colleagues did. Likewise, better political skills were demonstrated by employees with a higher EI level. “We also found that employees with a higher emotional intelligence level were less likely to use forceful and aggressive forms of persuasion while attempting to persuade their supervisors. Those employees tended to use much softer influence tactics,” he concluded.

Indeed, with EI encompassing an ability to be selfaware and self-motivating, manage moods and relationships as well as maintaining an ability to be empathetic, there is much to be said for its use as a currency within the world of HR and recruitment. Of course, there are personal variables to EI that span across education, IQ, personality and experience that will help dictate a person’s EI, but ultimately the deciding factor comes down to the habitual application of EI, both within a given situation and as a subconscious whole.

Meisler’s survey comes off the back of a 2008 job satisfaction survey by The Segal Company, a New York-based compensation, benefits and HR consultancy firm. The survey concluded that state and local public sector workers under the age of 40 focused more on their career, in terms of job security, opportunities and training, than their more senior colleagues – they were also more likely to actively look for work elsewhere.

Elliot Susseles, SVP of The Segal Company, said: “The study found that the biggest driver of turnover for employees under 40 was a dissatisfaction with career opportunities and job content. Th is suggests the importance of establishing and communicating career path opportunities, work development and interesting work assignments to successfully recruit and retain younger employees.”

However, both age groups had similar concerns when it came to pay and benefits but, as has been traditional for government employees, pay remains less of a factor than benefits for workers both above and below the 40 mark. So, perhaps unsurprisingly, satisfaction levels were low when it came to the topics of pay and careers. Segal considered that the fi ndings reflected the challenge of attracting and keeping new talent in state and local public services.

While the Segal survey does well to highlight differences in job satisfaction levels between age groups, one thing is certain right across the board: EI has a profound effect on job satisfaction and employers should be utilizing its benefits accordingly – something the world of HR is extremely well-versed at.

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News in pictures

Chilean miner Esteban Rojas greets people after being rescued along with 32 colleagues after being trapped for more than two months deep underground

Hollywood star Angelina Jolie has won back a permit to shoot parts of a film in Bosnia after a government minister saw the script. The permit had originally been canceled after details of the film’s plot caused public outcry in Bosnia

In the UK, the BBC’s decision to remove human resources chief from the board has rekindled the debate over whether HR deserves a place at the top table

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18

INTERNATIONAL NEWS

African HR

Summer blues

In Rwanda, human resource management expert and the former Rector of Kigali Institute of Management, Dr. Benjamin Akinyemi, has urged HR managers to be more proactive, adaptive, creative and innovative, so as to achieve key human resource strategic goals. “The government is doing much to develop human resources within the country, but the organizations should also take a cue from government to maximize the potentials of their workers,” he said at a one-day conference attended by over 60 HR practitioners in the country at the end of September.

A third of British workers returned from the summer vacation season ready to embark on a search for a new job, according to Badenoch & Clark. Thirty-one percent of employees are job-hunting with five percent looking to leave their profession entirely. Just one in 10 said they were refreshed post holiday and looking for a promotion. Those working in financial services were the most negative with 64.3 percent looking for a new job and lawyers a close second at 59 percent.

Equal rights A decision taken in the Court of Justice of the European Union has suggested that fathers who take advantage of new rights to extended paternity leave from April next year could qualify for the same rights and benefits as women who take additional maternity leave. Some employers are already offering the same benefits to men on parental leave as they do to women from next year, but it looks like others may be forced to do the same.

However, the ruling’s impact could be limited as it is only likely to affect benefits that would be paid during the second six months of a woman’s maternity leave.

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INTERNATIONAL NEWS 19

New programs The University of Dubai (UD) has received an enthusiastic response to all four of the new BBA disciplines: Business Economics, Human Resources Management, Entrepreneurship Management and Supply Chain and Logistics Management. Dr. M. Omar Hefni, President of the University of Dubai, says: “UD is pleased to know that its programs have ready acceptance in the market as they aim to foster strategic decision-making ability, a capacity for teamwork and networking and thus producing genuine leaders in their respective fields.”

Instructors trained

Job search online

Thirteen senior and mid-level Iraqi managers earned Human Resources Management Instructor certifications.

Each instructor was trained in Iraqi-led human resources professional development to be taught at provincial level and at the Ministry of Interior headquarters. “Human resources is a critical area in helping organizations adapt,” said Iraqi 1st Lt. Rafid Abdul Wahid, a personnel manager in the MoI Officer Management section. “Knowing the principles and skills involved helps the organization adapt and cope with the challenges associated with continuous change.”

In Australia, Morgan McKinley have reported that 91 percent of job hunters are using recruitment firms when hunting for a new role, while 46 percent would try social media sites. The survey asked about specific social networking sites and found that 46 percent of individuals surveyed say they would use LinkedIn for their next job search (versus 38 percent in Singapore, 33 percent in Hong Kong and 25 percent in Japan), nine percent would try Facebook and two percent say they would use Twitter.

The August 2010 survey was conducted across 104 Sydney professionals who are registered with the firm for roles in the banking and financial services, and commercial sectors.

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20

UPFRONT

FIVE-MINUTE EXECUTIVE

Our culture is a reflection of the environment that we’ve created in the stores. Usually we have a 1500-square-foot retail footprint with a small collection of staff, with at any one time two to five people working. Our culture is all about the relationship with our customer, and that’s reflected within the stores, but also here at corporate. It’s very small, it’s very familial, it’s about building relationships.

With our stores being so dispersed around the world it’s about knowing our neighbors and knowing our neighborhood and really becoming part of the community. We recognize that our customers are now more diverse, and in turn we want to make sure we reflect the communities in which we work.

There’s no question and no surprise that our associates are a reflection of our customer base.

Video gaming has evolved; it’s now a form of entertainment for the masses. So it’s gone from this niche kind of male 12- to 40-year-old gamer, to a form of entertainment for the family whether you’re six to 70. What that means for us is our customer has become broader, today we’re seeing females and grandparents shopping not only for gift s but for themselves.

Our management, our store managers, our multiunit managers are very proactive in ensuring that we reflect the customer that’s shopping at GameStop. So for example, a great pipeline for us for part-time hires during the holidays is we see all these new customers come in and we often ask them if they want to work at GameStop. The second thing is we do a lot of community outreach from a local standpoint and work with the community organizations to identify part-time talent that want to come and work for us. And it’s all locally based, all needing to reflect the communities in which we serve.

Game on Marissa Andrada, Senior Vice President for GameStop, reveals the importance of culture and building relationships with customers.

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One of the big incentives that our managers just love every year is that we fly in all of our managers to a meeting that all of our vendor partners also come in, and we spend four days with them, investing in them. They leave understanding all the key products coming out, all the key priorities for GameStop as a company. Overall that’s a huge incentive because it’s a way to continue to retain and engage our associates, because we’re investing in them.

The holiday season is always an excellent time at GameStop because all of the products are out.

What’s unique is that our vendors like to ensure that our associates are well-informed about the product so anything from t-shirts or something that might reflect the product, to extra gift s around that. It’s a time when we do extra customer activities and events that our associates just love to run.

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UPFRONT 21

What recession?

PeopleScout reports hiring uptick

D THE TOP 10 Toronto New York Singapore London Montreal Zurich Stockholm Amsterdam Copenhagen Los Angeles

THE BOTTOM 5 Dhaka, Bangladesh Phnom Penh, Cambodia Lagos, Nigeria Karachi, Pakistan Tehran, Iran

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Location, location, location

A

ccording to a study by Aon Consulting, a global risk management fi rm, Toronto is the least risky city in the world to recruit, employ and relocate employees. The study measured the risk involved to organizations in 90 cities worldwide by analyzing demographics, education, employment practices and government regulations.

“Montreal and Toronto are among the five lowest risk cities primarily due to Canada’s low level of corruption; strict enforcement of equal opportunity laws; health and retirement benefits; and high quality and broad availability of training facilities. The main difference between the two is due to Toronto’s larger population as well as quality and broader availability of training resources,” said the report.

Rounding out the top 10 were New York in second place, Singapore and London tied at third place with Montreal in fi ft h. Zurich and Stockholm tied for sixth, Copenhagen and Amsterdam shared eighth place and Los Angeles was 10th.

Rick Payne, Aon’s Chief Research Officer, said that a significant factor influencing the report is government support. “Cities that were low risk typically have a government that is transparent, non-confrontational, and deals with employment issues fairly. Employers in these cities are less likely to be surprised by changes in government policies on employment, healthcare and retirement. Therefore, they have fewer issues fi nding and retaining educated and experienced talent.”

Payne went on to say that the report indicated that not even the top cities are perfect. “The talent pool in Toronto and Montreal is small compared to New York or Los Angeles, which increases the risk of recruiting for certain types of jobs such as highly specialized fi nancial jobs and design/visual arts jobs. Additionally, in Singapore the inflow of foreign talent helps to increase its talent pool despite its small population, low birth rate and aging workforce.”

espite sluggish jobs reports and fears of a double dip recession, some companies are growing their workforces. PeopleScout, one of the world’s largest recruitment process outsourcing (RPO) providers, reports its clients had 69 percent more new hires in the first eight months of 2010 than the same period in 2009.

“Hiring growth has been impacted by (1) hiring freezes being lifted, (2) general business lift, and (3) a particularly robust uptick in replacement hiring, as workers have become more confident about switching employers,” say Patrick Beharelle, CEO of PeopleScout’s parent company SeatonCorp.

PeopleScout, for its part, has hired over 250 recruitment professionals in the last 90 days to support its clients hiring demands. PeopleScout also reported an uptick in companies signing RPO contracts, with the firm securing 11 new RPO engagements since May. Typically an RPO provider acts as a company's internal recruitment function for a portion of the company’s jobs. RPO providers typically manage the super-majority of the recruiting/hiring process, from the opening of a job requisition through the onboarding of the new hire, including staff, technology, method and reporting.

• A health insurance company’s hiring activity for call center positions is up 280 percent • A major airline is hiring 35 percent more in 2010, particularly reservation agents and flight attendants • A clinical services firm is hiring at a 62 percent higher rate, both professional and non-professional positions • A major telecommunications company has increased its hiring by more than 30 percent in 2010 for key front-line positions

Workplace suicides jumped 28 percent to 251 cases in 2008, up from 196 in the previous year Source: US Department of Labor

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UPFRONT

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TOP 10 PLACES TO LIVE 10

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Rogers, AR

Ames, IA

Fishers, IN

Overland Park, KS

Fort Collins, CO

Right next door to retail behemoth Wal-Mart, many executives move to the Arkansas town of Rogers, giving it a cosmopolitan feel. Top-notch schools and outdoor activities, including swimming and wakeboarding on the town’s two lakes, and golfing on its five course are just some of the draws to Rogers.

Unemployment in Ames stands at just 4.3 percent thanks to Iowa State University, which employs 9000 people, plus the many other biotech and agriculture jobs nearby.

Besides cultural and athletic offerings, the town boasts 36 parks, a bustling shopping district and a new aquatic center.

Fishers offers a winning combination of low-cost houses, easy access to the big city and good schools. And it’s booming.

Development abounds and 1600 jobs were created last year alone with major employees including Sallie Mae and Roche Diagnostics.

Schools, a 300-acre arboretum and botanical garden, a biweekly farmers market and a brand new 12-field soccer complex are just some of the draws of this Kansas City suburb.

With 29 miles of well-used cycle trails in the foothills of Colorado’s Front Range this is a great place to live if you want to spend time on your bike. Likewise, the town has become a high-end microbrew mecca, so pack your bag if that’s more your thing. The one thing hurting this idyllic town however, is the schools. The state sliced public school budgets this year, laying off 139 full-time employees in Fort Collins’ Poudre School District.

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McKinney, TX

Bellevue, WA

Newton, MA

At number five, McKinney near Dallas has low crime, affordable homes and good jobs. It also has a lovingly restored downtown with 19th century buildings housing restaurants, boutiques and galleries. While the town has grown massively over the past decade, the community is still tree-filled and surrounded by ponds, parks and hiking trails.

Bellevue’s compact downtown is packed with new skyscrapers that hover above Lake Washington and when the clouds part, mountain views are beautiful. The jobless rate is more than two points below that of the Seattle metro area, thanks to a recent influx of jobs from Microsoft, T-Mobile, Verizon and Expedia. The town’s high schools are also consistently at the top of state rankings.

Full of New England charm, Newton is less than 45 minutes away from downtown Boston and is loaded with pedestrian friendly shopping, districts, parks and playgrounds.

It’s not perfect however; this community comes with a hefty price tag: a three-bedroom house runs at almost $600,000.

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2 Columbia/Ellicott City, MD Boasting grand homes, an 18th century downtown and lots of restaurants, Columbia offers a wide range of housing, tons of parkland and a major music venue. This duo is also an economic powerhouse, with unemployment standing at 5.2 percent. Excellent schools and a diverse population make this a great family location.

1 Eden Prairie, MN Why is Eden Prairie number one? Not only is it friendly, but is has just a 5.1 percent unemployment rate, which is nearly one percentage point below the county rate and four points below the national average. With a population of 64,000 and 50,000 jobs right in town, it’s got to help.

Major employers include, C H Robinson, a trucking company, hearing-aid maker Starkey Labs and the Minnesota Vikings.

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24

UPFRONT

The ripple of workplace empowerment The new workplaces of the future are on the cutting edge of many exciting opportunities, says Judy White.

IN MY VIEW Back in 1993, when Sears almost went bankrupt and began the long process of analysis and understanding what was truly driving their financial performance, they discovered 22 months following the correlation analysis that from an initial 70 possible performance indicators, two clearly drove revenue growth: employees and customer impression.

Interestingly, during their journey of analysis, one of Sears's well-known competitors, WalMart was on the cutting edge of innovation and empowered leadership to create the just-in-time (JIT) inventory system. Leveraging relational capital both within their organization and among their vendors, allowed Wal-Mart to lead strategic change and revolutionize supply chain management.

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L

eading organizations like DaVita Inc., Whole Foods Market, Herman Miller Inc., GE, Google, SAS, Southwest Airlines, 3M, Cisco, Johnson & Johnson, and many others have strategically challenged their core assumptions about talent and the value of relationships within their companies. In the fast changing business environment where the only constant is change, leaders must accept that changes or pebbles may be thrown into the otherwise calm waters in which they operate.

The key to leading in an environment of change is not to try to prevent the change or minimize its role and impact on the company, but rather to proactively change the ripple effects that the change itself creates. In order to prevent a tidal wave of fear emanating from the pebble of change, leadership is now called to action. Will your company demonstrate deliberate leadership that communicates a clear focus on the future and the commitment to support the company and the very employees that are its core and future? Have you built upon a foundation of trust and open communication with your employees? Are leaders truly ready to lead and assume the responsibilities that change calls for and what employees deserve from those they follow?

Strategic intent remains pro-active in changing the ripple effects that occur when small pebbles are thrown out into a workplace. Rather than allow any pebbles of unhealthy workplace behaviors that send ripples of fear throughout their cultures, top leadership needs to be diligent about calibrating a clearer focus for the future supported by committed action.

“The key to leading From survival mode to transformation, where in an environment of employee talents are optimized to work more effectively across the enterprise, maintaining a change is not to try collective focus toward meeting the meaningful to prevent the change needs of customers and shareholders is central. or minimize its role The focus on meeting the needs of others is especially important if the US realizes a double-dip and impact on the recession in the near future. The deep relationcompany, but rather to ships and shared experiences that are created when facing organizational trials and the unspoproactively change the ken connectedness that comes from an energized ripple effects that the and highly focused team will determine how your change itself creates” company handles the pebbles or tidal waves of the new economy. It is the foundation of strong relationships and the sense of connectedness that will produce a liberating experience in the workplace that results in a positive effect through generating bonds of loyalty among customers and employees.

It is critically important for companies to manage, monitor and measure relational capital as well as its fi nancial capital. Though mounting fi nancial pressures may build and the temptation to adopt a “bunker” mentality may look attractive, employees, especially pivotal talent, can continue to position your company from where it is today to extraordinary heights. Harnessing the intangible assets of creativity, ideas, and high-quality relationships can lead to exponential growth and dynamic strategic advantage.

Talent cannot flourish if organizations do not continually reassess their first level core capability system: leadership. What kind of leaders are in place within your company?

Do they embody the company’s core beliefs, emphasize consistent behavior of integrity, and encourage employees to think creatively as well as strategically? When the ripples of change do come, how will your leadership respond? Will they respond with a sense of urgency in communicating the company’s position and strategy in navigating this new change? Will they foster an environment of fear or an environment of security? Are leaders communicating based on logic, compassion and sound reasoning? Can your leaders effectively lead? Do they convey, embody and instill the trust that will continue to build positive relationships and grow relational capital? Are your leaders equipped to lead the necessary change forward?

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UPFRONT 25

Hiring for attitude

D

Six ways for women to build retirement security

T

he widening gender gap in retirement security is becoming increasingly obvious. Income determines the size of critical social security benefits and how much workers can contribute to retirement accounts. With women on an unequal pay scale to men, not advancing into management jobs as quickly and living up to three years longer than a man poses a big threat to economic well-being. The Center for American Progress notes that nearly one in six elderly unmarried women aged 60 and over lived in poverty in 2008, and 16 percent of those 75 and older were poor. The comparable poverty figures for men are much lower.

But while gender gap problems persist in the workplace, there’s plenty for women to get busy with on the retirement planning front.

1 2 3 4 5 6

Get educated and make a plan. Construct a detailed plan that takes into account what you spend now and try to project your expected retirement needs Focus on benefits. Look closely at retirement offers when considering job offers, and even consider changing to a field that offers better packages Start saving early Shed debt. Plan to for a debt-free retirement if at all possible Retire later. Don’t under estimate the retirement boost you can get by working even a few years longer Understand spousal benefits. Check to see whether you’d be better off planning to take your own social security benefit or half of a spouse’s benefit amount

uring a three-year study, Leadership IQ discovered that 46 percent of newly-hired employees will fail within 18 months, while only 19 percent will achieve unequivocal success. But – contrary to popular belief – technical skills are not the primary reason for failure, rather poor interpersonal skills dominate the list, flaws that managers admit were overlooked during the interview process.

The study also found that 26 percent of new hires fail because they can’t accept feedback, 23 percent because they’re unable to understand and manage emotions, 17 percent because they lack the necessary motivation to excel, 15 percent because they have the wrong temperament for the job, and only 11 percent because they lack the necessary technical skills.

While the failure rate for new hires is distressing, it should not be surprising: 82 percent of managers reported that in hindsight, their interview process with these employees elicited subtle clues that they would be headed for trouble. But during the interviews, managers were too focused on other issues, too pressed for time, or lacked confidence in their interviewing abilities to heed the warning signs.

“The typical interview process fixates on ensuring that new hires are technically competent,” explains Mark Murphy, CEO of Leadership IQ. “But coachability, emotional intelligence, motivation and temperament are much more predictive of a new hire’s success or failure. Do technical skills really matter if the employee isn’t open to improving, alienates es their co-workers, lacks drive and has the wrong personality for the job?”

11%

26%

15% Top areas of failure:

17%

23%

Coachability 26 26% Emotional intellig gence 23% 3% % Motivation 17% Temperament 15% Technical competence11%

Source: Reuters.com

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HEADING

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The 10 richest Americans Source: The Forbes 400

Name

$

1. Bill Gates 2. Warren Buffett 3. Larry Ellison 4. Christy Walton 5. Charles Koch 6. David Koch 7. Jim Walton 8. Alice Walton 9. S. Robson Walton 10. Michael Bloomberg

$ $

Net Worth

Age

Source

$54 billion $45 billion $27 billion $24 billion $21.5 billion $21.5 billion $20.1 billion $20 billion $19.7 billion $18 billion

54 80 66 55 74 70 62 61 66 68

Microsoft Berkshire Hathaway Oracle Walmart Manufacturing, energy Manufacturing, energy Walmart Walmart Walmart Walmart

Claims of bias against Muslims in the workplace rose to 1490 last year from 1304 in 2008 and just 697 in 2004

$ $ $ $

$

California has the heighest number of billionaires for 2010 with New York in second and Florida third

Source: EEOC

Company index Q4 2010 Companies in this issue are indexed to the ďŹ rst page of the article in which each is mentioned.

Aardman 76 Aflac 50, 51 Avature CRM 102, 103 Benefitfocus 56, 57 Best Buy 115 Boeing Inc. 42 Bridgestreet 67 Center of Medicare and Medicaid Services 46 Ceridian 60, 61 CIGNA Healthcare 47 Competentum 125 Concentra 12, 48, 49 CORT 68, 69 Cross-Tab Marketing Services 94 CultureRx 108 Department of Health and Human Services 42 DreamWorks Animation 76 Employee Benefit Research Institute 42 Equal Employment Opportunity Commission (EEOC) 94 Fiduciary Benchmarks 10 Frost & Sullivan 97

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Google 76 Harvard Pilgrim Health Care 76 Herman Miller 76 Highland Group 62 HireRight 90 HSA Bank IFC iGiftCard 4 Incentive Federation 112 Intelifact 84, 85 Jobvite 94 L’Oreal 32 Ladders 30 Lighthouse1 40, 41 Marist College 8 Mercer 42 Microsoft 94 NCL 6 Nike 76 Office of Federal Contract Compliance Programs (OFCCP) 94 Ogilvy & Mather 76 Omaha Steaks 28, OBC

Onlife Health 2 Peak Performance Servies 117 PeopleScout 21, 88, 89 PricewaterhouseCoopers 98 Proctor & Gamble 76 Providence Health & Services 102 Saudi Aramco 104 Sirva 65 Smartbox 111 Taleo 94 The Corporate Housing Providers Association 62 The Energy Project 86 Tower Perrin 86 Towers Watson 42 TruDiligence 92, 93 UMR 58, 59 United Health IFC, 70 University of Michigan 52 Xtraordinary Adventures 15

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Beauty contest Today’s talent war battleground means employers need to up their game to attract and retain top talent. For Geoff Skingsley, Executive Vice President of Human Resources at L’Oréal, the world’s largest cosmetics and beauty company, investment in staff is a strategic priority.

By Stacey Sheppard

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THE BIG INTERVIEW 33

T

he advertising catchphrase of L’Oréal Paris is arguably one of the most widely recognized corporate slogans in the world. “Because you’re worth it” is L’Oréal’s way of telling consumers that whatever their age, gender, ethnicity or look, they deserve to use these products. And the slogan, which has been around in its various forms since 1971, seems to have done the job – L’Oréal, which boasts 23 global brands, saw $23.7 billion in consolidated sales in 2009.

However, this philosophy seems to be so much more than just a simple advertising and marketing tool designed to boost sales. “Because you’re worth it” is an attitude that extends far beyond the consumer base of the French cosmetics giant’s L’Oréal Paris brand and is also engrained in the company culture of the group, particularly when it comes to Human Resources. And it is because of this that L’Oréal is an award winning company that has been consistently recognized for its human capital initiatives.

Geoff Skingsley, Executive Vice President of Human Resources, puts such achievements down to the fact that L’Oréal has always had a long-term approach to managing its people and this is reflected in the numerous policies that have been in place for some years now.

The global profit sharing policy for example, which has been running for over 10 years, is a long-term commitment that means that every employee of the group gets access to a share of the company’s profits, depending on its performance in each part of the world.

L’Oréal is also very committed to ethics. Their original ethics charter was launched in 2000, but was reviewed in 2007 and made more comprehensive. There is also an annual ethics day in October on which every one of the group’s 64,000 employees are able to chat online with L’Oréal’s Chief Executive Officer about the Code of Business Ethics. Th is, says Skingsley, is a pretty enterprising initiative.

Attraction And it is initiatives like these that make L’Oréal such an attractive place to work. The company is highly ranked by students and graduates as one of the most appealing employers and it frequently appears in the many lists of top employers published by the likes of Fortune, Business Week, the UK’s Times newspaper and Universum, the employer branding company.

The draw of L’Oréal, according to Skingsley, can be broken down into two main components. “The fi rst is the nature of our business because we have some very attractive brands and a very good corporate reputation as a business because we’ve been successful for decades. But then, on the other hand, we have a human resource philosophy that has been very powerful in attracting young people because we make a lot of investments around graduates, and we have this long-term HR philosophy that means that when we talk to young people about the prospects in our company, we really talk

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THE BIG INTERVIEW

34

about the potential for their long-term career,” explains Skingsley.

However, a further aspect that Skingsley believes may add to the appeal of L’Oréal for many young people is the fact that it is a global company, present in more than 60 countries, with 23 international brands. “We’re able to offer a global opportunity because what we offer is not specific to just one country. Our message is the same around the world, and the opportunity is the same whether you’re in Taiwan, Argentina or London. Th is is also one of the reasons why our universal ranking is consistently high in a large number of countries,” he says.

For graduates who do take up the opportunity to work at L’Oréal, Skingsley says they can be sure of a rapid job progression in which they are given a fair amount of responsibility quite early on. “The other thing that I think is a key component of our attractiveness is early responsibility, and we deliver on it,” he says.

“There are many managers inside the company who can and do testify to what happened to them in terms of being able to get responsibility – either for a brand or for P&L or R&D or for a factory or whatever it is – at a relatively tender age. We have countless examples of people who, before the age of 30, had their fi rst key management responsibility, and that’s part of our promise to young people, and we deliver on it,” says Skingsley, clearly proud of the company’s achievements in this respect.

Recruitment It is easy to see that the initiatives and policies that L’Oréal has in place go a long way into ensuring that it meets the expectations of the younger generations that are now hitting the job market. But in the midst of a raging talent war, simply putting such initiatives in place and hoping the top talent comes to you just isn’t enough.

Companies today have to be much more proactive in the hunt for the very best talent on offer. And as one might

expect, L’Oréal is also pulling out all the stops as far as recruitment is concerned.

“Recruitment has always been an investment priority in our job strategy,” says Skingsley. “Unlike many other companies, we put a large amount of money and extremely good talent into the teams that run recruitment for us. Recruitment is a strategic job in the HR organization, and we like to ensure that we are maintaining a continuous pipeline of very high caliber graduates moving into the organization, and all the investments that we make are basically driven from that strategic imperative.”

The strategy that L’Oréal pursues is unlike that of other companies in more ways than one.

Whilst most businesses seek out experienced, highly accomplished, industry experts to form

“Unlike many other companies, we put a large amount of money and extremely good talent into the teams that run recruitment for us”

Characters from the new recruitment game, REVEAL by L’Oréal

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their recruitment teams, L’Oréal takes a different approach completely. “We have an international recruitment department which is staffed, by and large, with people in their 20s and early 30s” says Skingsley, and he is quick to stress that the young people he employs are more than capable of doing a good job.

“We make sure that the talents we put in there are very good talents for L’Oréal. They are some of the best talents we have in the organization at that level, and they’re also close to student reality because of the age they are – many of them only graduated in the last few years,” he says.

“We give them business tools that are very comprehensively prepared and tested, and we know they work. We also devote quite substantial budgets to enabling them to come up with new ideas, and whilst not all of them work, the fact is some of them work spectacularly well,” says Skingsley.

Allowing his young recruitment team such freedom to innovate and come up with ways of reaching out to the young generation of workers is indeed a gamble, after all as Skingsley himself says, not all of them work, but when they do L’Oréal benefits in a big way.

Business games Take Brandstorm for example, one of the business games that make up L’Oréal’s innovative recruitment platform. Launched by the group in 1993, the international marketing competition aims to attract the very best marketing students from around world as they battle it out to defi ne a marketing strategy and communication campaign for a new line of products within an existing international L’Oréal brand. So far the competition has attracted more than 37,000 students from 220 schools in 42 different countries.

According to Skingsley, the fact that L’Oréal has been using such business games since the 1990s proves that the cosmetics giant has an extremely innovative approach to recruitment. “We were a pioneer back in the early 90s when we invented what was initially called The Marketing

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Human resources at L’Oréal 64,600 employees in 66 countries A commitment to developing the competencies and expertise of all employees to support the group’s continued growth: • 5 development centers around the globe – in Shanghai, Rio de Janeiro, Dubai, New York and Paris • An online, next-generation learning offer • A wide range of in-house tailored training programs A global recruitment strategy: • Ground-breaking business games: REVEAL by L’Oréal the new online business game, and L’Oréal Brandstorm the creative marketing competition • A strategy of continuous recruitment of talented graduates • A vigorous management trainee program, strongly focused on our rapidly developing markets • Internship opportunities: 80% of young graduates hired in 2009 were former L’Oréal interns A strong commitment to diversity: • 110 nationalities • 57% of managers and 38% of management committee members are women • Over 7500 managers in 32 countries have attended L’Oréal’s diversity training program L’Oréal is ranked among the world’s most attractive employers (number three worldwide among FMCG companies for business students)

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L’Oréal’s brand portfolio Biotherm Cacherel Diesel Garnier Giorgio Armani Helena Rubenstein Innéov Keraskin Esthetics Kérastase Kiehl’s

Lancôme La Roche-Posay Le Club des Créateurs L’Oréal Paris L’Oréal Professionnel Matrix Maybelline NY Mizani Ralph Lauren Redken

Sanoflore Shu Uemura Shu Uemura Art of Hair SkinCeuticals Softsheen Carson The Body Shop Vichy Viktor & Rolf YSL Beauté

Award, which has now become Brandstorm; but we were one of the fi rst organizations to create a meaningful marketing award,” explains Skingsley.

And Brandstorm is not the only example of how well L’Oréal has judged the recruitment market. The year 2001 saw the launch of the e-Strat Challenge: L’Oréal’s fi rst online business game,` in which business students from around the world play at being the manager of a virtual cosmetics company via a dedicated website. The game has witnessed massive success with 50,000 players in 120 countries taking part each year since its inception. It has also become somewhat of a benchmark in the field and has been used in teaching programs at leading universities all over the world.

However, L’Oréal recently launched a brand new online business game that looks set to rival the e-Strat challenge as the group’s key hiring tool. REVEAL by L’Oréal, which went live earlier this year, is a unique recruitment game that L’Oréal is hoping will revolutionize graduate recruitment. The game invites students and graduates to work on virtual business tasks across different departments in the company. Players will be given feedback on their performance in the game and those who excel will be invited to local recruitment events or interviews.

“It’s a very ambitious project,” says Skingsley, explaining how the company invested several hundreds of

“We know that one of our challenges is that not everybody understands just how much potential there is in the beauty industry and just how exciting it is” thousands of dollars into the game, which had a dedicated team of two people working on it for over a year. He goes on to clarify the two objectives of the game, saying that the first objective is to encourage as many students as possible, from all over the world and from different backgrounds, to take part in the game – hence the reason for it being internet based – and to help them discover themselves by exposing them to a virtual L’Oréal work environment.

The second objective is to help people discover the beauty industry, says Skingsley. “We know that one of our challenges is that not everybody understands just how much potential there is in the beauty industry and just how exciting it is.” Before continuing, Skingsley warns me that he is about to sound like a salesman, something he says he is not ashamed of. “It’s a very exciting industry. It’s fast moving and it has this incredible mix between technical performance and aesthetics and emotional values,” he says.

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of that, we did it in 2009 in an economic context that was really pretty unfavorable.”

Explaining what it was exactly that enabled L’Oréal to be in a position to deliver on that promise Skingsley says: “Firstly, we mobilized the whole organization to help make it happen. It wasn’t a single division or a single country, and even though it was piloted by our luxury division, it was actually an effort by the entire human resources organization to create the amount of mobility necessary to be able to integrate Yves Saint Laurent people, not only into the luxury structure, but sometimes into other parts of the business, which we did.”

“Not only have we kept the people, but we’ve kept them in a reasonably positive way, and the best indication of that is the business results”

Yves Saint Laurent Beauté became a part fo L’Oréal’s portfolio in 2008

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The Yves Saint Laurent integration story In June 2008, PPR, the French multinational holding company specializing in retail shops and luxury brands, sold Yves Saint Laurent Beauté to L’Oréal for $1.5 billion, following authorization from the competition authorities.

The acquisition of YSL Beauté presented a number of challenges for the cosmetics giant, not to mention the huge undertaking that was the integration of the brand into its Luxury Products division without making any of the 1300 employees redundant – an achievement that saw L’Oréal scoop the Trophée du Capital Humain 2010 prize in France for management of employment.

“It’s quite a big commitment to make,” says Skingsley. “When we take over an organization with a large number of people, it’s a significant commitment to say we will integrate them with minimum loss of employment and then deliver on it. And then on top

The integration program did take time, however, and Skingsley highlights the fact that it was important not to rush the process. “We took 18 months to complete the integration of Yves Saint Laurent, but because we gave ourselves that timeframe, it meant that we were able to integrate the vast majority of employees into that division and make them feel a constructive and happy part of the L’Oréal organization,” explains Skingsley.

However, there was also a cultural challenge that the integration presented, since YSL Beauté had already changed hands four times in the previous 20 years and the prospect of having a fifth owner was quite unsettling for the staff. “We had to make sure that they felt comfortable and understood the culture they were moving into, and that’s something you don’t do in one meeting,” explains Skingsley. “It was a long engagement, which took a lot of investment in terms of both time and money, which was primarily done by the human resource teams.”

But these efforts clearly paid off and the best proof of how successful the integration was, according to Skinsgley, is the fact that the YSL business is now in such great shape with doubledigit growth around the world. “You couldn’t do that if you didn’t have motivated, efficient employees,” he says. “Not only have we kept the people, but we’ve kept them in a reasonably positive way, and the best indication of that is the business results.”

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The L’Oréal Group’s main facts and figures for 2009: • 100 years of expertise in cosmetics • 5 key areas of expertise: haircare, hair color, skincare, make-up and fragrances • 23 global brands • Products distributed in 130 countries • $27.3 billion consolidated sales in 2009 • $828 million in R&D investments • 674 patents filed in 2009 • 64,600 employees worldwide

“The category of the beauty business is unique in terms of what it takes to be successful, and L’Oreal is the worldwide leader. So, in exposing people to the beauty industry through REVEAL we are basically able to attract a certain caliber of students.” And it appears to be working, as L’Oréal has already made nearly 100 recruitments through REVEAL by L’Oréal since its launch.

This is one of the main benefits that L’Oréal has been able to capitalize on through its portfolio of business games.

“We benefit because it’s a competition and the brightest and best tend to win those competitions. We have a very high strike rate in hiring the bright students that end up being either the country winners or the regional winners or even the worldwide winners of these games,” says Skinsgsley, revealing that many of the marketing managers and marketing directors at L’Oréal today were winners of Brandstorm six or seven years ago.

Integration “We are able to seamlessly integrate from business game to recruitment to career, and it’s a very virtuous circle,” says Skingsley. But the efforts don’t stop once the top talent has been recruited. In fact, going back to the point what he said earlier about having a long-term HR philosophy, recruitment is just the beginning of the process. One of the main challenges facing employers today is not necessarily hiring top talent, but holding on to them.

Anecdotal evidence shows that when the Millennial generation – those born after 1980 – don’t get what they want from a job – usually a collaborative environment and upward mobility in a short period of time – they tend to jump ship, and surveys have shown that most tend to be looking to move on within two years of being in a job. It is precisely for this reason, Skingsley says, that L’Oréal has introduced an integration program that lasts exactly this length of time.

Called L’Oréal FIT (Follow-Up & Integration Track), the scheme is a personalized integration and support program

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adaptable to the needs of all new employees at L’Oréal. “The whole nature of how you follow an individual when they join the company needs to have a medium-term perspective and not just a short-term perspective,” says Skingsley.

“The FIT program that we introduced is designed to last two years, but I think it is important to give people a perspective beyond that, and this comes back to what I said before about rapid opportunity and rapid responsibility.

Young people need to see those around them getting access to positions of responsibility, because it gives them belief in what could happen to them.”

And if you look at the top of the company today, Skingsley says, everybody who is on the board lived through that process of getting access to early responsibility in their late 20s. “We are regularly nominating people in their late 20s to be head of marketing, head of commerce, or head of finance in a division or on a brand,” he says. “We have to make sure that the career promise is being delivered to those

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people, and even if it hasn’t happened to them by the end of two years, they can see it happening to people around them, and therefore, they can believe it.”

However, whilst L’Oréal is putting a lot of effort into meeting the aspirations of the younger generations entering the workforce today, there are certain expectations that Skingsley believes are not quite so necessary to deliver on, particularly the much publicised desire to work when and where you want.

“We have to make sure there’s some flexibility regarding how people work, and we have to make sure that we’re in touch with what that generation expects, but what is not talked about much and what we firmly believe is an underappreciated part of a successful working environment, is a strong sense of community. And to do that people have to be physically in a building. They have to interact with each other on a very intense basis, and we believe that’s part of our success, and we believe it’s equally relevant for the upand-coming generation,” remarks Skingsley.

With all things considered, L’Oréal appears to be doing a pretty good job of offering students and graduates exactly what they want from an employer, workplace and career, and this undoubtedly helps them not only to attract the best talent but also to retain it. But where does such an innovative human resources strategy go from here? According to Skingsley the strategy is not really going to change that much at all, although the tools and technology that are used to deliver that strategy will obviously need to evolve with the times.

“The real question is about reach,” exclaims Skinsgley.

“How can we reach further and further around the world into markets where our presence is only just being established?” Certainly, with e-recruitment tools like REVEAL

by L’Oréal and Brandstorm, this question is already being answered.

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SPECIAL FOCUS

HEALTH and the workplace

How will health reform affect your company?

I

n the middle of World War II, fi nding their attempts to attract new employees stymied by a severe labor shortage and government-imposed wage controls, desperate companies hit upon a new idea: offering health insurance as part of their fi nancial compensation packages. The idea took off, and like it or not, US employers are now inextricably involved in the health insurance – and by extension, the health – of their employees. In fact, a recent analysis by the Employee Benefit Research Institute showed that employment-based coverage was the dominant source of health insurance for 59 percent of Americans under the age of 65.

Health Reform 42

Th is arrangement has worked well – at least for those who have jobs – but changes are on the horizon. Health care costs are on the rise for employers, with an anticipated active employee healthcare cost trend (combined medical and pharmacy rates) for 2011 of 8.2 percent, according to a survey conduct by Towers Watson in August.

At the same time, the potential financial impact of the Patient Protection and Affordable Care Act looms large, and many employers are responding by passing along additional costs to their employees: 85 percent of respondents to the Towers Watson survey said they plan to increase medical and/or pharmacy premiums for active employees in 2011.

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Most employers also said they are currently focusing on compliance with the new law, rather than looking at how it might affect their longer-term benefit strategies, although they did indicate that their focus will shift to rethinking strategies and developing multiyear approaches in 2011.

Th is may be leaving it a bit late – although the Act’s biggest changes come into force between 2014 and 2018, this doesn’t mean companies can afford to take their time deciphering its implications. Some parts of the Act have already taken effect and others will do so as soon as January 2011.

HR managers – always at the sharp end of the employee/employer interface – will in many companies be the ones charged with ensuring the new measures are accepted and acted upon, which means keeping up to date with the latest developments. Below, we provide a little help in this direction by examining some essential points of the reform bill as it relates to companies and their employees.

Wellness Many respondents to the Towers Watson survey said they plan to increase their efforts to encourage employee participation in health-related programs such as wellness programs, behavioral outcomes and health risk assessments.

This is not surprising, given the requirement in the health reform bill that employer health plans cover, at no charge, most preventive care for employees. Specifically, the law codifies the HIPAA regulations on employer-sponsored programs, which allow for employees to be given rewards when they participate in wellness activities, or when they meet certain health status targets. This means the HIPAA rules, such as the limit on financial incentives for wellness – now raised to 30 percent of the cost of coverage, up from 20 percent – will become statutory.

The new law also leaves open the possibility that the permissible wellness incentive level could be raised to 50 percent, following a review of wellness programs to ensure that such a move would not disadvantage other employees.

Large firms, at least, appear to have got the message.

According to the results of the Annual Mercer EmployerSponsored Benefits Survey, among large firms, the use of health management and consumer-oriented health plans as cost-control strategies appears to be even more important than cutting benefits and shift ing costs to workers. Many large employers offer incentives – often cash, but also reductions in premiums – to workers to join such programs.

This trend is borne out elsewhere. The American Heart Association (AHA 2010) has recognized more than 1200 “fit-friendly” companies, while in a 2009 national study on prescription benefit management trends by Medco, nearly 60 percent of plan sponsors pointed to wellness programs as the single most important influence on healthcare cost containment over the next three to five years. Participation in such programs rose to 76 percent last year from 65 percent in 2008, and more than half of companies not currently offering a wellness program said they had plans to do so within the next two years.

Health Reform 43

America’s best employers for health In June, 66 companies were presented with the 2010 Best Employers for Healthy Lifestyles awards by the National Business Group on Health. The awards recognize large employers for their commitment to creating healthy work environments and encouraging their employees to make healthier lifestyle choices.

“Employers all across the nation are recognizing just how important a healthy workplace and a healthy workforce are to improving productivity as well as controlling healthcare costs,” said Helen Darling, President of the NBGH. “The 66 employers that we are recognizing this year exemplify the kind of innovation and commitment that’s possible to providing lifestyle improvement programs which encourage healthier lifestyles for employees and families.”

Winners of the Best Employers for Healthy Lifestyles awards were honored in one of three categories: Platinum, for established workplace wellbeing programs with measurable success and documented outcomes; Gold, for creating cultural and environmental changes that support employees who are committed to long-term behavior changes; and Silver, for employers who have launched programs or services to promote living a healthier lifestyle.

For 59% of Q Americans employment based coverage is the source of health insurance

"HR managers will in many companies be the ones charged with ensuring the new measures are accepted and acted upon, which means keeping up to date with the latest developments"

2010 winners of the Best Employers for Healthy Lifestyles Platinum awards were: Aetna Andersen Corporation Baptist Health South Florida Cerner Corporation CIGNA Intel Corporation Mayo Clinic Medtronic Michelin Nationwide Mutual Insurance Company PepsiCo, Inc. Pitney Bowes Inc. Quest Diagnostics Union Pacific Unum UPMC (University of Pittsburgh Medical Center), UPMC Health Plan

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One such employer is Boeing Inc. Speaking at the EBRI biannual policy forum, Boeing’s Director of Global Benefits and Integration, Pam French, said the company sees a definite return on its investment in prevention and wellness programs.

As part of its program, Boeing offers free health screenings to all US-based employees, who can choose to have a finger stick blood test to check total cholesterol, LDL cholesterol, HDL cholesterol, triglycerides and glucose (blood sugar); blood pressure; and BMI and waist circumference.

This information can then be used to complete a health assessment, for which they receive a $50 incentive.

Boeing also offers its employees a wellness ‘toolkit’ comprised of 14 elements, including a website, a monthly health newsletter, a yearly health risk assessment, weight management tools, family care resources, an employee assistance program and exercise opportunities.

Grandfathering A ‘grandfathered’ health plan is any group health plan or individual coverage that came into effect before March 23, 2010 – the date of the new law’s enactment. Even if individuals re-enrol or new employees (and their families) are added after this date, the plan’s grandfathered status continues.

An employee who belongs to a grandfathered health plan can add his or her dependents to the plan after the March 23 date, without affecting the plan’s grandfathered status, as long as the plan allowed for dependent/family coverage before the Act was brought in.

Multi-employer and single-employer plans that were collectively bargained and were in effect on March 23, 2010, are not subject to the new rules under reform law until the date on which the last of the collective bargaining agreements relating to the coverage terminates. At that point, a collectively bargained plan would be subject to healthcare reform rules and, assuming that it is grandfathered, it would have to comply with the requirements for grandfathered plans.

Although existing plans are in this way exempted from many of the changes introduced by the reforms, there are some important exceptions. If your plan year begins six months after the date of the bill’s enactment (or January 1, 2011 for calendar year plans), there are certain requirements you must fulfil, including eliminating pre-existing condition exclusions for enrolees under 19; having no lifeline limits and no restrictive annual limits; having a minimum loss ratio of 85 percent (fully insured plans only); distributing a uniform summary of benefits to participants (fully insured plans only); and barring cancellation of health insurance coverage.

From 2014, grandfathered plans will be prohibited from placing annual limits on essential health benefits, pre-existing conditions, and waiting periods of more than 90 days.

Exchanges The concept of a health insurance exchange was a central component of President Obama’s health reform initiative. In promoting health reform, Obama said that

Health Reform 44

an exchange should be “...a market where Americans can one-stop shop for a healthcare plan, compare benefits and prices, and choose the plan that’s best for them… None of these plans should deny coverage on the basis of a preexisting condition, and all of these plans should include an affordable basic benefit package that includes prevention, and protection against catastrophic costs.”

Under the reform bill, from 2014, employees who qualify for an affordability exemption to the individual mandate but do not qualify for credits will be able to join an exchange plan using their employer contribution. Exchanges aim to offer a choice of plans, establish common rules round insurance offering and pricing, and give consumers information to help them better understand their options – the ultimate goal being the creation of a more organized and competitive market for health insurance.

The history of employer-sponsored healthcare

D

uring World War II, following the imposition of widespread wage and price controls by the government, companies were casting about for a solution to the continuing labor shortage. They began offering health insurance as part of their employment contracts, capitalizing on the Stabilization Act of 1942, which exempted fringe benefits from caps on salaries and wages.

After the war, the National Labor Relations Board ruled that health insurance should be considered to be part of an employee’s wages in the sense of the law. This gave employers the right to negotiate on the subject, cementing the involvement of employers in employee healthcare.

From very early on, employers’ contributions to employee health plans have been exempt from employee taxable income, providing yet another incentive for them to include health benefits as part of a compensation package. As a result, the employer-sponsored model of health insurance became part of the everyday reality for the majority of employed Americans.

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Money for exchanges

I

n early October, Secretary of Health and Human Services Kathleen Sibelius announced $49 million in planning grants to 48 states and the District of Columbia to assist them in establishing health insurance exchanges.

Making the announcement, Sibelius pointed out that those who do have health insurance through large employers pay higher costs, “because they can’t pool their costs or spread the risk.

“That’s why the Affordable Care Act helps states create exchanges, so individuals and small businesses can band together, have the same purchasing power as those big employers and get a fairer deal when it comes to their healthcare. Today, we’re providing critical resources to help states take the first step toward creating these competitive marketplaces,” she said.

Individual states will be eligible for help with: • Determining of IT technology and infrastructure need to be upgraded • Creating partnerships with organizations in the community organizations • Establishing call centers to answer questions from consumers • Setting out the statutory rules needed to build the exchanges • Hiring staff to meet ongoing needs • Coordinating eligibility and enrolment systems across Medicaid, the Children’s Health Insurance Program (CHIP), and the exchanges • Putting in place performance metrics, milestones, and ongoing evaluation

“Employees should be able to get transparent information from an exchange about such provisions as covered benefits and premium costs, as well as details of previous performance in managing longterm illnesses, encouraging wellness and providing customer satisfaction”

Health Reform 45

In theory, exchanges will make it easier for consumers to compare costs across plans, with the organization and standardization of covered services and cost sharing (for example, deductibles, coinsurance or co-payments, and outof-pocket limits). The intention is to promote competition on the price of coverage and prevent or minimize the potential for plans to vary their benefits in an attempt to attract healthier than average enrolees.

Employees should be able to get transparent information from an exchange about such provisions as covered benefits and premium costs, as well as details of previous performance in managing long-term illnesses, encouraging wellness and providing customer satisfaction. Problems with billing or access to plans could also be dealt with.

Exchanges could be used to facilitate enrolment and premium payments for people buying their own insurance or those who work for smaller companies. (This function is usually taken on by the employer in the case of larger businesses.)

On October 1, California became the first state to begin work on a health insurance exchange. Although California’s exchange will not be operational until 2014, when the majority of health reform provisions kick in, the fact that it is in the vanguard could mean its exchange becomes a model for those that follow.

Five categories of coverage plans will be offered on the California exchange, ranging from the least expensive catastrophic coverage plan to platinum plans with arrays of benefits. Consumers will also be able to use the exchange to fi nd out if they are eligible for federal subsidies to help pay for their chosen plans.

Boeing’s wellness toolkit Healthy living tools offered by Boeing to its employees include: 1. www.BoeingWellness.com With content powered by the Mayo Clinic, offers detailed information on a wide range of health topics, as well as interactive online tools.

2. BoeingWellness health letter A customized monthly newsletter created by the Mayo Clinic containing practical information on wellness topics and tips for healthy living.

3. Health risk assessment An interactive tool on the BoeingWellness.com site. Participants answer a secure questionnaire and receive a personal health report to help them understand their risk areas.

4. Weight management tools Tools available online include Weight Watchers and the Mayo Clinic Healthy Weight Program.

Other tools include on-site fitness centers and discounts on fitness equipment and gym memberships.

5. Employee assistance program Connects employees and their families to counselling professionals, covering the cost of up to six sessions per issue per year.

6. Family care resources Provides referrals for services such as day care, family care and elder care, and for household services such as home improvement contractors and pet care.

7. Stress management website A ‘one stop shop’ for all stress-related resources offered by the company, including links to the employee assistance and family care resources programs.

8. Exercise opportunities Boeing offers on-site fitness centers or discounts on gym memberships to employees and their families.

9. Flu prevention programs North American employees are offered free flu shots and self-care tips each autumn.

10. Free & Clear Quit for Life A 12-month quit tobacco plan gives employees access to a personal coach.

20/10/2010 10:55

SPECIAL FOCUS

46

Pharmacy benefit management Health reform and PBMs.

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ealth reform will bring sweeping changes to many sectors of the economy, not least within the healthcare sector itself. In 2008 there were 47 million Americans without health insurance, according to the Census Bureau. One of the main goals of reform is to bring healthcare coverage to these uninsured people; by extension, this will mean the establishment of a much larger customer base of those who now have individual health plans.

This larger user base will allow the potential for PBMs and other health insurance players to grow significantly, and will increase the drive towards more customized products.

Thanks to these and other new regulations, pharmacy benefit managers will need to be aware of and support any changes in the enrolment process, as well as supporting drug manufacturers in providing discounts to their members and having rebate contracts with the Center of Medicare and Medicaid services.

Following the implementation of the health insurance exchanges in 2014, PBMs will be required to offer a minimum benefit plan that meets the following requirements: • • • •

Eliminate the lifetime maximum Restrict the annual maximum limit Share costs for preventive care benefits Eliminate exclusions for those with pre-existing conditions • Provide coverage for dependents up to age 26 PBMs will need to reduce time to market and allow flexibility of features so that products appeal to a wider customer base. Th is will include the development of new and more customizable products, as well as changes to the underwriting and member enrolment processes and to claim and payment processing and rebate processing.

Social networking will emerge as an important tool to help PBMs further streamline their market segments as well as identify new ones through direct access to potential plan members.

Under healthcare reform, the CMS plan structures will change substantially for Medicare Part-D plans. In order to take advantage of this opportunity, PBMs must align to the new guidelines and ensure their plans meet consumer needs.

Another change involves the advent of e-prescribing.

While current communication among various PBM stakeholders does happen electronically, when a prescription is sent to a pharmacy there are still many manual processes involved. E-prescribing will move real-time interaction forward and raise levels of standardization and effectiveness.

Health Reform 46

"PBMs will need to reduce time to market and allow flexibility of features so that products appeal to a wider customer base"

What to look for when choosing a pharmacy benefit manager: • Pick two companies and negotiate all guarantees, terms and conditions before making a decision • Make sure the plan sponsor has full audit rights • Ensure that the PBM uses the lowest published average wholesale pricing • Guarantee the disclosure of the methodology for generic pricing • Do not make your selection until the contract has been reviewed by experts

Relevant changes by implementation 2010:

Risk pool created

2010:

Coverage of the doughnut hole: Medicare drug beneficiaries who fall into the gap will be a $250 rebate

2011:

Those in the gap will get a 50 percent discount on brand name drugs

2011:

Pharmaceutical companies with sales of more than $5 million will pay an annual fee based on market share

2013:

The sale of medical devices will be subject to a 2.9 percent excise tax.

No tax on items purchased by consumers through retail outlets

2014:

Health information exchange to be established

20/10/2010 10:55

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INDUSTRY INSIGHT

The new focus on prevention and wellness Employers face a greater burden to make the healthcare act successful, says Tammy Steele.

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mployers are the primary source of healthcare coverage for most individuals in the US, and offer a significant opportunity to influence the health and behaviors of the nation’s workforce. However, this opportunity also brings great challenges for employers as they begin to navigate the new healthcare landscape.

The new healthcare act, which is set to be implemented in multiple phases during the next 10 years, requires employers to extend health insurance benefits to their entire workforce, limits the portion of costs employees may pay for coverage, restricts the amount of costs an employer can pass along to employees, and requires employers to offer a certain level of coverage to all employees (such as eliminating annual and lifetime benefit maximums and pre-existing condition restrictions). As these elements begin to take shape and create a new healthcare landscape, employers face a greater burden to make the program successful, while navigating through the complicated measures and incurring more cost for employee coverage.

Long before the issue of healthcare reform became a reality, employers were seeking ways to lower their ever-increasing healthcare costs without cutting coverage. According to the Kaiser Family Foundation, employer healthcare costs have continued to rise at a substantial pace for the past decade, increasing a total of 114 percent – nearly four times the rate of inflation. Faced with the new (financial) requirements of the healthcare act and continued increases in the cost of employee healthcare coverage, more companies are turning to comprehensive health and wellness programs to offset costs and improve the health of employees.

Comprehensive wellness and preventive care programs have become an important asset for employers, as a way to enhance an existing health benefit plan, or bring cost-saving primary and wellness care directly to employees, at a lower cost. Beginning with acute care services like treatment for colds and allergies, sprains and strains, and other common health issues, the comprehensive wellness program also focuses heavily on preventive care elements that include annual physicals, screenings and vaccinations. The new healthcare law requires (in-network) preventive care services to be offered at no cost to individuals, which makes comprehensive wellness programs a savings for employees and employers.

These programs can also incorporate health risk assessments, health improvement plans and coaching, tobacco cessation programs and participation tracking. Depending upon the needs, size and investment of the company, comprehensive wellness programs can be delivered locally and/ or implemented at the workplace.

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Tammy Steele is Senior Vice President of Human Resources for Concentra, a national health and wellness company that provides custom and comprehensive healthcare programs direct to employees through workplace health centers, on-site events, medical mobile units and more.

Independent research has shown that wellness programs can provide companies a return of up to $6 per person for every $1 invested. This rate of return was even noted by the Congressional Budget Office, which recently stated that the effects of preventive care as part of the new healthcare laws may offer greater, unknown cost savings that may offset a portion of the act’s nearly $1 trillion cost. And in sharp contrast to the regulations and requirements from the new healthcare laws, wellness and prevention is one area where companies may get assistance. Employers of all sizes may be eligible for federal credits to implement wellness programs according to the new laws.

In spite of the success and the cost savings, comprehensive wellness programs may still be cost-prohibitive for small employers, who will be required to offer the same level of coverage as major corporations. To help small employers meet the required levels, many of which have yet to be defined by the US Health and Human Services Department, several insurance companies are revamping plans to be more attractive to small businesses. In response to the growing need, many providers and insurance organizations are also developing smaller-scale wellness programs, to be made available to small businesses and individuals through national medical centers.

For now, the cost and impact for employers to navigate through the new healthcare landscape is largely unknown, and will be determined as more of the specific rules and codes of the legislation are written by the Department of Health and Human Services. The next significant phase of the new healthcare laws will go into effect in early 2011. In the interim, employers (and employees) anxiously await new challenges and opportunities that will change the healthcare landscape.

20/10/2010 10:47

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EXECUTIVE INTERVIEW

Healthcare reform: What businesses need to know now Aflac’s David Pringle answers key questions on how health reform will impact employers and the benefits they offer.

How will the Patient Protection and Affordable Care Act (PPACA) help employers manage rising healthcare costs?

David Pringle. PPACA creates four different cost-sharing levels (ranging from 60 percent to 90 percent coinsurance) that employers can offer starting in 2014. Although employers don’t like to find themselves in this position, by shift ing more of the coinsurance burden to employees, employers can still balance the scales of providing quality health insurance while managing rising costs.

Some carriers plan to increase their current plan premiums in the coming year. Most companies and their employees cannot afford this increase. What are employers’ options?

DP. Because of the narrow range of changes that may be made to a grandfathered plan, many employers whose health insurance costs will increase may face a dilemma.

If deductibles, co-pays, or the percentage of employer contribution is increased by more than the amounts allowed under the new law, the plans will lose grandfathered status.

If that happens, an employer may choose to provide a qualified health plan, which could be more expensive than keeping the grandfathered plan. If a new qualified health plan is provided, it must comply with all new insurance market reforms, including the new IRS nondiscrimination rules. An employer may also choose to terminate coverage altogether. If coverage is terminated, business owners and key employees will lose the benefit of having health coverage paid with pre-tax dollars.

What can employees do to manage the inevitable rise in costs as more and more costs get shifted their way?

DP. One thing employees can do to manage their own healthcare expenses as more of the cost gets shifted to them is to hedge against higher out-of-pocket expenses by purchasing voluntary or supplemental health insurance. Our experience in Japan, which has a national healthcare model, is that although major incidents are covered, the costs associated with offering broad coverage creates financial gaps that policyholders don’t realize until it’s too late. In Japan, the co-payments, deductibles, out-of-pocket maximums, and coinsurance costs continue to shift more toward consumers, which means more and more of their disposable income is at risk. By purchasing supplemental insurance like cancer, accident, disability, and others, they help protect their income from the unforeseen expenses brought on by a serious illness or accident. The need for Americans to protect their income isn’t any different.

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Does healthcare reform affect my ability to provide voluntary worksite benefits to my employees?

DP. No. Voluntary worksite insurance, also called supplemental or excepted benefits, includes accident, disability, stand-alone vision, and/or dental plans, as well as cancer and hospital indemnity insurance. Unlike major medical insurance, voluntary coverage pays cash benefits directly to the policyholder. The new health insurance reforms are aimed at improving access to major medical coverage. In fact, the need for voluntary products will become more acute as people discover the financial gaps inherent in major medical coverage. I expect the market for voluntary products will be in high demand over the next few years as PPACA gets implemented.

How will the cap on flexible spending accounts affect out-of-pocket costs?

DP. PPACA imposed a limit of $2500 on health flexible spending accounts (FSA). For those who redirected more than that (a typical employer has a maximum FSA contribution of $5000 - $6000), the difference will now be taxable as gross income, starting in 2013. This means people will have to pay out-of-pocket for expenses over that amount.

As anyone who has dealt with a serious sickness or injury can tell you, the medical and nonmedical expenses can pile up quickly – and dramatically – for many. This is where voluntary insurance comes in handy. A hospital indemnity policy, for example, would help defray those unexpected out-of-pocket costs and give policyholders peace of mind in trying times.

David Pringle is Senior Vice President of Federal Relations at Aflac, where he has worked for more than 32 years. His primary responsibility is coordinating Aflac’s government relations and lobbying efforts in Washington, DC. He is also secretary and principal fundraiser for Aflac’s Political Action Committee (Aflac PAC).

20/10/2010 10:41

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WELLNESS

Why attitudes to employee health must change from reactive to proactive, according to Dee Edington.

H The way forward with

wellness Wellness_dee edington.indd 52

ow is a sick employee like a disruptive kid in a classroom? The parallels may not be immediately obvious, but Dee Edington explains it this way: “That disruptive kid gets all the attention, and the kids doing the work they’re supposed to do can be left out. It’s the same as putting all the emphasis on employees who get ill, and ignoring the healthy ones. A company can’t be successful without healthy, high-performing people – and not just 80 percent of them. We need 95 to 100 percent.”

Fortunately, Edington, who is Director of the University of Michigan’s Health Management Research Center, believes that wellness is an idea whose time has finally come. “It’s a wonderful change,” he says. “Helping people stay healthy is much more effective than trying to fi x people after they get a disease. If you wait for defects, you’ll never solve the fundamental problem. That strategy, whether it’s in medicine or health promotion, will never help any country become healthy and high-performing. Wellness, in the sense of prevention and high quality of life, is probably the only solution that will help get us there.”

The establishment of a wellness program offers a number of benefits, though Edington stresses that how companies view these benefits very much depends on the cultural context in which they fi nd themselves.

“It can also depend on the type of organization, public or private, large or small, and the demographics of the population in terms of age and gender. In the United States, we focus a lot on cost, as opposed to countries like the UK, Canada, Australia and China, where they don’t pay healthcare costs. That’s interesting, because governments usually don’t have any money, so the companies indirectly are paying for it.

“Here in the US, we started out thinking about the cost of healthcare and pharmacies and then went into the things that the UK and Canada and others were thinking about: performance issues around workers’ compensation

20/10/2010 11:08

WELLNESS 53

and costs, absent days, disability and productivity. Then it goes beyond that and impacts ‘best place to work’ measures. That’s probably as important as productivity: how good a place is this to work, and do you still feel enthusiasm and creativity every day?”

One of the hurdles to be overcome in connection with this new outlook is changing the way people think. As Edington points out, giving employees unasked-for health advice can cause resentment: people don’t like the idea of Big Brother telling them how to live their lives. Th is attitude often translates as, “When I’m not sick, my health is my business; when I get sick, it will be your business.”

“It takes some time to re-shift the idea that health is the absence of disease,” Edington says. “We don’t value something until we don’t have it. We should turn that around; that’s one thing that we have to change in our culture and in the conversation around health.”

Leading from the top

A utility company saved $12.1 million in association with a wellness program over 9 years

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Edington believes that buy-in from senior leadership is essential, because they set the mission, direction and vision of the company. HR managers will also play a key role in developing the culture and environment in the organization that allows this vision to come alive.

“In each organization, how you set the environment and the culture is key,” Edington underlines. “The environment is probably the easiest to influence – things like the food service and stairwells, as well as providing autonomy for people around their own work stations, and educating their managers and supervisors.

“I wouldn’t even touch individuals in terms of their behavior change until you fi x the environment because if

you take a changed person and put them back in the same environment, whether it’s health or whether it’s management style or something else, they go right back to the same old behavior. Until you fi x the environment and culture and get a clear vision from senior leadership, you’re chasing your tail. You will not be a successful company.”

A University of Michigan study of workplace wellness programs showed that a Midwest utility company saved $12.1 million in association with a wellness program over nine years. Edington says the key to achieving that level of savings is having the persistence and resilience to stay with the program, through all its inevitable ups and downs.

“With that particular study and some other ones we’ve seen, it depended on the courage of senior leadership to stay with it, because there are times when the profits are not where they should be, and people might think, ‘Why don’t we eliminate this wellness program and put it into profit and put it into salaries?’ The senior leadership have to feel that it’s important to maintain that, because their long-term success is dependent on the health of their people.

“The study also demonstrated also that, as time went on, the return on investment grew from one smaller number to a larger number. And that will continue to grow, though it will level off eventually – you can’t always continue to save money at an increasing rate, but at least you get up there and keep it high.

“The people who were doing the program had to continue to be enthused and not get discouraged because it wasn’t moving as fast as they would like to see and they weren’t making all the changes in people and the environment. The money adds up – it’s not $12 million in one or two years, but it’s over a long period of time.”

Although he mentions return on investment in connection with this particular case, Edington is not a great believer in using ROI as an indicator of the success of a wellness program. “I gave up on ROI a long, long time ago,” he says, laughing. “We do do them occasionally, but in general I don’t believe in ROI studies. I think they are seriously flawed.

“If you have the whole population in the denominator, then they might start to believe you, but most of the time the participants are measured against non-participants, and then you have a real problem because you have selfselection bias, so people who are ready to change or people who are already healthy will stay with the program.

“There are also problems with statistics. There are a whole host of things that indicate that it’s not a normally distributed sample once you do that. What you have to do is look at the trend of the whole population. And when you look only at participants and non-participants, the participants, typically, are such a low percentage of the population that you could get a hundred-to-one return on investment and not make a difference in the company, because it’s a small sample.

“And then, many times, some of the costs for the company come not only from the employee but also from the employee’s dependants, and most of the time dependants

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WELLNESS

are not included in the programs. You can’t see those impacts – people don’t necessarily take their earnings home and promote a change in attitudes toward health within the family.”

Rather than shackling himself to ROI, Edington prfers to focus on the trends, particularly year-over-year trends in measures such as disability or workers compensation or medical or pharmacy costs. He reiterates the need to “bend the trend” in the whole company – because if you don’t make a wide-ranging impact, then you aren’t making a difference.

10 reasons to implementt an employee wellness program 1. Higher morale and productivity Healthier employees are happier and tend to work harder.

2. Reduced healthcare costs An effective wellness program can significantly lower a company’s long-term healthcare spend.

3. Lower absenteeism Better overall health means less time off work.

4. Lower overall costs Overall costs are driven down by lower healthcare costs and reduced sick days.

5. Greater responsibility Employees who are well looked after feel more responsibility for completing their work.

6. Better work performance Healthier employees are better able to concentrate, improving their performance.

7. Increased productivity Better health achieved through education, incentives and care improves employee output levels.

8. More loyalty Employees who feel valued are less likely to leave the company.

9. Less sick leave An obvious one: healthier employees need less time off for illness.

10. Lower health insurance costs An effective wellness program can help protect against rising insurance rates.

Wellness_dee edington.indd 54

Follow the steps Edington summarizes the steps involved in creating a strong wellness program as follows: having strong, cooperative leaders, who provide vision and resources and become role models; having strong HR people or medical directors to lead the program; providing appropriate resources or reward structures; and carrying out appropriate measurement.

“Sometimes if you get the environment and culture right, you don’t even have to worry about individual programs because people will change just by associating with the culture and the environment,” Edington says. “As soon as people know what management wants, they want to be productive, they want to be good employees, and they can do those things.

“You also have to then provide resources, and ensure they are rewarded in one way or the other. Dollars are not a good way to do it, because you have to do more and more every year. You’ve got to fi nd other ways to reward people.

“Then you need to measure it. All programs that I know of have good measuring, and I call that quality assurance. They know that what they’re doing will make sure that vision is coming alive. Every objective has to have two or three metrics.”

Edington goes on to talk about a session he did with a big, multinational company. “I said, ‘Everyone stand up.

Now sit down if you think your senior leadership does not know three metrics around safety.’ Nobody sat down.

“Then I said, ‘OK, now sit down if you think your senior leaders don’t know three metrics around quality.’

Again nobody sat down. And then I said, ‘Sit down if you think your leaders don’t know three metrics around healthy people and workforces.’ Everybody sat down.

“We haven’t got health up there to the level of safety and quality. That’s one of the things with these successful programs – I know their senior leaders know about health metrics. They may not know it in the way I would like for them to know it, but they know that there’s a program out there. Those are the qualities that I would see in a successful, long-term sustainable wellness program.”

The important thing for Edington is to start with the idea that wellness has to be part of the system. He stresses that you can’t just wait for defects and then fi x them: you have to fi x the system before the problems arise.

“You need to think about all your outside partners and what they’re providing to you. Is everything aligned towards a healthy company? You’ve got to get those straightened out. And then you start out with the people.

And there will be health-risk appraisals. Most people are rewarding negative things, like giving money to people to quit smoking. That’s crazy. Give money to the nonsmokers and let the smokers figure it out. You’ve got to reward positive actions.

“That’s where wellness has to go. What organization really cares about health? They care about economics and performance. I never sell health. I sell the economics of it, and to get that, you have to have a serious business strategy.”

“Most people are rewarding negative things, like giving money to people to quit smoking.

That’s crazy.

Give money to the nonsmokers and let the smokers figure it out”

20/10/2010 11:08

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NEXT BIG THING

The new world: everyone is a healthcare consumer Shawn Jenkins reveals how consumer behavior will change to incorporate healthcare decisions.

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onsumer markets are volatile. They rapidly change, are seasonal and have mood swings. Predicting consumer buying patterns is difficult because they are typically based on individual wants and not their needs. The economy affects these markets as well, but again, not always in the way that we predict.

The next big thing is not the expansion of the traditional consumer market but rather an instantaneous flash, which creates a new world where everyone becomes a healthcare consumer. The conventional thinking in healthcare is that everything is bought and sold for a very logical, bottom-up cost. However, consumers don’t purchase that way.

Fueled by the internet, social media, the economy and healthcare reform, a new consumer world is near. Suddenly, all 310 million Americans will realize that they are healthcare consumers. At one point in time – in a flash – everyone will exhibit consumer behavior while making healthcare decisions.

The consumer healthcare market has been rigidly separate from the large group and small group markets, which has resulted in many different offerings for each segment. In essence, a few people with closely held power have dictated what options each segment will or won’t get.

For example, at any given company, a broker, carrier representative and employer administrator have been making healthcare benefit decisions on behalf of 5000 employees.

Th is has resulted in thousands, if not millions, of people being affected by the decisions of just a few.

What is this new consumer behavior? It is a thirst, desire and outright demand for information. Th is is more than the simple keyword search for general healthcare topics such as a ‘knee replacement’. Instead, consumers will ask for information that few will anticipate. Consumers will hunger for this meaningful data to help them make informed decisions, which can sometimes be emotional and even egocentric. In this new world, the fluid flow of data and information will be king.

HR administrators will become facilitators of this flow of data and information to consumers, with a primary focus on benefits administration. In turn, benefit managers will be able to offer employee/consumers guidance while providing access to the brands consumers choose to support their healthcare benefit decisions.

Employers will still have a central decision-making role. But in this new world, employees will dictate the terms of the transaction with the brand taking center stage. Individual consumers will ask: “Does this brand that I identify with stand for what I want on a deeply personal

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level? I want to be healthy. I want my family to be healthy and protected. I want freedom and flexibility. I want security. I want the best price.”

But the best price is a very subjective thing. Why do our cars, clothes and even our hairstyles look so different?

Th is is because we make decisions as individuals, which in turn dictate our consumer behavior. The new world will be driven by healthcare consumers who determine the rules about what is valuable to them individually.

After the flash, those 5000 individuals won’t settle for being spoon fed in the new healthcare consumer world.

They will demand brand identity with a personal connection and will get smart about the products they want, with or without input.

The key is to understand that in an instant flash everyone will wake up and realize that they are a healthcare consumer. Are you ready for this new world? Evaluate your strategy now. Consider implementing technology and communication tools to educate your employees and create an environment where they have control. Those who put the technology infrastructure and brand awareness in front of their consumer/employees will be prepared to meet tomorrow’s market demand.

Shawn Jenkins, Benefitfocus President and CEO, has realized a vision as the company’s co-founder that is dramatically changing the landscape of healthcare benefits administration in all 50 states and 26 countries. He actively oversees sales activities and manages client relationships, averaging 10-12 client visits per month.

For further information, please visit www.benefitfocus.com

20/10/2010 10:45

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INDUSTRY INSIGHT

A move in the right direction Barton Halling outlines the impact of healthcare reform legislation on employers and consumerdriven health strategies.

W Barton Halling is Vice President of Product Management for Consumer Driven and Emerging Markets for UMR, the third-party administrator (TPA) unit of UnitedHealthcare. Halling leads efforts to aggressively leverage the unique competitive position of UMR with core functionality and capabilities at the convergence of the health and wealth industries.

inston Churchill once said, “There is nothing wrong with change, as long as it is in the right direction”.

Much is currently in flux within the employer-sponsored health benefits world and participants in this market live with a rapid pace of change that has almost become accepted as the norm. In the midst of this whirlwind, the need for well thought out, courageous benefit strategies has become paramount for companies that wish to continue driving positive transformation instead of becoming a victim of any and all changes that come their way.

Many employers have constructed a false perception that the most recent manifestation of healthcare consumerism (2000 through today) represents a radical change and drives hesitation from decision makers who are considering a consumer-driven health (CDH) strategy. Heaped on top of that perception is a growing concern about how 2010’s healthcare reform legislation will reshape the benefits landscape, materially altering how CDH plans can be used. In response, it is worth the time

“Without material dispute, consumers continue to play a greater and more influential role in creating a positive impact on health benefits expense trends” to investigate how reform has impacted consumer-driven strategies, specific to the member/account holder.

When the reform dust settled in late March 2010, it resulted in minimal impacts to CDH plans. HRAs (Health Reimbursement Accounts), HSAs (Health Savings Accounts) and FSAs (Flexible Spending Accounts) are still viable products, which are expected to experience continued growth and remain strikingly similar to their pre-reform versions. Here is a summary of the reform changes: Qualified High Deductible Health Plan (QHDHP)/ HSA Consumers will no longer be able to pay for overthe-counter (OTC) medicines with their HSAs starting Jan. 1, 2011, unless they have prescriptions. Copies of the

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prescription and receipts should be saved for tax records.

The penalty for using HSA funds for non-qualified medical expenses will increase from 10 percent to 20 percent beginning Jan. 1, 2011.

Healthcare FSA Beginning Jan. 1, 2011, consumers will no longer be able to use healthcare FSA funds for OTC medicines, unless prescribed. In order to be reimbursed for a prescribed OTC medicine, a claim form and supporting documentation must be submitted rather than using an FSA debit card to pay. The pre-tax contribution limit per plan year will be $2500 beginning Jan. 1, 2013.

HRA and Retirement Reimbursement Account (RRA) As of Jan. 1, 2011, consumers will no longer be able to use HRA/RRA funds for OTC medicines, unless prescribed. In order to be reimbursed for a prescribed OTC medicine, a claim form and supporting documentation must be submitted instead of using an HRA/RRA debit card to pay.

In conclusion, changes enacted by the reform will be nominal, or even unnoticeable to many CDH plan members. The foundational concepts of consumerism within the healthcare delivery equation have not fundamentally changed for quite some time and remain grounded in simple economic principles.

At the crux of every health expenditure is a consumer who has tremendous influence over medical costs. Members play a decisive role regarding where, when, from whom and at what price they seek medical products/ services. Bringing members into the center of the “decision making ring”, exposes members to the true cost of healthcare instead of insulating them from it.

Reform has not changed these simple principles, nor has it changed the ability to utilize CDH plans and capitalize on the inherent benefits consumer strategies provide to employers and plan members alike.

Without material dispute, consumers continue to play a greater and more influential role in creating a positive impact on health benefits expense trends. Although some may argue the fi ner points of how, when and within what context a consumer strategy should be pursued, evidence is certainly arriving with each quarter and each plan year, confi rming that this change in the health benefits environment may well be in the “right” direction.

20/10/2010 11:04

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EXECUTIVE INTERVIEW

Healthcare reform and the wellness connection Dorothea Allen discusses the importance of building out preventative programming to help address healthcare reform.

With the passing of the Patient Protection and Affordable Care Act (H.R. 3590) this past spring, many significant changes were set into motion that impact employers, employees and insurers. Can you outline the primary changes as they relate to wellness programming?

Dorothea Allen. It goes without saying that this law will have more impact than nearly any federal law in the past 50 years. From a high level, the law really affects accessibility of healthcare (the health insurance exchanges and expanding dependent care coverage are examples) and accountability for healthcare (the Patient Bill of Rights is an example). In both cases, the focus comes down to taking preventative action for overall wellness.

For insurance carriers, the requirement to offer preventative care services impacts the medical loss ratio (MLR).

The MLR requires that 85 percent of premium fees must be dedicated to medical/preventative services, leaving only 15 percent from administrative services. Therefore, insurance carriers will need to expand or develop their current wellness and preventative service offerings.

For employers that are trying to mitigate rising healthcare costs by shift ing some of the cost-sharing to employees, the resulting benefit plan changes could impact their ability to receive “grandfather” status for PPACA. As a result, these employers won’t be able to charge a co-pay for preventative services. For smaller employers (those under 100 employees) that want to develop a wellness program, there will be some grant opportunities available in 2011.

Additionally, employers can now offer greater premium incentives for employees that participate in a wellness program (changing from 20 percent to 30 percent, and may go up to 50 percent). And, if the Health Workforce Act passes, employers will have the added incentive of a tax credit.

All of these changes translate to exciting opportunities for employees to benefit from an expanded array of wellness programs and services.

How has Ceridian responded to these changes?

DA. Ceridian is already well positioned to address healthcare reform through our benefits administration and health and productivity solutions. Beyond monitoring regulations and the US Preventative Care Task Force, Ceridian is ensuring that its comprehensive wellness offerings are not only compliant but will bring the best value to employers and employees. This involves looking at new and innovative ways for delivering service, such as online

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coaching. By partnering with employers and carriers, Ceridian is also able to provide the program consultation and support for each unique environment.

What action should employers take right now in regards to wellness?

DA. Many employers already have some wellness initiatives in place, so now would be an excellent time to really assess these programs and ensure that they are meeting your objectives. Since the PPACA incentives focus on outcomesbased programs, employers should look at their program structure. Are you only rewarding participation in the HRA? Is there an opportunity to encourage engagement in a coaching program that will get you and your employees the results you desire? Have you set realistic program goals with a two-to three-year horizon? These are the questions employers should explore with a trusted consultant or provider that can offer guidance on the best actions to take.

What can we expect to see from Ceridian Health & Productivity Solutions in the coming 12 to 24 months?

DA. In addition to delivering programs in more innovative ways, Ceridian is developing resources that will help employees navigate the complexities of the healthcare system and truly advocate for their needs. Because Ceridian has always recognized the strong connection between mental and physical health, you’ll see more offerings that truly integrate the delivery and reporting of these programs. And, Ceridian will continue to enhance the tools that clearly articulate the value of these programs to the organization.

Everyone benefits when we can prove that wellness programs do make a difference.

Dorothea Allen is Vice President of Marketing and Product for Ceridian Health & Productivity Solutions and is responsible for product development, management and marketing related to employee assistance, work-life and wellness programs.

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CORPORATE HOUSING

On the

move

The corporate housing industry undoubtedly suffered at the hands of the global economic crisis, but Adam Sherer believes that the recovery will start to take hold in 2011.

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he corporate housing industry has its origins in the relocation industry, which came about when corporations realized the need to send their employees to new locations in order to better capitalize on market opportunities. Whether relocating permanently or simply spending an extended period away from home for project-based work or training purposes, employees needed new kinds of accommodation that were able to meet the specific needs of working away from home.

Over the last decade, as corporate housing has developed, there are increasing places in which this type of lodging solution is helpful, whoever is on assignment. Sherer reveals that people who are in training and project type business are the top users, while relocation is another strong component of the corporate housing industry. Other fi rms have recognized corporate housing as an extended stay choice above and beyond long-stay hotels.

Adam Sherer, President of the Corporate Housing Providers Association, reveals that the biggest market for corporate housing is Washington DC, followed by LA, Houston, Dallas, New York and Chicago. “They’re urban centers,” he confi rms. “And they’re the locations of a lot of commerce and corporate headquarters so there’s an obvious need here for standard relocation. As you hire new associates or move them within the organization, for example, you’re going to need them in the main centers of business.”

Sherer explains that each region has a specific reason for being a commercial housing hub. New York for example, sees a lot of interim programs during the summer for financial services firms, which drives a significant volume in those months. Los Angeles on the other hand is driven by the movie industry and is based on temporary assignments as production companies come in, so there are lots of people on extended assignments here.

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Outlook for 2010 In the Highland Group’s Corporate Housing Industry Report 2009, it found both the US and Canadian corporate housing industry has survived the economic challenges of 2009. The US scaled back on inventory to meet demand, while Canada held a relatively flat rate. The report also found that in comparison to other segments of the lodging industry, corporate housing fared better.

48%

27%

20% 5%

Positive/Slight/Mode 48% Flat 27% Optimistic/Good/Grow 20% Down 5%

Source: The Highland Group

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However, while the corporate housing industry has hubs of activity there is no doubt that it has been impacted in recent years. For many years, whilst business was booming and demand was high, corporate housing providers fared particularly well. But, as for most industries, 2008 and 2009 proved to be a very tough time indeed. The housing market has experienced a particularly tumultuous period, with house prices plummeting and consumers struggling to come up with the necessary capital for down payments.

Corporate housing was a $2.36 billion industry in the US in 2009, down 18.3 percent from $2.78 billion in 2008. The industry lost half an occupancy point and 1.7 percent in average rate. Corporate housing, as one would expect, has not managed to escape the effects of the downturn, but it did fare better than many other sectors of the lodging industry. Indeed, the hotel market also saw contracting demand. According to Smith Travel Research, hotel demand dropped 5.8 percent in 2009.

In an effort to respond to the recession, every corporate housing provider streamlined its operations in 2009. They reduced inventory in order to match the decline in demand and sustain occupancy and margins.

Th is is not unusual as the market commonly adds and drops corporate housing inventory depending on market conditions, but the changes that were made last year were the biggest that the industry has seen in the past decade.

According to the Corporate Housing Industry Report 2010, compiled by the Corporate Housing Providers Association (CHPA) in conjunction with the Highland Group, “Providers projected a 2.9 percent inventory decline in 2009, following a 5.7 percent drop in 2008, both due to the recession.

However, in response to market conditions, they were in fact much more aggressive in adjusting inventory (by -16 percent) than they anticipated.”

Sherer explains that as the country entered the recession, general business activity was down significantly, and obviously corporate housing was not immune to that. “There was about a 15-18 percent drop in overall revenues and units available in the industry,” he says. “We’re starting to see in certain areas that we’re

“When you go into the apartment it’s obviously a larger footprint than a hotel.

They have more space and a full-size kitchen with a washer and dryer. They can go outside their apartment building and buy organic food and cook it themselves, which creates a really nice lifestyle for a guest” coming out pretty quickly, but we think there will be a multi-year recovery for the industry. It’s absolutely impacted as corporations cut travel spend and it’s been a severe hit.”

Bearing in mind the difficulties the market has faced over the past couple of years, Sherer explains that corporate housing market offers a variety of options within the extended stay segment for everyone. Sherer says that people who use corporate housing units are typically independent: “It’s not a hotel, there’s no front desk or whole support staff there, which is a good thing for a lot of our customers who want to be independent – they like the anonymity and having their own place.

“When you go into the apartment it’s obviously a larger footprint than a hotel. They have more space and a full-size kitchen with a washer and dryer. They can go outside their apartment building and buy organic food and cook it themselves, which creates a really nice lifestyle for a guest. The fact that we have fitness centers in our apartment buildings also contributes to this.”

Indeed, it actually feels as though the employee has some spare time and has a place in which to enjoy it. Even if they are away from home for 30 days and extremely busy during the day, it would still be possible to have some

Corporate housing in numbers • Total industry revenue was $2.36 billion in 2009, down 18.3% from $2.78 billion in 2008.

• In 2009, the industry lost almost half an occupancy point and $2 (1.7%) in average rate. It also shed 16.5% of its US inventory.

• Average one-bedroom monthly rent is $3,450 ($115/night).

• Approximately 61,280 US corporate housing units on an average day.

• Average stay in corporate housing units is 92 days.

• The Washington, DC MSA remains the largest market with 5925 estimated units including Washington DC and its submarkets.

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Relocation, relocation An argument that comes up time and time again against corporate housing is that in combination with the recession, isn’t video conferencing a better prospect to travelling or relocating? “There’s absolutely the potential for long-term trends, such as teleconferencing and telecommuting to have an impact on the business transient segment,” explains Sherer.

“But, from us, if you think about that extended stay sector and you take one industry in particular, such as the professional service firms, the consultants. One of the things that they’re always trying to work with is the fact that their business is based on talent and in order to retain that talent you have to keep it engaged. Putting them on extended assignment is sometimes challenging for those consultants with families who won’t necessarily want to be on the road all the time.

“I think that could be a long-term impact. Having said that, I still think we’re seeing that in order for consultants to match up with their clients, they need to send out the best client teams and draw that talent from across the talent. That will necessitate extended travel.”

down time in a relaxing environment. There is also the opportunity to integrate into a community and get a really authentic experience of a town, city or area that you may never have had the chance to see before.

Hotels are notoriously hard to relax in for more than a couple of nights and it is impossible to personalize that space. Using a corporate solution can make the experience much more pleasant. Sherer explains that this also impacts on employee morale and engagement: it makes it easier for employers to convince employees to go on these extended stay projects when they know they are going to be staying somewhere that they can personalise and where they have their own privacy.

“If you see the satisfaction scores across the industry they’re very high and I think that’s due to the level of engagement. It says ‘My employer values me, understands that I’m going to be out on an extended assignment and has put me in a lodging product that makes sense. I’m going to have the space to operate and I’m going to have some work/life balance.’”

Sherer goes on to explain that it is not only single people who are using these corporate housing solutions. According to CHPA’s inventory, around

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35 percent of units are two beds and five percent are three bed units. “We also have the ability, of course, to put together all the products and services so we could rent single family homes or townhouses, so that flexibility is available when there’s that special need.”

And for employers? Well, explains Sherer, corporate housing allows you to ensure your employees are wherever you need them to be. “While hotels are more obviously fi xed in nature, there’s the option to deploy a project team in a more remote area. It is also possible to work with your corporate housing provider of choice to fi nd a residential location that close to that work site.

“It’s this distribution on demand that is almost the key component for employers. Then of course there are some safety aspects in terms of the anonymity and being in a residential apartment, which is appealing to employers.”

While the recession that has undoubtedly had an impact on the industry, Sherer believes that there will be more growth in this sector as the economy improves, which will develop nicely over the short-term period before moving into the long-term. “There will be growth in this industry again because will people look at all their options. Hotel rates will be going back up as things are getting better and there’s more demand.

“There has been very little supply built from a hotel or apartment side.

So if we have the ability to offer a better value than the hotels then I think we’re going to see significantly more demand come to corporate housing.

Within this industry we are focusing on awareness to key decision-makers to let them know that they might not be aware, but there’s this segment out here that could really answer your needs on an extended stay basis.”

Sherer is expecting a pretty healthy recovery for the corporate housing sector. He predicts that for 2011, there are going to be corporations that need to stop rate increases. At the same time, he says there is a need for more apartments to be built in order to meet the demand, therefore 2012 will see the upswing really kick in.

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INDUSTRY INSIGHT

Touring services support temporary assignment growth

Mark Koepsell explains why employee relocation is a key talent management strategy.

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emporary assignments continue to grow in lieu of permanent employee relocations as companies adjust their talent management strategies to reflect the difficulties employees have selling a home in a sluggish housing market. Companies are deploying employees on strategic initiatives for assignments often lasting 18 months or longer including new market start-ups, facilities expansions, mergers and acquisitions, joint ventures, disaster recovery and stimulus projects.

CORT, a Berkshire Hathaway company and the only national provider of furniture rental, is supporting the growth in temporary assignments with the most comprehensive suite of relocation services developed specifically for renters. Local market touring services, in which an area expert assesses the needs of prospective renters and then literally drives them into different apartment communities that match those needs, are a cornerstone of the program. The number of tours given is rapidly growing due to the rise in temporary assignments.

“The rising costs of relocation and the uncertain business environment mean that companies will continue to look toward alternative employee mobility approaches”

“Th is is not simply an internet lead or phone reference,” says Jeff Rowe, CORT’s Vice President of ApartmentSearch.com. “No other company in our industry literally drives relocating employees into apartment communities thousands of times each month, and savvy property managers realize these residents are unlikely to be reached by traditional marketing efforts.”

The number of tours given by CORT is up by 55 percent so far this year compared to last year, and has more than doubled in recent months, up 109 percent in April and 155 percent in May. CORT is averaging more than 300 tours a month and the average person visits about eight properties on each tour.

Th is growth is the result of the increasing number of agreements that CORT has signed with corporations, including the more than 80 percent of the Fortune 500

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companies that CORT has supported through the years, to help relocating employees fi nd the ideal rental home in their new community.

CORT’s touring services simplify employee relocation for companies, ease the transition for relocating employees and their families and drive potential renters into thousands of apartment communities nationwide. Th is allows CORT to leverage its core strengths in the rapid deployment and management of rental furniture, rental housing locating and providing destination-area services to empower the world’s mobile workforce.

CORT utilizes touring experts that know the area and have relationships with apartments in the community.

Local experts save the relocating employee’s time and their employer’s money by only taking employees to apartment communities that suit their specific renting needs.

Touring experts consider proximity to the employee’s job site as well as neighborhood and amenities preferences when conducting community tours. CORT has developed longstanding relationships with apartment communities over the past four decades that allow them to deliver this local expertise to employees working on assignment, or to companies managing temporary assignments for groups of employees.

In addition to fi nding the right rental home, relocating employees face many challenges in their new location. CORT offers a suite of destination services that help simplify the transition for relocating employees and their families. These services include help with many inconveniences that employees encounter when relocating, such as furnishing their apartment and setting up utility connections. In addition, CORT offers services for relocating international assignees, such as English-language classes or assistance obtaining a social security card.

Employee relocation remains a key talent management strategy for organizations and often requires employee deployment to locations for an extended period of time. While this is often required to achieve company goals and complete projects, the rising costs of relocation and the uncertain business environment mean that companies will continue to look toward alternative employee mobility approaches.

CORT recognized the opportunity to create a mutually beneficial relationship between companies and apartment communities through local market touring services. The result? Relocation is simplified for employees and their employers.

Mark Koepsell, Senior Vice President of Field Sales, developed CORT’s National Accounts, Federal Sales and Global Furniture Rental teams.

Koepsell first became involved in 1998 with the Employee Relocation Council, and was among the first to receive the association’s Certified Relocation Professional designation.

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FEATURE

As venues go, Madison Square Garden is right up there as one of the most iconic and famous arenas in the world. But behind all the razzamatazz is a dedicated and diverse workforce, as Dwight Tierney, SVP of HR and Admin, explains.

By Gerhart Trüb

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nown colloquially as “The Garden”, New York City’s Madison Square Garden has played host to worldfamous sports stars, musicians and performers since it fi rst opened its doors in 1968. The multi-purpose sports arena situated in the heart of Manhattan on 7th Avenue between 31st and 33rd Street continues to be an integral part of the Big Apple and a top visitor attraction. Th is is despite the fact it is neither situated near Madison Square, nor is it a garden. Located above Pennsylvania Station, this is the fourth incarnation of the Garden – the fi rst was constructed on Madison Avenue way back in 1879.

As well as staging the famous fi rst Muhammad Ali v Joe Fraser fight in 1971, it is today home to basketball team the New York Nicks and hockey’s New York Rangers – both side’s home games accommodate almost 20,000 spectators. There are 270 music events a year while over the years it has provided the backdrop for a catalogue of fi lms, including one of my personal favourites: the rematch between Rocky Balboa and Clubber Lang in the box office smash hit Rocky III. Despite the Garden’s notoriety, it’s just one part of a wide range of business activities under the MSG umbrella.

The company Madison Square Garden (MSG) is a fully integrated, entertainment and media business comprising of three segments: MSG Sports, MSG Entertainment and MSG Media. The man charged with overseeing HR for a 6000-strong workforce across the business units is Dwight Tierney, SVP of HR and Admin. HRM catches Tierney at a time when staff are working “flat out” approaching the holiday season, traditionally the busiest time of the year, although there is rarely a quiet period for MSG. When

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the busy periods start, MSG can take on between 500 and 1000 new staff for all the venues. “It’s heavy and intensive recruiting,” says Tierney.

MSG boasts a workforce with diverse jobs and Tierney is firm believer that creative people should be managed differently to corporate employees. “That doesn’t mean our creative employees are not required to uphold the same standards as everybody else, but you approach it and communicate differently and you advise and counsel differently,” he explains. “It’s basically about respecting and understanding that the creative process is a little bit different that your standard corporate employee.” Tierney himself is a creative industry veteran – in 1981 he was on the management team of the groundbreaking music video channel MTV. He was later based in London for 11 years working for Viacom’s EMEA operations.

Tierney says contrasting agendas between corporate and creative employees can lead to clashes. He clenches his fists and bumps his knuckles together to symbolise staff at loggerheads with one another. “You need to get to a situation where you have people intertwining instead of clashing,” he suggests, opening his fists and sliding all 10 fi ngers and thumbs together in a gesture of unity. “While it’s important that people understand and respect the creative process, there is a also a business to run.”

The Garden itself is undergoing a radical transformation costing upwards of $750 million. Already $100 million has been spent to give this 32-year-old arena a new lease of life as it fights to compete with sporting venues in town like the new City Field (Yankees stadium) and New Meadowlands (now home to the New York Giants and New York Jets). And akin to this makeover, the recruitment process has been given an overhaul to turn it into a more rigorous and thorough process. “We’ve improved and streamlined our quality control by doing a different kind of interview-

“You have to take a look at the competition to see what they are doing and make sure you are an attractive employer”

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FEATURE

ing style and a more in-depth drilling and interviewing when it comes to our service-oriented jobs, like customerfacing jobs in our venues.”

MSG has recently completed a full year of the improved interview process and the results have been tangible, says Tierney. “The quality of people we now have are those who are interested in being helpful to our customers, happy to be in a public environment and just have that willingness and eagerness to be helpful and supportive to our clients.

The deep-drill interview process and selection process has been a remarkably successful thing for us and we’ve certified our HR people in the interview process.”

The interviewing stage now helps deliver better future ROI and eliminates the need for having to re-hire an applicant when the first hire doesn’t pan out. “It’s equally important that we are not wasting our resources recruiting and having the wrong person before an extended period of mediocrity and an exit.

By giving ourselves a better opportunity to identify positive people, everybody wins. We have a happy employee, it minimizes the recruiting process, and the payoff is for our clients and our customers in the arena.”

As well as using the power of the brand to attract new staff, MSG also harnesses its social media and online presence to attract would-be employees. “We’ve also tried to be more creative in the way we fi nd people such as using social networking to some extent,” he says. “It’s also been about understanding and embracing the differences that a younger generation brings to the marketplace, especially the ‘technofreaks’, not the ‘technophobes’ – guys who are able to absorb information from six different directions at the same time.”

Surveys show that more than 50 percent of employees are now visiting social networking sites to screen wouldbe employees. Tierney, however, stresses that websites like Facebook and Twitter are not used to “check on” applicants.

“We use it to reach people – we’re not interesting in using it to check on people. We make our decision based on the interview, the quality of the person and their appropriateness for the role. You could look at somebody’s Facebook page and see something that you don’t really think is appropriate for your business and you make a decision based on it. We’re not doing that; we’re looking at it as way to communicate with people.”

For Tieney, using social networking sites for background screening comes with far too much legal and ethical baggage. “There are companies that do that but I think it’s fraught with questions and issues,” he says. “There’s trepidation because you wonder what the legal pitfalls are going to be here and what the exposures that some companies may have if they are seen using this as a decisionmaking tool.”

Those who do make it over the threshold come faceto-face with a wide spectrum of demographics – the Baby Boomers, Generation X, Generation Y and the latest generation dubbed Millenials. “I would say it’s the fi rst time in history that you’ve had four generations in the workforce at the same time, although a lot of this has to

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with the economy and the Baby Boomers not being able to leave as quickly as they thought they might.” Th is difference in ages and experience doesn’t necessarily create friction, says Tierney, but sometimes “puzzlement”. He offers an example to illustrate the point: “There is this young guy that we just hired, and the other day I was walking past his desk and he had his iPod on. The question is whether he is getting his work done? Is it high quality work? So we have to be more adoptive when it comes to new generations.”

Tierney says he fi nds the Millennials to be generally tech savvy, able to absorb information from numerous sources and are receptive to feedback. It would appear this willingness to accept feedback is not a trait always found with other generations at MSG. “Th is is something that is difficult for the Baby Boomers and Generation X and Y because they feel the work speaks for itself and that unless they hear from us, then the work was fi ne. In a way, though, this is a good thing because it forces communication between the boss and the employee – where the boss has not communicated effectively in the past, they are now being challenged a lot more, which can make them a little crazy.”

He continues: “But as a Baby Boomer or even a Generation X or Y you are being challenged to provide good feedback and constructive information for the Millennials that they taken onboard to make them better.”

Of course, Millennials’ new skills and work methods will shape MSG in the future. It could lead to more emphasis being placed on communications. “If these Millennials continue to be successful then it will be their style that manages and runs the company in the next 10 to 15 years, which will mean a much more open way of communicating,” Tierney reveals. Working with the Millenials has revitalized the older generations, he muses, because they appreciate the value of looking at things from a different perspective. However, Tierney, a self-confessed Baby Boomer, says technology today can leave some of his peers feeling left behind. “I see friends and colleagues completely freaked out by technology and unable or unwilling to embrace it.”

Another pertinent issue that needs discussing is incentives. Obviously applicants are attracted jobs with good salaries, but employee benefits can prove the deciding factor when choosing a job. MSG has a robust and progressive compensation and benefits program in order to attract and retain the best employees. “You have to take a look at the competition to see what they are doing and make sure you are an attractive employer,” Tierney explains. “But you have to consider the cost of all the programs like health and welfare plans”.

Diversity is more than just a recruitment buzzword nowadays – it’s a priority for business. Being located in diverse city’s like New York, Boston and Chicago means MSG can recruit from a variety of backgrounds. “We need to be reflective of the demographics and the communities of where we work. We don’t do it from a business standpoint, but rather because we think it is important to be in our community.”

Madison Square Garden: There have been four Madison Square Gardens over the past 125 years Touted as ‘the world’s most famous arena’, the present and 4th entertainment complex was built in 1968 Cost $123 million to construct Seats 19,763 for basketball and 18,200 for ice hockey Hosts 270 music events a year

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WORKPLACE ENVIRONMENT

Grand designs Ski lodges, a fireman’s pole, fairground horses. Sounds like a kid’s dream, but it could be your future office space.

By Rebecca Goozee

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or most of us office space is drab, uninspiring and – nine times out of 10 – pretty gray. But, for those lucky few, there is another way; a technicolor parallel universe full of aircraft hangers, pulsating TV screens, B52 ejector seats and massage treatments. Google, of course, is at the forefront of providing a thoroughly fun environment. Although physical and psychological well-being is the order of the day, there is also room for repurposed ski gondolas and stand-alone yurts, endless swimming pools and baths full of foam blocks, as well as time-saving solutions like scooters, slides and fi re poles.

But Google isn’t the only company getting in on the act. Organizations around the world are jumping on the alternative workspace bandwagon. In Portland, Oregon, for example, the Nike headquarters is set on 192 acres of lush green and that includes 17 buildings of just over two million square feet, two Olympic-standard sports centers, a six-acre lake and natural wetlands. Nike’s college-style campus was deliberately designed to provide an informal, open community feel.

Likewise, the Oakley headquarters in Foothill Ranch, California, has fully embraced the brand’s bold personali-

CASE STUDY: 40 WINKS According to a recent Stanford University study, Americans average fewer than seven hours of sleep per night, with about 20 percent suffering from sleepiness during the day. So it’s no surprise that alongside gyms, childcare facilities and lactation rooms, nap-friendly “quiet rooms” are now making the rounds. Google – the frontrunner in all employee-friendly perks – already feature a number of futuristic napping pods scattered throughout its Mountain View campus.

Likewise, Nike has its nap-friendly quiet rooms that can also be used for meditation, Jawa, a small mobile technology company in Scottsdale, Arizona, has two resting rooms for snoozing, while Ben & Jerry’s provides unofficial space to grab 40 winks. Other companies have opted to outsource their daytime sleeping solutions. Newsweek, Time Warner and a whole host of other companies use Yelo, a napping spa in midtown Manhattan, New York, that offers naps in “cocoon-like” treatment rooms. A 20-minute nap goes for $15.

While napping at work has become acceptable at some companies, pulling off a productivity nap is not easy and scientists are skeptical about the benefits of snoozing at work. However, Roger Rosa, a senior scientist at the National Institute for Occupational Safety and Health believes a nap can be worthwhile: “If you’ve lost an hour of your previous night’s sleep, a nap may be just the ticket. If you’ve been up all night, it may give you a hangover effect known as ‘sleep inertia.’”

Source: Businessweek.com

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ty. Perched on a hill, the sunglasses manufacturer is housed in what looks like a post-apocalyptic fortress from an alien planet. The towering fortress is complete with a torpedo, tank and B52 bomber ejection seats. While the place isn’t for everyone, it certainly works as a high-tech, creative location for superior experimentation and supreme manufacturing.

Urban Outfitters, Bloomberg, T-Mobile USA, DreamWorks Animation, Hasbro: all are getting in on the act as office design becomes increasingly recognized as a vital element of a successful, productive and enjoyable working environment. And rightly so. Workspace can have a tremendous impact on employees and is critical in ensuring success in today’s business world. Increased competition, globalization and the economic climate are all driving changes in the way work is managed and completed. It is becoming more complex, more collaborative and certainly more time-pressured and technologically intensive. And in line with this, the workspace is seeing more demands placed upon it; we are looking to the work environment to foster culture and to positively affect employees.

Indeed, there is logic in the changing nature of work leading to a stimulating work environment, and as such the work environment is a fundamentally social place that can nurture togetherness and manifest a brand. Th is, in turn, can attract, retain and engage employees. Bingo. There’s your answer to why office space has become such an important business strategy.

Innovation Kursty Groves, who was working as an innovation consultant when she took a sabbatical and began trawling the most creative office spaces in the world, agrees. “I’d be working with clients and helping improve their internal processes, their skills, their tool kits around creativity and innovation, and they’d get so inspired – before heading back to these dull, uninspiring offices. I thought, ‘this is happening time and time again, and yet there must be some companies out there doing a really great job at using space to sustain and inspire people.’”

It was on the back of this that Groves began compiling a list of the most creative spaces before going to visit them. She asked herself two questions: “Are they innovative in their field, and do they use their environment to help them express their company values or help them get more innovative products to market. If the answer was yes, then I paid a visit.”

But it’s not all about beanbags and massages. Groves explains that one of the best things she saw was at DreamWorks Animation. Here the company used landscaping in between buildings to slow people down for two reasons.

“What would happen is that people would get really caught up in their own world, working really hard and just want to get quickly from once place to another. What the employ-

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ees would get is a meandering path to make people take a breath of fresh air and to slow down.

“It was the Art Director for How To Train Your Dragon that said, ‘It’s in those moments when you slow down and take a breath of fresh air that actually the problems you’ve been banging your head against a brick wall about start to float to the surface. These moments can be really powerful.’” Groves found this particular principle really interesting, claiming that anything designed into the daily paths that people tread to make them stop, slow down and think, is incredibly powerful.

Using spaces to allow and ensure people connect with each other on a level outside of formal meetings is a great way to share thoughts and ideas on the fly and allow for much more positive and productive interactions. Groves

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Above: The Lego Group: All white, devoid of any color, the Innovation Room is a blank canvas for stimulus and ideas A. Lightweight tables and chairs B. Flipcharts on wheels C. Low-level casual seating D. Semi-translucent partician screens suspended from the celing track

describes how Aardman, the Academy-award winning animation studio based in Bristol, UK, have created spaces that allow people to do just that. “Just by having extra wide staircases it encourages people to actually stop and have a chat. Then, better still, they designed these little booths as junctions between stairways and walkways so that if you bump into somebody and the conversation grows, you can sit down and continue your conversation. It’s a really clever way of getting people to connect in a much more informal way.”

Over in China, the Ogilvy and Mather Beijing office was awarded Office of the Year by Media magazine in 2006. Shenan Chuang, CEO of Ogilvy and Mather Greater China, was credited with the office’s success. Last year the company went about revitalizing its image in southern China with its Guangzhou office project, which aimed to grow and nurture creativity in its employees in the region.

With the core business all about sharing ideas and creativity, Chuang believed it was important to express commitment to innovation through a creative, yet professional office space. With this in mind the company designed the office with a “Carnival of Ideas” theme. Bright gold features predominantly within the vibrant color scheme and the design incorporates a variety of textures like velvet, wood and marble. “We installed merry-go-round style wooden

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“Just by having extra wide staircases it encourages people to actually stop and have a chat”

destination that can inspire and motivate, ensuring culture and promoting the brand,” she says before going on to explain the benefits of office design itself. “The physical environment sends important cues to employees, and the degree of openness in the environment can send messages about the degree to which collaboration is an expected behavior, or the amount of personalization that is available to people regarding what’s valued in the organization.

“Even the location of leadership can send a message.

Are leaders co-located with their teams or are they separate? The amenities can send messages about the degree to which people are valued and what kinds of things are reinforced in the culture. Even the amount of windows or daylight can speak volumes about the importance of sustainability and the connection to the environment.”

Likewise, Pamela Meyer, author of From Workplace to Playspace, sees a direct link between the environment and the sense of engagement, productivity and participation. She believes that it sends a message of alignment throughout the company. “A big reason organizations can experience a drop in morale is when they see people saying one thing, but doing another. And that disconnect starts to just shut people down. But it also literally provides more

CASE STUDY: GREEN FINGERS

horses, colorful fluorescent lights and lots of mirrors,” says Chuang. “Even the meeting rooms are themed. We wanted the space to be efficient, so there are surprises through the office like lounge areas where you don’t expect them – complete with fun chairs that rock back and forth – or a sitting area that can be converted into a movie theater. These features bring a bit of whimsy and delight to the day-to-day activities of the office.”

Chuang goes on to explain that with people spending so many hours a day in the office she wants it to be as comfortable as possible with large open spaces fi lled with light and spaces to relax. “One of my proudest achievements at Ogilvy is establishing a dedicated art gallery space.

Located in the reception area of our Beijing office is the O Gallery. The idea is to display the works of young and emerging Chinese artists, whom don’t have a gallery to support them. Putting art to the fore helps project a funky and modern image to clients and also helps us to attract talent.”

Driving behavior Tracy Brower, consultant to furniture design company Herman Miller, believes that work environments can certainly help drive certain behaviors, such as learning, collaboration and creativity. “It’s really about making a

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It’s not just workspace design that’s important, a number of initiatives have been hitting the headlines; from napping pods to corporate gardening. Yes, corporate gardening. Peggy Malumphy, Director of Compensation, Benefits and HRIS at Harvard Pilgrim Health Care, explains why her company decided to pursue this unusual idea. “I grew up on a farm, so the idea of gardening at work resonated for me from a very personal standpoint. When management suggested the idea, I jumped on it and thought that this was quirky enough to catch on.

“We certainly had some interested and engaged employees and the different outcomes were really tremendous. First of all, our highly producing workforce is sometimes hard to pry away from their desks, so here was an idea that got them some fresh air and interacting with other people with the company. That was the social aspect of it. Then there was the idea that we’re teaching people to grow nutritious food at low cost in small areas. Third, Harvard Pilgrim has an acute lens focus on social responsibility. What we wanted to do with the produce that we harvested was give some to employees, but also give it away to organizations or agencies that might not have this organic produce readily available to them.”

About 35 people signed up last year and that number has grown to 80 in 2010. Volunteering to plant, weed and harvest the employees spend around 30 minutes a week helping out. But Harvard Pilgrim Health Care are not the only organization with a corporate garden, Google, Yahoo, Kohl, Aveda and PepsiCo have all invested in this unusual benefit.

Bob Eubank, Executive Director of the New England Human Resources Association, says that at a time when many employers are slashing perks, gardens are a small benefit that can boost morale and let companies indulge in teamwork, wellness and sustainability. Who knows, it could even be coming to a workplace near you.

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CASE STUDY: CREATIVE COLLABORATION

While researching for her book I Wish I Worked There, Kursty Groves has seen many examples of creative collaboration. The Clay Street Project at Proctor & Gamble is a particularly successful one from a HR point of view. “This is a project where people are taken out of their daily role completely rather than try and juggle it with their main jobs – which is how most people attempt to do innovation projects. So for 12 weeks they take 12 people out of the business and they focus on nothing but this creative challenge.

“For this 12 weeks they go to a completely different space, offsite and located in downtown Cincinnati, away from the headquarters. This took some employees out of their comfort zone as it used to be a pretty rough part of the city.

This space is completely blank. It’s a converted brewery, and there is brick and big, old wooden floorboards.

“These 12 people, who hardly know each other at the beginning, have to define how they are going to work together. They’re given a raw space and they’re put in this almost entrepreneurial position where they just have to make it work for themselves.

“Not only do these people emerge 12 weeks later with some hugely innovative ideas, such as the Herbal Essence brand being completely revised through this, but loads of big business challenges have been solved in this way. These people also come out re-engaged, inspired and with a deep connection to the company and each other. Then they go back into the business with a changed behavior that starts to positively infect other people with this way of working.”

space for collaboration, for unexpected connection, for reflection and stimulation. So when the workplace design, as well as the interpersonal approach, the culture and the climate of the organization support this kind of engagement, we really see a significant difference in the organization day to day.”

Meyer believes that “playspace” is key to a thriving and sustainable, high-engagement workplace. She says that while many, if not of all, of us are socialized to understand that work and play are incompatible – that we should fi nd work hard and stressful and associate play with fun and freedom – it is imperative the we unlearn this association.

“What I’ve seen in my own research is that organizations that are thriving have transcended this work/play dualism and so their workforces are simultaneously productive and energizing,” she says. “They’re focused and fun, they’re innovative and also profitable. I write about play space as

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space for the play of new ideas and possibilities, something that organizations are paying a lot of lip service to, but aren’t necessarily doing.”

Meyer says the biggest challenge is creating a balance between creativity and constraint, and claims that her work is centered on helping people understand where they can play. “People tend to use constraints as excuses to avoid being more creative or playful. In fact, we need to understand what those barriers are and then we can always find some place to play within that and

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Above: Procter & Gamble: Essential kit for Clay Street

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A. Open shelves display see-through bins full of supplies B. An abundance of Post-Its, tape, modeling clay, colorful pens and other essential creation kit C. Furniture cast on wheels provides flexibility for each group D. Curtains act as partitions allowing teams to change their ‘set’ as necessary E. A planet gong aurually punctuates gatherings and sets tone for sessions F. Rugs are used to create visual boundaries for meeting areas

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create more freedom. There is then a possibility for new things to emerge, which makes a significant difference to the level of engagement people experience in the workplace.”

Meyer has studied a number of organizations that are surviving against the odds because they are committed to fostering play space. Umpqua Bank is the perfect example of an organization that has lots of boundaries and a reputation for a sense of stability that it has to communication, yet does a lot to empower its employees, which is unexpected in such a conservative industry.”

Starting from the very first minute of the day, says Meyer, staff start with a motivational moment. “Every one of the 175 locations can do whatever they want in those first few minutes as long as it’s not political or religious; it’s just meant to energize and engage the employees. They’ll do anything from rocking out to a Rolling Stones song, or playing a game of marshmallow dodgeball to get everybody going and get their juices flowing.”

The company also indulges in handshake marketing as opposed to traditional broadcast advertising. “My favorite example is that an employee could be standing in a

10 PSYCHOLOGICAL DRIVERS OF WORKFORCE PRODUCTIVITY MEANING: A clear and inspiring vision with which people feel aligned VALUES: A common set of values and behaviors consistently displayed OPTIMISM: A positive attitude and trust in the leadership team to deliver COLLABORATION: Effective teamwork and stimulation through interaction CONFIDENCE: A focus on developing selfbelief by playing to strengths rather than only addressing weaknesses INDIVIDUALISM: Respect for the unique skills and contribution of everyone AUTONOMY: Individuals given the responsibility to make decisions ORIGINALITY: Recognition of the value of originality and a culture of acceptance of good new ideas GOALS: Clear and specific goals and visible celebration of achievement RECOGNITION: Being recognized and valued for good work and receiving a fair and transparent regard for achievement of goals

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Nike’s HQ is set on

192 ACRES of lush green

line at a coffee shop and say, ‘I’d like to pay for my coffee and everyone behind me. Tell them it’s on Umpqua Bank.’

Suddenly they’ve touched 10-15 people in line at a relatively low cost, and it also creates a sense of empowerment for the employees,” says Meyer.

What next?

So if the workplace environment can be used as an extra management tool to help sustain and inspire the workforce, what are the key things to consider before designing a new workspace for employees? First, advises Brower, look at the organization’s vision for the future. Second, the company’s strategy and business goals should always play a role in the physical environment, so ensure this is the case. Third, look at the mix of individual, team and organizational needs and balance those. “Give thought to the culture today, the culture you want and how you move from one to the other, using the physical work environment as a lever to get there,” says Brower.

“When it comes to organizations who have a brand or provide a service or product there will always be the need for a physical place for people to work together” Groves believes it is also important to understand that it is a myth that innovative spaces make a huge dent in profit margins. In fact, in the ratio between the cost to operate a space versus salaries, people cost around 15 times more than the space ever will – well, unless you’re paying them too much. “If you’re buying things off the shelf it can often be more expensive, so being creative about the choices that you make in the way that you furnish an environment can be really cost effective.”

With new generations calling the shots in the workspace alongside some interesting trends in technology, there is no doubt that the working environment can and will adapt to its users. Groves predicts that as the number of people working from home rises along with people working on the move, employees will be looking to a sense of place and space with an in-built structure and other people around them. “I guess there will also be gravity towards a place,” she says. “When it comes to organizations who have a brand or provide a service or product there will always be the need for a physical place for people to work together.

It might be that simply the type of work people do when they’re together might change. Collaborative work will take place in the traditional office space, whereas people can retreat to smaller and more secluded places to carry out more mundane tasks.”

While it ultimately depends on the make-up of the functions that people have as to where they are going to work and the space they are looking to do that in, there will certainly be some interesting spaces emerging in the next decade. In the meantime, keep your eyes peeled for those beanbags. ■

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A B

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Above: T-Mobile’s !Creation Center: A. A freestanding illuminated ‘T’ B. A restored pulley system allows for quick transferral of large objects, such as ideas display boards, from floor to floor C. Double-height bamboo trees D. Spiral staircase E. People are encouraged to bring bikes to work F. Casual meeting areas are created adjacent to high-traffic junctions for impromptu chats G. A craft station in a centralized location

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ASK THE EXPERT

Cyber-stalking: hiring based on Facebook?

Social media sites such as Facebook are an increasingly popular medium for individuals to disseminate personal information. Is it ethical for an employer to make the decision to hire or not hire a prospective employee based on information gathered from such websites, asks Maddison Lake.

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n Germany, a recent draft law on employee data security proposed making it illegal for employers to send friend requests to prospective employees on Facebook in order to access their “private” posts. However, one must consider exactly why people use Facebook in the fi rst place when evaluating the ethical ramifications of using social networking sites as an employment screening tool.

Facebook and other comparable websites are by their very nature public; they exist for the sole purpose of social networking, which necessarily involves sharing information.

Any individual who posts personal information in such a forum should necessarily expect it to be publicly available. Even if that information is limited such that it can only be viewed by that individual’s friends, there is no inherent guarantee that those friends will keep the information private. In short, by making the decision to post information about themselves on Facebook, prospective employees are choosing to make that information public, and it is ethically acceptable for potential employers to use this information as a resource. Facebook is like a billboard. In my opinion, it is a company’s duty to mitigate liability by properly screening potential employees using any legal method, including looking at information posted on Facebook.

Social networking sites are undeniably very useful to employers when evaluating a prospective employee – though the information Facebook provides regarding any given individual is in no way comprehensive, it is of tremendous utility as a barometer of maturity. One may scrutinize the Facebook profi le of a promising potential new hire and fi nd incriminating evidence, such as photographs of illegal drug use. Even if there are no revelations of illegal and/or undesirable behavior, simply looking at the types of people your prospective new hire has chosen to add or accept as Facebook friends will tell you a great deal about their personality.

We once had a client that ordered pre-employment background checks on a number of prospective hires for a middle management position. Among the candidates was a recent college graduate with excellent credentials and plenty of managerial experience. Although the candidate’s criminal record was clean, our client’s HR manager decided to check his Facebook as an extra precaution. The HR manager found pictures of the prospective candidate drinking alcohol with people he had identified as his employees. Needless to say, the candidate was no longer

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considered for the position based on his apparent fraternization with employees. By properly screening potential new hires, employers mitigate risk and work to create and maintain a productive and safe work environment for their current employees.

Facebook and other social networking sites provide employers with useful, pertinent information concerning prospective hires. If nothing else, employers can get an idea of the way a job candidate chooses to represent him or herself in an informal, public forum. However, information obtained from Facebook is obviously not wholly accurate. People can easily misrepresent themselves on social networking sites, so any information found on your applicant’s page should be questioned. Investigating the background of a prospective hire using a thorough, professional pre-employment screening service is the only true way to assess an individual’s character and judgment. Background checking is among the most important steps in the hiring process to mitigate criminal and fi nancial risk.

I recommend using Facebook as part of the employment screening process, but only in conjunction with hard data pulled from a professional background report.

Background checks provide you all the necessary concrete information about a prospective new hire’s history, while Facebook can provide you with much supplemental insight on a candidate’s character. Utilizing both data sources can give you a multi-dimensional summary of a prospective hire and enable you to make a confident, informed decision as to whether or not the individual would fit your organization’s needs.

Maddison Lake is the President and CEO of Shield Employment.

Based in Asheville, North Carolina, Lake helps small to large-scale businesses mitigate liability by providing cost effective, advanced enterprise level employment screening solutions nationwide.

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PRODUCTIVITY

THE ENGAGEMENT GAP Why engaged employees are so much better for the bottom line.

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2008 Tower Perrin survey found that out of 90,000 employees worldwide, a tiny 21 percent were found to be fully engaged at work, with double that number (40 percent) disenchanted or disengaged. And in July of this year, Hewitt Associates, a global consulting and outsourcing company, reported that almost half of organizations around the world saw a significant drop in employee engagement levels at the end of June 2010 quarter.

Hewitt’s analysis goes on to suggest a clear link between employee engagement levels and fi nancial performance, while Tower Perrin found that companies with low levels of employee engagement had a 33 percent annual decline in operating income and an 11 percent annual decline in earnings growth. On the other hand, those with high engagement, reported a 19 percent increase in operating income and 28 percent growth in earnings per share.

The study also found that companies with the highest levels of employee engagement achieve better fi nancial

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$350 billion is lost each year due to lower levels of productivity

results and are more successful in retaining their most valued employees than companies with lower levels of engagement. Various other research shows that the connection between an employee’s job and organizational strategy is the most important driver of employee engagement.

Employees with the highest levels of commitment perform 20 percent better and are 87 percent less likely to leave the organization, which indicates that engagement is linked to organizational performance.

There is no doubt that employee engagement is a key business driver for organizational success: high levels of engagement lead to retention of talent, fosters customer loyalty and improves organizational performance. The question is: how do you engage your workforce?

Engagement is a complex subject and can be defi ned by many different factors, from workplace culture, organizational communication and managerial styles, to trust and respect, leadership and company reputation. And for today’s generation access to training, career opportunities

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and work/life balance is important. Therefore, if the HR department designs, measures and evaluates workplace policies and practices to help attract and retain talent, there is more potential for engagement.

Looking at the current situation, attracting, engaging and retaining talent is becoming increasingly important and there is no doubt that leaders and managers need to master a new of abilities on order to engage their people.

The Towers Perrin survey backs this up showing that senior leadership has a significant impact on engagement. The top engagement driver both globally and in the US is the employees’ belief that senior management has their best interests at heart.

THE ENGAGEMENT GAP Enrolled Disenchanted Engaged Disengaged

Engaged employees work harder, are more loyal and more willing to go the extra mile for the organization However, only four in 10 respondents believe this is the case in their organizations. More than half also felt that senior management “treats us as just another part of the organization to be managed” or “as if we don’t matter”.

Both senior leaders and managers get low marks on key aspects of their role, in particular on empathy, communication and transparency.

The bottom line is that leaders need to connect with and inspire the workforce in order to fully engage them.

On the back of the research, Towers Perrin suggested five potential insights that would allow an organization to close the engagement gap. First, the organization is the most

41% 30% 21% 8%

powerful influencer of employee engagement, therefore the organization has to look at the way they are running the company and ensure they are doing everything possible to engage their employees. Second, there is no single “right model” for a high performance culture; the most effective approach depends on an organization’s strategic priorities.

Th ird, employees are eager to invest more of themselves to help the company succeed, but they want to understand what is in it for them.

Fourth, senior leaders need to make the leap to a more inspirational style of leadership to help drive higher engagement. Finally, companies need to understand their customers to design a work environment and experience that will drive higher engagement and performance.

The bottom line in engagement is that engaged employees will work harder and are more likely to go the extra mile for their organization. By understanding that employee behaviors can either positively or negatively affect organizational success, it is vital that that employee engagement is regarded as a serious challenge. Indeed, companies that are successful at improving engagement in spite of these pressures are the ones that create an environment focused on key human capital elements.

CASE STUDY: Sony Pictures Entertainment

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he Energy Project, established a decade ago to help individuals and organizations transform the way they work, believes the reason we are so disenchanted with work stems from the assumption that we operate best in the same way as computers: at continuous high speed, for long periods of time, running multiple programs at the same time. The Energy Project believes that in fact this way of working will only lead to burnout. It instead focuses on individuals and organizations managing their energy as opposed to their time. Time, after all, is finite, and by contrast, you can expand your personal energy and regularly renew it.

Once people understand how their supply of available energy

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is influenced by the choices they make, they can learn new strategies that increase the fuel in their tanks and boost their productivity. By choosing to define precise time at which to do specific activities, these new behaviors become simple but powerful rituals. The Energy Project suggests practices such as shutting down your email for a couple of hours or taking a daily 3pm walk to get an emotional or physical breather.

Sony Pictures Entertainment, based in Culver City, California, has worked with the Energy Project.

The reaction to the program was overwhelmingly positive. Eightyeight percent of participants say it has made them more focused and productive, while more than

90 percent say it has helped them bring more energy to work every day. Sony’s management believes that the changes have also boosted the company’s bottom line.

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EXECUTIVE INTERVIEW

Is your talent acquisition engine scalable?

PeopleScout’s Patrick Beharelle explains how companies are improving their talent acquisition scalability.

The economic downturn led companies to downsize their internal recruiting staff. How are leading companies rebuilding their capabilities as volumes start to increase?

Patrick Beharelle. The period immediately following a recession is an opportunity for thoughtful reflection and true innovation. Despite the perception of a jobless recovery, some fi rms are experiencing heavy demand for replacement hires and growth hires. Others are bracing for an uptick as recovery gains momentum. The fact is, recent studies show over 50 percent of workers are considering an exit from their employer, once hiring conditions are favorable.

In preparation for the hiring uptick, some forward-thinking HR execs have built a ‘hybrid’ talent acquisition model, where a slimmed down internal recruiting staff is augmented with support from a recruitment process outsourcing (RPO) provider. The scalability advantages and highly variable cost structure are often the key justifications for a hybrid RPO model.

RPO is not a new concept and is not suitable for every situation. But RPO offerings have significantly matured over the last several years and success stories of lower cost/hire, improved candidate quality, faster hiring cycles, and true scalability are plentiful.

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You mentioned leading firms are building ‘hybrid’ talent acquisition models. How does it typically work?

PB. RPO solutions tend to be customized to the client’s specific business challenge and culture, so perhaps the most effective way to answer the question is with an example.

A large telecommunications provider we’ll call TelCo made a strategic decision to keep a scaled-down internal recruitment team to focus on the most complex and hardest to fi ll positions, while leveraging an RPO provider (PeopleScout in this case) to focus on the higher volume, less complex positions. Specifically, TelCo outsourced most of the recruitment steps (sourcing, screening, scheduling, offer admin, pre-employment verifications, applicant tracking) for 4500 of the company’s 6000 annual hires, while the internal team focused on the remaining 1500 positions (director level and above). Overall cost per hire has been cut by 20 percent and time to fi ll has been trimmed by 15 percent.

RPO is not suitable for all situations. What are some of the necessary conditions for a successful RPO engagement?

PB. First, ‘buy in’ from HR leaders and hiring managers is critical. If key constituents are not supportive, it can be difficult to overcome. Often HR is leading the push for RPO – laying ground work to ensure hiring managers are brought in may slow the implementation a bit, but ensuring their support is worth the extra time. Second, a solid business case is important. Business cases vary in sophistication from fi rm to fi rm, but ultimately, the fees to the RPO provider need to be justified. Budgets are tight. A clearly articulated business case provides a solid foundation.

Th ird, the scope of the engagement and pace of implementation are crucial decisions that need to align with the buyer’s culture. Some RPO buyers prefer a pilot phase to start, while others are more comfortable with a large scope – it’s a question of culture and comfort level. Fourth, clear expectations and true candor between the buyer and provider are critical. There will be challenges on both sides. It sounds obvious,

but providers need to ensure the team is properly structured for rapid flexing up/down. When an RPO provider struggles, it is usually due to not assigning enough resources. Buyers need to be held accountable too – directionally correct forecasts and internal change management are important to ensure the provider is positioned for success.

Any parting thoughts?

PB. Tactical layoffs were executed. The questions are now more strategic for HR. How to variabalize cost structure? How to rebuild capability?

Engage third party support, and if so, what scope and what fi rm? Is process/technology meeting business needs? RPO, when structured well, can deliver double digit cost savings and improved candidate quality and achieve substantially more scalability – but the engagement must be structured well from the beginning.

Patrick Beharelle is the CEO of SeatonCorp, a $350 million best-in-class staffing/recruiting company that operates under the PeopleScout, Staff Management, and StudentScout brands. Beharelle has been a featured speaker at several key RPO industry events, a regular contributor to industry publications, and is a recognized thought leader in the RPO space. He can be reached at pbeharelle@seatoncorp.com or at 312.397.3269

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EMPLOYMENT SCREENING

With 90 percent of employers expecting to hire new employees or for their workforce to remain unchanged in terms of total employment, organizations are focused on screening practices that ensure rapid, efficient and effective hiring of top talent.

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ith input from over 1800 respondents on almost 100 questions regarding human resources, recruiting, security, safety, compliance and operations, from organizations of all sizes, the HireRight 2010 Employment Screening Benchmarking Report reveals common employment screening practices, policies and programs to help organizations evaluate their own screening programs and identify strengths, weaknesses and potential areas for improvement.

There are good reasons why virtually all large companies and a significant percentage of small to mid-sized organizations regularly perform employee screening. As the HireRight report highlights, the key drivers of screening today include improving the quality of new hires, compliance with governmental and industry regulations, and reducing risk for the organization of workplace incidents as well as litigation for negligent hiring.

Twenty-one percent of the companies surveyed reported that they had had an incident in the last year that could have been prevented with a background or drug check. Of those companies experiencing incidents, 62 percent reported poor quality hires and 35 percent had accidents in the workplace, while 20 percent reported theft or fraud and five percent experienced violence.

“Screening has become a central component of many companies’ recruiting processes, leading to a significant trend toward integration of screening with human capital management and applicant tracking systems,” explains Rob Pickell, Senior VP of Customer Solutions for HireRight.

“When performed correctly, employee screening improves morale, since it enhances the quality of the workforce and demonstrates the company’s concern for the safety and positive environment of its workers.”

In light of the economic environment, continues Pickell, it was positive to see that 43 percent of companies surveyed expected to increase the size of their workforce in 2010 despite the state of the economy, with a full 90 percent anticipating either an increase or no change in workforce size. The study has also highlighted the growth of small and mid-sized companies that now perceive screening as an essential hiring process, whereas it was confined to the larger employers just a few years ago.

“The number of companies that currently screen globally or plan to conduct global screens doubled between 2009 and 2010, a reflection both of the significance of international hiring and the improvement in available global screening

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tools. Interestingly, even screening of the global extended workforce – those part-time or on a contract for example – doubled in the last year,” says Pickell.

Expected change to workforce size Large decline >10%: 2% Some decline 5-9%: 8% Little change 0-4%: 47% Some growth 5-9%: 33% Large growth >10%: 10%

Key opportunities The benchmarking report reveals that companies expect to hire people in 2010 and that almost half are challenged by finding, attracting and retaining experienced workers.

These companies tend to view screening as a method of ensuring the best possible hires. “Background screening is playing an increasingly central role in talent management,” states Pickell. “The growth opportunities are tremendous.

While a great majority of companies perform “some kind” of screening, there is an increasing trend towards adoption of screening of extended workforce and global hires.

“Another hiring-related opportunity for US employers is in the management of their employee eligibility program.

I-9 forms management is still a backwater of inefficient manual operation for most companies. Automation of I-9 will become more and more prevalent in the near future and presents the added benefit of integration with the government’s E-Verify program.”

But with opportunities come challenges. And the biggest challenge can be summed up with the phrase “screening policy”, explains Pickell. Companies that do not have a policy can experience a whole range of problems, such as applicant and employee dissatisfaction, legal risks, inefficiency and inconsistent decision-making. A screening policy clearly defines who is responsible for screening, who has the authority to review and make decisions on screening information, who will be screened, why, when and in what way.

“A screening policy should be published, shared and monitored by an organization,” says Pickell. “The goal of the policy is to establish clear operating and decision guidelines

Percentage of candidates that provide untruthful information during screening Background check, drug/alcohol, health screening or employee eligibility verification program Yes 94% No, but plan to 3% No, no plan to 3%

The HireRight survey shows that more companies are taking advantage of new technologies and processes to institute fair, effective and easy-to-use screening programs around the world.

• 10 percent of background checking results that adversely affect candidates range from exaggeration of title and education to serious unreported felonies, indicating the importance of background checking to the wellbeing of the organization • 94 percent of those reporting maintain a background checking, drug testing and/or employment eligibility program, signifying increased adoption of these programs among small to mid-sized companies • 66 percent of companies report using contingent labor to supplement their workforce, with 44 percent expecting growth in this sector of the workforce • 15 percent of respondents report taking adverse action on more than one in five candidates • 69 percent of respondents have caught a candidate lying on his or her resume • 72 percent of respondents refine and improve their screening programs frequently or occasionally

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None: 16% Less than 1 in 5: 11% More than 1 in 5: 14% Up to 1 in 10: 59%

for the employer so that the organization is protected both from unsafe hires and legal risks.”

Another critical area, explains Pickell, is the amount of respondents screening contingent labor. Just one third admitted to screening this crucial element of the workforce, leaving a substantial security gap wide open. “Over the past decade, employers have been most focused on rolling out employment screening across their permanent workforce.

As awareness of the risks of an unscreening contingent workforce has continued to build, so has the practice of extended workforce screening,” says Pickell. “But implementing an extended workforce screening program is not easy and requires significant commitment by the employer.”

So even as awareness has increased, some employers have chosen not to implement such a program due to the inherent complexities. The good news is that extended workforce screening solutions are becoming increasingly available to help employers manage these complexities and plug this common security gap.

This is not the only area that is improving. Pickell says it is imperative that the applicant experience is changed for the future of screening. “Since screening is a fact of life, making sure the applicant or employee is involved in the process and understands their role and how information will be used, will be important to broader candidate experience for the employer, reflecting either positively or negatively in their employment brand,” says Pickell. “We expect to see a greater level of transparency in the future. This will be reflected in new automated technologies that let applicants enter their own information and then track the process step by step, maintaining extensive visibility.”

Making screening faster and more efficient will benefit both the applicant and the hiring company and it seems that integration of screening as a one-step process in hiring and talent management will continue apace.

20/10/2010 12:00

92

INDUSTRY INSIGHT

Secure screening Isaac Butler IV reveals why you get what you pay for in pre-employment screening.

S

tatistics indicate your business is probably conducting pre-employment screening. Statistics also show you probably chose your vendor based on turn-around times and price, a fact that may be putting your company at risk.

In the early years of pre-employment screening, running background checks was an option. Only the most diligent companies with obvious exposure screened applicants. Not so today. Increased litigation prompts most businesses to conduct background checks. This increased need, along with the advent of technology making data access easier than ever, has produced an explosion in the growth of the pre-employment screening industry. However, with this growth, a disturbing trend has emerged.

As the industry looks to technology to provide cheaper and faster access to information, some vendors are employing questionable screening practices. They are compromising integrity and diligence to provide rock-bottom pricing and instant searches. Companies who offer so-called “complete” background checks at bargain prices are creating a false sense of security for unsuspecting businesses that are trying to protect the bottom line and may not understand the value of a proper search.

Two of the most misunderstood aspects of screening are Fair Credit Reporting Act (FCRA) compliance and acquisition of criminal records. These also are the two areas in which most companies will face litigation should their processes fall short.

Many business owners believe all consumer reporting agencies provide FCRA-compliant information, which couldn’t be further from the truth. Hundreds of companies offer raw, unfi ltered data that does not meet FCRA requirements.

The acquisition of criminal records is the aspect of preemployment screening that presents the greatest risk of litigation. In-person document retrieval is the most reliable method to obtain criminal records. It provides accurate, real-time information directly from the point of origin: the courthouse responsible for maintaining those records. But it is often costly and is always more time-consuming than database research and screen-scraping technologies.

Even the name of another popular tool, the “National Criminal Index” search, is misleading. There is no true national search available for pre-employment screening purposes. The very best of these databases are 65 to 80 percent complete at any given time. Some states do not report any information to them, and others do so only on a periodic basis. A National Criminal Index search should be

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Isaac Butler IV has been with TruDiligence since 1999. Butler has a strong background in business administration and helped to build the TruDiligence Customer Service and Retention programs. He currently acts as Director of Operations and works closely with the marketing, administration and data processing departments.

used only on a cursory or supplemental basis, and screeners should verify any reportable records at the source and check target jurisdictions.

Employers are spending hundreds, if not thousands, of dollars to secure new talent and train new employees.

Unfortunately, pre-employment screening is often an afterthought. When businesses don’t implement a quality screening program through a reputable vendor, they are putting their reputation, workforce and clientele at risk.

Meanwhile, the pre-employment screening industry has not done an adequate job of educating businesses on the liability associated with screening. If your company is looking to protect itself from litigation and obtain accurate information on applicants, you must understand what searches your vendor is conducting and what limitations the vendor’s research tools may have.

Take time to speak with your current or prospective vendor to ascertain the exact scope of the information it provides. The vendor should be able to give you intelligent, clear insight into its processes and procedures, as well as consult with you on best practices that will help minimize your exposure. If the vendor can’t answer your questions to your satisfaction, fi nd one that can.

If your goal is to protect your business, you may need to invest more time and money into the process. Even one dollar is too much to spend on a process that doesn’t limit your liability. As with all services, you get what you pay for. Don’t jeopardize your business or the quality of your services by implementing substandard pre-employment screening.

20/10/2010 13:05

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94

TALENT MANAGEMENT

Cyber

SCREENING

As social media becomes an increasingly useful tool for HR professionals looking to screen job applicants, Stacey Sheppard examines the benefits and the potential pitfalls for both candidates and recruiters.

O

ne of your employees has recently handed in his notice in order to pursue a new life overseas with his wife, who has been asked to relocate for her job. The task of finding a suitable replacement to fi ll this position falls on your shoulders, as the company’s HR manager. As the CVs come flooding in, the arduous task of sift ing through potential candidates begins. Verifying all the information that a particular candidate has disclosed and conducting the necessary background checks and screening processes is all part of the job.

But what if there was an easier, quicker, cheaper way to check up on applicants and the information they have provided? You decide to do a quick search for one of the prospective employees on the social networking site Facebook to see what you can fi nd out about her. From the information and photographs posted on her profi le you discover that she is a frequent user of recreational drugs,

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is a prominent animal rights campaigner and belongs to a number of groups for expectant mothers.

Whilst this information provides you with a much more candid insight into the candidate’s personality, it is also information that can answer a whole host of questions it would normally be illegal for you to ask directly in an interview. But like it or not, you are now in possession of this information, so what are you supposed to do with it? Not giving someone a job because you suspect they may be pregnant could be classed as discrimination. So what do you do? Give them the job anyway knowing that six months down the line you will be recruiting to fi ll this position again? Now that

75% of companies have policies in place to research applicants online

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you possess this knowledge, there is no way to unlearn it.

Th is is the dilemma that HR professionals are faced with today.

Although most social networking sites have been around for less than a decade, their popularity has exploded in recent years, taking them from what was once a novelty designed to enable socializing in cyberspace, to what has today become one of the most powerful recruiting tools available to HR professionals. Cyber-vetting job applicants using social networking sites is now fairly common practice for recruitment specialists looking to gain a competitive edge by identifying and engaging the best candidates available.

Recent research commissioned by Microsoft found that 79 percent of US hiring managers and recruiters surveyed have reviewed online information about job applicants. In addition, 75 percent of those surveyed report that their companies have formal policies in place that require hiring personnel to research applicants online. With so many HR professionals resorting to this medium for checking the veracity of the information that candidates are including in their applications, job seekers need to be more wary than ever of the kinds of things they are posting up in cyberspace and the effects that such information could have on their professional career development.

And yet there exists a huge discrepancy between the percentage of HR professionals who claim to have rejected candidates based on the outcome of what they discovered online (79 percent) and the comparatively low percentage of applicants who believe that online information had an impact on their job search (seven percent). Such a view is slightly naïve given that a person’s online reputation can seemingly make or break their chances of being recruited. There is also a great deal of inconsistency in what HR professionals consider appropriate to review online for screening processes and what applicants believe to be acceptable.

Of those recruiters and HR professionals surveyed for Microsoft’s research, 89 percent fi nd it appropriate to consider professional online data when assessing a candidate and 84 percent of them think it is proper to consider personal data posted online. However, only 15 percent of US consumers surveyed think it is very appropriate that employers review candidates’ photo and video sharing sites, 25 percent think it is somewhat appropriate, and 44 percent think it is somewhat or very inappropriate. Yet, 59 percent of recruiters and HR professionals surveyed check these sites.

In the coming years, the use of online reputational data by HR professionals and recruiters will dramatically increase; 84 percent of those surveyed believe its use will increase over the next five years. And with this increased usage come greater ethical and legal questions for HR professionals’. Social media can very easily become an employment compliance issue, as information that would normally be considered “protected” is now accessible, free, and voluntarily displayed on people’s social networking profi les.

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Online profiles How do you use online profiles when reviewing candidates?

Occasionally search for profiles 38.3%

Always search 32.0%

Do not review profiles at all 16.2%

Review if provided by candidate 13.5%

Source: Jobvite Social Recruiting Survey 2010

Percent of recruiters and HR professionals who use these types of sites when researching applicants Search engines

78%

Social networking sites

63%

Photo and video sharing sites

59%

Professional and business networking sites

57%

Personal websites

48%

Blogs

46%

News sharing sites (eg Twitter)

41%

Online forums and communities

34%

Virtual world sites

32%

Websites that aggregate personal information

32%

Online gaming sites

27%

Profesional background checking services

27%

Classifieds and auction ssites

25%

None of these

2%

Source: Royal Holloway University of London School of Management

Do you think your personal cyber data influences your future career and employment opportunities? % of Number of respondents respondents Yes

15.3%

23

No

86%

129

Number of respondents Number of respondents who skipped this question

150 2

Source: Microsoft study Online Reputation in a Connected World

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TALENT MANAGEMENT

The challenge that social media presents to applicants, despite many of them not being aware of it, is knowing when and how to keep their private lives private and prevent their personal information from falling into the wrong hands at the wrong time and so impeding their chances of climbing up the corporate ladder. However, what is not discussed quite so readily are the risks and drawbacks that can be encountered by HR professionals using social media as an applicant screening tool. A recent white paper report published by talent management solution provider Taleo, entitled Social Network Recruiting: Managing Compliance Issues, highlights the legal pitfalls that recruiters can fall foul of.

The report states that the challenge of using social networks as a business tool is “making the most of what they have to offer while maintaining compliance with government regulatory bodies such as The Equal Employment Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP).”

Many businesses that use social networks either to advertise their job openings or to screen candidates are opening themselves up to the risk of lawsuits on the grounds of discrimination. “The risk […] hinges on whether or not the use of social networks is motivated by an intent to discriminate (“disparate treatment”) or whether the practice, although it appears neutral at face value, has an unintentional and unjustified adverse impact on members of a protected class (“disparate impact”),” states the report.

Whilst companies have every right to reject applicants on the grounds that certain character traits are not compatible with the requirements of the job and should do so in order to avoid the risks of negligent hiring, it is impossible to ensure that any information gleaned from social networks will be job-relevant. In rejecting an applicant, the burden falls fi rmly on the recruiter or HR profes-

93.10%

Number of respondents Yes: 6 No: 81 Total: 87

Source: Microsoft study Online Reputation in a Connected World

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“Cyber-vetting job applicants using social networking sites is now fairly common practice for recruitment specialists looking to gain a competitive edge by identifying and engaging the best candidates available”

Types of online reputational information that influenced decisions to reject a candidate

Do you know how to manage your cyber data or information in order to advertise yourself for more employment opportunities and avoid negative impact?

Number of respondents who skipped question: 48

sional to prove that the information discovered online did not affect the hiring decision.

There will always be a small minority of candidates, who, when rejected, may assume that the decision came down to their so-called ‘net-rep’ and consequently take legal action, especially if it is a known fact that an online search was conducted. In this instance, a business must be able to prove that the decision was based on objective, relevant job criteria. If they can do this, a court case is unlikely, but the risks are still substantial enough to make HR professionals take the issue seriously.

However, at the moment there are no specific laws or guidelines in the US from the EEOC or OFCCP governing the use of social networks. Given that the information that sites such as Facebook, Twitter, LinkedIn and MySpace can supply and the fact that this information is a free resource that can provide myriad benefits to the hiring process, most HR professionals fi nd it almost impossible to disregard.

In Europe, privacy concerns are starting to make an appearance on the political agenda. A draft law, which includes provisions that would prohibit employers from using social networking sites to research prospective candidates, has recently been endorsed by the German cabinet, but is yet to pass through parliament. The proposed legislation would see violations punished with prison sentences of up to two years or with monetary penalties.

“Private social networks are private social networks and not gateways to gaining information on job applicants,” German Interior Minister Thomas de Maiziére told reporters. Without similar legislative proposals in the US, HR professionals are left with no other choice than to use their own common sense in conjunction with reference to existing OFCCP guidelines to ensure their cyber searches do not result in a discrimination lawsuit.

Concerns about the candidate’s lifestyle

58%

Inappropiate comments and text written by the candidate

56%

Unsuitable photos, videos and information

55%

Inappropiate comments or text written by friends and relatives

43%

Comments criticizing previous employer, co-workers or clients

40%

Inappropiate comments or text written by colleagues or work

40%

acquaintances

6.90%

Yes

No

Membership in certain groups and networks

35%

Discovered that information the candidate shared was false

30%

Poor communication skills displyed online

27%

Concern about the candidate’s financial background

16%

20/10/2010 11:03

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98

DIVERSITY

THE BRAND FROM

within

Having a diverse workforce is not only pivotal from an HR perspective; it’s the very nature of innovative business. But as part of a minority group, discovering your identity in an organization can be a daunting and confusing task. Thankfully, with the right guidance and education, finding your ‘personal brand’ is only a few steps away.

D

iversity is a term that used to be bandied about with little credence; mocked as an HR fad that would disappear as ‘real business’ remained the name of the game. Employees built their own culture with a like it or lump it ethos that, more often than not, meant that the most talented didn’t necessarily become the most successful.

Companies tried to change the lay of the land but without any real understanding of how to do so – leaving those that needed help the most, isolated and disconnected.

Fortunately times have changed exponentially since then. Demographics in 21st century business have fl ipped: decision-makers are grasping the advantages of a diverse workforce; employees are encouraged to drive their “personal brand” with confidence; and companies, as a generalization, are holistically involving their respective HR heads to secure a future with “embedded diversity”. A leader at doing precisely that, PricewaterhouseCoopers (PWC) has priceless experience under its belt when it comes to educating, implementing and progressing diversity within its workforce – epitomized by its Chief Diversity Officer (CDO), Niloufar Molavi.

Having grown up in Tehran, Iran, before moving to France and fi nally settling in the US, Molavi knows fi rst hand the importance of diversity within a company’s culture. Her experience in traveling between different business cultures has without doubt enabled her success at PWC – tagging herself as a “change agent”. “I’ve had to navigate different cultures, which come in many different shapes and forms; every organization has a different culture,” begins Molavi.

“You have to make sure you understand what that culture is and how you fit into it. I think those experiences have defi nitely allowed me to help others in my role as

PWC ED P98-101.indd 98

Chief Diversity Officer. When I think of identity, I think I have many different identities. I’m a wife; a mother; a tax professional; a mentor; a teacher. It’s how all those identities intersect with each other that ultimately build my experiences. If I can bring that unique experience to work, then that’s when we are going to be able to see innovation.

We’re going to be able to have people with different perspectives to solve all kinds of problems that our clients may be looking for us to solve.”

And when it comes to clients, the bottom line remains that keeping them happy equates to bigger profits, which is why Molavi sees diversity as a “business imperative” that offers a competitive advantage in the marketplace. “As a professional services firm, our clients expect that we’re going to bring the highest quality client service teams to their accounts to serve them. The way we can do that is by having a diverse team that has complementary skills that are serving the client,” she says.

With US demographics changing and women being noted as the fast growing population in the workforce today, ensuring you can attract and retain the best possible talent to meet client needs comes down to ensuring the right environment is built within the company where the talent can succeed, bring unique values to the table and achieve the highest potential possible. Of course, inherent within that is the need for innovative talent – something usually driven by a background of vast and different experiences. But how do you build a program within your company to identify, nurture and fight for these talented employees?

“I really do believe it starts with the commitment at the top of the organization, not just the tone at the top, but the actions at the top,” reveals Molavi. At PWC, Molavi reports to her CEO, but she also sits on the US leadership team, making it quite obvious that diversity isn’t just a program for PWC – it’s embedded in its strategy. “When we talk

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100

DIVERSITY

about our growth strategy, when we talk about our strategy to serve clients, diversity is embedded in everything we do.

So we want to make sure it’s embedded in our corporate culture, as well as the experiences our people have at PWC”.

While one would presume that embedding diversity within a business strategy would encourage a confl ict of interest with regards to business needs, the reality is that it actually further ignites business interests.

“For example, we are not competing internally with respect to how we develop our people. We think about how we develop every individual within the organization. How do we make sure that everybody’s getting those opportunities to be successful in the organization? It’s all embedded; whether it’s our learning and education curriculums that we have or how we sell and deliver to our clients. What I don’t struggle with is being at a lower level trying to drive a strategy that’s not consistent with the broader strategy.

“Sometimes you can have mixed messages and fi nd yourself asking ‘which priority do you want me to focus on?’ Maybe someone higher up the organization is going to be heard louder than someone further down the food chain,” she continues. “We don’t have that issue at PWC, which is why we’ve designed our structure in the manner that we have. In addition, I’m a tax partner as well as a CDO, so I understand our business. I know what it takes to serve clients and what it takes to develop people. So I also bring that perspective to the table with respect to our diversity strategies.”

As a general rule of thumb, diversity programs that tend to fail, according to Molavi, do so because they’re not aligned with the company’s strategy. If anything, diversity related or otherwise, has to be crow barred into an organization, it’s quite clearly unnatural and not aligned with the current success of the company and should be avoided accordingly. Another important lesson from PWC’s CDO is to engage everyone when discussing diversity. That means including men in talks about women-related issues, the majority when discussing the minority and to generally explore the overarching experiences prevailing across the spectrum. However, it’s easy for companies to fall into the trap of engaging this notion a couple of times a year and calling themselves diversity-orientated, when the reality is that they’re anything but.

As Molavi explains, to know you’re diversity-orientated is to know that, yet again, diversity is ingrained into the company structure. “It has to become part of the fabric of our culture in order for us to ultimately be able to reach our goal of an extremely diverse organization. If we’re not achieving that goal, then we’re going to have people who will become disconnected. Sometimes that’s the danger that you run into when you talk about programs. Now, I’m not suggesting that you don’t need programs, as they have worked phenomenally well for us. For example, flexibility is a big issue with a lot of our people – certainly with our women,” she says.

The flexibility program Molavi alludes to is PWC’s ‘full-circle program’, in which parents within the company are offered the chance to “off-ramp” for the fi rst five years

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after their children are born, allowing them to be parents while still staying connected to the company, continuing to grow and maintain their respective disciplines. Within that five years, at any point in time, they can come back to the organization without having fallen out of the loop.

“Full circle is pretty unique,” affi rms Molavi. “We launched this back in 2007 and what we experienced is that we had plenty of talented women who were at the point in their lives where they felt they had to make some difficult decisions and felt they only had one option – to leave – then they would figure out at a later point what to do. We wanted to give them another option. We wanted them to come back, at any point in time, when they were ready to come back.

“Based on the exit interviews and experiences we had, we decided to launch this. I’m happy to say that November 2009 we’ve had a number of people who went off on the full circle program, who’ve now returned to the firm. We’ve already seen them; we’ve been able to work with them; we know what they’re capable of; and we know what their potential is. So it’s a win-win situation really.”

While programs like full-circle have been a resounding success for both the company and its employees, there are many people in the wider context of the business world who look at diversity programs in the negative as a way to fi ll quotas and tick boxes. Indeed, some would most probably look at PWC’s use of white men as “diversity champions” as doing precisely that. But Molavi asserts that part of the problem is overcoming this presumption and taking the necessary measures to ensure that everyone is engaged in the discussions.

“We want to hear everybody’s point of view and our goal is for all our top talent to succeed in the organization.

We’re not looking at fi lling quotas or giving any particular group of individuals any type of advantage. What we want to see is that everyone who has high potential succeeds in our organization, regardless of his or her background or gender. That’s where our focus is – and we’re certainly not trying to arrive at any kind of forced or unnatural result.

Our end goal is for the organization to be an inclusive environment where everyone can bring their unique experiences and be successful. So I do hope that there’s a day that what we do is so embedded in our culture that we won’t need somebody in my role sitting here thinking about it, because we’re already there.”

With 50 percent of new employees being women and a further 30 percent coming from minority groups, PWC has certainly found its feet when it comes to diversity. However, if Molavi’s end goal is to be realized, everyone in the organization – from top to bottom – needs to understand what the “unwritten rules” of the company are. Of course new starters will be aware of the need for solid technical and communication skills as a rule of entering a company, but there are always those unwritten rules that no one tells them about. In Molavi’s opinion, the most important of these rules relates to how approach your “personal brand”.

Questions like ‘how do I want people to know me’; ‘what experiences am I going to have to have to be able to build

“Diversity, ultimately, is about how we build an organization with talented individuals from very different backgrounds”

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DIVERSITY 101

that personal brand’; and ‘is my brand relevant to the organization’ will all need to be confronted if an employee’s personal brand is to become effective.

However, building a personal brand isn’t something that can be done in a fi nite amount of time – it’s something to nurture as it evolves through one’s career. Once it’s established, Molavi asserts that success will follow as the goal becomes an ability to fulfi ll that personal brand. With this in mind, Molavi has developed a program to provide African-American associates guidance in identifying these unwritten rules, providing immediate feedback and coaching around what it’ll take for them to ultimately become successful and carry their brand. In addition, the same is being done within PWC for its more senior population.

“We forget that people have different experiences before they get to the organization,” says Molavi, “therefore we make assumptions that they will know what those unwritten rules are. Alternatively, they may see it once they get here, but that’s not always the case. So knowing that, we’re focused on providing everyone with some of those unwritten rules.”

“I think it comes down to a difference in cultures,” retorts Molavi when asked about where an understanding of these unwritten rules comes from. “Another big part of it is

PWC ED P98-101.indd 101

the experiences you’ve had in life. Everybody has different experiences and it doesn’t have to be based on your race or gender. It may have been the environment you were raised in. So what we’re trying to do is make sure everybody understands that experiences will be inherently different.”

Ultimately, for a company as big as PWC, if employees can’t come into the workplace and feel comfortable as individuals then it’s unavoidable that an artificial atmosphere will begin to emerge – the fi rst signs of trouble for a company of any size, let alone that of PWC’s. For those in a minority at work, not being able to be yourself has huge repercussions for both personal and organizational costs – which is exactly why PWC is launching its GLBT (gay, lesbian, bi-sexual and transgender) strategy, focusing on the importance of being truthful, honest and transparent about who you are in your sexuality. The company even has an advisory board made up of gay and lesbian open partners who were pivotal in helping Molavi put together the GLBT strategy.

“Not only are they thinking about the strategy, but they’re actually out in our markets meeting with our people and helping us roll out our strategy. But an important component of our GLBT strategy is our ‘straight allies’. Again, it goes back to mentioning that we need to make sure we’re engaging everyone in our organization in order for us to be successful with our overall diversity strategy. That is something very unique and our partners really serve as role models for a lot of our GLBT employees.”

Whilst having existing employees to head a program to encourage minority employees to be secure in their sexuality in the foreground, the logical jump would be to presume that it leaves a gap in tolerance control of new recruits entering the organization that might not be as accepting.

That would be the presumption, but as Molavi points out, if your organization is aligned to build on cultural dexterity, then the recruitment ‘hole’ ceases to be.

“We recognize that everybody comes down to PWC with a very unique skill set, with unique experiences and we’re not all alike – and don’t want to be alike – because there’s value in that. It’s about learning how to work across those differences. As we look at who we’re hiring, we do look at individual elements and their ability to work across them and learn cultural dexterity, because that is something that you can actually learn over time.”

For an industry that thrives on impressions, opinions and solid communication, overcoming the hurdles to securing diversity within any organization comes down to one thing: education. People aren’t naturally resistant to diversity – they’re educated to do so. “Sometimes it’s about providing people with tools that can help them help others be that champion, be that coach, be that mentor, put themselves in somebody else’s shoes,” says Molavi. “Diversity, ultimately, is about how we build an organization with talented individuals from very different backgrounds. So I don’t think diversity is ever going to become passé, unless we believe that managing talent is no longer relevant. Certainly, I know in my organization that we don’t manufacture a product. Our people are our product.”

20/10/2010 11:28

102

PROJECT FOCUS

Relative values Michael Johnson details how one company leveraged a candidate relationship management system to move from a tactical to a strategic recruiting function.

W

ith more than 49,000 employees across 27 hospitals and numerous other health, housing and educational services, Providence Health & Services is a leading notfor-profit health system providing comprehensive services to meet the needs of communities across five states including Alaska, Washington, Montana, Oregon and California.

With over 6000 hires in 2009, Providence looked to increase recruitment process efficiency, raise overall service levels to the hiring manager community, and build better alignment with business performance to transform itself from a tactical to strategic recruiting function.

At first the company viewed CRM simply as a sourcing tool to help search in multiple places to find candidates for open roles. Eventually it became clear that, using CRM, the team could improve overall recruitment process design and execution, from finding the right talent to engaging with them over a period of time until an open requisition that matched their skill set could be presented. In essence, building and maintaining relationships with prospective candidates that feel personal and relevant and align with the workforce plan.

“Providence Health & Services now has a system-wide deployed CRM that enables it to respond to the talent needs of the business on-demand” Th rough their existing applicant tracking system (ATS) they could post the job and respond to incoming applicants, but that was no longer sufficient. Proactively searching for qualified people, communicating the employer value proposition to them and ultimately converting them into bona fide applicants involved a lot of process and data, akin to a proactive sales and marketing process. “The previous view of sourcing was simply data mining – you’ll just fi nd them,” says Carol Kubeldis, Regional Director Sourcing Strategy with Providence Health & Services.

“Now we can get out in front of our audience in ways we were not able to before with the support of CRM and our sourcing and communication strategy to reduce marketing and advertising spend.”

Collaboration is key. “Recruiters can continuously engage applicants that are no longer being actively con-

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sidered and it’s easy for them to share access and updates with one another. To support the design of an integrated workflow, recruiters benefit from understanding the overall sourcing strategy – how to drive candidates to the CRM and the importance of it to our recruitment efforts,” says Kubeldis.

With significant consultative help from Avature, the implementation went smoothly. The CRM system went live in January 2009, and talent sourcing has seen tremendous improvement ever since that day. “Talent acquisition has more time so they are getting better at assessing internal excellence skills, which is key to alignment with the business,” says Kubeldis. “We’re screening better to fit with the organization’s mission and needed competencies. Avature CRM, with its proactive communication tools, supports meeting those objectives. People may self-select out if not a fit, and they can more easily see alignment with our mission and values. Sourcing is more proactive so we’re able to better support the businesses and we don’t feel as pressured to hire a ‘warm body’. We’re getting higher quality people.”

Now, Providence has rolled out the system to all of its regional recruitment centers and recently began using the CRM to manage the redeployment of internal hires.

“In 2009 costs against contingency and retained search firms compared to internal costs delivered reduced by 79 percent,” says Kubeldis. “Time-to-fi ll dropped drastically by 25 percent. Marketing and advertising expenses were reduced by 65 percent, including our job board spend. The average age of our requisitions came down seven percent in 2009. So, although this was a unique year, we still hired 6000 people and CRM had influence.”

High impact service delivery starts with speed and efficiency. Most importantly, Providence Health & Services now has a system-wide deployed CRM that enables it to respond to the talent needs of the business on-demand.

Michael Johnson is Vice President of Avature CRM, the only Enterprise 2.0 CRM system designed specifically for recruiting and delivered as software-as-a-service.

Customer: Providence Health & Services Industry: Healthcare Challenge: Increase candidate quality, recruiter efficiency, overall talent acquisition service delivery, and alignment with business performance Solution: Avature’s hosted recruitment CRM for sourcing specialists to find, engage, pre-qualify and re-engage talent identified externally and internally as high potential prospects for critical roles Benefits: Reduced hiring cycle times and recruitment costs while increasing overall quality of hire

20/10/2010 10:42

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104

INTERNATIONAL FOCUS

CAREER

LADDER National oil company Saudi Aramco is the world’s largest oil and gas company, boasting about 54,000 employees. Huda Ghoson, General Manager of Training and Development, leads one of the Saudi Aramco organizations responsible for attracting, retaining and developing staff. For her, the company offers so much more than just an attractive salary.

You first joined Saudi Aramco in 1981. Can you give us an insight into how recruitment, training and career development have changed at the company?

Huda Ghoson. Over the past 30 years, recruitment, training and development have undergone major transformation in line with the evolving business, economic and social climate. While we continued to maintain a long-term focus and clear vision for our human resources strategy, the transformation of our approach was necessitated by the changing business environment, demographics and traits of the new generation of workers. For example, in the past, the focus of attraction and retention was mainly on generous pay and other tangible benefits. Today, employees do expect competitive pay, but it is not the only factor for accepting employment. More so, they expect the company to provide challenging work assignments, learning and development opportunities, clearly mapped-out career progression, and a voice in the decision-making process. We are also more selective in our recruitment practices today, and apply rigorous assessment techniques to assure the quality and skills of candidates and the long-term return on our huge investment in human resources.

As for training and development, in the past, programs were designed to build technical skills with limited focus on soft skills and leadership competencies. Employees had a limited role in their development and the decision-making process. Today, young professionals are encouraged from day one to take ownership of the process and to assume a driver’s seat in the roadmap of their careers. The emphasis is that continuous development is their own responsibility and that they need to take active roles to ensure that their learning objectives and career and business goals are aligned. Self-development is an ongoing enterprise at Saudi Aramco that takes different forms and is practiced on a daily basis at all levels of the organization. The overall program

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is supported by ongoing mentoring, coaching and knowledge transfer processes, and strong commitment from the management team to monitor progress and assure the availability of skills at all times. Today, our HR management and development processes are more participative compared to the approaches of the past.

We hear a lot about skills shortages in the oil and gas industry. Are there areas of Saudi Aramco lacking particular skills – geologists and scientists, for instance?

HG. The industry has for the past few years experienced difficulty in finding and retaining skilled manpower. This is partly due to the permanent loss of professionals during previous downturns, the industry image and declining university enrollment in key disciplines. Today, the pool of specialists is shrinking, and the average age of an employee in the oil and gas industry is close to 50.

Saudi Aramco anticipated this shortage of skills a few years ago and is able to address its staffing needs through implementation of a long-term strategy and investment in human resources development. More than 80 percent of our recruitment needs come from our training programs, which produce skilled and professional workers (annually) with different disciplines based on business needs.

“Building organizational capabilities in Saudi Aramco to meet future energy demand starts with a structured and integrated process for talent management and development”

What are the success factors for attracting and retaining young talent in Saudi Aramco?

HG. The success of our HR strategy is attributed to three main factors. The first factor is building on the solid reputation of the company. In fact, this constitutes the cornerstone of the company’s attraction and retention policies. Young talent is attracted and proud to join Saudi Aramco because of the company’s track record of successful performance, solid corporate values and governance; its prominent and influential position in the local and global economies; its

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Saudi Aramco’s multinational workforce consists of 54,000 employees from over 50 different countries

strong social responsibility; fair and inclusive HR policies; a well-balanced approach to maximizing return on investments; the wellbeing of its employees; and the environment in which it operates.

The second factor is our heavy investment in the training, development and management of our people that is generously supported and clearly championed by the company. The third factor is the total reward package. Saudi Aramco’s total reward policies and programs are designed to satisfy every stage of the employee’s personal and professional growth, starting with competitive salaries, a comprehensive healthcare program for the employee and his/ her family, holidays and vacations, home loans, savings and pension plans, community services and safety and security.

These policies assure the employee’s long-term financial security, health and wellbeing and work-life balance so that they can focus on their work and achieve the highest levels of productivity.

The oil and gas industry globally faces the dilemma of experienced and knowledgeable employees reaching retirement. Is this a problem for you and can you explain what is being done to transfer skills and experience to the next generation who will be tomorrow’s leaders?

HG. We are addressing this issue through our long-term talent management strategy to build, develop and maintain a pipeline of skilled and prepared leaders from within the company. Saudi Aramco has a formal succession planning process that is applied consistently throughout the organization. This process involves talent reviews and assessment of high potential, ongoing career and leadership development plans, including exclusive action learning opportunities targeting top performers with high potential.

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Moreover, we employ a variety of methods and assessments for identifying, evaluating and ranking candidates for leadership positions. Once these individuals have been identified, they must be placed into the company’s leadership pipeline and their progress and potential tracked on a regular basis. Succession planning is a process by which we identify and plan for the replacement of key leaders with ‘ready now’ successors when needed. In addition, we use multiple approaches to capture the experience and knowhow of experienced staff that involves ongoing feedback from coaches, mentorship programs, and formal knowledge transfer processes. These strategies are supported by a strong commitment from the management team to monitor progress and assure the availability of skills at all times.

And finally, we believe that the better the company does in recruiting and selecting talented employees, the greater the internal talent pool from which to choose future leaders.

Since its early days in the 1940s, the company has focused on developing Saudi nationals to safeguard against labor market fluctuations. Saudization efforts picked up dramatically in the mid-fifties. We grew from fewer than 20,000 employees in 1955, to about 58,000 today. At present, 88 percent of our employees are Saudis. It is worth noting that our top management and operations personnel are all Saudis. This is a remarkable achievement that is only possible due to careful planning and commitment to a strategic goal.

What is Saudi Aramco doing to encourage more young women into the industry? What was it that first attracted you to Saudi Aramco 30 years ago?

HG. To encourage more young women into the industry, Saudi Aramco has demonstrated genuine and pragmatic efforts in leveling the playing field and providing equal

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opportunities for growth and advancement based on meritocracy and contribution. Also, the company ensures that policies and programs are inclusive and conducive to an increasingly diverse workplace. In other words, our policies don’t only provide equal benefits and wages, but they also consider the family lifecycle and support work-life balance; thus meeting the needs and expectations of all employees. Moreover, we realize that some of the technical and engineering disciplines required in the company are not available or delivered by the local education system for women. Therefore, to attract more women to the industry, the company provides training and scholarships to young women to pursue undergraduate and graduate degrees in technical areas related to our core business at top universities around the globe.

As for my own experience, I believe I was attracted to Saudi Aramco by the learning and growth opportunities, diversity of the workforce, professional work environment, access to mentors and an open network of professional staff, and above all, corporate culture, values and work ethics.

And how do you attract skilled oil and gas professionals from abroad? What beneďŹ ts do you offer?

HG. A total comprehensive and compelling employment value proposition (EVP) is the foundation of the talent attraction and retention strategy locally and globally. For expatriate oil and gas professionals, the focus would be on our technology-savvy work environment; challenging and rewarding projects and work assignments; competitive pay package; healthcare programs; quality international

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standard education for their children; safety and security; lifestyle, including travel and leisure, and family-friendly policies and community programs. The effectiveness of our EVP is evidenced by the low turnover rate among expatriates and their long service with the company.

Energy demand is forecast to soar in the next 20 years as emerging economies become more reliant on hydrocarbons. How is Saudi Aramco planning for the future and to ensure the company has the talent to cope with rising demand?

HD. Building organizational capabilities in Saudi Aramco to meet future energy demand starts with a structured and integrated process for talent management and development. The process consists of five fundamental phases, and begins with applying a sophisticated workforce planning model to forecast labor requirements for every business plan period and up to 30 years into the future, using hypothetical scenarios. The model identifies the required skills and recruitment targets. When the plans are approved, the second phase begins with staffi ng activities. Selection criteria are developed, monitored and applied consistently to assure quality candidates and their learning potential.

Candidates go through psychometric and aptitude tests to fi lter the pool and select the top promising applicants. We also sponsor a large number of high school students and train them in our facilities for skilled jobs, or send them to local or international universities based on business needs.

We currently have about 7000 students attending full-time academic/vocational training or university education.

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“Our strategies are effective because they run consistently, regardless of the ebb and flow of the business cycle”

Once employees join us, an individual development plan is designed to build a solid start with strong foundations by going through an intensive, immersive and integrated learning experience – and this is the third phase. The goal is to substantially compress the cycle time for turning new recruits into contributing team members of the workforce.

This is the most critical step in transforming our young recruits into competent professionals and effective leaders.

The fourth phase is the performance management process whereby supervisors play a major role in driving, managing, monitoring and rewarding the desired performance. The third and fourth phases are ongoing and mutually inclusive processes that don’t stop until the employee ends his/her service with the company.

And fi nally, the fi ft h step is the succession planning process that is applied consistently throughout the company. Th is process involves talent reviews, assessment of high potential and knowledge transfer plans. Th is process is helping us address any retirement bulge and an ageing workforce by ensuring qualified employees are ready when they are needed. All five phases of the integrated talent management architecture are held together by competency models that provide consistent framework, language and a set of expectations.

The last two years have seen oil prices hit $147 a barrel before plummeting to just $35 a barrel and then rising to today’s current levels. How do you deal with the impact this has on staff numbers and staff investment because projects could get shelved and the headcount reduced?

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HD. The industry has learned that the current skills shortage was caused by layoffs during previous downturns. So it does not make business sense to let our critical staff go, especially after investing in their training and development, when we know that an upturn in the business cycle could be just around the corner. As mentioned earlier, maintaining long-term strategic focus and policies that do not fluctuate with the global economy has helped us build solid organizational capabilities, and assured the readiness of our workforce and availability of skills when they are most needed – during bad times as well as good times. Our strategies are effective because they run consistently, regardless of the ebb and flow of the business cycle.

Talent management in Saudi Aramco is considered a strategic imperative and business necessity that requires a clear vision and focus. It has always been at the top of our priorities despite economic conditions, and is placed at the pinnacle of our business goals along with maximizing profitability and sustaining reliability of supply.

What gives you the most pleasure from your job?

HD. I get most pleasure when I feel I’m adding value to the organization and helping people tackle challenges and achieve excellent results. My contentment comes from serving and guiding my team and organization and facilitating the needed resources to accomplish personal and business goals. My mission is to lead, guide and serve. And that’s what makes my job most exciting, challenging and gratifying.

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“In a ROWE, work is something you do, not a place you go” Jody Thompson

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Paid for

PRODUCTIVITY Imagine that your workplace is not guided by how much time is spent in the office or what brand of suit is worn to meetings, there are no more unsociable late nights or early morning rush hours, instead your performance is based purely on the results you generate. Sounds great, doesn’t it?

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o-created by Jody Thompson and Cali Ressler, the results only work environment (ROWE) is a HR management strategy with a difference. Employees are paid for results as opposed to the number of hours worked. The duo originally proposed the strategy when they worked at Best Buy, back in 2003, and have since started a consulting group called CultureRx. “We knew it was time to kill the 1950s approach to work,” says Thompson. “We also knew it was time to stop talking about ‘flexibility’ and ‘work/life balance’. For so long, organizations have been trying to address and solve those problems.” Thompson and Ressler believe that it is not an organization’s responsibility to manage flexibility, but to be clear about measurable goals and expectations and manage those instead.

“When we created ROWE, we didn’t cut any corners. We envisioned what the perfect work environment would be like – for organizations and for people. An environment where employees knew exactly what they had to do to keep their jobs and have the freedom to do that any way they want.

We started experimenting with two departments at Best Buy’s headquarters and success followed – increased productivity, increased engagement, reduced voluntary turnover and happier, healthier employees.”

Indeed, the benefits associated with ROWE are individual, organizational and societal. Thompson explains that the individual gets their life back; they are liberated and free to make their own decisions regarding the way they work. “Employees tell us all the time: ‘I’m fi nally able to be the kind of spouse/partner/friend/volunteer/etc that I’ve always wanted to be because now I’m living life on my own terms, I get the best of both worlds,’” says Thompson.

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Employees feel fulfi lled because they’re set up for success in their jobs – able to use their brains and common sense to do their work in the most productive and efficient ways possible. “Employees are healthier”, says Thompson, “we’ve heard time and time again about people’s blood pressure going down, heart attack risks being reduced, headache issues going away, weight issues being addressed, and so on.”

And for organizations it appears to be the perfect scenario: if you want or need more productivity it would traditionally mean hiring more people, but not so in a ROWE system. According to Thompson and Ressler, employees get an average of 41 percent more productivity from their existing population of staff using a ROWE system. What more are you looking for?

“For organizations looking to ensure they keep hold of their best employees, ROWE is a talent magnet,” says Ressler. “Once they’re given freedom, employees turn down promotions for more money at non-ROWE companies. And on the fl ip side, organizations that want to get rid of dead weight – people that are simply ‘putting in their time’ – are able to do so in a ROWE. Very easily. No one can hide, you either produce or you don’t: no results, no job. Managers can stop being hall monitors and babysitters and they actually have more time to focus on strategic planning and being a coach/mentor for employees.”

ROWE’s benefits also spread far and wide on a societal level. “In a ROWE, parents can arrange to be with their children more, they are able to volunteer and give back to the community in many ways. And as ROWE spreads, we predict that traffic congestion will lessen and we’ll start to see major environmental impacts. Employees in a ROWE are also able to be more proactive with their health, which will set a foundation for a much healthier society overall,” says Thompson. “In a ROWE, work is something you do, not a place you go.”

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Results, results, results With ROWE, it’s all about a focus on results as opposed to a physical presence at a desk in an office, there needs to be a focus on setting the goals and expectations and explaining how they will be measured.

Indeed, the biggest challenge currently standing in the way of ROWE adoption is that organizations today operate with this equation: Time + Physical Presence = Results.

Ressler explains that in order to set expectations, managers and employees really need to have “the rug ripped from under them” so that they’ll push each other to set really clear goals and measurements. And that once that happens, the tracking comes easily. “We have a tool called Work Simple that’s unlike any other performance management tool out there – it’s dynamic, collaborative and focused on the right things,” says Ressler.

Hennepin County in Minnesota has made the switch to ROWE. Why? Well, explains Deb Truesdell, ROWE and Telework Manager, the county recognized that people were looking for more flexibility as well as change the method of service delivery. “Originally we were focusing on the benefits of telework, but quickly scratched that idea when we realized that ROWE was going to far better meet our needs,” says Truesdell.

At the beginning of the implementation Hennepin County had a group of 500 employees that undertook a series of sessions and training to understand how to work in a ROWE system. “Our fi rst group started in April 2009 and were ready to begin working in a ROWE in July and August of 2009,” explains Truesdell. “So we have actually passed the one-year mark where we have folks who have been working in this new environment for a

Real life ROWE “ROWE has really been benefiting lives at Hennepin County,” says Deb Truesdell. “During one of our trainings, a young guy came up to one of the trainers and said, ‘I know you’re not going to believe me, but ROWE saved my marriage.’ And they’re like, ‘what?’ And he replied that he has two young kids and that both his wife and himself were assigned to work 8.00 to 4.30. He said that every morning they fought over who was sorting the kids out and he said it was so stressful they were on the point of splitting up.

“And then he becomes part of ROWE, and he just did something simple like changed his start time. So now he comes in later and is able to get the kids off with no more stress in the morning. He said that it has had an unbelievable impact on the whole family.

“Then there was the mom whose college-aged daughter had H1N1. The daughter needs to be at home and while she doesn’t need someone to hold her hand, she needs somebody there. Since mom is working in a ROWE, she arranges with her team that she will work remotely for a two-week span and be able to stay at home with her daughter. Now, the county won because the work still got done – typically if you’re out, nobody does your work – and the mom wins because she doesn’t feel like she’s taking advantage of her team or worrying about work because she’s still doing it.”

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year or more. And we have just started our fourth migration to ROWE this September, which will mean around 1600 people out of our 2800 workforce will be in the ROWE system.”

With over 21 different areas within the department, Truesdell was keen that people from across the whole division would be involved rather than a specific area each time. “We wanted to give it an honest try and make sure that we could do this with a really diverse working environment.”

The benefits include a reduction in expenses, an increase in productivity and an engaged workforce. “First of all. Our infrastructure costs have come down,” says Truesdell. “We don’t need so many workspaces so we’re saving on the square footage, as well as cooling and heating.

“Trusting people, giving them credit and giving them power over their lives is the best engagement I can think of” Deb Truesdell “We are also seeing an increase in productivity even though we’re still in the early days. We haven’t had the results in for that long, so we can’t necessarily tie that to ROWE, but it sure seems coincidental. We are also expecting a more engaged workforce. I have been here for 27 years and ever since I have been trying to figure out how to keep employees motivated and engaged. Trusting people, giving them credit and giving them power over their lives is the best engagement I can think of.”

It seems to be taking over the world one company at the time and for anyone looking to incorporate the same ideas into their organization and needs to pitch ROWE to their leadership, Thompson suggests remembering two things. “First, take the word flexibility out of your vocabulary. Stop focusing on how to help your employees fi nd work/life balance and instead pitch ROWE as the way to get everyone focused on results – to shed all the things that just don’t matter and increase productivity.

“Second, talk about not hiring anymore people to do what you need to do as an organization. You have the talent/skills with you now, they just need to be free to use their common sense and not be shackled by 1950s rules. Same population and more productivity – how can you beat that?”

Indeed, Truesdell suggests that if she were to go through the process again she would spend more time educating leadership and press them on the fact that ROWE is a done deal.

“If your leadership has agreed, you’ve got to go forward and do it well,” she laughs. “Because you are the one that is going to held accountable for it.

It was a hard transition because we had a real mixed leadership team and ‘command and control’ was valued at the company. I would say to anyone else to make sure the top leadership has its heart in it and make sure you spend time with them so they understand it properly.”

At Hennepin County, Truesdell reflects on the impact ROWE has had on the organization, saying that it has changed the mindset of how people view work. “We view work as a place we have to go to, really work should be done around your life. It doesn’t have to be your whole life.” Truesdell goes on to explain that ROWE is applicable to just about any organization: “Everything I read nowadays talks about workplace flexibility and how to attract and retain employees, particularly with the younger generations coming up for who the traditional workspace just doesn’t work for.”

Will ROWE take over the world? Thompson believes it will take decades to spread. “In 50 years, the world will be operating based on results.

Time, physical presence and effort won’t have any meaning anymore.”

Here’s hoping.

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Risk

and reward Are incentives worth the money companies spend on them?

Y

ou can lead a horse to water but you can’t make it drink. It may be an old saying, but it happens to be true, and nowhere more so than in the case of employees. Some people seem to be born with a high level of self-motivation: their reward is a job well done. Others require an external stimulus to encourage them to do their best. This is where the question of incentives comes in – is it worth spending money to keep your employees sweet?

With memories of the recent fi nancial downturn still fresh, you could be forgiven for thinking it’s an academic question anyway.

After all, according to one source, in 2009 nearly 25 percent of employers said they completely cut their spending on benefits/incentives if they could. Other incentives, including more vacation time, flexible hours and the ability to work from home were named as alternatives.

Now the signs of economic recovery are here, however, and with them has come a renewed focus on incentives. Th is could be the perfect opportunity for HR managers to revitalize their company’s incentive and reward programs. Achieving high levels of employee motivation are crucial to a company’s success: if your employees don’t perform, neither will your business.

According to the Incentive Federation, before the downturn, North American organizations spent approximately $27 billion a year on merchandise and travel incentives. Cash incentives included, the total exceeded $115 billion. And an analysis by Incentive Research Foundation found that properly selected and administered tangible incentives (cash and awards) can dramatically increase work performance.

The analysis also found that when tangible incentives are carefully selected, implemented

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and monitored, they increase incentivized work complaints about the way the programs were implemented. performance an average of 22 percent.

Before you begin, ask yourself the followTangible incentives were also shown to siging questions: what can I do to motivate and nificantly increase one’s intrinsic interest in job engage employees and encourage positive behavtask. Claims by previous studies that tangible ioral change? And how can I improve the flow of incentives often cause unintentional decreases dialogue through all levels of the company? You in work’s intrinsic value were not supported by need to know why you are implementing the plan, current research. In 57 percent of the cases rewhat your goals are, and what you want the end ported, objectives were either met or surpassed. result to be – perhaps an improved reputation In 92 percent of the cases, objectives were surboth within and outside the company, as well as passed, met, or at least partially met. higher levels of engagement and motivation.

The Incentive Federation survey showed that if selected, implemented and monitored Tailoring correctly, incentive programs can increase There’s also no point working up a wonderperformance by an average of 22 percent. Team ful bonus program if it turns out the resulting incentives can increase performance by as much incentives are not something your people value. as 44 percent. Incentive programs were also In order to discover what incentives will work found to assist people in pursuing work-related best in your company, start by reading industry goals, to help attract quality employees, and to be valued by both managers and employees.

But before we get carried away with all these positive numbers, we need to remember that an incentive plan should be planned carefully from the implementation stage, because even the best incentive programs can be DIFFERENT LEVELS negated by poor presentation and delivery. A survey conducted by the Incentive Research Foundation of companies using incentive AN EMPLOYEE SURVEY programs found that while such programs are highly RESULTS TO valued by both employees BUILD YOUR and management (99 percent of all survey respondents), 98 OPEN COMMUNICATION percent of respondents had

HOW TO BUILD AN INCENTIVE PROGRAM

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STAY

2. TARGET

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TRENDS

3. C R E AT E 4.

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“It’s crucial to maintain open lines of communication when building the basis for an effective employee incentive program”

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magazines and HR reports to fi nd out what the trends are in employee benefits and incentives.

Th is will help ensure your program stays competitive with others in the market.

Next, divide employees up by level. Even in companies where drawing attention to vertical stratification is discouraged, differences in level need to be acknowledged so that incentives can be targeted appropriately. It may be necessary to speak to upper level managers individually to determine what will work best for them. To efficiently canvass the views of large groups of employees, consider conducting a survey and encourage input about the appeal of particular types of rewards. Any surveys should be anonymous so employees don’t feel negative comments could jeopardize their jobs. Use the results to tailor your incentive program more closely to the needs and desires of your workforce.

Above all, it’s crucial to maintain open lines of communication when building the basis for an effective employee incentive program. People need to be encouraged to talk openly with HR about their concerns, in order to help establish a program that suits them.

The Incentive Federation recommends the following steps prior to the implementation of an incentive program. Assessment: Examine your business closely to see if there are any gaps in performance, where behavior could be influenced through incentives. Selection: Choose between a general recognition program and one based on quota or performance. Value: Ensure the value of the program is communicated to employees through adequate communication and support.

Training: Provide enough support and education to ensure people can achieve the goals required. Support: employees need to believe in the program and have confidence that rewards will be fairly given. Engagement: Award programs should be structured to elicit maximum engagement from employees, as this encourages the biggest performance gains.

Measurement: The Federation recommends that three aspects be measured: active choice (choosing to do the targeted work in the intended manner), commitment (persistence over a long period of time), and mental effort (the ability to think clearly). Analysis: The fi nal ele-

Targeting incentives Tangible incentives (cash and awards) work to different degrees according to the conditions in which they are implemented.

For example:

To encourage something never done before: Tangible incentives yielded an average 15 percent increase in performance – the lowest of any type of performance goal To focus on and persist in working toward a goal: Tangible incentives increase performance by 27 percent To encourage “thinking smarter”: Tangible incentives increased performance an average of 26 percent To incentivize quality versus quantity goals: Tangible incentives had an equal effect on both quantity goals and quality goals To incentivize teams vs. individuals: Incentivized teams increased their performance by 45 percent; incentivized individuals increased performance an average of 27 percent. The increase in team performance is thought to result from decreased ‘social loafing’ that occurs in teams, because of the monitoring required by incentive programs. Clearly, peer pressure has significant value.

ment recommended by the Federation is analysis against the performance objectives and costs, with information recycled in order to adjust future programs.

“Organizations using incentive systems are able to hire and retain higher quality workers” Incentives vs rewards Then there is the question of whether incentives should differ from rewards: the former being used to encourage good performance and foster a positive working environment, while the latter are offered as a bonus to employees who have already achieved a certain standard.

Th is distinction is important, because offering performance-based rewards after the fact brings an incentive program much more into the area of ROI and accounting rather than focusing on employee satisfaction.

Th is reward approach results in a structure designed to minimize risk and maximize cost control. An example of this would be raising the value of a reward as team budgets are met.

‘Recognition’ type incentives are then in danger of being superseded by sales incentives, which are linked to the business performance, which are seen as self-funding because they generate an ROI. The problem with recognition-based incentives is that they tend to reward only the sales side of the company, where value to the business is more easily quantified. Singling out one segment of staff in this way goes against incentive theory, which stresses that all employees deserve the same level of satisfaction in their jobs. With ROI-based rewards, it becomes harder to get approval for programs aimed at non-sales teams, whose impact on the bottom line is less obvious.

A focus on rewarding one-off successes can also be a short-term strategy that ignores the importance of creating employees who are ambassadors for their company. One way to ensure all employees are recognized is to watch out for opportunities to reward loyalty and extra effort over the long term. Examples could be recognizing milestones in length of service or in personal events such as birthdays, weddings and the births of children, or singling out people who contribute constructive suggestions for changing the workplace environment.

Source: The Incentive Research Foundation

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Spending Once you have decided whom the incentives should go to, how do you decide how much to spend? Ironically, spending too much may be counterproductive – experts agree that 1.5 to two percent of base pay, or the equivalent of two hours worth of salary costs per month, should be enough to produce good results.

Cash is not always an employee’s best friend, either. When questioned, staff will often admit to having spent their last cash bonus on bills, or may not even remember where the money went. Th is is why greater success can often be achieved with tangible incentives, such as gift certificates or vouchers redeemable at a range of stores or that offer the employee access to activities he or she might not normally undertake. Th is will make the incentive more memorable, rather than it just being lumped in with that month’s salary.

You’ve revamped your incentive program, and now your staff are happier and the office atmosphere is positive and productive – but this may not be enough to satisfy your CEO if he or she was expecting to see tangible results. Employee satisfaction scores, retention rates and staff attrition scores can all be used to get around this problem, as well as looking at whether employees recommend their workplace to others, and seeking feedback regarding their feelings about their employer.

What about potential downsides of introducing an incentive program? There are some who argue that offering employee incentives takes away from the value of their own interest in their jobs. Over the years, an argument that has gained some traction is that incentives can destroy personal, intrinsic interest in work.

However, research conducted in this area has concluded that rewarding people for exceeding targets causes them to value work more and even heightens self-confidence and employee loyalty.

Businesses also often express concern that money spent on incentives is wasted, because they are only paying for something that would have been achieved anyway. However, research conducted by Harold Stolovitch, Richard Clark and Steven Condly found that only eight percent of respondents said they would have achieved the same results without incentives.

There is some evidence that team member retention can be lower in companies in which incentives are used to reward performance, which may be due to the fact that the focus on individual abilities cause natural attrition in those whose performance is not up to par. However, organizations using incentive systems are able to hire and retain higher quality workers.

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TYPES OF INCENTIVES What are the most popular ways to reward employees?

Cash Always popular, cash bonuses have the advantage of being simple – no wondering whether they will be to the recipient’s taste. The downside is that when lumped in with that month’s salary, a cash award may be quickly forgotten and not perceived as particularly special.

Food Chocolates, cookies and other sweet treats are always popular, but it’s worth thinking outside the box for something really memorable.

Hampers can satisfy a variety of tastes, or go exotic and put together something with an international flavor. If your workforce includes dedicated carnivores, you can even have choice cuts of steak delivered to their doors.

Travel Travel incentives are always popular because they allow employees the chance to escape the office environment, wind down and relax. Travel incentives can range from a short stay at a nearby hotel or resort to a more exotic long-haul destination.

You could even scale it to progress from the local to the more far-flung on a scale depending on the level of achievement.

Adventure Probably the most memorable of rewards, ‘adventure’ gifts represent the more daring end of the incentives market. From the relatively tame options of motor racing and white water rafting, to sky diving, hot air ballooning – and even the opportunity to experience weightlessness at the edge of space.

Gift cards Not as cold as cash, more flexible than an actual gift – gift cards top the incentives list, and can be used to offer just about any of the non-monetary incentives mentioned above.

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Travel | Gadgets | Books | Leisure | Money Agenda

Travel

Technology

Gadgets

In review

What to see and do this fall

36 hours in Los Angeles

The rise of e-readers

Electronic toys for grown-ups

This quarter’s must-reads

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Coming up…

Dec. 02-11 National Finals Rodeo, Las Vegas Organized by the Professional Rodeo Cowboys Association, the National Finals Rodeo, held at the Thomas & Mack Center at the University of Nevada in Las Vegas, is the grand finale of the modern professional rodeo circuit. It has been held in Las Vegas since 1984. Known as the Super Bowl of Rodeo, this 10-day event puts the talents of the nation’s top 15 money-winners to the test as they compete for championship titles.

Nov. 25 Macy’s Thanksgiving Day Parade, New York The annual Thanksgiving Day Parade presented

by Macy’s, in New York City starts at 9am EST on Thanksgiving Day. In addition to the wellknown balloons and floats, the parade also features live music and other performances, such as the college and high school marching bands from across the country. More than 44 million people watch the parade on television each year.

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Oct. 12-Jan.01 Wild Lights, Colorado The entire 35 acres of Denver Zoo is transformed into a magical winter wonderland. The family-orientated event offers hundreds of incandescent trees, holiday entertainment, music, warming stations, and refreshments including soft bread pretzels, roasted nuts, funnel cakes, churros, cider and hot chocolate.

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Dec. 03-04 Get Your Pig On Barbecue Competition, Arizona In Fountain Hills, Arizona, inaugural outdoor BBQ festival will feature a Kansas City Barbecue Society sanctioned BBQ competition, live entertainment and a product-sampling pavilion.

Nov. 18-20 Grand Rapids International Wine & Food Festival, Michihgan Michigan’s premier wine and food experience with over 1000 wines and beers from around the world together with the top fine dining restaurants in Grand Rapids. This event attracts thousands of food and wine fanatics and offers a fantastic array of tastings and cooking demonstrations.

Jan. 06-17 Palm Springs International Film Festival, California Dedicated to showcasing the work of exceptional new and emerging talents, as well as the celebrated works of established auteurs. An industry-friendly launch pad for new films and filmmakers, this event combines the best aspects of a casual marketplace with an established reputation as a great audience festival that filmmakers love to attend.

Jan. 30 Chevron Houston Marathon, Texas With thousands of runners and spectators, the Houston Marathon is the largest single day sporting event in the city. The marathon is popular because of the flat, fast and friendly course, the cool winter weather and the festive experience with 200,000 onlookers, numerous jazz bands, belly dancers, Elvis impersonators and other entertainers.

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36 hours in... Los Angeles Time: PST (UTC-8) | Population: 3.8 million (city) | Area: 498 square miles | Elevation: 77 yards ds

LAheadquartered firms AECOM Capital Group CB Richard Ellis DeviantArt Dunn & Crutcher Fox Sports Net Guess?

Health Net Northrop Grumman Occidental Petroleum Paramount Pictures Premier America Sunkist Growers Tutor Perini

In the know

Eat

The second largest city in the US after New York, Los Angeles, often called by its initials or nickname of the City of Angels, is a world center of business, international trade, entertainment, culture, media and technology. Sprawling along the pacific coast of Southern California, its coastline stretches 122 kilometers from Malibu to Long Beach. Los Angeles is also the largest manufacturing center in the western US and the contiguous ports of LA and Long Beach together comprise the fifth busiest port in the world.

LA is often billed as the Creative Capital of the World, due to the fact that one in every six of its residents works in a creative industry. And according to the USC Stevens Institute for Innovation, “There are more artists, writers, filmmakers, actors, dancers and musicians living and working in Los Angeles than any other city at any time in the history of civilization.”

Ca’Brea is a charming restaurant known for Italian food that looks as good as it tastes. The starters, bread, risottos and pasta dishes, such as homemade agnolotti stuffed with veal and prosciutto in a mushroom sauce, are particularly recommended. A great spot, with lots of wonderful-looking carved wood, polished granite, high ceilings and sand-blasted glass. Popular with young lawyers and film industry people, the restaurant gets very crowded in the evening, so reservations are essential.

Housed in a remarkable building, commissioned in 1928 by Charlie Chaplin, Campanile is composed of elegant dining rooms and an atrium courtyard, central to the sky-lit room. The menu is modern Mediterranean with robust flavors, such as beet with pomegranate and cod with eggplant puree. A superb place to do business or relax with attentive, yet unhurried service and delicious food.

Saddle Peak Lodge is a real hunting lodge, high in the hills above Malibu, a fantastic place to escape the madness of LA. Think real wood, fireplaces and no cell phone reception, with plenty of game on the menu along with seafood. All in all a unique menu, attentive service and cozy atmosphere.

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Time off If you like to work out in your down time then the best place to head is Runyon Canyon Park. The 134-acre park’s main drag snakes along the canyon floor, gradually ascending to the scenic point called Cloud’s Rest. Fitness buffs can choose to proceed downward via a steep dirt fire trail while the rest of us can retrace the path for a gradual, paved return to the bottom.

You have to head to the beach during your stay, and like everything else in LA, there’s one to suit everyone: Zuma beach in Malibu is typical with hot mums and surfer dudes; Venice beach, is great for people-watching, and Manhattan beach is the home of beach volleyball and a great place for a walk.

If you are into shopping, Third Street Promenade is an outdoor mall just three blocks from the beach, and just as good is The Grove in the Fairfax District. The Grove’s trolley travels the one block between the mall and the amazing Farmer’s Market where every single booth sells delicious food.

LA is the second largest city in the US LA was founded on September 4, 1781,

by Spanish governor Felipe de Neve LA has hosted the 1932 and 1984 Summer Olympics LA enjoys a subtropical climate, with an average of 35 days of precipitation annually

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Drink

Sleep

LA offers a mix of live bands, cabaret, jazz, rock and blues as well as being home to some of the most vibrant comedy clubs in the US. Sunset Boulevard still boasts some of the most famous clubs, but other good spots are Santa Monica, Hollywood and West Hollywood, Pine Avenue in Long Beach and Pasadena’s Old Town.

Some of the finest views of LA are found at Skybar, an open-air, ivy-covered pavilion perched between the pool and Outdoor Living Room at the Mondrian Hotel in West Hollywood.

The Beverly Hills Hotel is pure old-style Hollywood glamour. Behind the famous façade lies the star-studded haven, and following a $100 million restoration a few years back, the hotel’s grand lobby and impeccably landscaped grounds retain their over-the-top glory, while lavish guest rooms boast every luxury.

Petit Ermitage is a quaint boutique hotel located right in the center of West Hollywood with fantastic views and great rooms.

Nestled on a quiet street, eclectic European antiques grace every space in the hotel and details include customcrafted mattresses, 618 thread count, water works fixtures, in-suite fireplaces with handcrafted mantels and hand-woven Turkish carpets. While it’s budget friendly, the Petit Ermitage is definitely not a budget experience.

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E is for education Social media and learning technology go hand in hand and it’s only a matter of time before e-readers get in on the action.

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round eight percent of the US population uses an e-reader, with a poll from Harris Interactive releasing figures that show around 12 percent of respondents (or one in eight), said they are likely to get one in the next six months. In a statement, Harris said: “With e-reader sales expected to continue to climb and as more devices now become available, it is inevitable that reading habits of Americans will change.”

And it’s not just habits that will change; a new generation is set to rule how we read, learn and socialize. By the end of 2010, members of Generation Y will outnumber babyboomers. While radio took 38 years to reach 50 million users, televisions took 13 years, the internet four years and the iPod only three, Facebook, the king of social media, added 100 million users in less than nine months. There’s no denying that there’s a revolution happening.

A 2009 US Department of Education study demonstrated that online students outperform their face-to-face counterparts, while one in six higher education students are enrolled in online courses. Pew Research Center’s Internet & American Life Project reveals that 57 percent of experts agree that the pace of learning in the next decade will increasingly be set by student choices. In the next decade they predict that most students will spend at least part of their ‘school days’ in virtual classes, grouped online.

Amazon.com’s Kindle has sold around five million devices since 2007 One obvious advantage of e-readers is the fact that they are portable and able to facilitate near instant access to a huge range of texts and media more cost effectively than paper-based media. This is no doubt a huge potential here for e-readers in education and e-learning; for example, studying, distributing content, loaning library matter, marking and note-taking.

Indeed, with the sudden proliferation of e-books, e-readers and e-textbooks on the market, technology is having a huge impact on how we learn.

And it’s not just students and those in education who are set to benefit; employees in workplaces across the world will see advantages too. From a formal point of view, if an organization’s employees were issued with e-readers it could ensure that each person had instant, anywhere access to policies, procedures and how-to’s.

This would work across many industries, including retail and engineering, for example. For informal learning training, texts and other learning tools could be made available for those who wanted to improve themselves in an informal way.

Indeed, it’s an exciting time for e-readers as social media is opening doors, empowering individuals to learn if and as they choose. Informal learning for personal and career development is at last coming of age – thanks to social media and low cost portable technology.

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Jeff Bezos, Amazon, introduces the New Kindle DX

20/10/2010 11:19

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Technology for today’s executive Polaroid 300 Instant Camera After being dropped for a few years, Polaroid instant cameras have been rejuvenated by a new creative director, Lady Gaga, and a new flagship instant snapper in the shape of a Polaroid 300 Instant Camera. While pretty chunky, the Polaroid 300 is also surprisingly lightweight. An instant flash is now built in and there are four scene settings to get the most out of the straight-to-shot prints.

Sony DR-GA500 gaming headphones Sony has officially unleashed its brand new gaming headphones, with 7.1ch 3D surround sound effects. With a separate signal-processing unit, which decodes and delivers Dolby Pro Logic llx audio, Sony has also ensured that the headphones themselves are created with ‘triple enfolding’ padding, so they’ll sit on your ears for hours without the least bit of irritation. While they’re primarily designed for gaming, they’ll also be great for watching movies or listening to music, and the built in mic will be handy for Skype conversations or other VoIP services.

Apple 12-core Mac Pro Packing a punch, the 12-core Mac pro desktop beast is now available from Apple, with prices starting at a whopping $4999. But for that price tag you get a lot of machine. Entry models feature two 2.66GHz six-core Intel Xeon Westmere processors, a 1TB hard drive and 6GB of RAM with an ATI Radeon HD 5770 in charge of graphics duties.

Splash the cash further and the 12-core Mac Pro offers even more.

Sanyo Xacti VPC-PD2 Sanyo have finally delivered what we’ve all been waiting for: a high-def pocket camcorder with optical zoom lens. The VPc-PD2 offers a 3X optical zoom lens that ranges from 38mm wide angle to a 114mm telephoto, along with stereo microphones on the sides of the camera. The price fits the rest of the market at only $170 and it measures a slinky 2.48 x 0.87 x 4.36, weighing 3.7 ounces – that’s positively pocketable. Good work Sanyo.

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Hot off the press Use Your Head to Get Your Foot in the Door: Job Search Secrets No One Else Will Tell You

By Harvey Mackay Bestselling business author Harvey Mackay returns to the market with an uplifting, amusing and accessible book crammed with proven tips in a guide to the toughest job market in decades. He shows how to be at your best when things are at their worst and utilizes his huge business experience to guide you through the whole process – from reading warning signs that your job might be under threat so that you can keep yourself on the payroll, to preparing for and acing your interview, to negotiating a raise once you’ve got the job.

HRM says: Placing importance on the mental game of job hunting and surviving in the workplace, this book is a great game plan drawing on Mackay’s personal experiences.

The Way We’re Working Isn’t Working: The Four Forgotten Needs That Energize Great Performance

By Tony Schwartz and Catherine McCarthy with Jean Gomes Through his years of intensive consulting work, Schwartz has developed a powerful program for changing the way we work that greatly boosts engagement and satisfaction with our work and increases our performance. In this book he shows that the current model of work – in which people are treated essentially as machines – is specifically counter-productive because it saps us of our physical, emotional, mental and spiritual energy. In order for us to perform at our best, we must make a set of key changes in our work lives – and our companies must institute changes that will provide us with the regular physical renewal, emotional reward, mental focus and stimulation; and the sense of purpose and of significance that we need.

HRM says: Really interesting take on why we work as we do and how best to embrace a new philosophy focused on creating an energy-optimized workforce. It’s time to focus on quality not quantity.

The Happiness Advantage: The Seven Principles That Fuel Success and Performance at Work

By Shawn Achor Recent discoveries in the fi eld of positive psychology have shown that happiness fuels success, not the other way around. When we are positive, our brains become more engaged, creative, motivated, energetic, resilient and productive at work. This isn’t just an empty mantra. This discovery has been repeatedly borne out by rigorous research in psychology and neuroscience, management studies, and the bottom lines of organizations around the globe.

Shawn Achor produced the largest study to date (1600 participants) concerning happiness and human potential. Drawing upon the results of the study and on Achor’s personal experience, The Happiness Advantage uncovers and explores the idea that when we are happier we become much more positive and productive, allowing us to be more successful in the long term.

HRM says: From one of the world’s leading experts on human potential this book is everything you would expect it to be: a thoroughly interesting read on work happiness.

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A merrier holiday season

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ccording to a survey by the National Retail Federation, US consumers are set to spend more this holiday season. Shoppers plan to spend an average of $688.87 on gifts, decorations, food and other holiday-related purchases in 2010, up from the $681.83 spent last year. However, this is still well below the $755.13 spent in 2007, just before the economic downturn wreaked havoc with the retail industry.

The survey also stated that 61.7 percent of shoppers believed the economy would affect their spending, down from 65.3 percent in 2009. Bargains are still a high priority, with 54.1 percent saying they would look for sales, while 40.6 percent plan to use coupons.

Most shoppers also plan to treat themselves. About 57.1 percent of consumers are expecting to make non-gift purchases for themselves, up 52.9 percent from 2009. They are also planning to spend more on themselves: $107.50 on average, compared with $101.37 last year.

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