Workforce - January/February 2019

workforce.com

January/February 2019

PUBLIC AWARENESS

HR tech among the trials facing civil servants

RECRUITING IN PUBLIC

Talent wars with the private sector

GOING INTO LABOR RELATIONS Two sides of the negotiating table

Memphis CHRO Alex Smith takes city’s tech to the cloud.

ADVICE PROVIDER

RECORDKEEPER

RECORD

For Plan Sponsor Use Only.

FidelityŽ Portfolio Advisory Service at Work is a service of Fidelity Personal and Workplace Advisors LLC, a registered investment adviser and a Fidelity Investments company. Discretionary portfolio management services provided by Strategic Advisers LLC, a registered investment adviser and a Fidelity Investments company. This service provides advisory services for a fee. Š 2018 FMR LLC. All rights reserved.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

857078.1.0

Now you can choose Fidelity as your participant advice provider.

And keep your recordkeeper the same.

Fidelity advisory services, including managed accounts, can now be available through any recordkeeper you like. That means you have more choice. And that’s a big deal, because when selecting an advice provider, it’s your fiduciary duty to choose the right one for your employees. With so much on the line, it’s good to know you can put the experience, strength, and stability of Fidelity to work for you.

Call us now to see how you can get Fidelity advisory services through your current recordkeeper.

DKEEPER

RECORDKEEPER

855-9-ADVICE | go.fidelity.com/advice (855-923-8423)

From Our Editors

FROM PERSONNEL TO WORKFORCE

I’m old enough to remember when you had to roll down your car window by hand. Lap belts in the front seat, too.

Now, power windows come standard.Anti-lock brakes and air bags, as well.

Back-up cameras, GPS and satellite radio are increasingly part of the package.

What was once a luxury is now standard issue.

In HR, a similar rise in standards continues apace.

Each year, organizations expect more and better practices from their HR departments. Organizations are better for it, too.

So when the ISO announced last month the release of standards for recruitment, diversity, workforce planning, leadership and workplace culture among others (page 40), it’s worth remembering the professionalization of the field wasn’t always a given.

Now it comes standard.

Time to up the game again.

— Mike Prokopeak, Editor in Chief 4

Workƒorce | w o r k f o r c e . c o m

The workplace has changed a lot since 1922. That year The Journal of Personnel Research debuted, rebranded later as Personnel Journal and finally Workforce. Now in our 97th year, we take a look back at what was on the minds of past generations of people managers.

Acting on Labor Relations,

SEPTEMBER 1935

Arguably the most historic federal labor-relations decision to protect both workers and employers was signed into law in 1935, and the September issue of Personnel Journal took eight pages to republish major provisions of the Wagner-Connery Labor Disputes Act along with brief commentary on their significance.The commentary lends little perspective — “It does not cover all industry and labor, but is applicable only when violation of the legal right of independent self-organization would burden or obstruct interstate commerce” — but the significance of devoting that much space in a magazine reveals the wide-ranging impact of this landmark labor legislation.The issue also contained a book review of “Government Career Service,” in which author Leonard D.White wrote,“Unless we establish a recognized career comparable to the careers which can be found in the universities, in the professions, and in the business world, the best men will go elsewhere and government will get exactly what it deserves.” Finally, a short story on “Beauty Culture as a Vocation for Women” pointed out disparities in pay — between “white women” earning $14.25 a week and “Negro women” who earned $8. And white men? They averaged $22.50 a week.

— Rick Bell

Aren’t the ’90s Ironic?

JANUARY 1999

We’re ringing in the new year with an issue that summarized a decade with an abundance of pop culture references. Allan Halcrow, editor in chief at the time, channeled his inner Forrest Gump in his editorial letter, writing that work in the ’90s was “a lot more than a box of chocolates.”

“The ’90s in Review” looked at everything from the Middle East crisis to presidential impeachment hearings to the death of Princess Diana. The story deemed the decade as “a decade of irony,” referencing Alanis Morissette’s hit song “Ironic.”

January 19 99 What was ironic about the workplace of the ’90s, exactly? Even though corporate America embraced diversity initiatives throughout the decade, employee lawsuits against employers for inequities were higher in the late ’90s than at the outset.

The issue also featured a news brief about women’s groups pressing lawmakers to get employers to cover the cost of contraception as a health benefit, since following the release of Viagra in 1998, most insurers covered the prescription for men — something more inconsistent than ironic.

Finally, there was a list of new workplace trends that began appearing in the ’90s — many of which are still relevant today. November 1998 marked the beginning of telecommuting becoming an acceptable practice. February 1996 marked a period of gang infiltration in the workplace. And April 1997 brought on new HR challenges thanks to a series of mega-mergers.

— Andie Burjek j a n u a ry / f e b ru a ry

2019

Spark learning and discussion with a book that matters.

Companies across the US are investing in corporate leadership events and reading programs to inspire employees.

• Choose from Amazon’s massive Kindle book selection for your next L&D initiative.

• Easily buy eBooks in large quantities and send to your team in minutes.

• Read best selling business & leadership titles anytime, anywhere, with the free Kindle app.

See how easy it is to get started 15 12 13 14 15+

Purchase

Select the eBook quantity

Deliver

Send the eBook link to your contacts

Read

Recipients can read on any device

Visit Amazon to order large quantities of your favorite Kindle books:

www.amazon.com/ebooksforbusiness Questions? Speak with a Kindle books expert: kecs@amazon.com

A PUBLICATION OF January/February 2019 | Volume 98, Issue 1 CHIEF EXECUTIVE OFFICER VICE PRESIDENT, RESEARCH AND John R. Taggart ADVISORY SERVICES jrtag@workforce.com Sarah Kimmel PRESIDENT skimmel@workforce.com Kevin A. Simpson RESEARCH MANAGER ksimpson@workforce.com Tim Harnett VICE PRESIDENT, tharnett@workforce.com GROUP PUBLISHER DATA SCIENTIST Clifford Capone Grey Litaker ccapone@workforce.com glitaker@workforce.com VICE PRESIDENT, VIDEO AND MULTIMEDIA EDITOR IN CHIEF PRODUCER Mike Prokopeak Andrew Kennedy Lewis mikep@workforce.com alewis@workforce.com EDITORIAL DIRECTOR MEDIA & PRODUCTION Rick Bell MANAGER rbell@workforce.com Ashley Flora MANAGING EDITOR aflora@workforce.com Ashley St. John VICE PRESIDENT, EVENTS astjohn@workforce.com TREY SMITH ASSOCIATE EDITORS tsmith@workforce.com Andie Burjek EVENTS CONTENT EDITOR aburjek@workforce.com Malaz Elsheikh Ave Rio melsheikh@workforce.com ario@workforce.com WEBCAST MANAGER ASSISTANT MANAGING Alec O’Dell EDITOR aodell@workforce.com Christopher Magnus EVENTS GRAPHIC cmagnus@workforce.com DESIGNER EDITORIAL ART DIRECTOR Latonya Hampton Theresa Stoodley lhampton@workforce.com tstoodley@workforce.com BUSINESS MANAGER Vince Czarnowski EDITORIAL ASSOCIATE vince@workforce.com David Chasanov dchasanov@workforce.com MARKETING DIRECTOR Greg Miller Aysha Ashley Househ gmiller@workforce.com ahouseh@workforce.com

MARKETING SPECIALIST Kristen Britt kbritt@workforce.com REGIONAL SALES MANAGERS Derek Graham dgraham@workforce.com Robert Stevens rstevens@workforce.com Daniella Weinberg dweinberg@workforce.com DIRECTOR, BUSINESS DEVELOPMENT Kevin Fields kfields@workforce.com

CONTRIBUTING WRITERS Laurie Bassi Jennifer Benz Carol Brzozowski Kris Dunn Jerry Glass China Gorman Sarah Fister Gale Jon Hyman Patty Kujawa Dan McMurrer Dale Pazdra Rita Pyrillis Daniel Saeedi Heather M. Sager Rachel L. Schaller

FREE, LIVE, WEBINARS.

DIRECTOR, AUDIENCE DEVELOPMENT Cindy Cardinal ccardinal@workforce.com DIGITAL & AUDIENCE INSIGHTS MANAGER Lauren Wilbur lwilbur@CLOmedia.com DIGITAL COORDINATOR Steven Diemand sdiemand@CLOmedia.com LIST MANAGER Mike Rovello hcmlistrentals@infogroup.com BUSINESS ADMINISTRATIVE MANAGER Melanie Lee mlee@workforce.com

WORKFORCE EDITORIAL ADVISORY BOARD Arie Ball, Vice President, Sourcing and Talent Acquisition, Sodexo Angela Bailey, Associate Director and Chief Human Capital Officer, U.S. Office of Personnel Management

UPCOMING! FEBRUARY 20 Building A Culture of Meditation In Your Organization

CHECK OUT WHAT YOU’VE MISSED! DECEMBER 12 Making a Business Case for Soft Skills

DECEMBER 13 Creating a Recruiting Strategy that Embraces Change

Kris Dunn, Chief Human Resources Officer, Kinetix, and Founder, Fistful of Talent and HR Capitalist Curtis Gray, Senior Vice President, Human Resources and Administration, BAE Systems Jil Greene, Vice President, Human Resources and Community Relations, Harrah’s New Orleans Ted Hoff, Human Resources Vice President, Global Sales and Sales Incentives, IBM Tracy Kofski, Vice President, Compensation and Benefits, General Mills Jon Hyman, Partner, Meyers, Roman, Friedberg & Lewis Jim McDermid, Vice President, Human Resources, Cardiac and Vascular Group, Medtronic Randall Moon, Vice President, International HR, Benefits and HRIS, Lowe’s Cos. Dan Satterthwaite, Head of Human Resources, DreamWorks

Available live on the air date and on-demand for one year after unless otherwise specified. Check them out today and keep the education going! www.workforce.com/wf-events/

EARN RECERTIFICATION CREDITS!

Dave Ulrich, Professor, Ross School of Business, University of Michigan Workforce (ISSN 2331-2793) is published bi-monthly by MediaTec Publishing Inc., 150 N. Michigan Ave., Suite 550, Chicago IL 60601. Periodicals postage paid at Chicago, IL and additional mailing offices. POSTMASTER: Send address changes to Workforce, P.O. Box 8712 Lowell, MA 01853. Subscriptions are free to qualified professionals within the US and Canada.

Digital free subscriptions are available worldwide. Nonqualified paid subscriptions are available at the subscription price of $199 for 6 issues. All countries outside the US and Canada must be prepaid in US funds with an additional $33 postage surcharge. Single price copy is $29.99 Workforce and Workforce.com are the trademarks of MediaTec Publishing Inc. Copyright © 2019, MediaTec Publishing Inc. ALL RIGHTS RESERVED. Reproduction of material published in Workforce is forbidden without permission.

Printed by: Quad/Graphics, Sussex, WI

The use of this seal is not an endorsement by the HRCertification Institute™ of the quality of the program. It means that this program has met the HR Certification Institute’s criteria to be pre-approved for recertification credit.

Human Capital Media is recognized by SHRM to offer Professional Development Credits (PDCs) for the SHRM-CPSM or SHRM-SCPSM. For more information about certification or recertification, please visit www.shrmcertification.org.

CONTENTS

ON THE COVER WORKIN’ IN MEMPHIS

Alex Smith took her private sector savviness public and acquired crucial HR tech tools.

Q

COVER PHOTO BY MICHAEL ALLEN

Y ASSURE LIT D UA

36

40 SECTOR REPORT 44 RECRUITMENT PROCESS

OUTSOURCING PROVIDERS

Recruitment process outsourcing companies do more than you think.

46 RECRUITING SOFTWARE PROVIDERS

Recruiting technology has suddenly become a hot commodity.

8

Workƒorce | w o r k f o r c e . c o m

FEATURES 26 CIVIC LESSONS

An aging workforce and outdated hiring processes put public sector employers on notice.

32 GOING INTO LABOR RELATIONS

HR Director Dale Pazdra and labor relations specialist Jerry Glass sound off on smoothing negotiations.

40 HR CERTIFIED

Recent approval by the ISO brings standardization practices to the human resources profession. j a n u a ry / f e b ru a ry

2019

ON THE WEB SPEAK UP!

32

The Workforce online community provides you with virtual meeting places to chat about issues and trends affecting you and your workplace.

LIKE US: workforce.com/facebookpage

FOLLOW US: workforce.com/twitteraccount

26

JOIN THE GROUP: workforce.com/linkedingroup

WATCH US: workforce.com/youtubechannel

FOR YOUR BENEFIT COLUMNS 4

YOUR FORCE

Setting the New Standard for Human Resources

14 WORK IN PROGRESS

That New Boss Feeling

16 QUALITY OF LIFE CARE

Palliative care is growing as a sought-after benefits option.

17 TAKING NOTICE

More employers make mental health issues a top priority.

19 BENEFITS BEAT

It’s Time to Get Political

22 THE PRACTICAL EMPLOYER

America’s Worst Employers

50 THE LAST WORD

Public Sector Modernization Plan

j a n u a ry / f e b ru a ry

2019

17 FINANCIAL BENEFIT Student loan payoff pays off for 401(k) contributions.

18 DESIGNING PROGRAMS

Wellness plans no longer have EEOC incentive guidelines to follow.

TRENDING 10 BACK TO SCHOOL

Feds hit campuses to find and attract younger workers.

11 PEOPLE MOVES

AND BY THE NUMBERS

TD Bank, SAP, Whirlpool greet new HR heads; going public.

12 Q&A

Feeding America’s Matt Hayes.

12 PUBLIC EXCHANGE

The IPMA honors several public sector HR leaders.

LEGAL 20 MANAGING A MERGER

Labor issues become a top concern during an acquisition.

21 LEGAL BRIEFINGS

Age bias; suing employees.

w o r k f o r c e . c o m | Workƒorce

9

TRENDING

Talent Crisis Sends Feds to School to Attract Younger Workers Solutions to easing the talent gap are more complicated than expedited hiring.

By Carol Brzozowski

A

n increasing U.S. population is requiring greater reliance on federal government services as the public sector workforce faces a growing talent crisis.

Thomas Ross, president of the Volcker Alliance, said 7.2 percent of the federal government workforce is younger than 30 years old compared to 25 percent in the private sector where young people interested in areas such as cybersecurity can command higher pay.

Meanwhile, the federal workforce is aging, with retirements creating vacancies.

When President Donald Trump signed HR 5515 — the John McCain National Defense Authorization Act for fiscal 2019 — into law in August, it initiated civil-service reform legislation not seen in nearly four decades.

Provisions focus on recruiting, hiring and attracting a younger workforce as outlined in “Renewing America’s Civil Service,” a joint initiative of the Volcker Alliance and the Partnership for Public Service, two nonpartisan, nonprofit organizations that worked with a U.S. Senate committee responsible for government operations to incorporate the jobs initiative into the bill, Ross said.

Solutions to easing the talent gap are expediting hiring for college graduates and post-secondary students and enabling federal agencies to determine recruitment processes to compete for top talent.

Security clearances notwithstanding, the federal government hiring process averages 106 days — three times as long as in the private sector, Ross said.

Government also can take a cue from the private sector in offering jobs to promising candidates months in advance of their graduation, Ross said.

The NDAA changes the Department of Defense’s authority to directly hire recent graduates and gives federal agencies flexibility in setting the minimum number of candidates who must be considered on a referral list for each vacancy.

Attracting people early in their career and transitioning them into permanent roles following a federal government in10

Workƒorce | w o r k f o r c e . c o m

ternship or fellowship while emphasizing the value of public service can make federal jobs appealing, said Ross.

The Volcker Alliance launched Government to Universities to engage in nationwide discussions with university and government officials regarding federal government workforce recruiting, as colleges and universities consider curriculums preparing students for the future government workforce, Ross said.

Such efforts engage not only schools of public affairs but also business schools, law schools and computer science programs, giving students the tools needed for data-driven decisions “so they understand how to be the best managers they can be and how to deal with the vast amount of outsourcing and contracting taking place in the government,” said Ross.

The Volcker Alliance’s “Preparing Tomorrow’s Public Service” report outlines skills and competencies government employees say would have benefited them

INCORPORATING MORE FIELD-BASED CONTENT IN EDUCATION AND TRAINING WILL HELP PREPARE NEW WORKERS. in school and raises ideas about professional development needed to ensure future success, Ross said.

They include team and self-management, responding to the public, data and technology skills, business acumen and navigating the broader environment.

Maggie Mello, Volcker Alliance associate director, said one surprising find was that respondents ranked soft skills important to success over more technical skills.

Maggie Mello

The Volcker Alliance promotes the idea of government agencies and professional associations assisting rising leaders with networking, mentoring, coaching and developing career-stage learning rubrics.

Higher education and training institutions can incorporate more fieldbased content such as mock negotiations, team-based assignments with assigned roles reflecting typical government roles, and coursework reflecting the interdependencies and overlapping domains in real-world public service.

They also can partner with government agencies and associations to develop scalable professional education offerings such as certificate programs aligned with competency areas.

“Preparing students for public service work is not as straightforward as preparing them for other occupations because as a public servant your objectives are often less clear,” said Jon Nehlsen, associate dean at Carnegie Mellon University’s Heinz College of Information Systems and Public Policy.

“Business schools teach students skills to increase shareholder value, a worthy proposition,” he added. “But what is the analogy for public policy schools? Increasing social welfare involves managing many groups with often-competing interests.” j a n u a ry / f e b ru a ry

2019

TRENDING

PEOPLE KELLEY CORNISH TD Bank named Kelley Cornish head of global diversity and inclusion. Cornish will expand the bank’s efforts to promote diversity throughout the U.S. and Canada, implementing and delivering its enterprise D&I strategy, with a focus on building and measuring workforce representation and extending accountability for inclusion across the organization. Cornish joined TD in 2017 SUSAN EISMA Merlin Entertainments named Susan Eisma as human resources director for Legoland New York Resort.

Eisma, a native of the village of Florida, New York, will lead the HR strategy for Legoland New York Resort as it prepares to recruit, hire and train 1,300 employees — many of them from the surrounding area. Eisma was previously VP of HR at Patina Restaurant Group.

MIKE FERGUSON BPO provider TaskUs named Mike Ferguson its first chief people officer. Ferguson will play a crucial role in building the company’s reputation as a “people first” employer as the company continues to expand globally. Ferguson brings two decades of experience in HR strategies and programs for international organizations. He comes to TaskUs from Chipotle Mexican Grill, where he was head of people support.

By the Numbers

moves CAREY MARTIN Whirlpool Corp. named Carey Martin as vice president of global human resources. Martin will succeed David Binkley as chief human resources officer in 2019.

Martin joined Whirlpool in 2013 as vice president of human resources for the North America region. Martin will report directly to Whirlpool CEO Marc Bitzer.

AMY SMITH Real estate investment company The Laramar Group named Amy Smith as vice president of human resources. Smith will develop and implement Laramar Group’s HR strategy for its 600 employees over multiple states and oversee all talent acquisition for multiple markets.

JUDITH MICHELLE WILLIAMS SAP SE named Judith Michelle Williams head of people sustainability and chief diversity and inclusion officer. Williams will grow SAP’s D&I strategy to fuel innovation and engagement and to drive business success and lead business health and diversity and inclusion, which focuses on gender intelligence, cross-generational intelligence, culture and identity, and differently abled people.

To be considered for People Moves, email a brief announcement and a high-resolution color photo to editors@workforce.com.

Include People Moves in the subject line. j a n u a ry / f e b ru a ry

2019

compiled by Rick Bell

Going Public Let’s break down the public sector workforce.

Rank and File

21,697,980

— Total number of U.S. public sector employees

13.5% 29.8% Federal

56.7%

State

Average annual wage

$56,870

Local

Union, Yes Public sector workers represented by unions

37.9%

Average age

45

Members of unions

34.4%

Armed Forces Enlisted personnel 1,085,286 Officers 233,589

(NOTE: Military personnel are not included in the same group as public sector)

Majority Report Public sector workers by gender Women

56.6%

Men

43.4% Source: Bureau of Labor Statistics

orkforce.com workforce.com | w Workƒorce 10| Workƒorce

11

TRENDING

Public Honors

By David Chasanov

T

AN EMPLOYEE ENGAGEMENT GURU

By David Chasanov

Matt Hayes, CHRO

Matt Hayes has been working in human resources for a quarter century. Some 18 of those 25 years were spent with Ingredion Inc., a for-profit ingredient provider.Two years ago, he made the shift to the nonprofit organization Feeding America. From providing volunteer opportunities to conducting employee surveys, Hayes, Feeding America’s CHRO, has excelled in all aspects of employee engagement.

Workforce: What got you interested in being a leader at this organization?

Matt Hayes: For quite a while in my career I thought about working for a mission-based organization. When Feeding America came along, I learned more about hunger in America and the impact it has in every community. Seeing the work Feeding America does to respond to that challenge, I wanted to join the fight. I’ve gotten to know the organization better and these people are very passionately committed to what we are doing. It’s a fun environment to work in as a regular employee and HR leader.

WF: What equals employee engagement for a nonprofit versus a for-profit?

Hayes: Thinking about Feeding America, we have volunteer opportunities at our 200 food banks and 60,000 agencies nationwide. On the for-profit side, understanding the value proposition you’re bringing your employees is critical to attracting, motivating and retaining talent. Even at Feeding America, where we think our mission is a major differentiator, we developed a model where we have seven factors that looks at employee engagement. It’s things like career advancement and work-life balance.

WF: Is there a new engagement strategy from when you first started?

Hayes: Employees now force-rank what matters most to them among seven focus areas. For example, where does career advancement rank versus work-life balance? Is it a 10, being fantastic, or a 1, this is missing right now? Then the manager and employee discuss the results. We found it helps promote transparent discussions about what matters most to each employee and what managers can do for those employees.

WF: When natural disasters occur, how do you engage employees through volunteer opportunities?

Hayes: We have a senior leader who’s focused on leading disaster response and we engage a cross-functional team to coordinate that effort. The team works to move food to impacted communities. We raise funds nationally to support disaster relief and advocate for federal disaster support in Washington when that’s needed. With Hurricane Florence, we provided 5 million pounds of food to communities in the Carolinas. We raised almost $2 million in funds to support that work. With Hurricane Michael, even in the early stages we worked with Florida’s Office of Emergency Management and the Federal Emergency Management Agency before the hurricane made landfall. We had water and meals staged in critical places. Disaster response is an integral part of our organization and mission.

12

Workƒorce | w o r k f o r c e . c o m

hree agencies, two HR veterans and a local association chapter recently were recognized by the International Public Management Association for Human Resources for public sector contributions.

The IPMA’s Agency Awards for Excellence went to Suffolk, Virginia, Department of Human Resources & Risk Management in the Up to 1,999 Employees category; the City and County of Denver Office of Human Resource in the 2,000 to 9,999 Employees category; and the state of Tennessee Department of Human Resources in the More Than 10,000 Employees category.

Agency awards go to member human resources programs whose overall quality, accomplishments and contributions have exceeded those normally seen in the public sector for at least the past three years, according to the IPMA. The Tennessee Chapter of the IPMA was chosen for the 2018 Chapter Award for Excellence. The chapter significantly improved the HR profession by introducing innovative membership recruitment and retention strategies including offering valuable educational programs and engaging in high-quality member communications, according to the IPMA. Individual awards also were given to Richard L. Stokes and Trish Holliday.

Stokes, an HR veteran, received the Honorary Life Membership, which recognizes HR leaders who have succeeded in advancing or continuing the purposes of the association. The association recognized Stokes’ service as an IPMA past president, teaching IPMA-HR certification courses and his 20-year experience leading Tennessee’s state chapter of IPMA-HR. Holliday earned the Warner W. Stockberger Achievement Award, which honors an employee’s contributions to public sector personnel management. Holliday is the state of Tennessee’s chief learning officer and assistant director of the state HR department. Holliday said winning the award was extremely inspiring. j a n u a ry / f e b ru a ry

2019

3 Behaviors for Leadership in the Digital Age

By China Gorman

I

t’s not enough for business leaders to merely be behind the curtain anymore.

In a world that’s rapidly becoming more technology driven, managers and executives must put in extra effort to create human relationships with their people — connections that are necessary for any organization to thrive in a complex and competitive marketplace.

The more your business is centered around artificial intelligence or other digital technologies, the more effort you have to make to be human and to create human relationships, pry people away from their smartphones, have face-to-face conversations, appreciate people and be honest.

1. Be trustworthy and fair. Whether your people see you regularly in person or you stay “behind the curtain,” your team has to be able to trust that what you say is the truth.That doesn’t necessarily mean you always share everything you know, but everything you do say has to be true. If you can’t share an answer to a question or some other information for a legal or strategic reason, then be upfront about that. When you speak you should tell the truth, and if the truth changes you should go back to your people and explain why.

2. Be personal and approachable. The second vital behavior for leaders is that even if you stay “behind the curtain” and all anybody sees is the smoke and the floating face of the “wizard,” you still have to figure out how to be personable and approachable.Your people still need to feel that you’re a human being — and that they’re being treated as human beings. That means if you bump into each other in the hallway, you stop, look him or her in the eye and talk directly to that person. If you struggle to make human connections with your team, consider holding office hours in the cafeteria two times a month for a few hours and announcing it to your team by offering to chat or answer questions. Maybe just two people will show up the first time. But the next time four people will attend, then eight. Before long you will have made real strides in changing the vibe in your organization.

3. Provide and acknowledge meaning. This can be a hard one for baby boomers, who, broadly speaking, are often happy just to have a job. But today’s reality is that there are younger generations in the workforce who, while certainly happy to have a job, care more about the values that they hold and the meaning they derive from their work than previous generations have. In this case, the CEO will rarely be the person who regularly acknowledges meaning for low-level employees, but they can still do it periodically.

Increasingly complex times demand dynamic leadership, which calls upon business leaders to step out from behind the curtain and connect with their people on a genuine human level.

China Gorman is managing director America for Unleash and is the former CEO of Great Place to Work. This content was developed in partnership with Unleash America.

To comment, email editors@workforce.com.

j a n u a ry / f e b ru a ry

2019

The Workforce Guide to Performance Measurement

By Mike Prokopeak

M

anagement moguls are mad for measurement.

Measurement is the key to higher corporate performance, some argue. It’s the path to optimal results, other say. With just the right measurement approach, a middle-of-the-road employee can be transformed into a world-class performer.

Performance measurement might just be one of the most important and most misunderstood concepts in management today. Add in modern technology and its ability to hoover up vast amounts of data and spit it back out into an endless series of charts, widgets and dashboards and the head spins.

When it comes to HR, measurement is both art and science. A century ago, it wasn’t just a fleet of Model T cars that came rolling off an assembly line in Detroit. Along with them came the popularization of an emerging business model: scientific management. Pioneered by efficiency guru Frederick W. Taylor, scientific management took engineering principles and applied them to the factory floor, helping bosses squeeze the most of their workers and machines.

In later years, legendary GE boss Jack Welch strode the marbled corridors of corporate America bringing stacked ranking into the mainstream.

High performing “A players” got promoted, “B players” were slotted into appropriate supporting roles and lowly “C players” got a shove out the door. Performance measurement moved from the factory floor to the C-suite, pushing aside a paternalistic corporate culture in favor of one based on performance.

The war for talent put a new spin on performance measurement. Rather than seeing employees battle to stay atop the org chart, companies found themselves competing to attract and retain the best and brightest who have the specialized skills needed to thrive in a fast-paced global economy. Performance measurement linked up further with performance management and its focus on engagement, retention and ongoing employee development.

With all the demands the modern economy places on an HR department, it’s understandable to be a bit confused about the state of performance measurement.

Workforce has you covered with our new “Guide to Performance Measurement” available at Workforce.com/performancemeasurement.

Management may be mad for measurement but we’re here to help you keep it sane. w o r k f o r c e . c o m | Workƒorce

13

TRENDING

THAT NEW BOSS FEELING

By Kris Dunn |

“W

Wo r k i n P r o g r e s s

here are we at with <insert random request for information>?”

If you hear this type of question from a new boss as an HR leader, be alert.This question is not an invitation to list what’s been done. It’s a test.

Put on a helmet, kids, because I’m about to give you some tough love.

In the future, all of you reading this will get a new boss.

Most of you will have five to 10 new bosses across the rest of your career, which is reflective of how chaotic work is for our generation and the general pace of change.

Some of those new bosses are going to have manageable expectations. But it’s important to note that many of them are going to expect new things out of you, and they generally won’t be that concerned with your feelings.

Many of the new bosses are going to expect you to be great in the way you do HR.The problem with that?

Their definition of great is going to be different than yours, and their definition is the only one that counts.

Here’s how your interactions with a new boss who expects you to be great are going to go: 1. The new boss comes in and things appear fine.

This is called the honeymoon period. All parties are getting to know each other, and your new boss is forming opinions of what he’s got related to talent on the team.

There are lunches, light meetings and even some jokes!

2. You’re presented with a challenge, and you do what you do, and what you have always done.

Let’s assume the challenge is about recruiting, and the boss asks you what you’re doing to recruit developers.

You reply with what you’ve always done, which is to post far and wide and pray those postings are effective. Note that you didn’t do more than what you did in the past in this area. It was out of your comfort zone, and what you had always done had always been enough.

3. The new boss expresses on some level that you’ll need to think differently to meet expectations.

How your new boss frames this request depends on the challenge, but it generally follows a “What else you got?”

4. The new boss doesn’t tell you what more looks like, but will tell you if they are impressed by what you’re doing. That’s why they’re the boss. If they have to tell you what to do, they’re not sure why they

need you on the team. They won’t tell you what to do, but they will compliment you if you’re on the right track and if you keep them updated on progress.

5. Silence is dangerous. Long stretches of silence are generally accompanied by you being fired or someone else being hired above you. The most dangerous thing you can do with a new boss is not engage. If you accept silence and refuse to get in front of the relationship, that’s you doing what you’ve always done. Organizational change usually follows long periods of silence.

I know.Things were fine before the new boss came along.

You’re not sure why you have to change, and it generally seems unfair.

I’m not here to argue with how you feel. I’m just here to tell you that most of us will have at least one new boss who acts like this.Your cadence with that new boss is going to feel almost exactly how I outlined above — if you look closely.

The danger is that you don’t make a move to get in front of it. When the new boss comes in and immediately wonders if you suck at HR, it’s not an automatic death sentence.You can adjust to the new expectation and perhaps even learn along the way.

To react to the new boss who has higher expectations, you’ll have to be assertive in changing your day-to-day routine.While that’s hard enough, it’s only the tip of the iceberg.

Reinventing how you are doing HR also comes with confrontation of others — vendors, the people you manage on your HR team and the managers and employees in the client groups you support.

You’re on the clock with any new boss both as an HR leader and a line HR pro.Whether you report to a CEO as an HR leader or a new VP of HR as a line HR pro, you’re likely to be tested.

You have to play offense. Don’t be fooled by long periods of silence, because low engagement from your new boss can represent an extended severance period, the kind where everyone knew but you.

Doing what you’ve always done is dangerous.

THE PROBLEM WITH YOUR BOSS WANTING YOU TO BE GREAT? THEIR DEFINITION OF GREAT WILL DIFFER FROM YOURS, AND THEIR DEFINITION IS THE ONLY ONE THAT COUNTS.

14

Workƒorce | w o r k f o r c e . c o m

Kris Dunn, the chief human resources officer at Kinetix, is a Workforce contributing editor. To comment, email editors@workforce.com.

j a n u a ry / f e b ru a ry

2019

Is your team too busy to be productive?

Over a third of employees admitted they’re productive for less than 30 hours a week, according to our new research. That’s a whole day each week that they’re at work, but not working.

Get our latest research report and find out how to really grow employee productivity.

Download the full report at www.sagepeople.com/productivity j a n u a ry / f e b ru a ry

2019

w o r k f o r c e . c o m | Workƒorce

15

FOR YOUR BENEFIT

Employers See Palliative Care as Option to Cut Health Costs A new guide is available to educate employers on palliative care strategies.

By Rita Pyrillis

W

hen George Schwartz’s late wife was diagnosed with advanced lung cancer in 2002, he faced the task of managing her care while working as a financial advisor in a small brokerage firm.

He accompanied her to appointments, researched treatment options, coordinated her care and struggled to manage the fears that came with the dire diagnosis.

The experience was both physically and emotionally draining.

It wasn’t until the couple turned to palliative medicine, a fairly new subspecialty recognized by the American Board of Medical Specialties in 2007 that helps patients manage serious illnesses, that the load became bearable, he recalled.

“It provided us relief from anxiety, starting with a clear explanation of the course of the disease, what end of life would be like and how a palliative care doctor would deal with her deteriorating health,” said Schwartz, 66, whose firm, Gilbert, Doniger & Co., is based in New York.“I had a lot of interaction with the health care system and I hadn’t heard of it. My wife found out about it in a magazine article.”Palliative medicine, which is practiced by specially trained doctors, nurses and other health care professionals, provides care for patients with life-limiting conditions such as cancer, advanced heart disease, dementia, and kidney failure, among others. The goal of palliative care is to improve quality of life through pain management, stress relief, treatment for fatigue and depression, and by offering support for caregivers.

Allison Silvers

Lea Tessitore

“Many people think that palliative care is synonymous with hospice care and that creates a barrier to having these conversations,” she said. “They think that this is the type of care I get when I’m ready to give up. But palliative care is a high-value way to make an impact on the lives of employees with serious illness and their caregivers. It can improve the quality of life and it can reduce costs.”

It is associated with shorter hospital stays and lower health care costs due to a decreased need for 911 calls, emergency room visits, hospitalizations and the elimination of costly and ineffective treatments. In fact, patients with serious illnesses who received palliative care saved an average of $3,237 over the course of a hospital stay compared to patients who did not receive it, according to a study published in JAMA Internal Medicine in 2018.

ABOUT 2 PERCENT OF THE COMMERCIAL These costs savings are catching the eye of employers, who recognize that while just a small fraction of employees have serious POPULATION IS FACING A SERIOUS ILLNESS AND illnesses, most of their health care dollars are going toward their THE CARE THEY GET IS OFTEN UNNECESSARY. … treatment, according to Allison Silvers, vice president of payment and policy at the Center to Advance Palliative Care.

THAT PERCENTAGE SOUNDS TINY BUT IT’S WHERE “About 2 percent of the commercial population is facing a serious illness and the care they get is often unnecessary. … That perEMPLOYERS ARE SPENDING THE MOST MONEY. centage sounds tiny but it’s where employers are spending most of their money.”

It is also associated with lower health care costs and better outOne employer who recognized the costly gaps in care for sericomes for patients and their caregivers, who are vulnerable to ously ill patients is Dow Chemical, which worked with insurance stress and illness, according to Lea Tessitore, a researcher with Cat- giant Aetna to launch a hospice program in 2004 that allows paalyst for Payment Reform, a nonprofit organization that works on tients to pursue treatment through palliative care.Typically, insurers behalf of large employers. will not cover hospice care if the patient continues to seek “cura“Cost savings can come in a variety of ways,” she said. “If you tive treatment,” said Silvers.This forces patients to choose between lead with a focus on quality of life then cost reductions will follow. palliative care and hospice, which focuses on the needs of the terFor example, having a conversation around the goals of care with minally ill. Dow is featured in the CPR toolkit. a provider can help to avoid aggressive and potentially harmful She hopes that more employers will see the potential of palliatreatment that isn’t necessary.” tive care to improve the lives of employees with serious illnesses.

In September, CPR and the Center to Advance Palliative Care “We really want purchasers to demand from their health plans released a guide to help employers develop a palliative care strategy that they make palliative care available to participants,” she said. and educate them on what it is and how it can help patients and “We’re hoping to drive demand. It’s not a hard thing for health caregivers.Tessitore said that it could also help employers approach plans to do, but they don’t have much impetus. Employers need to a topic that can be difficult to talk about. demand this.”

16

Workƒorce | w o r k f o r c e . c o m

j a n u a ry / f e b ru a ry

2019

FOR YOUR BENEFIT

Minding Mental Health

Student Loan Payoff Pays 401(k)s

Studies: Depression costs on the rise.

Despite overall positivity, experts warn of hidden pitfalls.

By Rita Pyrillis

By Patty Kujawa

M

ental illness has been a long-avoided topic in the workplace. But as rates of suicide, substance abuse, anxiety and depression increase, more employers are making these issues a top priority.

In fact, 57 percent of employers plan to increase their focus on mental and behavioral health to a great or “very great extent” over the next three years, according to a recent survey by Willis Towers Watson. Those surveyed rank mental illness alongside metabolic syndrome, diabetes and musculoskeletal disorders as top areas of concern. These are chronic conditions that require ongoing treatment, which drive up costs and contribute to lost productivity.

These factors have led more employers to examine the financial impact of mental illness on the workplace, said Darcy Gruttadaro, director, Center for Workplace Mental Health at the American Psychiatric Association Foundation.

“Recent studies on the cost of depression in the workplace have caught the attention of employers, especially those that address comorbidity,” she said. “When a patient has chronic conditions like asthma, diabetes or cancer, the cost to treat those conditions is two to three times higher when the patient suffers from depression.”

Depression costs the U.S. economy an estimated $210 billion annually, up 21 percent from 2005, according to a study published in the Journal of Clinical Psychiatry in 2015. About half of those costs are attributed to workplace absenteeism and reduced productivity and the other half are due to medical costs, the study showed.

However, employers must do a better job of ensuring access to mental health providers and services, according to a recent report by the National Alliance of Healthcare Purchasers Coalition, a nonprofit network of business coalitions.

The report recommends improving how depression is managed in primary care settings and promoting telehealth as a way to improve access, among other measures.

“If you have primary care offices addressing mental health issues with no special training, then it’s not clear that people getting the care that they need,” said Gruttadaro. “There’s a real push for collaborative care models with well-trained professionals to monitor patient care. Employers can leverage their purchasing power to ask plans for the right data and ask the right questions.” j a n u a ry / f e b ru a ry

2019

I

n an effort to help workers achieve certain financial wellness goals, the Internal Revenue Service recently issued a ruling allowing one company to make contributions to 401(k) accounts on behalf of those who pay off a certain percentage of student debt.

The IRS private letter ruling, issued last summer, was a response to an unnamed company’s request to amend its plan so workers who voluntarily agree to put at least 2 percent of pay toward a student loan would be eligible to receive an employer contribution equal to 5 percent of pay to their 401(k) plan.

The company — reportedly pharmaceutical giant Abbott Laboratories — asked for the IRS ruling last year because it was concerned it was violating a rule that bans employers from setting certain conditions before employees can become eligible for other benefits. Because the employer 401(k) contribution is triggered by the employee first opting to make the student loan payment, the IRS said the company was not violating the rule.

Experts applaud the ruling because it’s another strategy in the financial wellness initiative many companies are adopting to help workers take care of money issues today while preparing for the needs of tomorrow. For employers, this program may save money because it would eliminate the need for a separate student loan program as well as any contributions the company might make to it. While the ruling is specific to one company’s situation, many believe it will pave the way for other organizations to follow.

“There is some cost, but it is minor relative to a separate student loan program,” said Robyn Credico, defined-contribution consulting leader at Willis Towers Watson. “Clients are looking for financial wellness solutions like this and it won’t be a huge burden, cost-wise. It’s a great recruiting tool, too.”

While most agreed the ruling opens the door for organizations to help employees pay off debt today and save for retirement, there are a few glitches.

First, it creates a false sense of security, said John Lowell, partner at October Three Consulting. Most industry experts recommend saving between 10 percent to 15 percent of pay annually to retire on time, and 5 percent is well below that mark. In addition, a 2 percent reduction in a loan might not even be enough to cover interest payments.

“There are a lot of hidden pitfalls,” Lowell said, adding that he supports the initiative. “I think companies need to think this through.”

In addition, it might be hard for the company to track whether the employee is really paying down the student loan, Lowell added.

Overall, Credico and Lowell agreed that the program is a good start.

Employers interested in using it would need to amend their plan and check with plan attorneys to make sure the program follows the same structure as in the private letter ruling. w o r k f o r c e . c o m | Workƒorce

17

FOR YOUR BENEFIT

New Year, New Rules for Employee Wellness Employers designing wellness programs no longer have EEOC incentive guidelines to follow.

By Andie Burjek ew year, new rules. At least for compa- ployers are still at risk,” nies with workplace wellness programs. Wilensky said.

The Equal Employment Opportunity Ever since the guideline Commission’s incentive rule — which was instituted in 2016, dictated that wellness programs are con- many legal experts saw it as sidered voluntary if the incentive or pen- vulnerable, according to alty was no more than 30 percent of the Harry Liu, senior policy cost of the health insurance — will no researcher at the RAND longer be in effect as of Jan. 1, 2019, fol- Corp. and a professor at the lowing a lawsuit filed by AARP. This has Pardee RAND Graduate some employers feeling lost on the legal- School. Thirty percent is ity and future of their wellness programs. hardly voluntary, he added, AARP claimed that the 30 percent in- and according to published centive was coercive, leaving employees research and literature, fi- Gympass Houston team prepares to work out. no choice but to participate in a program nancial incentives don’t have a notable “Those are the things that are relatively that is supposedly “voluntary,” and this was effect in the long run. cheap and reach a large audience,” Liu said. problematic when participating in a proIn general, employers should focus With the removal of the EEOC’s ingram meant sharing private health infor- more on how to create a culture of centive rule, companies have to be mation.With no rule to follow, employers health, get leadership support of program, more creative in the way they’re incencan offer whatever incentive they want, and solicit employees’ input to customize tivizing people to take advantage of which also increases the program’s risk of the program according to employees’ wellness programs, said Nikki Salenetri, legal action from employees. needs so that employees, in a sense, own CHRO of Gympass, a platform that alWhile incentives can be effective for the program, he said. lows users to pay a monthly fee and short-term activities like getting a flu shot, “You want to respect employees, and visit different gyms and classes throughthere are other ways to motivate participa- you want to win their loyalty. You want out the month. tion and engagement in a wellness pro- and get their input to see what exactly One internal campaign in the organigram, according to Shira Wilensky, nation- they need,” Liu said. zation is called Let’s Go Together and enal practice leader, health and well-being at For example, in an environment like a courages employees to go to workouts in OneDigital Health and Benefits, an manufacturing company, employees easi- groups, she said. The idea behind this is Atlanta-based benefits company. ly may already get enough physical activ- that people who are new to fitness may “When you offer employees programs ity throughout the day. While corporate be scared to go into a gym for the first and resources that they want and per- executives might use a wellness perk like time, and this is a way for people with ceive as valuable, you don’t have to co- a free gym membership, the blue-collar common fitness interests or goals to superce them to participate,” she said, adding workers wouldn’t necessarily find that port each other. that their strategy with clients won’t be valuable, he said. The needs of different Promoting Let’s Go Together takes changing.They’ll continue to try to help employee cohorts can vary greatly. place both online and offline, Salenetri clients develop incentive programs that For employers looking for a way to said. Posters around the office let peoalign with company culture. expand the reach of their wellness pro- ple sign up for activities they like and What’s also important to remember gram now, one strategy is to focus on see who else signed up. And employees now is that all the rules impacting well- disease management programs rather use Slack channels focused on a comness program design are not going away, than lifestyle management programs. mon fitness activity like yoga or Pilates she said. There’s still privacy laws that Interventions like one-on-one health to make conversation among co-workprotect employees from having to dis- coaching aren’t money-saving, but in- ers that much easier. They also occaclose genetic and disability-related terventions that address chronic condi- sionally share photos with each other information for the sake of a compa- tions can save money, Liu said. Poten- from their workouts. ny-sponsored wellness program unless tial ways to go about this include “If you have a group of people that is it is voluntary. health education efforts through semi- encouraging each other to go [to the “The whole reason the EEOC rules nars, offering healthy food at work and gym] and they’re participating together, came into play is because there was no group coaching rather than one-on- we think that typically results in higher definition of ‘voluntary.’ In my mind, em- one coaching. usage,” Salenetri said.

18

Workƒorce | w o r k f o r c e . c o m

j a n u a ry / f e b ru a ry

2019

PHOTO CREDIT: GYMPASS

N

FOR YOUR BENEFIT

IT’S TIME TO GET POLITICAL

By Jennifer Benz |

I

Benefits Beat

n November, I spent a long weekend before the midterm election supporting my brother-in-law’s campaign for a state Assembly seat in rural Wisconsin.

We traveled to several campaign offices and spent the days knocking on doors in small towns. Approaching strangers’ houses to ask them about their political affiliations or their plans to vote can be an uncomfortable experience at first.

But it quickly becomes energizing as you encounter incredibly interesting people and witness their reactions.

For me, being part of the boots-on-the-ground effort to motivate voters was deeply inspiring, and it renewed my appreciation for the tireless work that happens outside the cable news cycle.

I was struck by the varied examples of people stepping up and stepping into an opportunity to do something for their community.

Whether actually running for office, as my brother-inlaw did, or staffing a field office, managing a campaign, hosting an event or attending a town hall meeting, there are countless ways to engage in local issues.

And it got me thinking about all the other ways I — and our industry — could be adding to important local and national dialogues.

Given the big challenges facing our country, I can think of no group more qualified or capable of influencing our political climate than HR and benefits leaders, who all have expertise in many of the areas being debated at the national level. HR leaders know all about balancing competing interests, creating equal opportunities and managing complex health and financial programs.

We know how to create policies and programs that can scale.We also know that a solid safety net benefits not only those who need it but also the community around them.

Katherine Eyster, deputy director of workplace programs at the National Partnership for Women & Families, agrees that HR leaders have valuable insights: “HR professionals have a key role to play in sharing their experiences with policymakers and advocates to ensure that legislation is thoughtfully and effectively designed with real companies and workers in mind.” Through her organization’s work, more than 75 companies and business leaders recently endorsed the need for a strong national paid family and medical leave policy.

“For too long the false narrative has endured that what is good for workers is bad for business, when evidence shows

time and again that when workers thrive, businesses and the economy grow,” she said.

Adding our voices to the national debate is an idea gaining momentum among HR leaders. Rosemarie Day, founder and CEO of Day Health Strategies, has a forthcoming book about engaging in politics to protect access to health care. In it, she presents a “continuum of involvement” that shows the various ways to get involved.

She shares ways you can speak as a private citizen or spokesperson for your organization. The first step is getting (and staying) informed, followed by sharing information, supporting a cause, speaking up, showing up (at events, rallies and more), organizing people and even running for office.

“As a society, we need safeguards and safety nets,” she said. “Benefits managers can represent the human side of capitalism, and they know the limitations of what private companies can do and the gaps that are very critical for the government to fill.”

Renee Lutzen, director of healthcare product management at UMB Healthcare Services (one of our clients), is a member of the Employers Council for Flexible Compensation. In that capacity, she has been able to visit legislators and regulators and educate them about the issues we face every day.

“Legislative offices are interested in and very receptive to hearing real stories from real people — those of us who are working in the industry of health care, HR and benefits administration. We’re not just sitting at a desk crunching numbers against theoretical concepts. We have real-life examples we can share on how current health care policies are impacting individuals along with insights on the potential effects proposed policies will have,” she said.

This year, I’m vowing to get more involved and helping others do the same. As for my brother-in-law, he lost by a tiny margin, but I have no doubt he’ll have a fantastic career in public life. His efforts and the integrity and vision that guided his campaign inspired thousands of people in his district and beyond. I hope our efforts will do the same.

HR LEADERS KNOW ALL ABOUT BALANCING COMPETING INTERESTS, CREATING EQUAL OPPORTUNITIES AND MANAGING COMPLEX HEALTH AND FINANCIAL PROGRAMS.

j a n u a ry / f e b ru a ry

2019

Jennifer Benz is CEO and founder of Benz Communications, a San Francisco-based employee benefits communications agency.

She was honored as one of Workforce’s Game Changers in 2013.

To comment, email editors@workforce.com.

w o r k f o r c e . c o m | Workƒorce

19

Legal Labor Issues a Costly Concern During Acquisitions Make sure frontline workers are cared for or anticipate big problems.

By Heather M. Sager

W

hen a company is considering a merger or weighing the idea of an acquisition, it is crucial to assess the impact on operations and, specifically, on labor and employment issues. Deal attorneys and bankers focus on the underlying value analysis and purchase documents, which clearly are important.

However, liability for labor and employment issues can be created by acts or omissions and rarely is avoided solely by virtue of indemnification clauses or seller warranties in deal documents.

Put simply, our legal system operates in large part to protect the “little guy,” which in the employment context, means the employee, not the company. This means that, despite the iron-clad separation of entities from a financial perspective, if operations continue following deal closure, an acquiring entity may be held liable for workplace obligations agreed to by the seller-predecessor or for acts or omissions creating liability prior to the close of the purchase.

The Employee’s Right How can this be, you ask? Remember the little guy. If they felt like they were wronged before the deal closed, they will chase both companies (especially if the selling entity was in financial distress). From a legal standpoint if, from our employee’s perspective, nothing changed after the deal closed — same physical office, same managers, same processes — it is possible the buyer may be found liable for the wrongdoings of the predecessor entity.

The idea is that a company should not be able to escape liability to its employees solely by changing its corporate name and closing a deal. Someone needs to make sure the little guy’s wrongs are righted. The way the courts often do it is by extending that liability to the “new” entity. The question is, how does “NewCo” avoid this? Ensure labor and employment are key components of due diligence, including the following: Wage and hour. If you are the seller, conduct internal policy and practice audits on wage and hour issues as part of due diligence. These audits can reveal existing procedural violations that could mushroom into “bet the company” class actions if not cured (or expressly carved out of the purchase price!). Some examples of such issues are pay stub compliance, meal/rest break issues, and employee or contractor misclassification. One 20

Workƒorce | w o r k f o r c e . c o m

of the most frequently overlooked areas of exposure is unpaid vacation or paid time off for employees of the selling entity — all of whom would technically be terminated (and thus owed these monies) in an asset purchase. Even if the buyer hires every one of them.

Employment agreements. Know your obligations to employees, no matter the role. High-level executives who are key to the transition often have change in control or severance provisions in employment agreements that trigger significant payouts in an asset deal. If the buyer wants to retain these folks, the terms of new employment should be agreed-upon before closing. The buyer also should be conscious of any restrictive covenants — if key personnel are departing as part of the deal, make sure you are protecting your assets by limiting their ability to go across the street and start a competing concern. Even in California, noncompetition arrangements are available for limited purposes in the context of a purchase or sale of a business.

Turnover/hiring practices. Prepare yourself for WARN Act obligations, which require extended notice/payout periods, even if employees are not going to miss a day of work because they are being hired by NewCo. Diligence should include a j a n u a ry / f e b ru a ry

2019

discussion of which entity will be handling WARN and COBRA notices. And once NewCo takes over, to help avoid the type of pass-through liability described above in the context of an asset deal, it should follow standard hiring practices for each of the “old” employees. Assess them like any other new hire, and ensure all paperwork is completed to establish the new business relationship.

Labor union issues. Make sure you know about the seller’s union agreements or activity. Ask whether there have been organizing drives or union activity. If there is any organized labor, ask to see all collective bargaining agreements and review all grievances.The CBAs may contain clauses obligating the buyer to assume the terms contained therein and the seller to expressly disclose the potential of a deal. If you are not planning to transition the organized operations to NewCo post-close, you may be responsible for posting a bond to cover the withdrawal liability for the multi-employer pension plan into which the seller previously contributed. This can be hundreds of thousands (or even millions) of dollars, and it is held in escrow for five years.

Immigration. Understand your employee base.

Does the selling entity have employees for whom it has sponsored work visas? If so, there needs to be an assessment of transferability and a discussion regarding that process. Does the deal involve international payments or taxes or transfers of operations that will necessitate analysis of non-U.S. issues?

Any company considering a merger or acquisition is acutely focused on the potential effect on its balance sheet from a pure numbers standpoint. It is axiomatic that a business’s largest asset (or liability) can be its workforce. Remember that effectively transitioning operations requires careful planning and educated decision-making as to how, or if, NewCo will be adopting the prior workforce and the policies and practices that applied to it. In order to make responsible decisions regarding the value of any prospective transaction, and the risks associated with it, both sides should look beyond the balance sheet to the people on the ground.

As these issues highlight, diligence regarding matters of potential exposure stemming from the labor and employment function is crucial when assessing the true net impact of a potential deal on your company’s bottom line. The little guys can have a huge impact; don’t overlook that in your focus on the paperwork.

Heather M. Sager is a member of the labor and employment group at Vedder Price and was a founding shareholder of the firm’s San Francisco office. To comment, email editors@workforce.com.

j a n u a ry / f e b ru a ry

2019

Legal Legal Briefings PUBLIC SECTOR EMPLOYERS AND AGE DISCRIMINATION When Mount Lemmon (Arizona) Fire District faced a budget crisis, it laid off its two oldest (and highest paid) full-time firefighters. They sued under the Age Discrimination in Employment Act. The district argued that it did not violate any laws because it is too small to be considered an “employer” under the ADEA. Section 630(b) of the ADEA defines the term “employer” to mean any individual or company who has 20 or more employees. It states the term employer “also means a State or political subdivision of a State.”

The district argued that the two sentences should be read together to excuse any state or local government employer with fewer than 20 employees from complying with the ADEA. The district urged the court to adopt this interpretation because it is consistent with court decisions applying the minimum employee requirement to public employers under Title VII of the Civil Rights Act of 1964. The court disagreed with each of the district’s arguments. It held that by using the terms “also means,” Congress intended to add a second definition of the term “employer,” not clarify the prior definition. The court also noted that the ADEA is sometimes broader than Title VII due to the different language used in each statute. Mount Lemmon Fire Dist. v. John Guido, No. 17-587 (Nov. 6, 2018).

IMPACT: Public sector employers are subject to the ADEA and prohibited from discriminating against employees over age 40 based on age.

BUSTING THE HOME-STATE ADVANTAGE Three Rivers Provider Network Inc. is a medical billing company headquartered in Nevada. It employed three high-ranking individuals, gave them access to its intellectual property and had them sign confidentiality agreements.

All three employees did not live in Nevada. The employees allegedly left Three Rivers and started a competing business in California, Medical Cost Containment Professionals LLC, using Three Rivers’ confidential information and business models and breaching their confidentiality agreements with Three Rivers. Three Rivers filed a complaint for breach of contract in Nevada against Medical Cost. The employees filed a motion to dismiss the complaint for lack of personal jurisdiction, alleging that they did not have sufficient minimum contacts with Nevada to be sued there. The court agreed. None of the former employees resided in Nevada, and the competing company, Medical Cost, was not incorporated in Nevada. The court rejected Three Rivers’ argument that the former employees knew they were hurting a Nevada employer. Such an argument, according to the court, was not enough to allow the non-Nevada employees to be sued there. Three Rivers Provider Network Inc. v. Medical Cost Containment Professionals LLC, No. 2:18-CV-135-JCM (GWF), 2018 WL 3620491 (D. Nev. July 30, 2018).

IMPACT: Following the U.S. Supreme Court’s 2014 decision in Walden v.

Fiore, courts around the country are dismissing cases where the employer attempts to sue a former employee for wrongful acts committed outside of the employer’s home state. These cases depend on their unique facts; courts look at the various contacts that the employee (and any potential new employer) have with the state where a lawsuit is filed.

Rachel L. Schaller and Daniel Saeedi are attorneys at Taft Stettinius & Hollister LLP. To comment, email editors@workforce.com.

w o r k f o r c e . c o m | Workƒorce

21

Legal

America’s Worst Employers Jon Hyman |

T

The Practical Employer

hroughout 2018 I tracked the worst behavior America’s employers offered up to their workforces. I found each of the examples I tracked in actual court filings or in news stories.These are actual employers doing actual awful things to their employees.

How truly awful does one need to be to be named the 2018 Worst Employer of the Year? Consider that the following bad bosses did not make the cut in our online poll: The Pregnancy Provoker: A supervisor compared an employee’s pregnancy to a tumor, expressed hope that she’d miscarry so that she wouldn’t miss work and told her to keep her legs crossed to delay childbirth so she could keep working.

The Soulless Supervisor: A supervisor fired an employee via text message while she was bedside with her son on life support.

The HR Pimp: A human resources chief hired women as possible sexual partners to men working for his government agency.

The Camera Creep: An employer ignored complaints that its general counsel had installed a hidden camera in the women’s locker room and had videos of nude and partially clothed female employees on his computer.

The Sadistic Sergeant: A police sergeant held a gun to an applicant’s head and threatened to shoot him if he made a mistake on his job application.

The Hedonistic Harasser: A company ignored complaints about genital grabbing and pantomimed rape, and further ignored complaints about threats of violence after the victim complained.

And if you think those were bad, here are the four worst, according to our online readers who voted on their favorite (or perhaps in this case, least favorite) bad bosses of 2018.

The Sexist, Racist, Xenophobic, Oh My!: A plant manager used racial slurs toward his employees, such as calling foreign-born employees “terrorists” and telling the company’s only African-American employee that her husband should work in a cotton field with a rope around his neck. The same plant manager also complained that he was “sick” of immigrants stealing jobs from Americans and not speaking English, forbade employees from speaking foreign languages and urged immigrant employees to leave America. Female employees did not fare much better, with the plant manager calling them “bitches,” and told one female employee that she was too “fat and disgusting” to have sex with her husband. When employees complained to the company’s

owner, he not only did nothing to stop the harassment, he also became an active participant.

The Supervisor Supremacist: A supervisor made numerous racist remarks to his lone African-American employee, including “white power,” “if you’re not white, you’re not right,” telling him to leave because the other employees were having a Klan meeting, and using the N-word. He also started his morning meetings by saying “white power” and giving the Nazi salute.The supervisor placed a jockey statue on the employee’s desk, affixed a whip in the jockey’s hand, tied the whip around the horse’s neck in a noose, and labeled the statue with the name of the African-American employee. Finally, someone painted a troll doll black and hanged it in the plant labeled with the name of the African-American employee.

The Tasering Torturer: A car salesman alleged that the dealership’s owner engaged in a continuous and unrelenting campaign of verbal and physical abuse and harassment, including: repeatedly demeaning him based on his large size with names such as “Tiny,” “Fat Ass,” and “handicapped”; pointing the red laser-sight of a handgun at him; placing the handgun to his chest while telling him not to make any sudden moves; holding knives or other sharp objects to his throat while demanding that he not make any sudden movements; telling him he could “slit [his] throat and sleep just fine at night”; striking his surgically repaired leg; lighting fires near him; and finally, repeatedly shocking him with a taser.

My vote, however, for the Worst Employer of 2018 goes to the owner of a Cleveland area convenience store who (allegedly) hired two men to rough up a handyman who was not performing up to standards. They went too far, however, which resulted in the handyman’s death. Criminal charges are pending. If you (allegedly) cause the death of an employee by (allegedly) hiring two men to rough him up as a workplace motivational tool, you’ve earned my vote for the Worst Employer of 2018.

While we can all cringe at how truly awful these employers are, there are basic lessons about harassment, sexism, racism, bullying and abuse undercutting each of these examples. So, employers, here is your goal for the new year, and it’s relatively simple to achieve: Do not end up on this list in 2019!

There are basic lessons about harassment, sexism, racism, bullying and abuse undercutting each of these examples.

22

Workƒorce | w o r k f o r c e . c o m

Jon Hyman is a partner at Meyers, Roman, Friedberg & Lewis in Cleveland. To comment, email editors@workforce.com. Follow Hyman’s blog at Workforce.com/PracticalEmployer.

j a n u a ry / f e b ru a ry

2019

Maximize the potential of your workforce.

At Capella, we take a collaborative and consultative approach with employer partners to design learning programs tailored to the unique needs of your organization and employees.

CapellaEmployerSolutions.com

866.360.8047

Accreditations: Capella University is accredited by the Higher Learning Commission. Higher Learning Commission: https://www.hlcommission.org, 800.621.7440.

Capella University: Capella Tower, 225 South Sixth Street, Ninth Floor, Minneapolis, MN 55402 1.888.CAPELLA (227.3552) Š 2018 Capella University

18-830

Global Employee Benefits Trends: The Tipping Point Thomsons Online Benefits conducts an annual survey of multi-national employers to ascertain trends in global benefits, the ‘Global Employee Benefits Watch’. The following is a summary of this year’s findings.

priority, it is closely followed by ‘enhancing employee engagement’ at 65%.

Benefits professionals are under pressure. The costs of providing benefits is rising, fuelled predominantly by the increase in health insurance and retirement costs associated largely with an ageing workforce. This can be seen most starkly in the United States, where, according to the Bureau of Labor Statistics , benefits accounted for 32% of total employer compensation costs.

So, it is not surprising that benefits are under renewed scrutiny by the C-suite.

This intense inspection reveals that a one-size-fits-all approach to benefits will not do. Today’s employees resist categorization, demanding exceptional and individualized employee experiences, underpinned by trust and transparency.

However, this is not the only pressure on benefits professionals, who face a conflicting set of priorities.

The number one global benefits strategy objective is now to “attract and retain talent” followed by “enhancing employee engagement.”

Getting global strategy right Our research revealed only 31% of organizations have had a defined global benefits strategy in place for three or more years.

While most organizations have either already implemented a global benefits strategy, the research reveals a mismatch between what organizations want to achieve and how their benefits strategies meet or fail to meet these goals.

As a result, benefits professionals are now reaching a tipping point; there are so many demands on the function that inaction is no longer an option.

Benefits strategy top priorities Attracting and retaining talent is by far the most important objective of an organization’s global benefits strategy.

Last year 65% of organizations taking part in Thomsons’ research said their number one global benefits strategy objective was to ‘attract and retain talent’.

This year the number has risen sharply, with 82% saying this is now their number one objective. As a business

One of the most worrying findings is that only one in three organizations researched believed their benefits strategy “is aligned to their people strategy”. Yet organizations largely understand that a well-aligned and clearly defined benefits strategy makes the delivery of global benefits objectives more successful.

Without the right strategy – underpinned by appropriate technology – organizations will struggle to leverage this to provide an authentic employee experience.

Flexible tech and the drive for diversity Never before has the emphasis on individuality been so pronounced. We will soon have five generations in the workplace at once. Up until this point there has been three or four generations at a time. This is going to create a huge impact on the types of workforce behaviour, what motivates employee engagement, and the tools and practices employees need to interact.

This mixed, multi-generational environment is a new diversity challenge for HR organizations everywhere.1

Personalization of benefits and communication in the moments that matter One of the most revealing set of findings in this research looks at when organizations are communicating about benefits with their employees and what they are talking to them about.

More than half (51%) of organizations surveyed this year, say they have either implemented flexible benefit plans with a further 14% considering doing so in future.

Employers need to use benefits communications strategically to contact their people at the moments that matter – whether that is reactively (birth of a child) or proactively (anticipating retirement).

The data driven game changer Six in ten benefits professionals believe that the use of data mining, statistics, machine learning and artificial intelligence to make data-predictions about the future,

is a game changer2 - one that could drastically increase engagement with workplace rewards and benefits.

Data analytics is now one of the key skills of benefits professionals require – particularly if they are to play a more strategic role. Looking to the future, if benefits professionals can help their organizations to better prepare for the impact of macro trends (such as an ageing workforce on benefits requirement and spend), they will be in a much more influential and powerful position.

In summary Benefits teams have seen their function evolve from purely providing protection and security for employees to pure strategic talent management – attracting, retaining and engaging the best people.

At a time of austerity and pay restraint, employee benefits are now seen as a key differentiator.

They are also increasingly being differentiated, with greater personalization of benefits so that they can appeal to different demographics.

Communication is increasingly proactive rather than reactive with a growing trend to engage with employees around significant life events.

As this year’s research reveals, we have now reached a tipping point where more benefits teams are adopting new technologies than not, and the pace of innovation is increasing. With administration increasingly automated, this technology is freeing up benefits teams to do more strategic (and arguably more interesting work).

Going forward, how benefits professionals manage to deliver a more tailored benefits experience, while protecting the privacy of their employees, is going to be a key challenge.

One of which those who have already reached the tipping point of delivering strategic value will soon face.

Get the complete Global Employee Benefits Watch report at www.thomsons.com/campaigns/global-insights

Thomsons Online Benefits is a SaaS provider of global employee benefits and employee engagement software. It is a wholly owned subsidiary of Mercer, a global consulting leader in advancing health, wealth and career. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC). Thomsons’ award-winning platform, Darwin™, is the global market leader for automated employee benefits administration. With over 2 million worldwide users, Darwin™ connects employees with their benefits in over 90 countries and 30 languages.

1 2

https://www.forbes.com/sites/rawnshah/2011/04/20/working-with-five-generations-in-the-workplace/#6599110d3e7a https://www.bls.gov/news.release/pdf/ecec.pdf

26

WorkĆ&#x2019;orce | w o r k f o r c e . c o m

j a n u a ry / f e b ru a ry

2019

Civic Lessons An aging workforce and outdated processes put public sector employers on notice.

BY CAROL BRZOZOWSKI

A

t a time when careers in government are increasingly underscored with public and political pressure, Kirsten Wyatt is sounding the alarm about the public sector workforce.

“The government needs to wake up and realize there’s a talent war,” said Wyatt, executive director of the Oregon-based Engaging Local Government Leaders, a nonprofit promoting diversity, education and networking among local government employees on a national level. “If you’re going to be competing for entry-level or jobs you want to fill with talent you can then nurture, you need to put in more effort.”

Public sector agencies from the massive federal government to tiny rural townships face unique challenges when competing with private businesses for talent. Recruiting and retention is a recurring concern for the skill set often associated with public service employees. And it’s no secret that private sector companies typically offer substantially higher wages and more flexible work schedules. And there are other factors coming into play.

Prime among them is the so-called silver tsunami, a wave of baby boomers exiting the workforce into retirement. Studies show some 10,000 boomers retire every day, leaving a huge gap for public sector employers to fill.

According to the U.S. Office of Personnel Management, the average age of a full-time federal employee is 47.5 years, with 45 percent of the workforce over 50 years old.

The Congressional Research Service indicates 52 percent of public workers are age 45 to 64 compared to 42.4 percent in the private sector.

j a n u a ry / f e b ru a ry

2019

w o r k f o r c e . c o m | Workƒorce

27

Federal workers are older than state and local government employees, too, studies show. Of those age 45 to 64, 56.7 percent are federal, 52.1 percent are local, and 49.7 percent are state employees.

In a 2018 survey by the Center for State & Local Government Excellence, public sector HR directors report higher numbers of retirements in 2018 over 2017.

Another challenge: Public agencies depend on tax base or bond-measure revenues to create new jobs and rehire for open positions. Hiring freezes are not uncommon even in flush economic times.

“When taxpayer dollars are on the line, protections and processes come into play that an untrained, private sector employee would not even consider,” said Nannina Angioni, a labor and employment attorney and partner of the Los Angeles-based law firm Kaedian LLP. Angioni said it can be costly and time consuming to find employees with public sector experience for Nannina Angioni entry-level positions given the increased ethical considerations, regulatory issues and legal obligations that typically don’t apply to private sector workers.

Still another challenge: enticing people to technology jobs. While millennials exhibit technological advantages being digital natives, it’s also one reason they are scarce in government workplaces with antiquated systems where they can’t sharpen their skills, said Kris Tremaine, a senior vice president focusing on the federal public sector at ICF, a global consulting and technology services company.

Although millennials will comprise 75 percent of the workforce by 2025, they currently make up only 10 percent of the federal sector technology workforce, said Tremaine.

MILLENNIALS WILL COMPRISE 75 PERCENT OF THE WORKFORCE BY 2020, BUT CURRENTLY MAKE UP ONLY 10 PERCENT OF THE FEDERAL SECTOR TECHNOLOGY WORKFORCE. Eighty-two percent of the Center for State & Local Government Excellence’s survey respondents indicated recruitment and retention as a workforce priority. They’re finding it difficult to fill positions in policing, engineering, network administration, emergency dispatch, accounting, skilled trades and information technology.

“When it comes to recruiting talent, you need to go where the talent is,” said ELGL’s Wyatt, adding that while 28

Workƒorce | w o r k f o r c e . c o m

many public sector HR departments continue to advertise jobs in newspapers, potential talent is hanging out on social media.

While Wyatt calls many job ads “boring,” she also notes successful efforts such as one produced by the city of Los Angeles for a graphic designer.The ad appeared as if a child drew it with a crayon. It went viral.

Fort Lauderdale, Florida, human resources professional Jody Blake posts jobs on social media featuring eye-catching images of palm tree-lined beaches or building plans.

To fill vacancies in Fort Lauderdale’s 2,500-member workforce, Blake uses Twitter, Facebook, LinkedIn, ZipRecruiter and Indeed.

She’s had the most success with LinkedIn, especially for stormwater and wastewater engineers. She posts jobs on engineering group sites at no cost and uses LinkedIn’s Recruiter Lite program to maximize her efforts.

“I believe in getting the word out any way you can,” she said. “Even if people aren’t interested themselves, they may know someone who is.”

The public sector should take a page from the private sector in hiring practices, including internships, career fairs, meet-ups, events, social activities and using more technology, said Tremaine. Blake, meanwhile, also seeks people with a passion to make a difference. Jobs emphasizing social good attract millennials who want to be part of making a difference “such as in helping Americans stop taking opioids or climate change issues,” Tremaine added.

Wyatt said,“You can work in sustainability, be a librarian, police officer or an engineer and all work for a local government with that public service ethos at the core of your job every day.”

Millennials Embrace Collaboration Human-centered open plan designs supporting teamwork where employees of different skill sets gather is important, said Tremaine.

While millennials skip from job to job often for higher pay, “some want clearer paths to growth and an understanding of where they fit in the organization,” Tremaine said, adding they prefer a coaching-mentor relationship to a boss.

Streamlining onerous paperwork and a protracted timeline involved in public sector employment may at- Kris Tremaine tract more employees,Tremaine said.

So too would the ability to leave a job and return “and not lose all of your benefits while drawing private sector best practices into the government,” she added.

Fort Lauderdale attracts many people looking for a switch after many years working in the private sector. While they made more money in private industry, they seek the security of the public sector, Blake said. j a n u a ry / f e b ru a ry

2019

The city of Weston, Florida, took a different approach 21 years ago by outsourcing most positions per its charter.

“Probably 70 percent or more of a government budget is the cost is to pay employees,” said City Manager John Flint.

Only 10 positions for the city of Weston are in-house: six department Jody Blake directors, a city manager, two assistants and a clerk. An assistant city manager handles necessary HR functions such as insurance and payroll contributions.

Law enforcement is provided through the Broward County Sheriff ’s Department. Other city jobs are filled by government outsourcing services such as C.A.P. Government, Calvin, Giordano & Associates, Municipal Technologies, and Weiss, Serota, Helfman, Cole & Bierman.

“All of the people here are by invitation and not by right.

If the people assigned to us don’t meet our expectations, it is easier for us to replace them. I don’t have to spend my time managing people. I can manage the city and spend more time with our elected officials and residents,” said Flint, adding Weston’s approach offers greater flexibility and efficiency.

Some outsourced employees have been with the city before its incorporation in 1996 when it was a community development district, said Flint. When the city changes service providers (which hasn’t happened in a decade), Flint ensures the incoming provider retains the current employees and keeps their salaries and benefits at least equal to the previous provider.

Kaedian LLP’s Angioni said that once they are hired, many public sector employees stay in their job for decades for the perks of consistent John Flint work hours, minimal demands outside of their set schedules, union benefits, rights to reinstatement, pensions and appeal rights to disciplinary actions.

Career Moves The public sector also offers the ability to try different careers while retaining benefits in one organization.

An agency might consider moving someone who’s been an analyst in community development for a few years into public utilities for another few years to increase their knowledge base and broaden their skills.

Such moves keep employees “engaged, excited and continually learning” while also giving departments “a fresh set of eyes,”Wyatt said.That’s important to retention, given the hundreds of thousands of dollars spent on employee wages, benefits, training and development over a five-year span, she added.

To retain employees in one of the most difficult public sector jobs — solid waste collection — Greenville, South j a n u a ry / f e b ru a ry

2019

Carolina, Solid Waste and Recycling Manager Mildred Lee treats a crew to lunch monthly to show her appreciation and elicit their input.

She’s retained employees by leading an effort to convert solid waste collection from five to four days. A supervisory mentoring program for all frontline solid waste employees has transitioned two into management.

THE PUBLIC SECTOR OFFERS THE ABILITY TO TRY DIFFERENT CAREERS WHILE RETAINING BENEFITS IN ONE ORGANIZATION. A 2018 survey by the Center for State & Local Government Excellence noted that more than 45 percent of the respondents offer flexible scheduling, 65 percent support employee development and training reimbursement, 37 percent host wellness programs or on-site fitness facilities, and 34 percent provide some form of paid family leave.

Wyatt said she receives increasing feedback about the value the midprofessional generation places on paid family leave.

Kansas City, Missouri, recently finished a one-year paid family leave pilot program. It was utilized primarily by male police officers. It’s the hardest job for which to recruit and is typically dominated by young men, said Wyatt.

“You look at the long-term impact that has on employee morale and loyalty and who you choose to work for with everything else being equal,” she added.

As the public sector starts to see the dismantling of retiree benefits, one useful tool may be adopting the Individual Medicare Marketplace for retiree health care programs, “a model generally far more affordable for retirees while offering cost savings for employers,” says Marianne Steger, director of public sector strategy at Willis Towers Watson and former health care director for the Ohio Public Employees Retirement System.

Retaining employees has meant offering low-priced health insurance, a generous retirement plan, educational incentives, annual reviews typically with pay increases and the ability to start off at a good rate of vacation time accrual, said Fort Lauderdale’s Blake.

Blake offers advice to new hires on how to improve their profile to increase their promotion chances. Employees are surveyed on the work culture. Employees are called community builders while residents are called neighbors.

Wyatt and her husband Kent — both former public sector employees — founded ELGL after noticing local government education, training and networking was siloed based on job title. Its 4,000 members nationwide PUBLIC WORKS continued on page 49 w o r k f o r c e . c o m | Workƒorce

29

EDWARD SNOWDEN COMES TO UNLEASH AMERICA

to talk about cyber security and keeping employee data safe in the digital age.

TRUST. TRUTH. TRANSPARENCY. *Edward Snowden will be speaking live via telecast.

THE FUTURE OF WORK HEADS BACK TO VEGAS! In 2013, Snowden opened our eyes about how your information is not secure. Six years later he is set to shake up the HR industry at UNLEASH America.

Join us May 14-15, 2019 at the ARIA Resort for a unique event that brings together CHROs, HR and IT decision makers, and influencers who are evolving the Future of Work.

Download our brochure and stay up-to-date by visiting unleashgroup.io/america2019

LAS VEGAS

ARIA RESORT, MAY 14-15 2019

Going Into

Labor

By keeping employee engagement in mind, union officials and public sector HR leaders can more easily find common ground.

BY DALE PAZDRA

32

WorkĆ&#x2019;orce | w o r k f o r c e . c o m

A

nimosity and being at odds no longer have to be the norm when coming to the table to negotiate public sector union-labor agreements.

By creating an environment that supports Dale Pazdra greater collaboration and problem-solving, the needs of both labor and management can be better understood. A climate of trust will grow when collaboration includes opportunities to increase employee engagement. Based on the input of three labor-relations experts, there are multiple ways to increase employee engagement and improve the effectiveness of labor relations.

j a n u a ry / f e b ru a ry

2019

Relations D

espite the Bureau of Labor Statistics reporting that 10.7 percent of all wage and salary workers in the U.S. are union members in both the private and public sector, union membership of public sector Jerry Glass employees at the federal, state and local levels is well above that at 34.4 percent.

Just in local government, the rate of union membership is 40.1 percent and includes teachers, police officers and firefighters. In contrast, only 6.5 percent of private sector employees belong to unions. That number is significant because average private sector compensation costs average $34.19 per hour, compared to an average of $49.23 per hour in state and local government â&#x20AC;&#x201D; a 30 percent difference in private to public employment costs.

j a n u a ry / f e b ru a ry

2019

Come to the bargaining table with the shared goal of finding a solution. It might even help to use private sector tactics.

BY JERRY GLASS

w o r k f o r c e . c o m | WorkĆ&#x2019;orce

33

LABOR RELATIONS THAT ARE BUILT ON TRUST AND OPEN DIALOGUE CREATE LASTING PARTNERSHIPS THAT ARE MORE MEANINGFUL AND FOCUSED ON MUTUAL RESULTS. Jeff Ling, executive vice president of human resources consultancy Evergreen Solutions LLC, suggests three best practices that sustain a culture of engagement: transparency in communication, allowing employees to partner with you

So how do public sector unions achieve such important gains when some of these same unions don’t have the ability to strike? First, let’s take a quick history lesson.

The New York state Legislature was one of the first states to pass labor laws protecting women and children. Labor unions continued to gain strength in the subsequent decades, resulting in the passage of the Railway Labor Act in 1926, allowing railroad employees to unionize, and the 1935 National Labor Relations Act, which guaranteed basic rights of private sector employees to organize into labor unions and encourages collective bargaining — generally defined as the negotiation between an employer and a labor union on issues of wages, hours and working conditions.

Notably, the NLRA did not extend those protections to employees in the public sector for fear that public employees would strike, leading to paralysis of government until their demands were met. In 1943, the New York Supreme Court in Railway Mail Ass’n. v. Murphy, said, “Nothing is more dangerous to public welfare than to admit that hired servants of the state can dictate to the government the hours, the wages, and conditions under which they will carry on essential ser-

34

Workƒorce | w o r k f o r c e . c o m

and asking for assistance to finding solutions to organization problems.

Labor relations that are built on trust and open dialogue create lasting partnerships that are more meaningful and focused on mutual results. Employee engagement flourishes in an environment of transparency where knowledge and organization information is frequently shared. For labor relations to remain strong, communications must be ongoing, transparent and meaningful.

Ling, who has worked in HR consulting for more than 25 years and leads Evergreen’s HR consulting practice, has devoted a majority of his career to advising public sector clients in all HR areas including employee engagement.

He said that transparency can only be achieved when leadership is willing to engage in ongoing communication. It is also important to share successes (what the organization is doing right) and failures (how the organization has learned from its mistakes).

Ling added that it is important to openly share the reasons behind changes in key leadership roles and the overall strategic direction. At the municipal level of

vices vital to the welfare, safety and security of the citizen.”

Today, most states have laws that formalize the bargaining process for some or all public employees, and some states permit only “meeting and conferring” on work-related issues.

Only 11 states allow public employees to strike. Of those, most prohibit striking for essential employees and in cases where striking would endanger public health and safety.

For example, NewYork’s Taylor Law grants public employees the right to organize and elect union representatives, but also makes work stoppages punishable with fines and jail time. Some states prohibit collective bargaining for teachers while others prohibit all public sector collective bargaining.

The Power of Public Sector Unions Without either limited or no ability to strike, public sector unions may try to leverage their power to help elect the very politicians who sit across from them at the bargaining table and influence legislation that affects public employees’ wages and availability of jobs. According to the California Fair Political Practices Commission, the California Teachers’Association spent more than $211 million from 2000 to 2009 on

j a n u a ry / f e b ru a ry

2019

government, public-safety budgets can garner a larger portion of the organization’s overall financial resources.

Establishing trust between organization and labor union leaders is the key to having a sustainable longterm financial outlook.

Ling also added that transparency in communication is key to having strong levels of engagement.

“It’s necessary to provide future direction and strategic outlook during non-negotiating years,” Ling said.

Engaging Employees in Key Decisions Including represented groups in organization focus groups on employee matters helps fuel ongoing collaboration. Offering employees the opportunity to influence changes in employee benefits or policies actively involves them in organization decisions and increases overall engagement.

Jackie Wehmeyer, human resources director for the city of Margate, Florida, described a time when an economic downturn resulted in decreased revenues as the city’s health care costs continued to rise. It was important to educate the union representatives on the drivers behind the cost of insurance and invite them

political campaigning — more than any other donor in the state and as much as the pharmaceutical industry, the oil industry and the tobacco industry combined. In 2005 alone, the CTA spent $54 million to defeat initiatives intended to cap the growth of state spending and make it easier to fire underperforming teachers.

Politicians who attempt to limit the power of public sector unions and their lobbying arms need to come to the table prepared to make realistic changes.A case study of how not to negotiate with a public sector union is the Chicago Teachers’ Union strike in 2012, which was in response to some of Chicago Mayor Rahm Emanuel’s initiatives. Emanuel campaigned to improve the education of Chicago schoolchildren and used his political might to pass an aggressive education-reform bill without consulting the teachers’ union.

The CTU brought other public unions to their cause and engaged in a 10-day strike. After an unsuccessful attempt to get a court order to force teachers back to work, both sides reached an agreement. While Emanuel did get a longer school day and longer school year, the teachers got an average raise of 17.6 percent over four years, health insurance increas-

j a n u a ry / f e b ru a ry

2019

to be part of a working group to evaluate plan design options, she recalled.

Although the design of the insurance plan isn’t a subject of labor negotiation, the act of asking for input demonstrated the organization’s commitment to employee engagement and willingness to seek their input on matters of importance.

Involving union representatives in other key decisions such as procuring new technology, vehicles, equipment and employee insurance coverage also is important to the organization’s ongoing commitment to employee engagement.

“It’s all about trust,” said Wehmeyer, who has 15 years of labor-relations experience representing management in multiple successful collective bargaining processes. “When employees and union representatives have the freedom to provide input, they feel more compelled to work together effectively.”

Collaborating to Find Solutions Leaders from both sides need to challenge the status PAZDRA continued on page 48

IN JURISDICTIONS WHERE STRIKING IS PROHIBITED, THERE ARE STILL WAYS TO REACH RESOLUTIONS OF DISAGREEMENTS. es, seniority pay increases and raises for additional education.

In jurisdictions where striking is prohibited, there are ways to reach final resolution of negotiations if parties disagree.

These include arbitration, mediation, fact-finding and bargaining without a final resolution mechanism.

In arbitration, a neutral third party facilitates discussions, examines the facts and makes a binding determination. In mediation, the parties agree on a professional who facilitates discussions and proposes solutions that both parties GLASS continued on page 48

w o r k f o r c e . c o m | Workƒorce

35

PAPER TRAILS

TO THE

CLOUD Some public sector agencies are still mired in paperwork and are slow to embrace cloud-based HR technology. What will push them?

BY SARAH FISTER GALE

W

36

Workƒorce | w o r k f o r c e . c o m

PHOTO BY MICHAEL ALLEN PHOTOGRAPHY

hen Alex Smith was hired as the chief human resources officer for the city of Memphis in 2016, she had never previously held a public sector job — one of the reasons she was selected.

City leaders wanted to bring fresh eyes to the team to address the ongoing problem of how to attract and retain the best talent to city jobs. Smith found that many of the city’s human resources processes were still paper-based and data was stored in siloed databases, which added time and confusion to hiring and talent management.

j a n u a ry / f e b ru a ry

2019

Surrounding Memphis CHRO Alex Smith, from left, is: Belinda Vinson: Data management supervisor Eric Sabatini: Sr. HR analytics & performance manager Kimberly Bailey: HR solution supervisor Alicia E. Jones: Performance review coordinator Kianah Wicks-Moore: HR solutions analyst Chastity Johnson: Lead compensation coordinator

j a n u a ry / f e b ru a ry

2019

w o r k f o r c e . c o m | WorkĆ&#x2019;orce

37

“I knew we needed to automate some of these processes,” said Smith, who previously held private-sector HR jobs with Brightstar Corp. and Target Corp. One of her first suggestions was to implement a cloud-based HR technology system that would streamline hiring and better manage candidates and employee data. After some negotiating, the chief information officer and head of finance agreed, and they adopted a cloud-based human capital management system from workplace software giant Oracle.

“It was a huge win,” Smith said.

The technology eliminated many of the manual tasks like copying addresses into multiple databases and producing monthly trend reports.

“Now I can focus on tasks that matter the most and I can track hiring data in real time,” she said. It also streamlined the candidate experience and helped her expand the city’s social recruiting and brand recognition. “It is helping us to be more proactive in attracting talent,” she said.

A few years ago, this kind of story — of a public sector agency investing in cloud-based HR technology and social recruiting platforms — would have been unusual.

The public sector has a reputation for being slow to adopt HR technology to empower workers and streamline HR tasks, said Sean Morris, a principal at Deloitte covering human capital trends in the public sector. “There is a history of under-investing in human capital by government due to limited budgets.”

“IF HR IS COMPETING WITH THE POLICE OR FIRE DEPARTMENTS FOR PROJECT FUNDING, POLICE AND FIRE WILL ALWAYS WIN.” — ALEX SMITH, CHRO, CITY OF MEMPHIS Public sector HR people also don’t have a seat at the funding table, which means there is no one to champion their cause, said Sean Osborne, vice president of product management for public companies for Acendre, a cloudbased talent management software company that serves the public sector. “We often find that HR doesn’t have the budget or authority to effect real change.”

Even when these agencies have funding for technology upgrades, the siloed nature of government agencies and opposing funding priorities can quickly push HR investments to the end of the line, Smith added. “If HR is competing with the police or fire departments for project funding, police and fire will always win.”

This lag effect is about more than just money. There is also a change management challenge. In government, many senior leaders and IT staff have been in those roles for years and they have a set way of doing their jobs and 38

Workƒorce | w o r k f o r c e . c o m

making decisions. Moving to the cloud is a completely different way of managing technology and data, and there is a lot of resistance to change, especially from employees who fear their jobs will be at risk.

Technology and Talent Are Getting Old These delays have had a long-term impact on recruiting talent management trends across the public sector. Many public sector agencies still rely on paper-based recruiting and onboarding steps, which are cumbersome and can add weeks to the hiring process. “Millennials and Gen Z don’t understand why it would take that long,” Morris said, noting that the negative experience may cause them to look elsewhere for work.These organizations also lack tools and transparency to effectively support career development, or to use people analytics as part of business and talent decisions. All of this is making it difficult for public sector agencies to attract and retain talent, said Morris. “That has put them in the situation they are in now.”

That situation is a rapidly aging workforce and a recruiting environment that makes it difficult to attract and retain young talent. Data from the Office of Personnel Management shows that less than 7 percent of the federal workforce is millennials, even though they make up 35 percent of the workforce nationwide; and 44 percent of federal workers are over the age of 50, which means they are inching ever closer to retirement with few younger staff ready to take their place.

This combination of aging talent and outdated technology is making it difficult for them to compete for young talent, said Daniel Torrens, global public sector HCM strategist for SAP SuccessFactors. “Candidates have a lot of choices today, and public sector organizations haven’t been building their brand or engagement strategies.”

These pressures are forcing public sector agencies to shift their attitude about cloud-based HR technology and to prioritize these transitions as they consider their future talent development and workforce management needs.

“Government CIOs no longer question whether they should move to the cloud, it’s all about, ‘How do we get there,’ ” Torrens said.

That’s good news for vendors. Torrens noted that four years ago, these agencies were still paying off their on-premise solutions and wouldn’t even consider a move to the cloud. But in the past 18 months that has changed.

“We are having a lot more conversations about how to build a business case and get funding to adopt the cloud.”

Talent Needs Force the Issue Fully 81 percent of public sector respondents now consider the cloud to be one of the top three technologies for ROI potential, according to the 2018 SolarWinds “IT Trends Report.” Almost as many (79 percent) see cloud as a top three solution to achieve productivity and efficiency benefits.

To support these interests, many public sector organizations, including government, education and health care, j a n u a ry / f e b ru a ry

2019

have adopted a cloud-first policy to replace legacy systems and design new more agile service-based solutions, said Sherry Amos, director of market development for education and government at Workday.

HR is also gaining more visibility in decision-making as public organizations acknowledge that talent management is a strategic issue that needs to be addressed. “In the past, finance drove all of these acquisitions,” Amos said.

“But HR now has a seat at the table.” This is giving public sector HR leaders an opportunity to shape the future of workforce management and the technologies their organizations will use to support them.

This is where the challenge of moving public sector HR into the cloud shifts to the vendors, Morris said. The decision to move to the cloud is only the first in many steps for public sector clients. “If a vendor wants to support customers in the government cloud space, they have to federalize their tool.”

FedRAMP and Title 5 The majority of government organizations have to meet a very unique set of rules and requirements for adopting any cloud-based solutions, and they rely on vendors to adapt their systems accordingly. These include ensuring all data centers meet FedRAMP, the Federal Risk and Authorization Management Program requirements, which include an extensive list of rules for security assessment, authorization and continuous monitoring of cloud products and services.

“Meeting FedRAMP is a high barrier to entry in this space,” Osborne said. Vendors also have to adapt their platforms to meet Title 5 rules regarding administrative personnel, which cover issues such as pay schedules, job titles and priority hiring for veterans and people with disabilities. It can take months and a significant financial investment to adapt current HR platforms for a public sector workplace environment.

Vendors also face a ton of pressure to get it right — because if they screw up things like data security it could result in national security risks. “Any time you move a large swath of data to a new environment you have to do your research because no system is foolproof,” Morris said.

The challenges are significant, but the effort to meet regulations and cater to this clientele is clearly worth it. “The federal government is the largest employer in the country,” Osborne said. And since most of these agencies are only just now considering cloud-based HR technology solutions, the commercial opportunities are bountiful. “The time is ripe right now for public sector organizations to move to the cloud,” said Eva Woo, global vice president of solutions management for SAP SuccessFactors.

ing regulatory requirements and adapting their customer management processes for a public sector environment.

That includes adapting their sales and marketing strategies for longer procurement cycles.

“It can take two years just to secure funding and execute procurement,” Amos said. Public sector clients also tend to pursue a phased approach to their transition to the cloud, starting with low-risk systems to demonstrate safety and performance before moving to more mission critical systems that support HR and finance.

THE MAJORITY OF CIVIL GOVERNMENT ORGANIZATIONS HAVE TO MEET A UNIQUE SET OF RULES AND REQUIREMENTS FOR ADOPTING CLOUD-BASED SOLUTIONS.

Public Sector Tipping Point

Morris noted that SAP and Oracle were among the first HR cloud-based solution providers to embrace public sector clients and their regulatory and procurement needs, though other vendors have been quickly following suit. He believes that the next three to five years will see a flurry of cloud-based HR projects across the public sector, including local and federal government, education, health care, and other agencies that need a better, faster and more transparent HR solution to deal with their recruiting and talent management needs.

Morris encourages vendors to make the continued investments in meeting regulations and to hire people with experience in public sector HR and IT who can help them navigate the complex procurement process. “The public sector is a massive market, but you have to play the long game,” he said. These agencies know they have to make investments in cloud-based HR solutions, but they will need vendors who can help them get there.

Vendors may also need to provide more IT support and education. City of Memphis’ Smith noted that many public agencies don’t have the head count or expertise to manage a cloud transformation on their own, so they will rely on vendors to fill gaps. “Having partners who will support training and change management needed on these projects is very important.”

These clients may have more needs than private sector companies, but the vendors who can support them and prove they understand how the public sector environment works will be will be best positioned to win these clients in the future.

The enormous sales potential is causing vendors across the HR technology industry to pay closer attention to the needs of public sector clients and to prioritize meet-

Sarah Fister Gale is a freelance writer based in the Chicago area.

To comment, email editors@workforce.com.

j a n u a ry / f e b ru a ry

2019

w o r k f o r c e . c o m | Workƒorce

39

40

WorkĆ&#x2019;orce | w o r k f o r c e . c o m

j a n u a ry / f e b ru a ry

2019

HR Certified Voluntary standardized human capital reporting has been on the table for several years. With the recent ISO approval, it’s about to become reality.

BY LAURIE BASSI AND DAN McMURRER

I

n November the first-ever ISO standard for human capital reporting was passed. Officially titled the “Human Resource Management — Guidelines for Internal and External Human Capital Reporting,” it was scheduled for publication Dec. 18.

Some background: ISO is the International Organization for Standardization. It is a worldwide federation of national standards bodies — the ISO member bodies.

The member body for the United States in the ISO is ANSI — the American National Standards Institute.The work of preparing international standards is normally carried out through ISO Technical Committees. In this case, the work was done by Technical Committee 260.

In 2011-12, there was an ANSI effort to create a human capital reporting standard for the United States. Those of us involved in the early ANSI work were disappointed when it failed to progress; we had hoped that an ANSI standard would eventually lead to an ISO standard. Although the ANSI effort was ultimately tabled, a subsequent ISO group formed to tackle the issue, resulting in the standard that was finalized Nov. 22.

Having an ISO standard is a much bigger deal than merely having an ANSI standard. Here’s what Jac Fitz-enz, who is often referred to as the Grandfather of HR Analytics, has to say about standardization: “An ethical code, a body of research, specialized education and performance standards are the basis of a profession. The adoption of ISO standards supports human resources’ claim to be a profession. It’s been a long, difficult journey from the founding of the American Society for Personnel Administration by 28 far-sighted people in 1948, but now the goal is within reach.”

Why Standardization?

We’re willing to guess that HR professionals are asking some variant of one or more of the following: • I work in a small firm, nonprofit organization or government agency; how can this possibly be relevant to me?

• Can I just ignore this?

• Is this standard a threat to me (and/or my employer)?

• Is there some way that I (and/or my employer) can benefit from this new development?

In order to answer these concerns, let’s first discuss some additional background that helps put this standard into context.

j a n u a ry / f e b ru a ry

2019

w o r k f o r c e . c o m | Workƒorce

41

Why Has This Standard Emerged?

The fundamental source of value creation in advanced economies such as the United States has shifted from tangible assets to intangible assets.Tangible assets have a physical form — machinery, buildings, land and inventors — whereas intangible assets are nonphysical, such as patents, goodwill and brand recognition.

Financial services firm Ocean Tomo reported that in 1975, 83 percent of the market value of S&P 500 firms was accounted for as tangible assets, with the remaining 17 percent of assets attributable to intangible assets.

A mere 40 years later, this ratio had flipped: In 2015, only 16 percent of the market value of S&P 500 firms was accounted for as tangible assets and the remaining 84 percent was attributable to intangible assets.

Since human capital is the fundamental source of most intangible assets, there is a much greater need today for measuring, monitoring, tracking and understanding how well people are being managed and developed. A broad array of stakeholders — executives, investors and employees themselves — want to know more about the people side of the businesses with which they are involved.

In light of this, “Workforce reporting is rethinking how organizational value should be understood and evaluated,” said Stefanie Becker, HR project director, HR strategy and planning for SAP SE. Becker also convened the working group initiated by the German Mirror Committee in the ISO Technical Committee 260 and oversaw the drafting of the human capital standard.

“The new ISO standard about workforce reporting assists organizations to move toward a more data-driven decision-making process across all facets of workforce management,” Becker said.“By using it for the public reporting, organizations can also fulfill the requirements of investors and other stakeholders by offering more transparency on their most valuable resource, human capital.”

And, indeed, investors are beginning to demand more insights on the people side of business. For example, the Human Capital Management Coalition, which is led by the UAW Retiree Medical Benefits Trust and includes 26 influential institutional investors representing more than $2.8 trillion in assets, “engages companies with the aim of understanding and improving how human capital management contributes to the creation of long-term shareholder value,” according to the coalition’s mission statement.

Cambria Allen, corporate governance director for the UAW Retiree Medical Benefits Trust, said, “The Human Capital Management Coalition filed its rulemaking petition with the U.S. Securities and Exchange Commission in 2017. We presented the investor case for more effective disclosure of human capital information from our portfolio companies and urged a multistakeholder effort to develop reporting standards that would provide shareholders critical access to relevant and reliable quantitative and qualitative data.

42

Workƒorce | w o r k f o r c e . c o m

Stefanie Becker

Cambria Allen

“This data will allow us to better understand and assess how well portfolio companies are managing their talent,” Allen said. “The work of the ISO represents an important contribution to this dialogue.”

In short, if there was doubt previously about demands in the investor community for reporting on the people side of the business, it is now clear investors view such information as central to their work. The time has more than come for a standard for reporting on the people side of the business.

Overview of the Standard Before getting into the details of the standard, a high-level view reveals some key facts that inform answers to the previous list of questions. First and foremost, the standard is about guidelines.There is nothing mandatory or compulsory about it, so there’s no need for anyone to get up in arms about it.

Second, the standard provides guidelines for both internal and external reporting and for large and small businesses, so there is something here for everyone. Some components are more appropriate for internal reporting or more relevant only to larger businesses.

Third, it represents the culmination of a tremendous amount of effort by a large and well-informed group of HR leaders from a wide range of backgrounds. There is a lot of wisdom, free advice and counsel built into it.

And fourth, the standard is very broad. So there may be parts of it that seem irrelevant for your organization. Our advice is not to be tempted to throw out the baby with the bathwater. Use what you can and what will be most valuable for your organization.

The standard provides guidelines on the following core human capital reporting areas: • Compliance and ethics.

• Costs.

• Diversity.

• Leadership.

• Organizational culture.

• Organizational health, safety and well-being.

• Productivity.

• Recruitment, mobility and turnover.

• Skills and capabilities. j a n u a ry / f e b ru a ry

2019

• Succession planning.

• Workforce availability.

Lee Webster, who served as the secretariat of the ISO Technical Committee 260 that created the standard, said, “This document is a first step. It will evolve, and additional definitions and formula will be added in future versions. We’re only at the 50-yard line.

There’s still lots more work to do.”

Human Capital Reporting Guidelines For External Stakeholders (From ISO Standard on Human Resource Management)

External reporting Human capital areas

What the Standard Suggests for Internal and External Reporting The standard is a 44-page document that contains lots of narratives, definitions and background discussion. Most useful for beginning to understand what it’s all about is Table 2 of the standard, which provides a summary of the recommendations for both internal and external reporting for both small and large organizations. The table on this page summarizes the standards’ recommendations for external reporting.

Compliance and ethics

Costs

Laurie Bassi and Dan McMurrer are the co-founders of McBassi & Co., pioneers in applying people analytics and co-authors of the book “Good Company: Business Success in the Worthiness Era.” To comment, email editors@workforce.com.

j a n u a ry / f e b ru a ry

2019

Small and medium organizations

Number and type of grievance filed

x

Number and type of concluded disciplinary action

x

Percentage of employees who have completed training on compliance and ethics

x

x

Total workforce costs

x

x

Workforce diversity with respect to

Diversity

What This Means to Your Organization The demands for better management, accountability and transparency with regard to human capital will only continue to grow in the coming years. This is the inevitable result of the increasing role that human capital plays in the creation of economic value.

Within that context, the standardization of human capital measurement and reporting is a natural development.

This is good news, we believe, for those HR professionals and employers who have a good story to tell. But there is no getting around that this is not a happy development for some: those who would prefer to be able to keep stakeholders in the dark regarding their “people track record.” So this is not a universally positive development for everyone. But it is certainly one that will benefit the “good guys.”

Our advice is to give the new ISO Standard careful consideration. There may be components of it that are not relevant to your organization (at least currently). But it is also the breadth of the standard that ensures there is something for every type of organization, including yours.

Large organizations

Leadership Organizational health, safety and well­-being

Productivity

a) age

x

b) gender

x

c) disability

x

d) other indicators of diversity

x

Diversity of leadership team

x

Leadership trust

x

Lost time for injury

x

Number of occupational accidents

x

x

Number of people killed during work

x

x

EBIT/revenue/turnover/profit per employee

x

x

Human capital ROI

x

x

Average length a) time to fill vacant positions

x

b) time to fill vacant critical business positions

x

Percentage of positions filled internally

x

Percentage of critical business positions filled internally

x

Turnover rate

x

x

Total developing and training costs

x

x

Workforce

Number of employees

x

x

availability

Full-time equivalents

x

x

Recruitment turnover and mobility

Skills and capabilities

Source: ISO Technical Committee 260

w o r k f o r c e . c o m | Workƒorce

43

SECTOR REPORT

Recruitment Process Outsourcing Providers

RPOs Do More Than You Think Desire for enhanced recruiting features is driving adoption and development.

By Sarah Fister Gale

C

ompanies are struggling to understand to fill high-level positions, and they are looking to their recruitment process outsourcing providers for answers.

Those answers come in the form of data, said Aberdeen analyst Zach Chertok. Companies want RPOs to provide insights into where candidates come from, what draws to the company, what engages passive candidates, and where they need to look to find better talent. “RPOs recognize that being able to deliver that data to clients is an added value,” he said.

This focus on data is emerging from the ongoing frustration recruiting managers face in filling hard-to-fill talent gaps. A 2017 report from Aberdeen showed that 80 percent of organizations have trouble recruiting high-potential talent, and 79 percent of recruiting managers don’t know how to solve their talent problems.

Companies hope RPOs can help them close these gaps — while providing advanced analytics that describe a candidate’s skills, capabilities and attitude — to ensure they are a good fit. That’s driven many RPOs to partner with assessment vendors and human capital data analytics companies to provide assessment results about candidates in a seamless package to their clients. “These partnerships require investment, but the added value they get from clients looking for these services pays for itself,” he said.

Other RPOs are integrating their own machine learning and analytics capabilities to accelerate recruiting for clients, and providing this data through adaptable dashboards and reports that link to the client’s applicant tracking system. “Clients are really interested in reporting capabilities,” said Jeanne MacDonald of Korn Ferry.

Having access to data about source of hire, assessment results and screen selection placement, along with more traditional résumé information is very appealing. “Their ATS can’t give them ‘process of hiring’ data, so they get really excited when they see it.”

BEYOND HIRING The adoption of these technologies is expected to increase in the coming years as vendors respond to clients’ demands for more advanced recruiting solutions. “Clients want RPOs to execute a lot of smoke and mirrors,” said MacDonald. And vendors are stepping up.

Vendors such as SevenStep, Korn Ferry and Alexander Mann now provide proprietary platforms that tap multiple

44

Workƒorce | w o r k f o r c e . c o m

historic and current data sets to help clients be more predictive in workforce planning, benchmarking themselves against competitors, and tap into new sources of data to screen and engage passive candidates. This is all is part of the RPO’s evolution to a strategic talent management partner, said Lamees Abourahma, executive director of the RPO Association. “RPOs are combining process, people, technology, and data to serve customers in a lot of new ways.”

Despite all of these value-added features and services, these vendors still struggle with the perception that they are merely an outsourcing service, MacDonald said. “RPOs need to be clearer about what we can deliver — and it’s a lot,” she said. She noted that many RPOs have moved beyond just filling open jobs to helping companies hone their employee brand, engaging passive candidates, building talent communities, and better managing recruiting costs. “A lot of organizations don’t even know what they spend on recruiting,” she said.

“RPOs can deliver those insights.”

But she cautions clients to recognize that many of these analytics capabilities are still new. Industry experts have been talking about the benefits of artificial intelligence and machine learning for years, but these are complex technologies and their applications are evolving. “Clients have to be realistic about where these technologies fit into their recruiting process,” MacDonald said. “Paradigms don’t change overnight.”

60

%

OF ORGANIZATIONS HANDLE RECRUITMENT INTERNALLY.

40

%

PARTNER WITH AN RPO PROVIDER.

Sarah Fister Gale is a writer in Chicago. To comment email editors@workforce.com.

j a n u a ry / f e b ru a ry

2019

HOT LIST Recruitment Process Outsourcing Providers Listed alphabetically; compiled by David Chasanov; editors@workforce.com

POSITIONS FILLED ANNUALLY

NUMBER OF CLIENTS OUTSOURCING END-TO-END RECRUITMENT PROCESS TO COMPANY

NUMBER OF CLIENTS OUTSOURCING RECRUITMENT OF ALL JOB CLASSES TO COMPANY

ABLE TO BLEND RECRUITING OF TEMPORARY/ PERMANENT STAFF ON SINGLE PLATFORM

NUMBER OF RECRUITMENT PROFESSIONALS ON STAFF

ALLEGIS GLOBAL SOLUTIONS allegisglobalsolutions.com

170,000

85

108

Yes

3,000

HUDSON RPO hudsonrpo.com

11,467

52

27

Yes

321

IBM TALENT ACQUISITION OPTIMIZATION ibmtalentao.com

150,000

60

Would not disclose

Yes

Would not disclose

KORN FERRY kornferry.com

100,000

80

Would not disclose

Yes

2,000

MANPOWERGROUP SOLUTIONS manpowergroupsolutions.com

300,000

400

100

Yes

3,400

PEOPLE SCIENCE people-science.com

10,000

12

3

Yes

68

RANDSTAD SOURCERIGHT randstadsourceright.com

189,428

318

Would not disclose

Yes

2,000

SEVENSTEP sevensteprpo.com

30,000

20

Would not disclose

Yes

310

COMPANY NAME & Web Address

Note: Adecco, ADP RPO, Alexander Mann Solutions, Cielo, Decision Toolbox, Kelly OCG, PeopleScout, Pontoon, Resource Solutions and Wilson HCG either declined to participate or did not respond to requests for information.

Source: Companies.

j a n u a ry / f e b ru a ry

2019

w o r k f o r c e . c o m | WorkÆ&#x2019;orce

45

SECTOR REPORT

Recruiting Software Providers

Recruiting Technology Is a Hot Commodity Tricky hiring gaps and financing are bringing boutique firms to the recruiting solutions table.

By Sarah Fister Gale

R

ecruiting technology continues to be a hot investment space, with venture capitalists and global enterprise solution providers investing millions in developing and acquiring innovative new point solutions. By the end of the third quarter of 2018, investment volume in HR technology had nearly tripled what was invested in 2017.

“There is a lot of money going into all aspects of recruiting and talent acquisition,” said David Mallon, an analyst with Bersin by Deloitte. “It’s generating a lot of innovation, but also a lot of noise.”

Trends around social recruiting, mobile apps and video interviewing are now the norm, noted Barbara Marder, senior partner and global innovation leader at Mercer. “We are still seeing improvements in these areas but they are now entrenched in the talent acquisition process.”

Newer trends focus on implementing artificial intelligence, machine learning, gamification, and chat bots into the recruiting platforms. “These are all still leading edge and we expect to see a lot more adoption in the coming years.”

variety of potential solutions. Vendors like Hired and Gapjumpers offer platforms that hide candidates’ names, universities and other defining features that can lead to bias in hiring. Other vendors forgo résumés all together, forcing companies to choose candidates based on their performance in coding challenges or assessment results rather than college pedigree.

More recently, vendors have begun adding virtual job fairs and analytics tools to help clients expand their talent pool and to be more holistic in honing their short list of top talent. “If companies want more diverse candidates they have to scout in more places,” said Marder.

Virtual technologies allow them to canvas on more campuses and to connect with more candidates.

“Once they are able to flood the pipeline, they can use machine learning algorithms to screen the data and find the best people.”

These algorithms can track any combination of individual and industry trend data to figure out who will be the best fit for a position, and they get more targeted with every search, she said. “It levels the playing field for diverse talent.” Companies need to be certain their algorithms aren’t also biased. Amazon recently discovered its recruiting algorithm was biased against women, because it was based on the traits of past high performers, who were predominantly male.

70

%

OF TALENT ACQUISITION PROFESSIONALS AGREE THAT SOURCING AUTOMATION WOULD INCREASE PRODUCTIVITY.

DIVERSITY DRIVES INNOVATION How these tools will be applied varies based on the challenges clients face. One area gaining a lot of attention is diversity in recruiting. Diversity ranked as the top hiring priority in LinkedIn’s 2018 “Global Recruiting Trends” report, with 78 percent of companies citing diversity as important to their strategy. However, the majority of these companies also report that finding diverse candidates to interview is their biggest obstacle, said Monica Lewis, product manager for LinkedIn. “They are not getting enough diverse candidates in their funnel, and they are looking for ways to reach a broader audience,” she said.

This challenge has won the interest and innovation of aspiring HR tech start-ups, who have been launching a

46

Workƒorce | w o r k f o r c e . c o m

CHATBOTS ADD A HUMAN TOUCH Vendors are also continuing to develop tools that improve the recruiting experience — for candidates and clients, said Mallon. That includes using chatbots to provide “human” interactions to keep candidates up to date on their applications, or to answer questions about the process. He noted that chatbot technology has gotten a lot more advanced in recent years, making these interactions more engaging than just waiting for an email. “It j a n u a ry / f e b ru a ry

2019

provides a lot of value while reducing the number of actual humans in the process.”

As these small vendors continue to demonstrate the value of their solutions it will surely lead to another flurry of acquisitions in this space.

“The recruiting industry is currently at ‘peak boutique’ with a lot of little players showing a lot of innovation,” Mallon said. That is often the point where enterprise providers start acquiring all the innovative point solutions to expand their own talent acquisition suite.

For companies wondering whether to implement

these new technologies today or wait until they mature, Marder urges them to think about their recruiting pain points, and whether a best-in-class solution is the answer.

“If one of these tools solves your recruiting problem and creates daylight between you and your competition — that can give you an edge at least for a while,” she said.

That can make the investment in a startup solution worth the risk.

Sarah Fister Gale is a writer in Chicago. To comment email editors@workforce.com.

HOT LIST Recruiting Software Providers Listed alphabetically; compiled by David Chasanov; editors@workforce.com

NAMES OF RECRUITING SOFTWARE

COMPANY NAME & Web Address

ICIMS icims.com

iCIMS Recruit; iCIMS Connect; iCIMS Onboard; iCIMS Unifi

TALENTREEF talentreef.com

TalentReef Recruiting & Talent Management Platform

NUMBER OF CLIENTS

KEY CLIENTS USING SYSTEM

4,000

Southwest Airlines; Foot Locker; Rite Aid; Allstate; Tiffany & Co.; Eddie Bauer

4,000

Focus Brands; Flynn Restaurant Group; LBA Hospitality; Landmark Industries; Lucky’s Market; Bob Evans

TEXTRECRUIT textrecruit.com

TextRecruit; TextApply; Ari; JobChat; TextHR

977

Bloomin’ Brands; Culligan International; Feeding America; Red Roof Inn; Subway; Texas Roadhouse; Yamaha Corp. of America

ULTIMATE SOFTWARE ultimatesoftware.com

UltiPro Recruiting

4,400

Would not disclose

Note: ADP did not respond to requests for information.

Source: Companies. j a n u a ry / f e b ru a ry

2019

w o r k f o r c e . c o m | Workƒorce

47

48

PAZDRA continued from page 35 quo and begin to lean on employee groups to creatively solve problems and develop solutions to increase collaboration. International Association of Fire Fighters Union President Brian Powell experienced this firsthand when a prolonged recovery from an economic recession resulted in some cities not being able to deliver meaningful pay increases that were needed to motivate union employees.

Powell, who is president of Local 3080 of the IAFF in Broward County Florida, said that instead of making unrealistic requests, union representatives collaborated with city leadership to identify other sources of funds (including the use of state funds for benefit enhancements) that could help subsidize the cost of the pay increases.

“The union has to be willing to sit down and listen and the city’s leadership needs to do the same,” Powell said. “It’s important for each side to prove the request is fair and have ongoing dialogue to develop possible solutions.”

This strategy helped both sides meet existing challenges and enabled pay increases to be delivered sooner.

Without collaborative labor-management relations, productive dialogue is limited and results in longer, less effective negotiations. When labor unions are willing to develop a broader understanding of financial limitations, such as the need to have adequate financial reserves for unforeseen emergencies, the dialogue can become more solutions-oriented.

Based on these shared experiences, human resources professionals who are seeking a more effective labor relations strategy should consider opportunities to increase employee engagement levels.

“Building relationships needs to begin long before the start of labor negotiations,” said Powell, who has more than 15 years of collective-bargaining experience. As a union leader, he negotiates collective-bargaining agreements with multiple municipal organizations in South Florida. “Collaboration and open dialogue help build trust and increase mutual understanding,” he said.

Focusing on communication, involving employees in key decisions and collaborating to solve organization problems are all best practices for building a foundation of trust that leads to stronger employee engagement.

Positive outcomes will increase during labor negotiations when organization and union leaders seize opportunities to collaborate, learn from each other and remain committed to open and honest communication.

GLASS continued from page 35 can accept or decline. In mediation/arbitration, the parties jointly choose a mediator and if both parties fail to come to an agreement, the mediator becomes the arbitrator.

Fact finding is a labor dispute resolution measure where an independent “fact finder” examines the arguments of both parties and offers a nonbinding resolution. In the public sector, as many state and local governments are in poor financial health, the fact finder generally sides with the employer and finds the unions’ proposals unreasonable to allow the employer to control costs.

Unions strive to secure good outcomes for the employees they represent during the initial stages of negotiations. Allowing a dispute to lead to arbitration takes the decision away from management and labor. Since arbitrators must adhere to certain standards, the awards are somewhat predictable. Generally, arbitrators reach decisions that neither labor nor management view as the best solution. In a world where labor-management cooperation has become so important, having someone with no vested interest in the outcome decide a union and agency’s fate is a poor outcome that can take years for the parties to repair.

It is encouraging to see that some state and local governments and unions are using tools borrowed from the private sector that help lead to voluntary agreements.The following are important methods that increase the likelihood of fair, voluntary agreements: • Engage employees at the workplace.

• Use interest-based bargaining techniques in contract negotiations, where both sides declare their interests and then work together to draft agreements that align common interests and balance disparate interests.

• Share information and consult with unions on longterm strategies. Since most labor agreements are in effect for at least three years, a government’s labor relations strategy should align with its own short- and long-term financial planning and overall strategy. Given the repetitive nature of the bargaining process, successful labor-management relationships have management communicate with and involve stakeholders regularly, not just during negotiations.

Bargaining involves transparent communication between labor and management regarding terms and conditions of employment. Effective bargaining is usually measured by whether labor and management can reach an agreement without involving a third party. By demonstrating interest in building rapport, exploring alternatives, refusing to put limits on the number of topics for negotiation, and coming to the table with the goal of a solution, management can maximize the chance of a favorable outcome without compromising the operations of government.

Dale Pazdra is the director of human resources for the city of Coral Springs, Florida, and adjunct professor at Barry University in Miami Shores, Florida. He has more than 25 years of experience working in human resources and has been in the public sector for the past 12 years. To comment, email editors@workforce.com.

Jerry Glass is the President of F&H Solutions Group, a management-consulting firm that specializes in human resources and labor relations. Glass has negotiated more than 250 collective bargaining agreements in the public and private sectors. To comment, email editors@workforce.com.

Workƒorce | w o r k f o r c e . c o m

j a n u a ry / f e b ru a ry

2019

PUBLIC WORKS continued from page 29 represent a cross-section of entry-level employees to mayors and city managers.

“It helps when librarians can learn from planners and cops can learn from finance directors,” said Wyatt.

Their organization provides collaboration and cross-departmental training through a technology network connecting public sector employees in one part of the country to others elsewhere to help deal with problems for which others have found solutions.

It also provides online content, monthly webinars, regional pop-up conferences and a national conference. Informal meet-ups are held on college campuses to introduce local government careers to college students.

Further, it focuses on increasing the number of women and people of color into local government leadership to reflect U.S.

community demographics.

While there is much focus on age demographics in public service, Wyatt said what most people in a public service career want is no different than anyone else: “feeling recognized for a job well done, independence and learning something that takes them to the next step in their career.”

Wyatt has seen some members go through a career crisis as they contemplate a move to the private sector for more pay and better fringe benefits.

“They choose to stick with government,” she said. “They built a network that supports them and reminds them it’s work worth doing and that’s powerful.”

Carol Brzozowski is a Florida-based independent journalist. She can be reached at editors@ workforce.com.

23 6 2nd cover, 3 Back Cover

Advertising: For advertising information, write to sales@workforce.com.

Back Issues: For all requests, including bulk issue orders, please visit our website at Workforce.com/products or email hcmalerts@e-circ.net.

Editorial: To submit an article for publication, go to Workforce.com/contribute/ submission-guidelines. Letters to the editor may be sent to editors@workforce.com.

j a n u a ry / f e b ru a ry

Advertisers/URLs Page 5

Amazon Kindle amazon.com/ebooksforbusiness Capella University capellacmployersolutions.com CLO Symposium CLOsymposium.com Fidelity Investments go.fidelity.com/advice Lincoln Financial Group lfg.com/bbb

2019

Sage People sagepeople.com/productivity Thomsons Online Benefits thomsons.com/campaigns/global-insights Unleash unleashgroup.io/america2019 Workforce Resource Center resources.workforce.com Workforce Webinars workforce.com/wf-events

List Rental: Contact Mike Rovello at (402) 836-5639 or Mike.Rovello@infogroup.com.

Permissions and Article Reprints: No part of Workforce can be reproduced without written permission.

All permissions to republish or distribute content from Workforce can be obtained through PARS International. For single article reprints in quantities of 250 and above and e-prints for Web posting, please contact PARS International at MediaTecReprints@parsintl.com.

Clifford Capone Vice President, Group Publisher 312-967-3538 ccapone@Workforce.com Derek Graham Regional Sales Manager 312-967-3591 dgraham@Workforce.com

AL, AR, DE, FL, GA, IA, IL, IN, KS, KY, LA, MD, MI, MN, MO, MS, NC, ND, NE, OH, OK, SC, SD, TN, TX, VA, WI, WV, District of Columbia, Ontario, Manitoba, Saskatchewan Newfoundland, Europe

Daniella Weinberg Regional Sales Manager 917-627-1125 dweinberg@Workforce.com CT, MA, MD, ME, NH, NJ, NY, PA, RI, VT, Quebec, New Brunswick, Newfoundland, Europe

Kevin M. Fields Director, Business Development 312-967-3565 kfields@Workforce.com

ADVERTISERS’ INDEX Advertisers/URLs Page

ADVERTISING SALES

15

Melanie Lee Business Administration Manager mlee@Workforce.com

24-25 30-31 3rd Cover 7

Subscription Services: All orders, inquiries and address changes should be addressed to Workforce P.O. Box 8712 Lowell, MA 01853 or call customer service at (800) 422-2681, email us at hcmalerts@e-circ.net or visit Workforce.com/subscribe.

Please provide both the old and new address as printed on the last label at least six weeks before the change. The first copy of a new subscription will be mailed within eight weeks of receipt of order. Missing issues must be claimed within six months after publication.

Subscriptions are free to qualified individuals within the U.S. and Canada.

Nonqualified paid subscriptions are available for $199 annually for 6 issues.

All countries outside the U.S. and Canada must be prepaid in U.S. funds with an additional $33 postage surcharge. Single copy price is $29.99.

w o r k f o r c e . c o m | Workƒorce

49

LAST WORD

Rick Bell

PUBLIC SECTOR MODERNIZATION PLAN

F

or several years I worked as a civilian contractor alongside service members at a military installation.

There was much to admire. Initially it was the unforgettable scope of ships housing 5,000 people like hulking, gray floating cities. Everyone had their jobs from running a post office to publishing the ship’s newspaper to making sure aircraft safely landed on the flight deck.

Whether it was aboard ship or on base it was clear that service members had a mission, a purpose — move with precision to serve the greater good of the organization and by extension make the country and the world a safer place to live.

THE CHALLENGES FACING PUBLIC AGENCIES ARE MANY, YET THERE ARE COMMON SENSE, ACHIEVABLE WAYS TO MODERNIZE THE WORKPLACE. For the past several years we’ve heard a growing chorus among younger workers that they too want purpose in their work. The Navy, for example, recast its tagline in late 2017 to entice what it calls the “centennial generation.”

Not only does the military provide for such a calling, the public sector also can satiate the appetite for social justice through work. Cultural concerns like collaboration, job security and mentoring also are hallmarks of public sector workplaces.

So why then, with such enticements that appeal to millennials, is there a dearth of youthful applicants applying for federal, state and local jobs?

Recruiting and retaining millennials is just one issue flummoxing the public sector today. In this issue of Workforce we examine the numerous challenges facing those involved in public sector people management, an area of human resources that seems to be overlooked despite the role government agencies play in our daily existence.

Consider that nearly 22 million Americans are public sector employees. By comparison, Walmart, the world’s largest employer, totals 2.3 million employees, while McDonald’s counts about 1.9 million workers.

Perception could play a big role. The private sector is often touted for its ability to be agile, nimble and flexible.

Public agencies are often perceived as deliberate and even antiquated.

The average age of the public sector workforce is nearly 50 years old. Its technology still favors paper documents over Google docs. And many public sector budgets bear 50

Workƒorce | w o r k f o r c e . c o m

the constraints of heavy pension obligations. Despite these challenges, we found silver linings that are slowly transforming agencies toward a more contemporary workplace.

First, tapping into a younger workforce. The average time to hire among government agencies stands at 106 days compared to 45 days in the private sector. Young or old, few people have the patience in today’s job market to wait that long to hear about a new job.

Some public entities are outsourcing the bulk of their workforce while other agencies have found success by taking their recruiting to social media. It’s clear that younger workers crave a rewarding work experience and being a civil servant offers opportunities that only a handful of private sector employers can match. And in an era where younger employees cite jobs that benefit the social good as a key perk, public agencies provide that clearer vision of their agency’s mission.

Unions remain a dominant component of the management-labor relationship to determine civil servants’ compensation and benefits. Yet such negotiations still are fraught with challenges that date back a century and for many government agencies these dialogues are embedded in a workplace strategy that the vast majority of private sector employers never have to consider.

We recruited two seasoned experts to offer an inside look at brokering labor deals. Dale Pazdra, the HR director for the city of Coral Springs, Florida, and Jerry Glass, who has negotiated some 250 union contracts in both the private and public sectors, offer their perspectives from both sides of the negotiating table. The key takeaways? Build rapport, be transparent and it’s OK to take a page from the private sector.

Interestingly, the city of Memphis turned to the private sector for its new CHRO. And what did Alex Smith do?

Convinced her superiors to reach for the cloud to transform the city’s archaic HR technology system.

Still, updating an HR system in the public sector does not come easy. As Smith said, “If HR is competing with the police or fire departments for project funding, police and fire will always win.”

To be clear, the challenges facing public agencies are many, yet there are common sense, achievable ways to build a more youthful workforce and modernize the workplace around them.

Like an aircraft carrier, government workplaces can’t turn on a dime. With time, patience and a little private sector innovation, the public sector can provide jobs appealing to workers’ sense of social justice while building a sustainable workforce of the future.

Rick Bell is Workforce’s editorial director. To comment, email editors@workforce.com.

j a n u a ry / f e b ru a ry

2019

ACQUIRE EFFECTIVE MANAGEMENT SKILLS Expand your team’s knowledge base.

RESOURCE CENTER Whitepapers | On-demand Webinars Research Studies | E-books

Offering FREE on-demand content for developing tomorrow’s workforce.

resources.workforce.com

BIGGER BROADER BETTER

HAVE YOU CONSIDERED LINCOLN’S GROUP BENEFITS LATELY? THERE’S NO BETTER TIME THAN NOW. Having acquired Liberty Life Assurance Company of Boston’s group benefits business, Lincoln Financial offers tailored group benefits solutions to companies small and large, spanning a variety of industries.

We are proud to be one of the nation’s leading group disability insurers,1 with over 100 years of experience.

We have highly flexible product offerings, industryleading absence and leave management capabilities, and offer an innovative clinical model providing robust return-to-work programs. Serving the needs of over 10 million employees, we find the right solution for each customer, while delivering the same level of compassion and expertise that you’ve come to trust and expect. See how bigger, broader and better can benefit you.

Call your representative today to learn how you can find a better way to benefit, or visit www.lfg.com/bbb

LCN-2148203-061218. Lincoln Financial Group and Lincoln Financial are the marketing names for Lincoln National Corporation and insurance company affiliates, including The Lincoln National Life Insurance Company, Fort Wayne, IN; Liberty Life Assurance Company of Boston, Boston, MA; and in New York, Lincoln Life & Annuity Company of New York, Syracuse, NY. 1 Source: Based on LIMRA, new sales premium, as of 12/31/17.