workforce.com
May 2016
CONSOLIDATION What recent health insurer deals mean for employers.
RECOGNIZED
David Novak talks the importance of appreciation.
ALZHEIMER’S CAME EARLY Companies should be prepared to help people like Ken Dodson, above, who has the disease.
From Our Editors
Working like a dog has a new meaning. While many in HR are barking up trees searching for ways to drive ever-higher workforce performance, the actual dogs are kicking back and making a mint. According to the Wall Street Journal,The Dog Agency, a talent management firm for man’s best friends, is booking photogenic pups to push products for up to $3,000 a pop. Like their human counterparts, celebrity canines are cashing in on their influence on sites like Instagram and Vine. They’re hawking everything from cars to shoes and shaking paws with companies keen to reach their many social media fans. One pair of bulldogs boasts more than 300,000 Instagram boosters. It’s a useful reminder. Even when it feels like work has gone to the dogs, there’s hidden value waiting to be uncovered if we just sniff around enough. — Mike Prokopeak, Editor in Chief 4
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Ericsson hosted the second annual Women in Technology event on Feb. 19 in Silicon Valley for local university students to support women pursuing careers in the tech industry. The day included networking with peers and professionals in a social environment and kicked off with opening remarks from Ericsson’s chief human resources officer, Bina Chaurasia. The students had the chance to hear personal stories and career tips from a panel of female Ericsson executives who shared their experience in the technology field.
READER FEEDBACK Readers sounded off on the March 2016 “Last Word” column titled “Wellness, Schmellness,” p. 50. I found this article while researching health and safety for my employer. My article is about sedentary lifestyle and how bad it is for you. I was looking for some good summary text and was stopped dead in my tracks when I read Rick Bell’s piece. There is a place in the industry for this type of critical commentary and I applaud you, sir! There is a proclivity in the industry to forward some questionable agendas, and it is refreshing to hear an honest evaluation instead of the monotonous drivel about motivation and improvement.The fact is people have been dying for years of poor eating habits, hygiene and lack of exercise, and no amount of corporate sustainability will change the bulk of human behavior. Oh, but saving even one life is still a worthwhile endeavor? You bet … but is it statistically relevant? The “fuzzy math” comment made me laugh out loud! —Donald Quillman,Senior Safety Manager Alaska LNG Project, Anchorage, Alaska
Reader Megan Stark emailed this: A co-worker dropped off this magazine because I am the go-to person for employee wellness at our company. I decided to skim through it, and the title “Wellness, Schmellness” intrigued me.Was this supposed to be sarcastic? Nothing is more frustrating than reading a published article written by a misinformed writer. You mentioned that you aren’t sure if companies are doing the right thing and compared wellness programs to families enabling an alcoholic. I’m not
entirely sure how there is any connection between the two, but I can assure you any well-run corporate wellness program does not cause employees to avoid taking responsibility for their health; it does the opposite. In order for employees to enroll in our wellness program, they need to participate in a biometric screening and fill out a health reimbursement arrangement form. And for the record, creamed broccoli soup is just as bad for you as a burger.You may want check out one of the wellness initiative posters on your company’s wall for healthier alternatives. Workforce.com/schmellness
Ralph Calao commented on the March story, “Welcome to Wellness 2.0,” p. 38. I always prefer hearing from the employer point of view vs. the consultants or vendors/ providers. Of course they will pitch the vast benefits of providing health and wellness programs and services, but the employer that has done so holds a lot more credibility.The employer is looking to reap specific results and organizational impact from implementing such strategies. Nice to hear why they decided to embark on the journey, what their specific strategy included and what the impact was, even if it’s still in process. Workforce.com/Wellness2.0 We welcome your comments on these stories and others on our website. Be sure to follow us and give us a shout on Twitter at @Workforcenews, too. Hope to hear from you! m ay
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CONFUSION-FREE CUSTOM CONTENT YOU HAVE A MAZE OF OPTIONS WHEN IT COMES TO CUSTOM CONTENT. Partner with the Human Capital Media Research & Advisory Group to create influential thought leadership and compelling custom content. We tailor our knowledge and insight of HR’s inner circle to your brand, giving you a powerful voice in the HR space. Work with the HCM Research and Advisory Group today! Questions? Visit humancapitalmedia.com/research. #ResearchHCM
May 2016 | Volume 95, Issue 5 PRESIDENT John R. Taggart jrtag@workforce.com
ASSOCIATE EDITORS Lauren Dixon ldixon@workforce.com
MEDIA MANAGER Ashley Flora aflora@workforce.com
EXECUTIVE VICE PRESIDENT, CREATIVE SERVICES Gwen Connelly gwen@workforce.com
Bravetta Hassell bhassell@workforce.com
VICE PRESIDENT, EVENTS Trey Smith tsmith@workforce.com
Sarah Sipek ssipek@workforce.com
COPY EDITOR VICE PRESIDENT, CFO, COO Frannie Sprouls Kevin A. Simpson fsprouls@workforce.com ksimpson@workforce.com EDITORIAL ART DIRECTOR VICE PRESIDENT, Anna Jo Beck GROUP PUBLISHER abeck@workforce.com Clifford Capone EDITORIAL INTERN ccapone@workforce.com Andie Burjek VICE PRESIDENT, aburjek@workforce.com EDITOR IN CHIEF VICE PRESIDENT, Mike Prokopeak RESEARCH AND mikep@workforce.com ADVISORY SERVICES EDITORIAL DIRECTOR Sarah Kimmel Rick Bell skimmel@workforce.com rbell@workforce.com RESEARCH MANAGER Tim Harnett GROUP EDITOR/ ASSOCIATE EDITORIAL tharnett@workforce.com DIRECTOR RESEARCH ANALYST Kellye Whitney Grey Litaker kwhitney@workforce.com clitaker@workforce.com MANAGING EDITOR James Tehrani jtehrani@workforce.com
RESEARCH ASSISTANT Kristen Britt kbirtt@workforce.com
CONTRIBUTING EDITOR Frank Kalman fkalman@workforce.com
WEB COORDINATOR Sam Dietzmann sdietzmann@workforce.com
John R. Taggart PRESIDENT
AUDIENCE DEVELOPMENT DIRECTOR Cindy Cardinal ccardinal@workforce.com DIGITAL SPECIALIST Lauren Lynch llynch@workforce.com
EVENT CONTENT MANAGER Ashley (Wynne) Collins awynne@workforce.com
LIST MANAGER Mike Rovello hcmlistrentals@infogroup.com BUSINESS ADMINISTRATIVE MANAGER Melanie Lee mlee@workforce.com
EVENTS MARKETING MANAGER Anthony Zepeda azepeda@workforce.com
WEBCAST COORDINATOR LEAD GENERATION Alec O’Dell ADMINISTRATOR aodell@workforce.com Nick Safir BUSINESS MANAGER nsafir@workforce.com Vince Czarnowski CONTRIBUTING WRITERS vince@workforce.com Marty Denis REGIONAL SALES Joe Dixon MANAGERS Kris Dunn Derek Graham Bob Frisch dgraham@workforce.com Sarah Fister Gale Marc Katz Rob Galford mkatz@workforce.com Cary Greene Daniella Weinberg Richard Y. Hu dweinberg@workforce.com Jon Hyman ACCOUNT EXECUTIVE Mark T. Kobata Brian Lorenz Patty Kujawa blorenz@workforce.com Gary B. Kushner DIRECTOR OF BUSINESS DEVELOPMENT, EVENTS Rita Pyrillis Michelle V. Rafter Kevin Fields kfields@workforce.com Tanja L. Thompson
Gwen Connelly EXECUTIVE VICE PRESIDENT
Kevin A. Simpson CHIEF FINANCIAL OFFICER CHIEF OPERATING OFFICER
Norman B. Kamikow CO-FOUNDER (1943 - 2014)
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 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 Dave Ulrich, Professor, Ross School of Business, University of Michigan
Workforce, ISSN 2331-2793, is published monthly by MediaTec Publishing Inc., 318 Harrison Street, Suite 301, Oakland, CA 94607. Periodicals Class Postage paid at Oakland, CA and additional mailing offices. POSTMASTER: Please send address changes to: Workforce magazine, P.O. Box 8712, Lowell, MA 01853. Subscriptions are free to qualified professionals within the U.S. and Canada. Nonqualified paid subscriptions are available at the subscription price of $199 for 12 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. Workforce and Workforce.com are the trademarks of MediaTec Publishing Inc. Copyright © 2016, MediaTec Publishing Inc. ALL RIGHTS RESERVED. Reproduction of material published in Workforce is forbidden without permission. Printed by: Quad/Graphics, Sussex, WI
FREE LIVE
ONLINE EVENTS
CONTENTS
ON THE COVER EASY TO FORGET
Ken and Nikki Dodson have dealt with his Alzheimer’s for years. How can companies help? COVER PHOTO BY BRAD ZIEGLER
32
28
PROFILE 40 FINGER LICKIN’, RUBBER CHICKEN
David Novak,Yum Brands’ former CEO, helped turn the company around by focusing on employee recognition.
SPECIAL REPORT 44 RECRUITING TECHNOLOGY
Predictive analytics begins to emerge, but unifying data still a major hurdle for major rollout at companies.
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FEATURES 32 INSURANCE CONSOLIDATION
CORRECTIONS In the March 2016 Health Insurers Hot List, p. 44, the website for Blue Cross Blue Shield of Michigan was listed incorrectly. It should be bcbsm.com.
36 SABOTAGE, AN INSIDE JOB
In the April 2016 story “Hearing Barely Makes a Peep,” p. 16, the number of teachers who have signed up for the benefit was incorrect.The correct number is 9,759.
Health insurance providers are buying each other up, but consumers remain leery of what it means. Workers can sabotage many things creating a form of corporate espionage. So what should HR do about it?
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40
ON THE WEB SPEAK UP!
The Workforce online community provides you with virtual meeting places to chat about issues and trends affecting you and your workplace. LIKE US:
: e g a t sabo
facebook.com/workforce.magazine
FOLLOW US:
twitter.com/workforcenews
JOIN THE GROUP: workforce.com/LinkedIn
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WATCH US: workforce.com/youtube
FOR YOUR BENEFIT 16 THE PULSE ON WELLNESS
COLUMNS 4
YOUR FORCE
Working like a dog.
14 WORK IN PROGRESS
Picking pirates or sailors.
19 BENEFITS BEAT
Employer’s role in helping workers deal with death of loved ones.
26 THE PRACTICAL EMPLOYER
Online comments cause an NLRB buzz saw.
50 THE LAST WORD
Mad men; bad men?
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Virgin Pulse’s recent acquisition of two smaller players could be just the start of wellness consolidation.
17 WHAT’S BREWING AT MILLERCOORS The brewing giant encourages employees to share their passions.
17 LOSING WEIGHT IS HARD, LOSING CASH IS HARDER
A new study shows people are more likely to meet wellness goals when penalized
18 RETIREMENT 101 ON 401(K)S
Seminar offers HR pros who are novices on retirement issues information to pass on to employees.
TRENDING 10 ALL ABOUT THAT ENGAGEMENT Jeremy Katz Music uses music videos for team-building.
10 DEAR WORKFORCE
Retention efforts; retirement guidance.
11 FROM THE WEB, PEOPLE MOVES AND BY THE NUMBERS
Donovan was bullied; Green to Accolade; immigration.
12 STILL ENGAGING
William Kahn talks ‘engagement,’ a workforce term he coined.
12 A COLLECTOR’S ITEM
A collection agency offers headhunter services as well.
LEGAL 24 PHOTO DEVELOPMENT
The Whole Foods Market NLRB decision.
25 LEGAL BRIEFINGS
Accessing arbitration agreements; tipping.
w o r k f o r c e . c o m | Workƒorce
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TRENDING
These Videos Are All About That Basic Engagement By Andie Burjek
Dear Q: How Do We Justify Retention Efforts? How do we craft a compelling argument to justify the need to retain employees? Our agency is short of staff, yet the unit is saddled with the responsibility of keeping people and property safe by enforcing traffic rules and regulations. We are concerned about the effect of not having adequate staff and want to persuade higher-ups to ensure we have the staff we need. —Critical Need, project specialist, government, Nigeria
PHOTO COURTESY OF JEREMY KATZ MUSIC
S
ure, a drunken display of karaoke at the office holiday party isn’t the brightest idea — neither is accidentally letting your new workout playlist blast through your otherwise quiet office. But there are other ways to fuse music and work that catch an employee’s attention and foster engagement, such as creating a music video. Jeremy Katz Music uses music videos as a team-building exercise. Jeremy Katz, pictured above, provides all the vocals, music, producing and editing for parody music videos, which companies can use to communicate a message. “Music is probably the best communicator to get any type of message across,” he said.“On a societal level, it is the universal language of everything from love to persuasion to marketing and advertising.” People remember a music video better than a boring lecture or PowerPoint presentation, he said. Katz’ first client was Royal Dutch Shell. Shell had a new workplace safety campaign,“Goal Zero,” designed to help eliminate accidents in the workplace. A team at Shell wrote “All About That Goal” to the tune of Meghan Trainor’s “All About That Bass.” Katz then recorded the song with the new lyrics and sent the MP3 to Shell, where employees took iPhone videos of themselves lip-syncing to the song. Katz used the video and audio to put together a comedy parody video that would engage employees and promote the message of safety in the workplace. Activities like this are effective, Katz said, because they bring people together, and anyone who wants to be involved can participate in some capacity. Although his business is new, just a few months old, the idea behind it is not entirely new. For example, Esprit Productions in Libertyville, Illinois, also produces music videos at corporate events. So do Kidbilly Music and Motion Source to name a few. Making music videos “boosts morale,” Katz said, “And within the company, you get everyone involved. Everyone brings something from their own cultural background, their own expertise and their own hobbies.”
JEREMY KATZ’S COMPANY HELPS EMPLOYERS ENGAGE WORKERS THROUGH MUSIC VIDEOS.
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A: Dear Critical: The best way to justify retention initiatives is to place a dollar value on them. One way for doing this is to ask the job’s managers to list the obstacles created by turnover and place a dollar cost next to them. Once your executives know turnover’s costs, you must then recommend solutions that actually work. The best way to cut turnover is to hold managers accountable for it. To do this, you must initiate a report that includes the manager’s name, goal, performance against goal and ideally the cost of turnover for each manager. Then ask your CEO to read and distribute that report monthly. Source: Dick Finnegan, C-Suite Analytics, Longwood, Florida
Q: What Kind of Retirement Guidance Should Be Offered? What is the trend among large corporations to offer retiring leaders some guidance or preparation for both the financial and emotional effect of retirement? Why do they do it and what types of services do they offer? —Fact-Finding Mission, president, consulting/legal, Los Gatos, California A: Dear Fact: Although every large corporation has its own way of dealing with retiring leaders, our experience has been that many corporations take the paternalistic approach mentioned in the question. This approach benefits both the retiring leader as they prepare for retirement and aids the organization by smoothing the transition to the next leader. Employees who expect to be financially secure in retirement are better prepared emotionally. Corporations can nurture this sense of security by providing financial planning services that help ensure that the retiring leader’s financial house is in order — that retirement savings are prudently invested and all benefits from the current and perhaps former employers are coordinated and accounted for. This will allow for a smooth transition into retirement. Helping leaders prepare for retirement can help the corporation, too. A leader’s retirement must be carefully communicated to employees, and their successor must be introduced in advance of the retirement date. If this is well-planned and executed, productivity will not be affected. A strategic approach to succession management helps create a flexible, high-performing organization and ensures that open positions do not impede the progress of important business initiatives. Source: Richard Reed, vice president and defined contribution practice leader, Sibson Consulting, Boston
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TRENDING
FROM THE WEB
BULLYING NOW, BULLYING LATER Jon Hyman blogs about his son, Donovan, who has Noonan syndrome. Donovan was bullied for the first time when a kid made fun of his ears. Hyman wonders if today’s schoolyard bully will be tomorrow’s workforce bully and if Gen Z will be able to handle it. Workforce.com/ Donovan A PINCH OF ‘SALT’ In the first “Wacky World of Work” podcast, James Tehrani interviews James Walsh, the author of the book “Playing Against the House.” The book is a first-person account about Walsh’s experiences as a union “salt” trying to organize Miami-area casinos while working as a waiter at the same time. Workforce.com/Salting HELP, A YELP In “5 Minutes of Management,” Workforce editors Rick Bell and Frank Kalman discuss the ramifications of an open letter from a now former Yelp employee to the CEO and more. Workforce.com/ Yelp5Minutes m ay
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PEOPLE
moves
MARK GREEN Corporate health consultancy Accolade named Mark Green as head of diversity and inclusion. Green has worked in the diversity and inclusion field since 2000 at a variety of companies, including W.W. Grainger Inc., Miller Brewing Co. and most recently AbbVie. Green earned his undergraduate and MBA degrees at the University of Notre Dame, where he was a running back on the 1988 national championship team. After college, he was selected in the 1989 NFL draft by the Chicago Bears. FRANK VITALE Engineering firm KeyLogic Systems, Inc. named Frank Vitale as chief human resources officer. Vitale will lead all HR resource functions. He previously was with Clear Mountain Bank as senior vice president of its Private Banking Group. He’s a graduate of the U.S. Army’s Academy of Health Sciences. MARY FREER Alcott HR named Mary Freer as director of human resources, western New York division. Before joining Alcott, Freer was with ROI HR Consulting Benefit Brokers of Western New York. 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.
By the Numbers compiled by Rick Bell
Immigrants and Economics Immigration is a hot-button topic of the 2016 election season. Here are some economic stats about immigrant workers:
40 million
immigrants living in U.S. (2012)
13% of U.S. population
in whitecollar jobs 46% work Source: Economic Policy Institute, 2014
40% of Fortune 500 companies were founded by an immigrant or the child of an immigrant (2010) Immigrant-founded engineering and tech firms employed
560,000 workers and generated $63 billion in sales in 2012.
New entrepreneurs who are immigrants are on 28.5% the rise. 13.3%
1997
2014
Source: Kauffman Foundation, 2015
10 Latino CEOs
among Fortune 500 companies Oscar Muñoz United Continental Holdings George Paz* Express Scripts Carlos Rodriguez ADP J. Paul Raines GameStop Joseph Alvarado Commercial Metals Robert E. Sanchez Ryder System J. Mario Molina Molina Healthcare Mary Barra General Motors Marcelo Claure Sprint Richard Gonzalez AbbVie *Scheduled to retire May 2016. Source: Al Día News
H-1B: 2 Letters, 1 Number, 1 Hyphen
The visa allows companies to bring foreign professionals with college degrees and specialized skills to fill jobs when qualified Americans cannot be found. approximate cost 85,000 issued annually per application
$4,000
233,000 applications were received in 2015 Source: United States Citizenship and Immigration Services, 2016
workforce.com | w Workƒorce orkforce.com 10| Workƒorce
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TRENDING
Debt Agency Adds Job Search Program
STILL ENGAGING AFTER ALL THESE YEARS By Andie Burjek
By Andie Burjek William Kahn, Boston University professor
Today it’s not uncommon to see article after article about the ubiquitous term “employee engagement.” Although a popular talking point now, the term itself is relatively new. Professor William Kahn of Boston University coined “engagement” in terms of the workforce setting in his 1990 paper, “Psychological Conditions of Personal Engagement and Disengagement at Work.” Workforce caught up with Kahn via email to discuss the evolution of the term. Workforce: Before you first used the word ‘engagement’ in the business setting, how did you identify the problem of employees being disengaged? William Kahn: The presenting issues revolved around employees’ lack of motivation and involvement. People were often doing only what needed to be done, as defined and directed by others, and their work had very little of their own personal selves, very little of what they thought and felt ought to happen as they went about their work. Managers did not really understand the problems, which they thought had to do with employees not being the right fit for the job or not being rewarded enough for their work.
WF: What was the ‘aha’ moment when you hit on engagement as a business case? Why did you use that word, that terminology? Kahn: There was no particular ‘aha’ moment. It was simply the accumulation of noticing, studying and writing about employees who were unfulfilled at work, and why that might be. I used ‘engagement’ and ‘disengagement’ because those words evoke very clearly the movements that people make toward and away from their work, other people and the roles that they had. Engagement is a word that suggests betrothal — the decision to commit to a role, an identity and a relationship that offers fulfillment.
WF: Why was it an issue then? Kahn: Leaders of organizations had very little understanding of modern concepts of empowerment, and believed that motivating others was mostly a matter of hiring the right people and giving them the right incentives. The engagement concept was developed based on the premise that individuals can make real choices about how much of their real, personal selves they would reveal and express in their work. That premise was radically different than the operating assumptions of the time.
WF: Has employee engagement evolved or is it still rooted in the same problems as 25 years ago? Kahn: The problems are much the same, although there is more sophistication about how they appear and are dealt with. The problems of giving people voice over what they do and how they do it, of ensuring that people find their work intrinsically meaningful, and enabling them to craft their roles still exist, as managers wish to exert control over others when they are made anxious by the demands to produce and perform.
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T
he last place most people would turn to for help finding a job is a debt collection agency, but one company hopes to change that. Choice Recovery, a debt collection agency based in Columbus, Ohio, began its Restart Program two years ago. With Restart, the company essentially created a job search agency within the collection agency. Although connecting job-searching and debt-collecting services is rare, it’s not completely unheard of. The company was inspired by another agency called CFS2. Founded five years ago by Bill Bartmann, the Tulsa, Oklahoma-based debt collection agency seeks to help debtors find gainful employment through a series of free offerings such as career services, social services and debt negotiations. Upon learning about this program, Choice Recovery was inspired to create one of its own. Choice Recovery helps candidates with various aspects of the job search such as creating and posting résumés and arranging interviews. “We make 10,000 phone calls a day trying to collect for our clients, and the No. 1 objection we hear is, ‘I can’t pay my bills because I’m not working,” said Chad Silverstein, Choice Recovery’s founder and president. “Those are our candidates right there.” Consultants connect interested people with a Restart specialist. Meanwhile, candidates’ accounts are put on hold during the job hunt process. “For employees, in an industry where it is commonplace for people to scream at them, hang up on them, and otherwise treat them unkindly, this is a refreshing approach,” said Susan Heathfield, a human resources expert and organization development consultant who curates HR content for About.com. m ay
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THE SCIENCE OF PERSONALITY
HOGANASSESSMENTS.COM
TRENDING
Wo r k i n P r o g r e s s
PICKING PIRATES OR SAILORS By Kris Dunn
I
t’s better to be a pirate than join the Navy.” That’s a loaded quote from a favorite cultural maven, Steve Jobs. Keep it in mind for the next few minutes, because I’m going to tell you the best thing you can do when hiring for cultural fit is figuring out who is a pirate — and who is a great fit for the navy. Let me guess:You think your culture is unique. Your employment brand is strong, with Glassdoor singing your praises and local newspapers dropping by to click photos of your workspace and write glossy profiles about how much passion your employees have. I’m not hating on that. There’s one little problem, through. You’re allowing your managers to decide who fits your culture, right? Your hiring managers aren’t great at interviewing for knowledge, skills and abilities.They’re even worse when it comes to deciding who fits your culture. How do you get a better handle on helping your managers evaluate cultural fit? First, you need to define your culture, but, more importantly, you need to identify the type of person across all job titles who is successful in your culture. It’s impossible to write an article that meets everyone’s needs from a cultural-fit perspective. But let’s assume this: Most people who promote their workplace culture as a competitive advantage tout some similar items as key to what makes them different. Your best chance at successfully hiring for cultural fit is to figure out what type of DNA becomes a star in your company and then find a behavioral assessment tool that can help you measure it. The problem is there are only a few behavioral characteristics that can provide a true link to the type of company you have. If I were going to choose a single behavioral characteristic to tie cultural fit to — regardless of company — it would be what I call “rules orientation.” Rules orientation works like this: People who are “high rules” actively look for the operations manual on the shelf when they’re dealing with issues. Doesn’t matter what their annual salary is, high-rules people want to be told what to do. That doesn’t mean they won’t do the job in question at a high level, but as you might expect, you really can’t expect a high-rules person to have a jones for innovation. They value structure and order. Translation:They are great fits to join your “navy.” Low-rules people, on the other hand, cringe at the thought
of having to comply with an operations manual. Low-rules people love organizational chaos, and they want to figure out what to do given a specific set of circumstances. Low-rules people will help you build the operations manual, but you better have another challenge/job for them once it’s built because they’ll refuse to have their daily activities managed to that degree. These types of people are organizational pirates. Combine this trait with strong cognitive skills and high assertiveness, and the only thing missing is an eye-patch that matches the person’s version of business casual. Why is rules orientation your best bet? First, if your business revolves in any way around innovation, you’ll need a higher percentage of lowrules people than most companies. Innovation means you’re creating something out of nothing. Asking a high-rules person to innovate on a daily basis is problematic. Remember that an individual being high rules isn’t good or bad; it’s just who they are. It’s up to you to make the right match for your company. But wait! Before you accuse me of writing only for the software industry, let’s ponder an alternative. Many of you are HR/talent professionals in very conservative companies where risk management is a primary concern. Even so, rules orientation is still important. From time to time, you might think you need someone with the ability to innovate or be a change agent. If that’s your goal, rules orientation is the best directional tool available. The problem is that your company most likely can’t provide an environment where the low-rules individual can be successful.You can want it and your hiring manager can want it, but you’ll likely still fail when hiring a low-rules person. A low-rules person joining a high red tape company would probably lead to frustrations from the level of approval that would be necessary to get things done. It will be tough for them to be successful (often in their own eyes) because of the time it takes to push a great idea through the approval change. Does the candidate in front of you want to be a pirate or join the navy? The answer is your best chance to add a little science to how you view cultural fit when hiring today.
IDENTIFY THE TYPE OF PERSON ACROSS ALL JOB TITLES WHO IS SUCCESSFUL IN YOUR CULTURE.
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Kris Dunn, the chief human resources officer at Kinetix, is a Workforce contributing editor. To comment, email editors@workforce.com.
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KEEP IT SIMPLE More choices, but fewer options. New rules for old products. Managing the ever-evolving complexities of employee benefits can be overwhelming. But not if you attend the next Focus on Benefits. It’s simply the only senior-level conference curated by Workforce magazine concentrating on the rise of consumerism in employee benefits management. Here’s another way to keep it simple — and smart.
Save $150 with our SUPER Early Bird rate. Deadline is June 3.
KEYNOTE SPEAKER HELAINE OLEN, AUTHOR “The Index Card: Why Personal Finance Doesn’t Have to be Complicated”
2016 WORKFORCEFOCUS.COM m ay
#WFFOCUS16 w o r k f o r c e . c o m | Workƒorce 15 @WORKFORCENEWS
FOR YOUR BENEFIT
The Pulse on Wellness: Acquisition Frenzy Afoot Virgin Pulse’s recent acquisition of two smaller players could be just the start of wellness consolidation. By Rita Pyrillis
C
orporate wellness has a new dominant player with Virgin no choice but to be acquired or go out of business.” Pulse’s recent acquisition of two competitors — a signal that Oftentimes, private equity and venture capital firms expect startmore consolidations are on the horizon in an industry crowded ups to double or triple their growth in that three- to five-year pewith scores of players. riod, according to industry analyst Andrew Sykes, president of Virgin Pulse, a wellness and engagement company that is part Habits At Work, a corporate wellness consulting firm in Chicago. of Richard Branson’s Virgin Group, announced in February that it was acquiring Providence, Rhode Island-based ShapeUp and ‘THIS IS THE FIRST IN A Global Corporate Challenge, a wellness firm based in Melbourne, Australia. Together, the three companies will serve 6,500 customHUGE WAVE OF THESE ers in 185 countries, according to a company news release. “This industry is growing quite rapidly, so there are a lot of KINDS OF companies building the same things,” said Chris Boyce, CEO of Virgin Pulse. “We saw an interesting opportunity by combining OCCURRENCES, AND ShapeUp and GCC, which has an international presence. With these three entities, we will have a huge number of clients, and IT’S GOING TO we are picking up great programs and international capabilities.” CONTINUE TO HAPPEN.’ Financial details of both acquisitions remain undisclosed, but the deals are likely the first of many to come, said Danna Korn, —DANNA KORN, CEO of Sonic Boom Wellness, a corporate wellness program based in Carlsbad, California. She predicts that 2016 “will be a SONIC BOOM WELLNESS big year” for mergers and acquisitions in the wellness world. “This is the first in a huge wave of these kinds of occurrences, and it’s going to continue to happen,” she said.“Companies will “Organic growth is very difficult to achieve at the pace that either get gobbled up or go out of business.” venture capital firms are looking for,” he said. “A way of getting With so many players crowding the field, like Sonic Boom, their money out is selling the business that they invested in.” Ceridian LifeWorks, Corporate Fitness Works, Limeade, Keas, The mergers and acquisitions trend mirrors the consolidation The Vitality Group and a steady flow of smaller startups enter- craze in the human resources software industry of a few years ago. ing the market, it’s inevitable that some will not survive, accord“It’s a really interesting and exciting time for our industry,” said ing to Mike Thompson, president and CEO of the National Henry Albrecht, CEO of Limeade, a Bellevue,Washington-based Business Coalition on Health. health and wellness technology company.“It’s a natural process in “The whole wellness arena is entirely fragmented,” he said. markets to assemble over time when there are similar products “There are literally hundreds of players, and it’s not clear that many and platforms to integrate.We’re in a period of coalescence.” have distinguished themselves from the pack. It’s like the wild, What this activity means for employers is unclear, but many Wild West.” agree that Virgin Pulse’s acquisitions will likely be a boon to companies trying to expand their global reach and those seek‘IT’S A REALLY INTERESTING ing more nuanced approaches to wellness.The wellness industry is shifting its focus from traditional methods like health risk asAND EXCITING TIME FOR sessments and biometric screenings to programs that address employees’ emotional, financial and mental well-being. OUR INDUSTRY.’ “The large employer market is increasingly global and seeking scalable wellness platforms and solutions that can be adapted —HENRY ALBRECHT, LIMEADE beyond the U.S.,” said LuAnn Heinen, vice president at the Companies that are majority-owned by venture capital and National Business Group on Health. “From that standpoint, the private equity firms are most susceptible to being sold or going successful integration of these companies, each of which had its bust, Korn said. own successful platform, could be a plus. At the same time, “Nearly every big player in the industry has taken a lot of we’re seeing a proliferation of startup players in the wellness funding in private equity venture capital,” she said. She added space, so there is no shortage of niche solutions for employers to that Sonic Boom is not funded by venture capital or private pilot in areas like diabetes prevention, nutrition, sleep and resilequity. “They have to pay it back plus interest, or someone will ience. It’s good news that now, and in the foreseeable future, have to buy you. Investors say that you have three to five years employers have access to large scalable solutions as well as new before you have to pay them back. If you can’t, then you have ideas and mobile apps from small vendors.” 16
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MillerCoors Brews Wellness, Sustainability Initiative
Losing Cash Harder Than Losing Weight
The brewing giant encourages employees to share their passions, which has helped it become greener.
Penalties work for wellness goals, University of Pennsylvania study finds.
By Sarah Sipek he appetite for workplace wellness continues to grow. And in the process, it appears some organizations are cleaning up their worksites and the world around them, too. At mega-brewer MillerCoors, wellness is improving employee engagement and helping to create a greener planet. One goal of the company’s wellness program is to get employees to form groups for lunchtime walks. During one such walk in June 2015, Kelly Harris, a brewery technician in its Trenton, Ohio, plant, shared his commitment to green living and sustainability, said Kim Marotta, director of sustainability at MillerCoors. “His colleagues encouraged him to share his feelings with management, and he did,” Marotta said.“He came to us with a plan and process for how to reduce waste in our breweries.” Marotta and her colleagues were all ears. MillerCoors started a sustainability initiative in 2009 to reduce its carbon footprint. Going into 2015, the company had committed to reducing plant waste by 15 percent across its eight major U.S. breweries. Harris approached them with a plan that June to color code recycling bins for cardboard, glass and trash that would make it easier for plant employees to sort and recycle waste. “His efforts really empowered the other plant employees,” Marotta said. “Before long, they were organizing dumpster dives to recover items from the trash that could have been recycled and reused.” Engaging employees in such ILLUSTRATION BY ANNA JO BECK activities is still a major challenge for corporate wellness programs. According to a 2014 Gallup study, more than 85 percent of U.S. employers offer a wellness program, though only 60 percent of employees are aware their companies have them. Of those who are aware, only 40 percent participate. “Engagement is the big hurdle with wellness,” said Sarah Lecuna, U.S. benefits offerings leader at Intuit Inc. “Companies are at the point where they know they need to offer wellness, but they haven’t figured out how to get employees to take part. Any hook that you can get to drive participation is great.” Harris’ plan made its way across all MillerCoors breweries. The company has been able to slash waste by 89 percent since beginning its sustainability initiative in 2009 and reach landfill-free operations at all its major breweries. The key to this success was taking the passion catalyzed in wellness and building an organizational structure around it. “It’s important to reward this positive behavior, so we recognize our employees and the efforts they are doing in their communities around sustainability,” Marotta said.“It’s all about tying it into a bigger cause.”
By Rita Pyrillis hen it comes to fitness, employees would rather lose pounds than cash, according to a recent study that found that punishing people for failing to meet their weight goals puts more pep in their step than offering them a reward. In the study by the Perelman School of Medicine at the University of Pennsylvania, 281 participants were given the goal of reaching 7,000 steps per day over several weeks. They were divided into four groups: a control group that received no financial incentive; a group that got $1.40 for every day they achieved their goal; a group that could enter a daily lottery to win a prize that averaged $1.40 each day; and a group whose members got $42 cash upfront and had $1.40 deducted for each day they failed to log enough steps. It turned out that the group under threat of having to pay the money back did far better than everyone else. Those who ran for rewards or were entered in a daily lottery were no more successful than the control group where participants reached their goal about 30 to 35 percent of the time, according to the study. But participants who risked losing the reward met their goal 45 percent of the time. David Roddenberry, CEO of HealthyWage, a wellness firm that designs incentive programs, said these results point to the effectiveness of using both sticks and carrots to motivate employees. The idea that losing something outweighs the pleasure of gaining something is a proven principle of behavioral economics, yet few employers embrace it. “Lost aversion principles have been proven in many settings, but they are so rarely incorporated into the design of employee wellness programs,” he said. “People are afraid to use penalties, but if you’re going to utilize an incentive-based approach, you should try to incorporate the stick.” Whatever tools are used, Larry Boress, president and CEO of the Midwest Business Group of Health, said employers need to find the incentives that work best for their unique workforce. “Some will respond to water bottles, others want cash or savings,” he said. “Regardless of what you use, the incentive will only get you in the door.The ultimate challenge is how to get people to continually be engaged in their health.”
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Retirement 101 on 401(k)s Seminar offers HR pros who are novices on retirement issues information that they can pass on to their workforces. By Patty Kujawa
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hristina Graceffa has been a human resources manager for a long time, but is new to handling a 401(k) plan. The HR pro from the Brewer Co. thought she would be the only one in that category when she took her seat at an all-day seminar held by The Plan Sponsor University in Milwaukee. After listening to some of the questions from the 18 other plan sponsors in attendance, she felt better about what she didn’t know. “I was worried that this was going to be over my head,” Graceffa said. “It gave me the understanding that you’re not alone.” Lots of HR and other managers get saddled with the task of running their company’s 401(k) but haven’t been taught how to do it, said Steff Chalk, Plan Sponsor University’s executive director. The university, based in Jupiter, Florida, travels throughout the country with daylong seminars taught by staff and adjunct local associates to help 401(k) plan managers learn more about their responsibilities. It is for-profit — the providers who present pay the fees — and the seminar is free for plan sponsors. If a provider tries to sell a product or service, Chalk said he stops it immediately. “Many of these people have had no training, and now they are in charge of a 401(k),” Chalk said. “We want them to get a better understanding of the whole picture.” The attendees at the Milwaukee seminar manage 401(k) plans covering nearly 4,000 participants, said Todd Barden, an adjunct lecturer for the university and senior retirement plan consultant for Great Lakes Retirement Plan Consultants. The aim of the event was to expose attendees to new ideas and goals. One goal talked about throughout the day was 90-10-90. It’s the ideal combination for a successful plan where there is 90 percent participation, 10 percent employee contribution rates that do not include the employer match, and 90 percent usage of professionally managed accounts, such as target-date funds. When designing a plan with these numbers, it’s hard for employees to go wrong. “If we leave all the decision-making to employees, many times they make the wrong choice,” Barden told the group. A large part of the seminar was spent talking about what works and what doesn’t in 401(k) plans. Participants broke into small groups to discuss issues. Then, leaders from each group presented top winners and losers. Things that UPCOMING SEMINARS: worked included automatic enrollment, emApril 27: Minneapolis ployer match, targeted April 28: Newton, Pennsylvania education and bilingual May 19: Brookville, New York communications. Unfortunately, there June 23: Purchase, New York were more things 18
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wrong with plans than right, participants agreed. Top on the list of things not working included compliance testing, millennial buy-in, boosting savings rates, multiple loans and weak or no company match. When the lists were complete, participants talked about the issues as they related to their 401(k) plans. There was open conversation with questions and suggested answers mostly coming from seminar participants. “Getting information that way is much better than hearing from me,” Chalk said. “Sharing content is much more valuable. We want them to know their challenges are not unique.” The Plan Sponsor University started two years ago and has held about 150 seminars as of March, Chalk said.Typical events have between 15 to 18 plan sponsors with a dozen advisers who help with the daylong lecture. The university is affiliated with The Retirement Advisor University (Chalk also is executive director of the retirement university) as well as 401kTV, a website showcasing videos of topics covered at the seminars. Plan Sponsor University likes to keep its events small and at local universities so participants don’t feel intimidated or pressured to purchase products or services. “This is more of an opportunity for us to help them work through some things that they may have been thinking about but don’t really know enough to come to any conclusions,” Chalk said. Pamela Zacharias, firm administrator for business law firm Meissner, Tierney, Fisher & Nichols in Milwaukee, said she came to get more information about plan design and fiduciary responsibilities. Overall, she felt her plan was doing well with its 4 percent match on 5 percent employee contribution, but she learned there were more features that could strengthen results for workers at her law firm. “My eyes were opened up to a lot of issues, and now I have a lot of questions,” Zacharias said. “I’d like to look into auto-escalation and changing our match so it inspires people to contribute more.” m ay
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FOR YOUR BENEFIT
Benefits Beat
DYING WORDS By Rita Pyrillis
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t Workforce, we’ve covered many tough topics that are often viewed as taboo in the workplace such as mental illness, addiction and Alzheimer’s disease. Discussions about these issues are difficult to have in any setting, but conversations at work about deeply personal struggles are fraught with concerns about privacy, legality, job security and other issues.There’s only so much that we want our employers to know about our lives and only so much that employers really want to know. But some things must be openly addressed to create a supportive workplace where employees can do their best during tough times knowing that others care. One of those things is a topic that most of us want to avoid, even though none of us can — dying. Those of us who have watched a loved one die know the blanket of pain and grief that covers us, making it hard to move through the day. Imagine carrying that heaviness to work where business goes on as usual. Recently, I watched my cousin shuttle between her job, the hospital where her mother was admitted after a fall and, ultimately, to hospice. Her employer seemed supportive, but she had only so many paid days off at her disposal so she lived in an exhausting loop of home, work and hospice until her mother died weeks later. I also watched a good friend juggle a demanding job and the care of her elderly parents — both in the hospital — while at the same time managing their financial and legal affairs. While both my cousin and friend are talented and hard-working, I’m sure that they struggled to stay focused and present on the job. I don’t know what kind of support their workplaces offered, but it’s becoming clear that employers need to think more about how to help workers through the dying process, whether through programs like end-of-life planning or caregiver or survivor support services. An aging workforce, medical advances that extend life and the growing ranks of caregivers means that more employees will be face to face with mortality, either their own or that of a loved one. Employers must be prepared to deal with this reality. Struggling with end-of-life issues is a heavy emotional and often a financial burden for workers who are overwhelmed with grief, anger, fear and a host of other emo-
tions that make it difficult to function. And that has a direct effect on productivity, performance, absenteeism and the cost of employee benefits. According to Dr. J. Brent Pawlecki, chief health officer at Goodyear Rubber & Tire Co., employers are not doing enough to help their workers through these tough times. “By making it a priority, employers can address the end of life as a specific workforce management challenge and work to understand the full impact on their employees,” he wrote in a 2010 article published in the journal Health Affairs. He advised employers to develop tools to facilitate discussions around end-of-life issues, offering help in completing advanced directives and resources to assist with funeral arrangements and estate settlement issues. He also suggests offering a plan with a carrier that covers end-oflife counseling. Many of these things are starting to happen. In 2014, Goodyear partnered with The Conversation Project to distribute 2,400 toolkits to guide employees in having end-of-life discussions. The organization was co-founded by journalist Ellen Goodman and the Institute for Healthcare Improvement to facilitate discussions around dying. The National Business Group on Health also offers similar support to employers. Pitney Bowes and General Electric are other companies that offer support services in this area. This year, Medicare began paying doctors to have endof-life discussions with their patients, and a growing number of insurers like Blue Cross Blue Shield of Massachusetts are offering end-of-life benefits to encourage patients and providers to talk about death and to increase services that can help the dying live out their remaining days with dignity. Thankfully, the “death panel” hysteria that erupted during debates over the Affordable Care Act years ago is behind us and a more thoughtful approach to the difficult business of dying is underway. It’s in the best interests of employers to help usher it along.
IT’S BECOMING CLEAR THAT EMPLOYERS NEED TO THINK MORE ABOUT HOW TO HELP WORKERS THROUGH THE DYING PROCESS.
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Rita Pyrillis is a former Workforce senior editor. She is currently a freelance writer based in the Chicago area. To comment, email editors@workforce.com.
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BEST PRACTICES IN COMPANY CULTURE
Nine Steps to Build an Intentional Company Culture BY LAURA HAMILL, PH.D., LIMEADE CHIEF PEOPLE OFFICER
Culture is being socialized at your company, whether you’re aware of it or not. It’s telling people how to behave, how to do their jobs and what matters to your organization. And here’s the clincher: Culture is the single most important factor in organizational success or failure. That’s why it’s critical to create an intentional culture that aligns with — and therefore enables — your business strategy. The key is to approach it from a proactive architectural model instead of an evolutionary model, where you allow random events to shape it. This might sound daunting, but these nine steps will help you get started: 1. Explain what the culture is and why it matters.
Clearly outline your culture for employees — how you define it, what you expect of them and how they can “live the culture.” Then explain your business strategy and how your culture aligns with it. For instance, if your company builds remote working solutions, a “butts in seats” culture flies in the face of your strategy. Instead, provide flexible work arrangements where people can work from home, allowing them to both live the culture and effectively test your product. 2. Set behavior expectations.
We’re not talking about a tagline. We’re talking specific behavior expectations for everyone — employees,
managers and leaders. Is the culture you need reactive or proactive? Indifferent or curious? Disjointed or integrated? There’s no right or wrong answer, but cultural attributes help you set expectations around workplace attitudes, how people work together and more. Once you determine the expectations, explicitly communicate them in simple “action” phrases. 3. Educate your people about the culture.
Leading by example is the best way to educate people about culture and expectations. Culture training is also a great addition to your toolbox. Include it in new-hire orientation and on a quarterly basis — and make sure to offer it when people can attend, whether that’s at lunch or several times throughout the day to accommodate shift workers. Look for content that goes deep on each cultural attribute you want to reinforce, so people truly understand what it means and how they can live it. 4. Set accountability and metrics.
To build a successful intentional culture, you have to evaluate it and hold employees (especially leaders) accountable for living it. Consider adding a few culturerelated questions to your employee survey. Add culture metrics to performance reviews. Create a developmental 360 assessment for leaders and managers to provide feedback on how well they demonstrate the culture. At Limeade, everyone is responsible for our culture of improvement. We do quarterly performance reviews to check in frequently and ensure “LimeMates” set
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challenging but attainable goals and improve their performance every quarter.
results in making our product better and stronger). 8. Thread the culture through everything you do.
5. Empower culture champions.
Every company has respected leaders — both formal and informal — who are ambassadors of your culture. Make sure these people know they’re regarded for upholding the culture and think about how you can recognize them. Maybe hold a contest asking people to nominate co-workers who are models for living the culture. Most important, give culture champions free rein to align their work and management styles so they can keep demonstrating what living the culture looks like.
Culture goes beyond behavior expectations and how employees live it. It should show up in your policies, procedures, systems, communications, benefits and more. How do you hire for culture fit? How do you talk about culture in employee orientation? How do you incorporate your culture into performance management? For example, if you’re trying to ensure a collaborative work environment, avoid stack-ranking your employees against each other. Instead, reinforce collaboration during performance reviews by drawing on peer feedback and offering rewards when teams meet their goals.
6. Communicate the culture.
Don’t be afraid to directly discuss culture. Talk about what it looks like, why it’s important, how it aligns and evolves with strategy, and how to live it. And make sure all communications align with your culture. If your organization is formal and structured, the tone of your communications should be, too. If things are more casual and on the fly, your communications should reflect that. 7. Create opportunities to live the culture.
This is a key part of setting behavior expectations. It’s important that people understand how to participate in the culture — in overt ways that help them see what it means to live it. At Limeade, we host “Own It Day,” where employees pitch their ideas for improving our product and delighting customers. This is an important part of our open and collaborative culture (and always
9. Recognize, reward, repeat. If you expect people to live your culture, give shout-outs to those who do it right. On the flip side, you also need to determine appropriate consequences for those who are missing the culture boat. And when it comes to rewards, make sure they align with your culture. The key is to recognize the right people for the right behavior with the right rewards.
And finally, repeat. Go right back to Step 1. Building an intentional culture isn’t a one-time thing. Just like your business strategy, culture needs to evolve to stay relevant. These nine steps aren’t linear — they form a continuous loop, so revisit each step and revise accordingly. Over time, you’ll see your culture grow stronger, your people become more engaged and your business strategy charge forward.
COMPANY PROFILE Limeade is a corporate wellness technology company that measurably improves employee health, well-being and performance, while building cultures that support well-being. Employees earn points and rewards for taking steps to improve, while employers move the needle on their business goals. Recognized for its own awardwinning culture, Limeade serves over 100 employers, including top global brands. Learn more on www.limeade.com.
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BEST PRACTICES IN TALENT MANAGEMENT
Transforming the Annual Performance Review BY HAL O G E N S O F T W A R E
Research supports what managers and employees have known for some time: that the annual performance review process is broken. Results from the Brandon Hall Group’s 2015 research survey indicate that, although 88 percent of organizations have a performance management strategy, 71 percent view it as ineffective. Since there is no doubt that organizations need a process for evaluating and improving employee performance, attention must turn to transforming the strategy to address negative perceptions by employees and managers and to more closely align it to changing business needs. Here are five best practices that can help to transform the annual performance review into a dynamic, employee-centered strategy, focused on aligning the entire workforce toward organizational priorities.
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Quarterly goal setting The goal setting process establishes direction, priority and clarity of expectations for employees and managers alike. The best outcomes come from goals that are both meaningful and challenging to employees, and aligned with organizational priorities. Many organizations perform annual goal setting exercises where goals and objectives set at the top of the organization are cascaded and translated into individual goals. This effectively gives employees a line of sight into how their work supports the organization as a whole, a strong motivator. But, what happens when change comes, as it inevitably does? A Bersin by Deloitte study suggests that executives revise goals almost three times as frequently as employees, leading to disconnection and wasted effort. Reviewing and revising goals on a quarterly basis ensure that employees stay focused on what
matters most. Here are some tips for quarterly goal setting: • Involve employees in setting individual goals that utilize their strengths and passions and provide development opportunities. • Set goals that ensure employees and managers have a shared understanding of what is expected of employees and how their performance will be evaluated. • Consider both the “what” and the “how” of goal setting. In other words, along with quantitative results, consider important behaviors and competencies that should be developed and demonstrated as part of goal achievement. • Document agreed-upon goals in a place readily accessible to employees and managers. A shared online tool will provide an easy method of keeping track of observations, discussion and progress toward goal achievement. • Schedule regular discussions (at least quarterly) to discuss progress on goals and make adjustments as necessary to maintain alignment with shifting organizational priorities.
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Development discussions Talent management best practices are leaning towards interweaving performance management with employee development in a way that downplays the potentially adversarial relationship inherent in traditional performance appraisals. Instead, managers are enlisted as development coaches, considering each employee’s strengths, passions and career aspirations when making project assignments and regularly discussing development plans and progress.
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Opportunities for development positively impact employee satisfaction, engagement and retention. Including discussion starters, such as the questions below, into regular meetings is a good way to kick-start the process of incorporating employee development. • • • •
What is your favorite part of this job? How could we better use your talents? What else would you like to be doing? How can we challenge you?
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360o feedback assessments Using multiple sources of feedback through 360o instruments reduces the potential for conscious or unconscious bias in evaluating employee performance. It also provides employees and managers with a well-rounded view of their skills, behaviors and development needs from peers, subordinates, customers, team mates and project leaders. To be effective, 360o feedback assessments must be reliably anonymous, with care taken to use the feedback as part of a development plan rather than strictly as a performance rating mechanism. 360o feedback need not be limited to formal assessments. Creating a supportive environment where teams are enabled and encouraged to provide and accept constructive feedback from one another will foster continuous improvement and self-management.
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Project reviews In a business rhythm that is driven more and more by projects and initiatives rather than the calendar, performance management limited to traditional annual appraisals loses impact and relevance. Instead, consider conducting discussions during and at the conclusion of projects to review results,
uncover lessons learned, identify best practices and plan for continuous improvement. This format provides a lessthreatening environment for feedback from multiple sources that can be immediately applied and practiced. Regular project reviews also provide opportunities to discuss and address potential project issues before they become serious, thereby increasing probability of success, both for the project and the employees involved. Documenting and sharing project review observations and conclusions will provide useful and objective information for performance evaluations and individual development planning.
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Check-ins Since the four practices described above all involve some sort of meeting between manager and employee, the check-in is more about how to stay in touch and create an open, trusting environment of feedback and support between manager and employee. Check-ins are best when they are scheduled every one or two weeks and incorporate the first four practices as appropriate. As business needs and generational expectations continue to move from command and control to collaborative leadership, utilizing these five best practices will help to transform the annual performance review into ongoing developmental processes enabling productive and satisfying working partnerships between managers and employees that benefit the entire organization. To learn more about how to transform the employee performance process, download the eBook “5 Ways to Transform the Annual Performance Review” at bit.ly/discover5ways
COMPANY PROFILE Halogen Software offers a cloud-based talent management suite that reinforces and drives higher employee performance across all talent programs — whether that is performance management, learning and development, succession planning, recruiting and onboarding, or compensation. Halogen Software’s powerful, yet simple-to-use solutions, which also include industry-vertical editions, are used by organizations that want to build a world-class workforce that is aligned, inspired and focused on delivering exceptional results. To learn more, visit www.halogensoftware.com
Legal Photo Development Based on the NLRB’s Whole Foods Market decision, companies might need to rethink policies about prohibiting photography and recording. By Tanja L. Thompson
f your company has policies prohibiting audio or video recording or taking pictures in the workplace and restricts cellphone use at work to nonworking times or nonwork areas, then beware. A recent National Labor Relations Board decision calls into question the validity of such policies. Even if not promulgated in response to any union activity or otherwise intended to interfere with employees’ rights under the National Labor Relations Act, such policies could still be found unlawful. In Whole Foods Market Inc., the NLRB was presented with the issue whether the grocery chain violated Section 8(a)(1) of the NLRA by maintaining two similar work rules that prohibited recordings in the workplace without prior management approval. An administrative law judge found the no-recording rules did not explicitly restrict employees’ rights because the rules did not prohibit employees from engaging in protected, concerted activities under Section 7 of the NLRA. Additionally, the judge did not view the act of making recordings in the workplace as its own protected right. Contrary to the sound decision of the judge, a divided NLRB found the rules unlawfully infringed upon employees’ Section 7 rights. Section 7 gives employees “the right to self-organization, to form, join or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” Whole Foods is yet another in a long series of NLRB decisions broadening its interpretation of employees’ Section 7 right to engage in other concerted activities for the purposes of mutual aid or protection by finding a seemingly neutral and benign company policy unlawful under the NLRA. While the act of recording generally is an individual act and prohibiting such recordings does not, in and of itself, prevent an employee from voicing concerns about terms and conditions of employment, the NLRB nevertheless found the rules unlawful. Based on this finding, one might think Whole Foods had no 24
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business reason for its rules or that the rules were intended to interfere with employees’ Section 7 rights, but that simply was not the case. The rules set forth the grocer’s legitimate business justification for the recording restriction, which was “to encourage open communication, free exchange of ideas, spontaneous and honest dialogue and an atmosphere of trust.” Further, the rules were in no way discriminatory. They applied to both supervisors and employees, they applied all of the time, and they applied whether employees were engaged in protected, concerted activity. Whole Foods also supported its business rationale with evidence that the rules aided the grocer in fostering free and open dialogue in three areas: • Group meetings, which included discussions of employee complaints as well as discussions of proprietary business information. • Peer review panels that reviewed termination decisions. • Meetings where employee requests for emergency assistance were discussed, which often included discussions of very private information about employees, including personal health issues. m ay
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Whole Foods simply wanted to ensure these types of candid exchanges continued in its stores. The board majority, however, did not find these to be overriding business reasons for the rules. And while the NLRB did not hold that companies are prohibited from having any policies that restrict recording in the workplace, it held that such policies must be narrowly tailored such that employees “understand that Section 7 activity is not being restricted.”The problem with this holding is that it is unclear how significant an employer’s business interests must be for a no-recording policy to pass muster. (See “Concerned About Concerted,” p. 26.) Based on this decision, it is not enough that an employer seeks to continue open and honest exchanges in the workplace. It likewise seems that a policy simply prohibiting all use of cellphones or other recording devices during working time or in working areas could be found overly broad. Thus, the NLRB offers as examples of protected, concerted conduct the photographing of unsafe equipment and the recording of discussions about terms and conditions of employment — both of which are likely to occur during working time and in work areas. The NLRB did not, in Whole Foods, overrule earlier precedent that found lawful a hospital’s policy restricting employees from recording images in a patient-care setting, but employers are left to wonder what business considerations short of patient privacy will suffice to justify no-recording policies. Arguments can be made that employers should be allowed to protect things like trade secrets and proprietary equipment or processes, and perhaps there will be other sanctioned policies to protect the privacy of other types of customers or clients. These, however, are unanswered questions following the Whole Foods decision. While Whole Foods is being appealed to the U.S. Court of Appeals for the 2nd Circuit, the NLRB will likely continue to scrutinize these types of policies. In the meantime, companies should closely examine their own recording and cellphone usage policies and assess the risks vs. the reward of such policies. At a minimum, companies should understand the potential risks of maintaining no-recording policies and define their best business case for maintaining such policies. Tanja L. Thompson is co-chair of the Traditional Labor Practice at Littler Mendelson in Memphis, Tennessee. She counsels employers in various industries on remaining union-free and managing their unionrepresented workplaces. To comment, email editors@workforce.com.
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Legal Legal Briefings ALL’S FAIR IN ARBITRATION AGREEMENTS? Employers can derive substantial benefits from arbitration agreements with their employees, including reductions in costs and speedier resolution of disputes. Trying to obtain too great a benefit from arbitration could instead ensure that the employer gets no benefit at all. Such was the case in the matter of Carbajal v. CWPSC Inc., a decision by the California State Court of Appeal for the 4th Appellate District. CWPSC required Martha Carbajal to execute an arbitration agreement as a term or condition of her employment. When Carbajal subsequently sued her employer, claiming failure to pay wages and other wage and hour violations, CWPSC moved to compel arbitration pursuant to the agreement. The trial court denied CWPSC’s motion, finding the arbitration agreement unenforceable. CWPSC appealed. The Court of Appeal upheld the decision of the trial court; it found that the arbitration agreement was unenforceable. The court found that the arbitration agreement required employees to arbitrate all claims involving their employment while the employer had the option of pursuing claims for injunctive relief before the trial court. The arbitration agreement also limited the employee’s ability to recover attorneys’ fees. The court found that the agreement was so “blatantly one-sided” and unfair that it could not be enforced. Carbajal v. CWPSC Inc., Case No. G050438 (Feb. 26, 2016). IMPACT: Employers must review their arbitration agreements to ensure they do not disproportionately favor the employer.
TIP JARRED The Fair Labor Standards Act says an employer may fulfill part of its hourly minimum wage obligation to a tipped employee with the employee’s tips; this is known as taking a “tip credit.” The FLSA requires that employers taking the tip credit allow employees to keep all tips unless they participate in a valid tip pool, which can only be composed of employees who are “customarily and regularly” tipped. In 2011, the U.S. Labor Department promulgated a rule that extended those tip pool restrictions to all employers — not just those taking the tip credit. After employees in two different cases challenged their employer’s tip pools for including employees who are not “customarily and regularly” tipped, the U.S. District Court for the District of Oregon and the U.S. District Court for the District of Nevada held that the DOL’s 2011 rule was invalid because it was contrary to Congress’ intent. The U.S. Court of Appeals for the 9th Circuit reversed, holding that under prior U.S. Supreme Court rulings, the Labor Department was within its rights to clarify and expand its regulations to cover even employers that do not take a tip credit. “The DOL, by regulation, could prohibit the very practice the court held to be neither explicitly nor implicitly prohibited by the FLSA.” Oregon Restaurant and Lodging Association v. Perez, Case No. 13-35765, and Cesarz v. Wynn Las Vegas LLC, Case No. 14-15243, 9th Circuit (Feb. 23, 2016). IMPACT: Employers should not allow tip pools that include employees that are not “customarily and regularly” tipped, even if the employer does not take a tip credit with respect to minimum wage. Mark T. Kobata and Marty Denis are partners at the law firm Barlow, Kobata and Denis, which has offices in Beverly Hills, California, and Chicago. To comment, email editors@workforce.com.
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Concerned About Concerted Jon Hyman |
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The Practical Employer
ocial media isn’t a conversation with oneself; it’s not a diary. It’s a conversation with the universe — either a closed universe of one’s friends and followers or an open universe of whoever happens to find a post online.What happens, however, when an employee posts about work? If no co-workers like, share or comment on the post, is it still considered “concerted” under federal labor laws? According to two recent (and bothersome) decisions, the answer is likely yes. In Whole Foods Market Inc., the National Labor Relations Board held that the employer’s rules prohibiting employees’ use of recording devices in the workplace violated their rights to engage in protected concerted activity under the National Labor Relations Act. The unlawful policies read as follows:“It is a violation of Whole Foods Market policy to record conversations, phone calls, images or company meetings with any recording device (including but not limited to a cellular telephone, PDA, digital recording device, digital camera, etc.) unless prior approval is received.” The company attempted to save the policy by arguing that the purpose behind it was to “eliminate a chilling effect on the expression of views that may exist when one person is concerned that his or her conversation with another is being secretly recorded.” That attempt failed because it prohibited all workplace recordings and did not differentiate between those protected by Section 7 and those not protected. In and of itself, this decision is noteworthy for its effect on workplace recording policies.Yet, as is often the case in legal opinions, the devil is in the details, and the details are found in the footnotes. In this case, employers need to pay attention to footnote 9, which stretches the definition of “concerted” to the point of nonexistence: “[A]ny act of recording by a single employee that forms part of, or is undertaken in furtherance of, a course of group action constitutes concerted activity within the meaning of Sec. 7. Even in the absence of group action, activity by one individual is deemed concerted if undertaken in an effort to enforce the provisions of a collective-bargaining agreement or in order to initiate or induce group action.” Indeed, just two months later, in Chipotle Services LLC, an NLRB judge expounded upon this definition of “concerted” in a case involving an employee’s social media musings. Chipotle involves an employee terminated after he took to
his personal Twitter account to voice his displeasure about the state of his wages and other working conditions while at Chipotle. For example, in response to a customer who tweeted “Free chipotle is the best thanks,” the employee replied, “nothing is free, only cheap #labor. Crew members only make $8.50hr how much is that steak bowl really?” The NLRB judge had little trouble concluding that Chipotle had fired the employee for engaging in protected concerted activity: speech about his wages, benefits or other terms and conditions of employment between or among employees. Pay attention, however, to how this judge defines “concerted,” as it is becoming apparent that one employee voicing his concerns about work on social media without any engagement from co-workers is sufficient to constitute “concerted” protected activity: “Kennedy’s tweet concerning snow days was directed to Chipotle’s communications director but visible to others; Kennedy’s other two tweets were in response to customer postings, and likewise visible to others. All these postings had the purpose of educating the public and creating sympathy and support for hourly workers in general and Chipotle’s workers in specific. They did not pertain to wholly personal issues relevant only to Kennedy but were truly group complaints. I conclude that Kennedy’s postings constitute protected concerted activity.” In other words, as long as an employee is addressing a group complaint, the activity is concerted, regardless of whether any other employee engages. These cases have broad implications. If, as the board suggests, employee intent is the measuring stick for whether a lone employee’s activity is concerted, then any employee’s solitary social media post can be considered concerted merely by the employee stating an intent to initiate or induce group action. And, since social media is inherently social, doesn’t this test suggest that all such activity is concerted? Fear not, employers, for this story has a silver lining.The charging party in Chipotle offered to accept food vouchers in lieu of back pay: “You cannot deny that their food is delicious, but their labor policies were atrocious.” If only every case were that simple to resolve.
The recent Whole Foods and Chipotle NLRB cases have broad implications for employers on what constitutes concerted activity in social media posts.
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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.
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Nominations Opening
AWARDS
Got an HR management initiative that’s achieving business results? Workforce magazine’s Optimas Awards help recognize it! Awards granted across 11 categories: u General Excellence (not open to general nominations) u Benefits u Business Impact u Corporate Citizenship u Global Outlook
u Innovation u Managing Change u Partnership u Recruiting u Training u Vision
Nominations open May 20. Visit workforce.com/optimas to apply.
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Too Soon to Forget As the baby boomers age, employers should prepare for more Alzheimer’s disease cases in the workplace. But sometimes younger workers get the disease, too. What then?
BY RITA PYRILLIS
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he first time Ken Dodson got lost, his wife Nikki chalked it up to stress. Ken Dodson, who was 28 at the time, was a supervisor at a Michigan steel company and often worked 12-hour days back in 2008, so getting a little turned around on his way home from the store didn’t seem like a big deal. But when it happened again on his way to pick up their daughter from school, Nikki Dodson’s gut told her that something was wrong — really wrong. At work, Ken Dodson noticed that he tired easily and kept forgetting safety protocols that he knew by rote. “I was having trouble doing things I did all the time,” Ken Dodson said in a recent Workforce interview, pausing a few beats after each carefully crafted sentence. “I usually never missed any time at work, but that last year, I didn’t have any energy. My mind raced to try to remember things, and it made everything worse.” Over the next two years, the Dodsons consulted doctors who said depression was likely the problem and prescribed antidepressants, but nothing changed. Nikki Dodson feared a brain tumor. It wasn’t until the Dodsons insisted on a brain scan
PHOTOS BY BRAD ZIEGLER
Ken Dodson, left, lost his job shortly after he was diagnosed with early-onset Alzheimer’s disease seven years ago. To make matters worse, his wife, Nikki, had to quit her job to care for him, which meant the Dodsons, who have three children, lost two major sources of income as well as health insurance.
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Employee Benefits and Early-Onset Alzheimer’s Getting an Alzheimer’s diagnosis among those under age 65 can be difficult because the condition is relatively rare, affecting about 5 percent of Americans with the disease. But it’s important that employees seek a diagnosis as soon as possible to maximize the benefits available to them, said Ruth Drew, director of family and information services, at the Alzheimer’s Association in Chicago. The organization outlines the options available to those who have received a diagnosis. Private insurance • Disability insurance: Short term and long term. • Family and Medical Leave Act, or FMLA: Employees are allowed 12 weeks per year. • COBRA: Employees need to be aware that, to retain coverage past a certain point, they will need to provide the insurance company proof of disability to continue coverage until Medicare kicks in. Social Security Disability The U.S. Social Security Administration includes early-onset Alzheimer’s to the list of conditions under its Compassionate Allowance Initiative, expediting access to Social Security Disability Insurance and Supplemental Security Income eligibility. Social Security disability benefits will begin five months after an employee develops a disability. Payment should start during the sixth month of disability. Begin this application process when the employee goes on short-term disability and provide the written diagnosis to Social Security to aid in the approval process. Medicare Coverage will start approximately two years after the employee has been on disability. Medigap This program is available to employees when they start Medicare to bridge the gap in medical coverage. If the employee chooses one of the Medicare Advantage Plans, Medigap may not be available to work with their plan. Medicare Managed (Medicare Advantage Plans) Medicare has partnered with several insurance companies to provide Medicare coverage with the addition of prescription coverage. —Rita Pyrillis
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that a diagnosis was confirmed. One week before his 30th birthday, Ken Dodson was diagnosed with early-onset Alzheimer’s disease. “I never in a million years thought Alzheimer’s, and I never thought that by the time I’m 40, I’ll be a widow with three kids at home,” Nikki said. (The average life expectancy for Alzheimer’s patients after diagnosis is eight to 10 years.) “People would say, ‘I hope you have money saved up,’ and I thought, ‘Are you kidding me? We were just starting our careers, we had just built a house, and we had just started our 401(k).’ ” Alzheimer’s disease is an irreversible, degenerative disorder that destroys memory and can also affect problem-solving, behavior and speech. While it’s typically considered to be a disease of old age, approximately 200,000 of the estimated 5.3 million Americans with Alzheimer’s have been diagnosed under age 65. And that workplace number is expected to grow as baby boomers age, posing a challenge to employers who risk losing talented employees unless they are willing to help caregivers and those diagnosed with the disease to stay on the job as long as possible. Early-onset Alzheimer’s, also known as younger-onset Alzheimer’s, can hit when someone is in their 30s or 40s, a time when families are least likely to have the financial and emotional resources to cope. For the Dodsons, now both 37, it meant losing their major source of income and their health insurance. Ken Dodson lost his job during a series of layoffs shortly after his diagnosis, and Nikki Dodson, a teacher, had to quit her job to become her husband’s full-time caregiver. Luckily for the Dodsons, individuals with early-onset Alzheimer’s are automatically eligible to receive expedited Social Security benefits, though the amount was a fraction of their dual income. “I know these are just material things, but we worked so hard to achieve them and now we have to work so hard just to make ends meet,” she said.
Working and Caregiving Whether an employee has Alzheimer’s or is caring for someone with the disease, employers will feel the fallout, according to Dr. Lawrence Weinstein, chief medical officer at Humana Behavioral Health. “Nearly 15 million people provide unpaid care to a person with Alzheimer’s or other dementias,” he said. “Many caregivers of people with Alzheimer’s reported making major changes to their work schedules because of caregiving responsibilities.”This includes going to work late or leaving early, taking a leave of absence, going from full time to part time or quitting,Weinstein said. Employers will also see higher disability costs if more workers in their 50s and early 60s suffer from cognitive impairment associated with dementia as well as lost productivity as employees struggle to manage their treatment, their finances and family demands, he said. While Alzheimer’s at any age is devastating, for younger adults with families to support, it can be even more overm ay
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say they try to keep it a secret but it becomes harder to do.” Carrie Richardson, 35, had no choice but to tell her employer that she has early-onset Alzheimer’s. In 2010, Richardson, a single mother of three living in Montgomery, Alabama, joined a federally funded study of a rare form of Alzheimer’s disease that is caused by a gene mutation. Richardson must take time off every few months to undergo rigorous cognitive testing; for a time, a nurse would show up at Richardson’s workplace to Ken Dodson, 37, holds his dog, Bella. Dodson first began having memory problems when he was 28. take her vitals and administer medication. Richardwhelming, according to social worker Susan Frick, son, who teaches preschool, said her supervisors are supco-founder of Without Warning, a support group at Rush portive and give her the time off that she needs. University Medical Center in Chicago for people with While she shows no symptoms yet, Richardson, who early-onset Alzheimer’s disease. Getting a diagnosis can be still teaches preschool, is preparing for the inevitable. Her difficult because no one expects a person in their 30s or mother moved in with her in August to help take care of 40s to have Alzheimer’s. her children who are ages 15, 13 and 9, and she has insur“It takes multiple doctors to see what’s going on,” she ance policies and a living will in place. She understands said. “Sometimes they’ll write it off as depression or, with what lies ahead all too well. Her father, grandmother, three women, as menopause. Sometimes it takes the caregiver a uncles and a cousin all died from early-onset Alzheimer’s. while, too. The person might seem more withdrawn or Richardson has two brothers — one tested positive for the different, but that could be anything.” genetic mutation, and the other did not. Frick said often the first people to notice a problem are For now, Richardson watches for signs that the disease co-workers, which makes awareness important for employers. has progressed. “Often the workplace starts to notice the problem be“I’m busy with three kids so I think some of it is normal, fore the family does because it’s hard to hold it together at but I don’t want to push it aside either,” she said. “I forget work,” Frick said. “Some people say they have to pull names of bands that I like. I forget small stuff.This morning all-nighters to get the same level of work done. Anything I couldn’t find my keys, and I was asking all the kids where new to the routine can become difficult. A lot of people my keys are. I spent 30 minutes looking. I put cream in the pantry. And over the summer, we moved into a new house and one day I pulled into the driveway and my daughter said, ‘This is not our house.’ ” Richardson is lucky to have a supportive employer, but that’s not the case for many workers, according to Ruth Drew, director of family and information services for the Alzheimer’s Association in Chicago. Often employees who are struggling with job performance because of early-onset Alzheimer’s are afraid to ask for help or they are unaware that something is wrong, and colleagues are afraid to speak up, she said. “If they get fired before anyone figures out what’s going on, then they can’t take advantage of the benefits they qualify for,” she said. “I love it when the family gets a diagnosis early on because that gives them the most options to At first, Nikki Dodson, Ken’s wife, believed that he was getting lost finding his way home because of stress.
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Insurance Consolidation: Big Bites, Big Business
Health insurers are gobbling each other up, but workers remain leery when fewer choices are available. BY SARAH SIPEK
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f you remember playing Hungry Hungry Hippos as a kid, you have a great visual for what’s been happening in the health care industry over the past 18 months. Since January 2015, health care organizations from hospital systems to health insurers have been gobbling each other up with the fervor of pastel-colored hippos going after white marbles. Aetna Inc. — the nation’s largest provider of Medicare Advantage plans — announced last July its intent to acquire Humana Inc. for a combina-
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tion of cash and stock valued at $37 billion that would cover 33 million members. Later that month, Anthem Inc. said it would buy Cigna Corp. for $54 billion and cover 53 million members. In the same month insurer UnitedHealth Group completed its purchase of pharmacy benefits manager Catamaran for $12.8 billion. That’s a lot of white marbles gobbled up in a single month. And in the health care industry, marbles — aka members — equal power. That’s a concern for industry
providers like Aetna and Humana to change their offerings,” O’Connor said. “Insurers had to take an educated guess at the kinds of plans consumers would want as a result of the health care mandate, and in many instances, they guessed wrong. Six years later, the mergers and acquisitions we’re seeing across the industry are a response to these providers wanting to be able to offer the policies and tools consumers are demanding.” While their intentions may be good, organizations such as the American Medical Association are more concerned with the effect on the industry than intent. The AMA has been vocal about its fear that consolidating the market will diminish competition and result in employers and employees paying higher premiums. It is for that reason that the AMA urged the U.S. Justice Department to block both acquisitions. “While good for business, we are focused on patient care and the ability of consumers to gain access to the care that they need,” said Dr. Barbara McAneny, AMA immediate past chair. “We don’t want the bottom line to get in the way of that.”
DURING THE FIRST NINE MONTHS OF 2015, DEALS IN THE HEALTH CARE INDUSTRY ALONE WERE VALUED AT $270 BILLION, ACCORDING TO MERGERMARKET GROUP. experts and consumers regarding the quality of health care that will ultimately be available when the dust of this acquisition frenzy settles. During the first nine months of 2015, deals in the health care industry alone were valued at $270 billion, according to Mergermarket Group, a media company specializing in corporate financial news and analysis. Arguably more important than the amount spent is the fact that these acquisition bids — the Aetna and Anthem deals were still awaiting regulatory approval at deadline — will shrink the nation’s largest health insurance companies to three from five. “The top concern when something like this happens is whether or not the real needs of consumers will continue to be met,” said Leemore Dafny, a former federal regulator who is now a professor at the Kellogg School of Management at Northwestern University in Chicago. “From an employee perspective, they want more choice and plan flexibility. From an employer’s perspective, they want to know that the plans will remain affordable.” Ironically, affordability is one of the drivers of the many industry mergers, according to Thomas O’Connor, managing director at Berkery Noyes Securities, an independent investment bank that provides merger and acquisitions consulting. “The Affordable Care Act forced insurance
ACA Forces Change When the ACA was signed into law March 23, 2010, the health care game changed. The legislation created the employer shared responsibility provision, which states that the federal government, state governments, insurers, employers and individuals have shared responsibility to reform and improve the availability, quality and affordability of health insurance coverage in the United States. “Basically, it means we’re all in this together,” O’Connor said. “Unfortunately, some of us are paying more than others.” As a part of that provision, employers with 50 or more employees are mandated to provide insurance to at least 95 percent of their full-time employees and dependents up to age 26, or pay a $2,000 per employee fee.
To learn about consolidation in the wellness industry, see “The Pulse on Wellness,” p. 16.
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“Even though the employer mandate didn’t go into effect until 2015, employers were suddenly looking for any and all ways to cut costs,” O’Connor said.“High deductible health plans put the burden of paying for health insurance on employees.” The Kaiser Family Foundation reports that average annual out-of-pocket costs per worker rose almost 230 percent between 2006 and 2015, based on its annual survey of employer health benefits coverage published in 2015. Further, 24 percent of all workers were enrolled in a high-deductible health plan with a savings option in 2015. This is a dramatic rise from 2009, when just 8 percent were covered under such plans.The latest Kaiser survey also suggests that 46 percent of employees have annual deductibles of over $1,000. “Understandably, employees fired back with demands for better technology and flexibility in plan choice so they only pay for what they need,” said Northwestern’s Dafny. Providers weren’t ready with offerings that would help consumers control costs on their own, said Patrick Pilch, managing director and national health care advisory leader of The BDO Center for Healthcare Excellence & Innovation. The mergers and acquisitions the industry is currently experiencing are a reaction to the high price employees in particular are now paying for health care insurance. “It’s not just Anthem-Cigna and Aetna-Humana,” Pilch said. “There have been a lot of transactions, and there will continue to be a lot of transactions for the next five to 10 years. Insurers want to strengthen their data analytics and technology offerings in particular to know how consumers are spending, and develop plan offerings that reflect those buying trends.” Dafny noted Aetna’s November 2014 acquisition of bswift — a benefits, HR and payroll technology platform — as an example. Bswift’s platform is consumer-friendly and allows consumers to make decisions more easily about their health care needs, she said. “And at right around $400 million, it’s a relatively small price to pay to better appeal to consumers who are making their own health care decisions for the first time,” Dafny said. O’Connor agrees that the ACA has forced insurers to bolster their software and technology offerings in a way that wasn’t necessary before the legislation went into effect. “The amount of money changing hands is distracting consumers from the intended end goal of these acquisitions,” O’Connor said. “Insurers aren’t trying to create a monopoly.They’re stockpiling resources to ultimately drive down cost.”
FTC, DOJ Won’t Let Monopoly Pass Go Despite confidence from some industry experts that these mergers will help and not hinder access to affordable health care, there are still some powerful people advocating against consolidation in the industry. m ay
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One of the most powerful is Democratic presidential candidate Hillary Clinton. In a statement she said, “I’m worried that the balance of power is moving too far away from consumers.” She has since urged regulatory bodies including the Federal Trade Commission and the U.S. Justice Department to review the acquisitions carefully for violations of anti-trust laws. And they are doing their due diligence. “Regulators will be looking at whether consumers will pay higher prices and if they have alternatives,” said C. Scott Hemphill, a professor at New York University Law School and a recognized antitrust scholar. In the case of mergers and acquisitions in particular, the FTC will focus on Section 7 of the Clayton Antitrust Act, which examines whether the intent is to create a monopoly, Hemphill said. The FTC wants to make sure that the companies have put structures in place that protect consumers from paying higher premiums, only having access to lower-quality plans and having limited access to their providers. The review process is twofold and begins with a pre-merger notification, Hemphill said. Companies considering a deal begin by filing a “first request” with the FTC and Justice Department. The report includes information about the two companies’ line of business and sales revenue. “The FTC or DOJ will then take 30 days to determine CONSOLIDATION continued on page 48 w o r k f o r c e . c o m | Workƒorce
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AN INSIDE JOB
Within your organization, workers can sabotage things like meetings or projects creating an insidious form of internal corporate espionage. So what can HR do to spot it and stop simple sabotage?
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BY BOB FRISCH, ROB GALFORD AND CARY GREENE
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uman resources professionals hear a lot behind closed doors from people at all levels of an organization. So it’s a fair guess that HR pros have the best view of overall culture and the various subcultures that exist in certain departments. HR leaders know when groups of employees are motivated and when they’re not; they know when a worker’s presence and personality is raising the bar for others and getting them excited about work.
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They also know when someone’s performance or attitude is acting as a drag and likely possess excellent techniques to accentuate the positives and curb the negatives. And they also know that there are times when departments underperform even when the team is sincere, hard-working employees with the company’s best interests at heart. People may complain to one another and to HR that decisions aren’t being made well, that they can’t seem to get their work done on time and that the department as a whole isn’t as productive as it should be.Yet no one can pinpoint the problem.
much as an unexpected competitor or market shift can from the outside. HR professionals need to be able to recognize its existence, spread the word and offer the organization ways to identify it, call it out (without placing blame), deal with it and prevent it. HR leaders have one of the most effective vantage points for rooting it out. The company’s health is at stake.
How We Learned About Simple Sabotage We didn’t begin focusing on how good employees — even excellent ones — can unintentionally damage an
LEFT UNCHECKED, SIMPLE SABOTAGE CAN HURT A COMPANY FROM THE INSIDE EVERY BIT AS MUCH AS AN UNEXPECTED COMPETITOR OR MARKET SHIFT CAN FROM THE OUTSIDE. That’s when you need to suspect simple sabotage: People behaving in ways that look good, sound logical and seem smart but in fact are slowly undermining everyone’s best efforts. We’re not talking about people pretending to be good employees but deliberately working under the radar to gum up the works. We’re talking about people who genuinely believe they are doing the right things (and who, for all intents and purposes, look as if they’re doing the right things) but are hurting your organization’s performance. Simple sabotage exists in one form or another in every organization, and it’s like a virus piggybacking on normally benign activities as it spreads. Left unchecked, it can hurt a company from the inside every bit as
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organization until co-author Bob Frisch discovered a declassified U.S. government document produced in 1944 titled “Simple Sabotage Field Manual.”Written under the auspices of Gen. William “Wild Bill” Donovan at the height of World War II, the manual presented a wide variety of easily executed sabotage tactics; it was printed in several languages and smuggled behind enemy lines to Allied supporters. Much of the manual was focused on physical acts of sabotage — slashing tires, starting fires with piles of oily rags and short-circuiting electrical systems. But a section was devoted to causing trouble in offices without getting caught, specifically by slowing down or even stalling decision-making processes, taking meetings offtrack and generally weakening the enemy’s organizational infrastructure under the guise of good or even exemplary behavior. These tactics were devastatingly destructive, and as Frisch read through them, he was struck by the notion that the same acts of sabotage were likely in widespread use today. In fact, he suspected unintentional acts of “simple sabotage” identical to the ones listed in the manual were probably acting as a corrosive agent in many if not most organizations. We conducted a survey and interviewed dozens of senior executives. Our research confirmed Frisch’s thinking: Simple sabom ay
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tage has the potential to run rampant and wreak havoc in any organization.
The Tactics The Office of Strategic Services, a U.S. wartime intelligence agency, identified eight such behaviors in the section of the “Simple Sabotage” manual dedicated to organizations: 1. “Insist on doing everything through ‘channels.’ Never permit shortcuts to be taken in order to expedite decisions.” 2. “Make ‘speeches.’ Talk as frequently as possible and at great length. Illustrate your ‘points’ by long anecdotes and accounts of personal experiences. Never hesitate to make a few appropriate ‘patriotic’ comments.” 3. “When possible, refer all matters to committees for ‘further study and consideration.’ Attempt to make the committees as large as possible — never less than five.” 4. “Bring up irrelevant issues as frequently as possible.” 5. “Haggle over precise wordings of communications, minutes, resolutions.” 6. “Refer back to matters decided upon at the last meeting and attempt to reopen the question of the advisability of that decision.” 7. “Advocate ‘caution.’ Be ‘reasonable’ and urge your fellow conferees to ‘be reasonable’ and avoid haste which might result in embarrassments or difficulties later on.” 8. “Be worried about the propriety of any decision — raise the question of whether such action as is contemplated lies within the jurisdiction of the group or whether it might conflict with the policy of some higher echelon.” Most HR pros can recognize some of them. They may think they can identify the culprits and stamp out inadvertent sabotage easily. But is that really possible? Take for example the tactic about bringing up irrelevant issues. HR leaders may be able to name the people who are known for their ability to inject random or personal stories into any conversation. But these people aren’t the saboteurs. They’re easy to spot, and usually easy to shut down. (“Steve, we would love to hear about your chicken coop, but now’s not the time. Let’s move on.”) Sabotage occurs in this case when the issue being raised seems to be relevant.The saboteurs think that what they’re saying is relevant, and their earnestness only helps make their case. They are engaging in good behavior, but taking the discussion at hand way off track. Here’s an example. When someone says, “Let’s learn from others’ mistakes,” they’re about to make a comparison between what the team is dealing with now and what another team has dealt with (incorrectly) in the past. The problem is that too often the people who raise such comparisons are putting apples against oranges. Say there is planning for the annual retreat. HR has scheduled a meeting to brainstorm breakout sessions. It m ay
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The Obedient Saboteur Many organizations employ what is known as the “obedient saboteur.” Let’s use Michael as an example. He is talking to a potential (and potentially important) client who wants him to change several stipulations in a proposed contract. Michael thinks the request is reasonable and has done his research, and he knows he can sell this client many add-on services down the line. He wants to approve the changes but can’t. The rules say his boss has to sign off, and his boss is away. So he explains the situation and says he will get back to the potential client. But that client has to select the winning bid by the end of the day. Michael isn’t able to respond until tomorrow and loses the deal. Companies love employees like Michael — people who do what they’re supposed to do all the time. They keep things running smoothly and predictably. But the obedient saboteur prevents personal judgment from overriding processes — like waiting on a supervisor’s approval at the expense of winning an important new contract — that for whatever reason are not working at the moment. —Bob Frisch, Rob Galford and Cary Greene
starts well, but then a colleague brings up a very poorly run industry conference that several people in the room recently attended. The group starts talking about that event, with attendees explaining how confused they were trying to find certain breakout sessions because of poor signage, how hard it was to hear speakers because of loud events taking place in rooms separated only by dividers, and how difficult it was to network at mealtimes because of the large numbers of people from other conferences using the same facility. Doing a post-mortem on someone else’s actions is interesting, and so people, including the HR leader, engage with vigor. Soon 20 minutes goes by. The task at hand isn’t accomplished in the time allotted, so there’s a need to reschedule. No one feels badly though because the group has raised several potential issues about the venue to discuss with the people who are arranging the location and logistics. And no one stops to think about whether the people arranging location and logistics need that input to begin with. SABOTAGE continued on page 49 w o r k f o r c e . c o m | Workƒorce
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David Novak
Finger Lickin’ Meets Rubber Chicken David Novak, Yum Brands’ former CEO, helped turn the company’s fortunes around by focusing on employee recognition with the help of an elastic friend — and now he’s sharing his knowledge in his latest book. BY RITA PYRILLIS
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hen David Novak joined the pedigreed ranks of down to earth. He asked questions about you and he cared PepsiCo Inc.’s executive management team in the about his team. He was a non-MBA in a land of MBAs. mid-’80s, he stood out from the start. His regu- You could see that sometimes he felt like a fish out of walar-guy demeanor, untucked shirts and slight Texas ter, but not because of his abilities and skills.” twang seemed at odds with His lack of academic the besuited Ivy League credentials was a sore spot S MBAs hungry to succeed so tender that Novak had in the company’s sink or to leave the room whenswim culture. ever colleagues began Novak was different, retalking about their decalled Gregg Dedrick, a grees and alma maters. former president at KFC, “All those guys had which was owned by MBAs from Harvard and PepsiCo at the time. Northwestern, you name “He was not of the typit, and I had a bachelor’s ical Pepsi mold,” said from the University of Dedrick, who met Novak Missouri, so whenever —DAVID NOVAK in 1989, three years after anyone talked about Novak joined the comwhere they went to pany as chief marketing officer for the Pizza Hut division, school, I went to the bathroom,” Novak said. “I was just which was also owned by the soft drink giant. “He was insecure about it because I didn’t have an MBA.Yet I was
‘ALL THOSE GUYS HAD MBA FROM HARVARD AND NORTHWESTERN, YOU NAME IT, AND I HAD A BACHELOR’S FROM THE UNIVERSITY OF MISSOURI, SO WHENEVER ANYONE TALKED ABOUT WHERE THEY WENT TO SCHOOL I WENT TO THE BATHROOM.’
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David Novak
PHOTOS COURTESY OF DAVID NOVAK
PROFILE
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PROFILE
David Novak
growing faster and moving faster up the ladder than most of my peers.” Clearly, the lack of a high-dollar degree wasn’t a hindrance. It took the humble, unassuming Missouri grad just a decade to scale PepsiCo’s ladder and become CEO of Yum Brands Inc., which under his leadership grew from a fragmented collection of financially embattled eateries into a world-renowned, multibillion-dollar force in the fastfood industry. Novak, 64, guided Yum until stepping down in 2014 to head Yum’s board of directors, which he retired from last year. Today his primary focus is on launching a new business venture, developing leadership programs for middle school students and funding various philanthropic projects through his family’s foundation.
‘HE WAS DOWN TO EARTH. HE ASKED QUESTIONS ABOUT YOU AND HE CARED ABOUT HIS TEAM. HE WAS A NON-MBA IN A LAND OF MBAS. YOU COULD SEE THAT SOMETIMES HE FELT LIKE A FISH OUT OF WATER, BUT NOT BECAUSE OF HIS ABILITIES AND SKILLS.’ —GREGG DEDRICK, A FORMER PRESIDENT AT KFC Novak’s rapid rise can be traced back to 1994 when he became KFC’s president. The fast-food chain was struggling financially and suffering from low morale after PepsiCo acquired it nearly a decade earlier. It was there that he began building a reputation as a skillful leader and became the launching pad to follow through on a promise he made to himself years before. Early in his career, he recalled meeting with a group of salespeople at PepsiCo who exp re s s e d high praise for a colleague who was about to retire. As they expressed their admiration, Novak’s new book comes out in May. the sales veteran 42
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began to cry, Novak recalled. “I asked him,‘Why are you crying? These guys are heaping praise on you.’ He said, ‘Well, I’ve been with this company 47 years, and I didn’t know people felt this way.’ ” That’s when Novak vowed that if he were ever in a leadership position, he would make employee recognition a top priority. He did just that at KFC and eventually turned the chain around.
Chicken Idea Hatched Novak credits the concept of recognition and rubber chickens for his success. He began rewarding employees for good work by tossing them a rubber chicken. He conceded that it might seem hokey but said it went a long way toward boosting morale. “Sometimes the soft things bring hard results,” he said. His accomplishment did not go unnoticed. In 1997 when PepsiCo spun off its struggling fast-food division, which included KFC, Pizza Hut and Taco Bell, Novak was asked to lead the new venture that would become Louisville, Kentucky-based Yum Brands. It was a big step for Novak, but an even bigger challenge. “We were struggling, we had terrible results, and we had a bad culture,” he said. “We took three great brands that were poorly managed, and we were able to put the right culture and processes in place and we had enormous success. One of the things that really drove it was the fact that we made creating a culture where everyone makes a difference a top priority.” Today, Novak is an evangelist of employee recognition, promoting the power of a simple “thank you” in a new book titled, “O Great One: A Little Story About the Awesome Power of Recognition,” and a new venture called OGO Enterprises. The acronym OGO comes from the name he jokingly asked his three grandchildren to call him — O Great One. While the details of his new company are still being hammered out, he said that OGO Enterprises offers online leadership training and will sell recognition-related products like an “OGO jar” modeled on a Father’s Day gift he received from his daughter. The jar contained slips of paper inscribed with expressions of gratitude from family members. “I realized that the concept of recognition is totally universal so why not create a brand around it?” he said. “I’m going to spend the rest of my life on my vocation, which is building awareness of the global recognition deficit and giving people ways to recognize others. I’m not going to make a dime on this, and I don’t really care.What I do care about it is making a difference in the world.” Jonathan Blum, senior vice president and chief of public affairs at Yum, calls Novak a visionary leader with a gift for recognizing what drives others. “That was his greatest gift to the organization,” said Blum, who was recruited to Yum by Novak in 1997 from Taco Bell. “Coaching people to success, he’d meet with m ay
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PROFILE
David Novak
team members, franchisees, supervisors, everyone. He would know what motivated you, and he would unlock that and work toward that for you. If someone wanted more responsibility, he would provide that. If someone were motivated by title, he’d use that. It’s an insight that not everybody has.” Neal Sullivan, chief business development officer at OGO Enterprises and a former marketing executive at media giant Gannett Co., attests to Novak’s ability to motivate. He recalled leaving a lengthy business meeting at Novak’s home and walking out to his car where Novak said his goodbyes. “He stopped halfway to the house and yells, ‘Hey Neal, one more thing,’ ” said Sullivan, who met Novak through Lead2Feed, a student leadership program established by Novak. “I’m thinking, ‘What didn’t we cover?’ and then he puts his hand out and looks me in the eye and says, ‘I just want to say how much I appreciate your passion for making this business a world-class brand.’ That just blew me away.”
Movin’ on From Town to Town One could argue that Novak’s people skills were honed by a childhood spent as the perennial new kid at school as his family moved from state to state — 23 of them by the time he was in seventh grade. His father was a surveyor for the U.S. Coast and Geodetic Survey; Novak and his two younger sisters grew up in trailer parks throughout the Midwest as well as New Mexico and Texas. “My mom would check me into school and say, ‘David you better make friends because we’re leaving,’ ” he said.“It taught me early on how to work through the anxiety of being in new situations, how to size up people, how to figure out who I wanted to make friends with, and how to get along.” Last year, Novak received a Horatio Alger Award, from the Horatio Alger Association of Distinguished Americans, which recognizes renowned leaders who have overcome adversity; he considers himself anything but unfortunate. “I like to tell people that my biggest break was being the son of Charles and Jean Novak,” he said. “They are wonderful people from humble backgrounds who wanted to make sure their kids achieved the American dream.” Novak, who was the first in his family to attend college, said his upbringing helped him to become a better leader. “When I’d go out to the restaurants and I’d see my mom and dad — really smart people — working hard, trying their best to make a living for their families,” he said. “I never felt that I was any better than anybody else. I just think I’ve been blessed to have great coaching and great experiences that have allowed me to take advantage of the gifts that God gave me.” Novak, a devout Christian, said his faith has taught him humility — a quality that Dedrick said helped him to win over even the biggest skeptics at PepsiCo. He recalled Nom ay
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David Novak, then-chairman and CEO of Yum Brands, serves milk to children at the Leovigildo Pineda Cardona community school in Santa Rita, Honduras, as part of the company’s annual World Hunger Relief effort (2011).
vak taking the stage at a big company meeting, slightly rumpled with his shirt hem hanging out and fumbling with his microphone, prompting the public relations director to slip him a note with instructions. Novak read the message out loud. “It said, ‘That thing is a mic so you might want to keep it near your mouth,’ ” recalled Dedrick.“People just roared. They loved it. People responded to his willingness to be vulnerable and transparent.” Novak never did earn an MBA, but he no longer needs to leave the room when others boast about their academic accolades.Turning Yum Brands from an underdog company into a global giant with 41,000 locations in 125 countries and annual revenue of more than $13 billion means that business school students will likely be learning from his leadership style for years to come. “You have to get through those inner dragons,” Novak said, referring to his insecurity over not having an MBA. “Experience trumps education over the long term and your ability to add value trumps a pedigree. It’s what you do with your experience that matters.” Novak hopes to spend the rest of his life sharing his experiences with others through his leadership training programs and by spreading the word about the importance of recognizing people’s accomplishments. “You may not believe in a floppy chicken, but you should believe in the concept of recognition,” he said. “If you don’t use recognition, you’re giving up one of the biggest advantages you have as a leader, which is to show people that you care about what they do and that you’re watching.” Rita Pyrillis is a writer based in the Chicago area. To comment, email editors@workforce.com.
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SPECIAL REPORT
R e c r u i t i n g Te c h n o l o g y
Prediction Restriction Predictive analytics begin to emerge, but unifying data is still a major hurdle for a major rollout at most companies. By Sarah Fister Gale
A
s the talent wars rage on, companies now find themselves cent of employers are concerned with the growing skills gap, needing to hire more people faster and at less cost than and talent acquisition managers in the LinkedIn report say ever before. competition is their No. 1 recruiting obstacle — ahead of According to LinkedIn Corp.’s “U.S. Recruiting Trends compensation and brand awareness. “Being able to get the 2015” report, 69 percent of companies are facing increased right people is important because it impacts the top and bothiring volume. Yet, only tom line,”Wilson said. 48 percent report increased Quality hires are more prohiring budgets, which sugductive, engaged and valuable gests they need to do more to the company.“And the cost with less to meet their hiring of a bad hire is more expengoals.To do it, they are blendsive than ever,” she added. ing their traditional recruiting Workforce analytics has technologies with better use long promised to help overof social media, analytics and come such challenges, but mobile applications to make vendors have been slow to the hiring process more effideliver the ease-of-use and cient and appealing to highly compelling future-focused resought-after talent. sults that these tools initially “All of the technology promised. Part of the problem trends we have been talking is that many companies don’t —AMY WILSON, WORKDAY about for the past few years have the linked databases necare finally coming to fruiessary to do a thorough analytion,” said Holger Mueller, principal analyst and vice president sis. Whether companies want to figure the best source of hire at Constellation Research Inc. for top candidates, which recruiters deliver the best people, or These tools are enabling recruiters to be more targeted in which skill sets or experiences translate to future high pertheir recruiting approach and to be more efficient in seeking formers, they can’t get the answers if they can’t access the data. out qualified passive candidates to meet higher “quality of “The key is having a unified system so you can leverage all of hire” standards, which have become the benchmark of success your data,”Wilson said. for today’s recruiters. “Quality of hire is the golden analytic that everyone is PREDICTIVE ANALYTICS LACK MATURITY talking about, but it’s still hard to achieve,” said Amy Wilson, Though even with the right databases, predictive analytics is vice president of human capital management product strategy still a long way from being integral to the recruiting process, at Workday Inc. In an economy where there are often more said Jack Hill, director of talent acquisition solutions at Peoopen jobs than skilled labor to fill them, finding high-quality pleFluent. “Most organizations aren’t ready for it.There is just candidates and converting them to new hires is a constant not a lot of maturity in the market yet.” battle, she said. That’s not stopping vendors from heading further down the CareerBuilder’s 2016 U.S. Jobs forecast shows that 63 per- analytics path. Most recruiting and human resources technol-
‘QUALITY OF HIRE IS THE GOLDEN ANALYTIC THAT EVERYONE IS TALKING ABOUT, BUT IT’S STILL HARD TO ACHIEVE.’
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HOT LIST E-Recruiting Providers Listed alphabetically; compiled by Joe Dixon; editors@workforce.com Company name & Web address
Names of e-recruiting software
Number of clients
Key clients using systems
ADP Recruiting Management; ADP Vantage HCM; ADP Workforce Now
4,000
Would not disclose
Greenhouse Recruiting
1,188
Airbnb; Buzzfeed; BrightRoll; Red Ventures; Sony PlayStation Network; Zenefits
IBM ibm.com
IBM Kenexa BrassRing on Cloud; IBM Kenexa Talent Acquisition Suite
Would not disclose
ICIMS icims.com
iCIMS Talent Acquisition Suite
3,200
JOBVITE jobvite.com
Jobvite Engage; Jobvite Hire; Jobvite Refer
Would not disclose
Fitbit; LinkedIn; Schneider Electric; SpaceX; Zappos
MONSTER monster.com
Monster Social Job Ads, TalentBin, Talent CRM, Talent Fusion
Would not disclose
Would not disclose
PAYCHEX paychex.com
MyStaffingPro; Paychex Flex Hiring
Would not disclose
Would not disclose
PEOPLEFLUENT Peoplefluent.com
PeopleFluent Recruiting
5,100
Advance Auto Parts; GoodLife Fitness; Exelon; Home Depot; Motorola
TalentReef Social Recruiting and Talent Management
500*
Churchill Downs Race Track and Casinos; Five Guys Burgers & Fries; Noodles & Co.; Travel Center of America; QuickChek
3,000
Bloomin’ Brands; Culligan International; Feeding America; Major League Baseball; Pep Boys; Subway; Texas Roadhouse; Yamaha Corporation of America
ADP adp.com GREENHOUSE greenhouse.io
TALENTREEF talentreef.com
ULTIMATE SOFTWARE Ultimatesoftware.com
UltiPro Recruiting
Note: Technomedia merged with French company Cegid in December 2015. Source: Companies
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FedEx; H&R Block; Shell Oil; Walt Disney Banner Health; Enterprise Holdings; Jamba Juice; Kate Spade; New Balance; Sysco
*2015 total cited
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SPECIAL REPORT
R e c r u i t i n g Te c h n o l o g y
ogy firms have been rolling out a host of analytics tools over the past two years that promise to give customers better insight into their hiring process. Vendors such as Greenhouse Software, HireVue, iCIMS Inc., PeopleFluent, Workday and others offer a variety of features to analyze recruiting performance and track key statistics, such as time to hire and acceptance rates, with customizable dashboards that make the data easy to access. But these measures are still fairly rudimentary. They look back at what companies have accomplished rather than use data to make future predictions. “There has been a lot of talk
DATA BANK Socially Weak
Mobile Mania
Few respondents said they excel at using social media data on employees to improve recruiting, engagement and employment brand.
More candidates are using mobile devices to search job opportunities and apply for positions.
Excellent
Not applicable
5% 5%
28%
Adequate
34
%
■ 2013 ■ 2014
38%
20%
16%
Weak
56%
Percentage of candidates who learn about opportunities with mobile devices.
Source: Deloitte’s Global Human Capital Trends 2015 survey
Percentage of candidates who apply for jobs with mobile devices.
Source: LinkedIn Corp. 2015 U.S. Recruiting Trends survey
More Money to Recruit but More Volume, Too Half of companies have increased their hiring budgets, but hiring volume has spiked even more, suggesting they must make better use of technology. ■ Hiring volume
100% 80% 60%
52%
52%
56%
37%
37%
34%
2011
2012
2013
40% 20%
■ Hiring budget
75%
69%
49%
48%
2014
2015
Source: LinkedIn Corp. 2016 U.S. Recruiting Trends survey
For Passives, Get Aggressive Three-quarters of job candidates consider themselves passive, which suggests companies need to focus their recruiting efforts to attract these potential job candidates.
Active job hunters: 25%
Passive job hunters: 75%
Source: LinkedIn Corp. 2015 U.S. Recruiting Trends survey
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Note: Active includes people actively looking and those who look for jobs a few times a week. Passive includes those who reach out to a personal network, those open to talking with a recruiter and those who are completely satisfied with their jobs and don’t want to move.
about predictive analytics, but it’s still a long way off,” Hill said. Even with strong analytics tools, finding top candidates is only the first step in this highly competitive job market. Companies also have to work a lot harder to make themselves more attractive to the people they want to hire. “The biggest trend in recruiting technology is the shift from administrative tools to having a great candidate process,” said Barbra Gago, vice president of marketing for Greenhouse. “It’s all about keeping the candidate engaged and tracking that engagement at every step in the hiring process.” To do this, vendors are responding to these pressures by adding “talent relationship management” features that are all designed with the candidate in mind. “There is a lot more emphasis today on the candidate experience,” said Claire Schooley, principal analyst at Forrester Research. “It’s not enough to just have an applicant tracking system.You have to be more engaging to attract new talent.” Schooley said that talent management tools are necessary to add value for customers to today’s recruiting technology. She made these features a condition of being included in her 2015 Forrester Wave report: “The 12 Providers Best Suited to Address the Changing Recruiting Landscape.”“The best vendors accommodate the candidate experience.” The top vendors also offer more simplified job applications, integrated video recruiting tools, a stronger focus on employer branding, and a streamlined, more transparent hiring process that keeps candidates, recruiters and hiring managers in the loop. They are also adding talent community tools that can now capture information about anyone who looks at a company’s career page for future recruiting possibilities. Talent community tools are gaining popularity in the recruiting space, because they offer recruiters a pre-qualified database of potential candidates, Hill said. “It gives them an inventory of candidates who they can source when positions open up,” he said. That speeds recruiting by eliminating the first phase of posting ads and wading through résumés. “It’s like having a pipeline of applicants who are already interested in the company.” Though he notes these pools can’t just be a dumping ground for data about anyone who wandered onto the site.“You need a vetting system with tagging functionality to create threaded candidate pools,” he said.
NEW IDEAS FOR NEW RECRUITS The focus on candidate experience has created new opportunities for small technology startups to gain recognition in this space. Greenhouse, for example, is making the hiring process more like a consumer shopping experience for candidates, Schooley said. “They capture the essence of what recruiting needs to be — an easy process where candidates can find the information they need in a few clicks.” Other startups are reworking the way companies and candidates connect, and making their services more accessible, especially for smaller companies, said Matt Paddock, general manager of Grow, a 40-person digital agency in Norfolk,Virginia. Paddock previously recruited for a large global firm that regularly signed yearlong contracts with sites such as Monster m ay
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and CareerBuilder to support the ongoing need for new talent. But Grow’s smaller, on-demand hiring needs require a more customizable approach, he said. So Paddock started using firms such as LiquidTalent, a Match.com-style recruiting platform that matches employers with developers and other tech talent based on their common fit and goals. “It’s super-slick technology that creates more of a balance of power between the candidate and hiring manager,” he said. He also uses Hired Inc., which filters tech talent candidates based on skills and salary requirements; and Working Not Working to hire freelance creative people. “All of these vendors flip the recruiting model on its head,” he said. “Instead of everything being employer-driven, they are more about putting the candidate at the center of the experience.They decide who they want to talk to. It’s like a reverse job fair.”
IGNORING YOUR BEST ASSET The one place these vendors are still falling short is helping companies take better advantage of the talent already in the company. Internal hiring is still viewed as a low-value candidate source ranking last both in source of quality and quantity of hires, according to the LinkedIn report. That’s shortsighted, Mueller said. “Internal transfers are up to seven times more valuable than external candidates.” Existing employees already know the culture, understand the business and ramp up a lot faster than new candidates. And by giving internal employees the opportunity to move up in the company, it can improve engagement and retention. Yet companies — and vendors — tend to ignore this valuable talent pool. While some enterprise talent management systems offer tools to compare internal and external candidates side by side, and to publish job opportunities internally on company websites, it’s still an underused talent resource that employers should be paying more attention to, he said. “Companies need to be more agile and strategic in understanding their talent depth chart, and to think about recruiting from outside the company as a last resort.” With new vendors emerging all the time, it can be difficult for companies to know where to invest their recruiting resources. Mueller advises them to educate themselves on what’s happening with workforce analytics and social networking, and to look for proof from vendors that the solutions they promise are real and applicable. “The classic recruiting model is changing, and vendors need to change with it,” he said. Paddock agrees. There are a lot of vendors working to create a frictionless recruiting experience,” he said. He urges recruiters to look at what’s available and how it stacks up. “There are a lot of different approaches out there now that stretch your recruiting dollar a lot further.” Sarah Fister Gale is a writer based in the Chicago area. To comment, email editors@workforce.com.
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A Web of Potential Pitfalls By Richard Y. Hu There is no doubt that recruiting software can ease the workload on recruiters, reduce administrative and personnel costs, improve the quality of hires and ensure compliance if adequately monitored. But let’s now talk about the other aspect of e-recruitment: the use of the Web-based recruiting and screening that is often integrated into recruiting software and what that can mean for you and your company.
The Dangers of Web-Based Recruiting Web-based recruiting in this context refers to job search websites and social media to help seek viable candidates. The main concern with job search websites is whether their pool of applicants are truly representative of the population. If you are not careful, you could end up with “disparate impact” discrimination against minorities and women. “Disparate impact” discrimination is when an employer has a policy that is neutral on its face, but is not genuinely tied to any business need and has a tendency to exclude individuals belonging to a federally protected category, but states may separately have additional protected categories. Likewise, “disparate impact” discrimination can also occur when recruiting applicants through social media, such as Facebook, LinkedIn or Twitter. Although companies increasingly use social networking sites to recruit applicants, you must be mindful that not every applicant uses social media. A 2014 Pew Research Center survey found that racial participation varied between social media platforms. Facebook is the most widely used platform regardless of race and ethnicity with involvement from 73 percent of Hispanics, 67 percent of African-Americans and 71 percent of Caucasians. On the other hand, LinkedIn has participation from 18 percent of Hispanics, 28 percent of African-Americans and 29 percent of Caucasians. To make sure that you insulate yourself when doing Web-based recruiting, diversify your recruiting so that you don’t use social media only. Additionally, you must include the appropriate equal opportunity and/or affirmative action language in job postings on social media because they are considered “advertisements.”
The Dangers of Web-Based Screening The other aspect of Web-based recruiting that applies to social media is that companies may still screen applicants by checking these sources. The danger is, however, still real and employers may run afoul of discrimination against protected persons under Title VII of the Civil Rights Act, the Age Discrimination in Employment Act, and certain state laws prohibiting “lifestyle discrimination.” To make sure that you have the best practices in place on social media, make sure to never ask for passwords from applicants to access the platforms. Several states have already enacted legislation prohibiting disclosure. Also, make sure that a human resources professional does the screening, check social media profiles after an applicant has already been interviewed when their membership in a protected category would likely be already known.
Richard Y. Hu is an associate attorney at Taft, Stettinus & Hollister in Chicago. To comment, email editors@workforce.com.
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ALZHEIMER’S continued from page 31 work with HR and take full advantage of the benefits available to them.” The association offers resources to employers to raise awareness of Alzheimer’s in the workplace to help human resources better understand the disease and develop support for employees who care for a loved one with Alzheimer’s. “About 15 million working Americans are caring for someone with dementia, and we don’t see it slowing down,” she said. “They may have kids in college or younger kids at home. They will be both caregivers and ones being cared for.We are seeing a tremendous impact on caregivers.Without a cure it’s really incumbent on all of us to have awareness of this disease and how it impacts caregivers.” But employers need to be cautious not to jump to conclusions and assume that signs of forgetfulness or cognitive lapses means someone has the disease, according to Peter Petesch, a shareholder with the law firm Littler Mendelson in Washington, D.C. “A lot of us should stick to our day jobs and manage performance, but when someone is aware that an employee has a diagnosis, there are certainly accommodations that can be made,” he said.“But it’s incumbent on the employee to come forward. Ask for an accommodation before it becomes a problem. The safest and most proactive approach an employer can take when an employee’s performance is deteriorating is to confront them with performance problems and determine if there is any way to get them back on track. It doesn’t involve diagnosing the employee, but it involves throwing it back to the employee to ask for accommodation.” While the Americans with Disabilities Act doesn’t issue a list of medical conditions that are covered, it has a general definition of disability that a person must meet to be covered. If an employee with dementia meets the criteria, they will be covered, Petesch said. “If the condition substantially limits life activity and impairs thinking, reasoning and a whole variety of cognitive activities,” he said, “then it almost always rises to the level of a disability under the ADA.” Petesch advises employers to consider accommodations like putting instructions in writing or working with the employee to set up deadline reminders on their online calendars. What employers can’t afford to do is ignore the problem, Drew added. “The number of people impacted by Alzheimer’s is going to increase as the baby boomers age,” she said. “Any employer that does not look at the issue and is not aware that they have employees who are struggling to care for someone with Alzheimer’s is at risk for losing really talented staff. People are able to stay in the workforce longer when they have flexibility, and employers should help them find a way to do that.”
CONSOLIDATION continued from page 35 if more information is necessary to make a decision,” Hemphill said. If that information checks out, the companies in question can enter a process called “second request” that is more investigative in nature. Regulators can request information on the companies’ products and services, market conditions and an analysis of potential competitive effects of the merger, Hemphill said. “This is where they get into the nitty-gritty,” Hemphill said. “Regulators want to make sure the mergers and acquisitions won’t disrupt competition in the industry. They also want to make sure it produces a more well-rounded company, not just one that is bigger and can bully the others.” Both the Aetna-Humana and Anthem-Cigna deals are in second request, which remains open until the regulatory body is satisfied with the information the companies have provided and regulators believe they have enough information to make a decision. When all the information is submitted, the regulatory body again has 30 days to review the documents and make a decision. There are three possible outcomes from a regulatory review: approval, denial and compromise. “Often in the case of large acquisitions like this, the FTC will come back with a change that needs to be made before the deal can close,” Hemphill said.“A lot of times it involves selling off portions of the company to avoid the possibility of a monopoly. Breaking up the company helps ensure that it can’t take control of the market.”
Rita Pyrillis is a writer based in the Chicago area. To comment, email editors@workforce.com.
Sarah Sipek is a Workforce associate editor. To comment, email editors@workforce.com.
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A Look Ahead While each deal awaits approval, O’Connor is quick to remind employers and employees alike that the buck doesn’t stop here. This merger mania will likely continue for the next 10 years. And it has the potential to favor smaller startup companies that have the ability to focus on niche market needs. “While these deals are getting done, the little guy has the opportunity to look over the data from the past six years and really dive deep into what consumers want,” O’Connor said. “The Aetnas and Anthems of the world may be bigger, but, unless they’re giving consumers the control they demand for the price they’re now having to pay, there’s still an opportunity for someone to come in and do it better.” Dafny’s advice is to hone in on technology. “Employees are still learning,” she said. “They know they want to spend less, but they need help figuring out how. Companies that can provide tools to make smart health care purchasing decisions are always going to be viable in the marketplace.”
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SABOTAGE continued from page 39 Another common way to commit sabotage by irrelevance? Bring up a burning issue. Usually, the inadvertent saboteur in this case believes they’re going to save the day by raising a topic that is critically important. They might walk into a meeting about the company’s loyalty program and say something like, “I just saw the results of our survey about customer service and we have a problem that we need to talk about now.” Maybe customer service is in shambles, but are the right people in the room to talk about it and make decisions about what’s to be done? Probably not. Meanwhile, what about the loyalty program? Multiply these two instances by the eight tactics, then by the dozens (or hundreds or
thousands of meetings or communications) that occur across an organization on a daily basis and it’s clear how insidious and pervasive simple sabotage can be. Simple sabotage in some form is hurting organizations. Because of its nature — and human nature — it always will be. But savvy HR leaders can fight effectively against it and minimize its effects. Recognizing it is the first step.
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Robert M. Galford, Bob Frisch and Cary Greene are co-authors of “Simple Sabotage: A Modern Field Manual for Detecting and Rooting Out Everyday Behaviors That Undermine Your Workplace.” Galford is managing partner of the Center for Leading Organizations; Frisch is the managing partner and Greene is a partner of the Strategic Offsites Group.
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LAST WORD
Rick Bell
MAD MEN; BAD MEN?
A
friend who works at a news agency covering courts nationwide sends me snippets of workplace harassment and discrimination charges from actual cases. Here are a couple of recent incidents. “When plaintiff complained about defendants’ client demanding sex from her, her bosses told her to ‘take one for the team.’ ” Also, “When plaintiff told her supervisor that she was pregnant, the supervisor began interviewing people to fill her position and said, ‘You need to buy yourself a girdle to
to a supervisor’s rightful dismissal, I credit my employers for acting quickly, taking the complaints seriously and conducting thorough investigations. That doesn’t appear to be the case at advertising giant J. Walter Thompson in the wake of recent sexual-harassment charges that led to the high-profile departure of CEO Gustavo Martinez. Most accounts surmise that company executives preferred to keep his boorish behavior in-house and sweep any accusations under the rug. The stalwart ad firm’s longtime communications chief Erin Johnson then filed a lawsuit in New York federal court in March charging that Martinez joked about raping female colleagues and made numerous racist comments about Jews and black people. Johnson, who is on paid leave as the case makes its way through the courts, allegedly was a recurring target of Martinez’s sexual suggestions. This case sadly is like a vintage “Mad Men” episode. Some in the industry, indeed at the company, stood by Martinez, contending among other things that his poor command of the English language (he was born in Argentina and raised in Spain) led to misunderstandings. Then there’s the belief that J. Walter Thompson and its hide your stomach because that’s embarrassing.’When plain- British parent company WPP simply condoned his behavtiff submitted a doctor’s note to go on early medical leave for ior and ignored Johnson’s claims. Reports stating its initial a pregnancy-related condition, defendants fired her.” reaction to place Johnson on paid leave and allow MartiMy immediate reaction: It’s as nauseating as it is hard to nez to remain in his post while assuring clients the claims believe that cretins like this not only work among us but were unfounded speaks volumes regarding its interpretaalso are elevated to supervisory positions. tion of guilt and innocence. It’s a chilling commentary on the state of today’s workManagement could have averted the fallout with a willplace that sexual harassment and bias dominate the Equal ingness to swiftly and fairly investigate the charges. But Employment Opportunity Commission’s caseload. EEOC rather than hire an outside party before news of the suit data show that there were 26,000-plus sexual bias cases went public, reports say that WPP chose to conduct its filed in both 2014 and 2015. own internal investigation. I’ve twice been called into depositions to tell what I It smacks of the old boys’ club covering for one another. knew about sexual harassment charges against my direct And it does nothing to diminish the industry’s reputation supervisors at two separate workplaces. In a random but that sexism and racist attitudes still run rampant while mioddly related comparison, I’ve only served on a jury once. nority-hiring rates remain dismal, despite repeated pledges One accused boss deserved to be dismissed after the to do better. charges came to light. It took nerves of steel for a young, Shows like “Mad Men” make for great TV drama while eager-to-please reporter to make the accusation against J. Walter Thompson has played into sensational tabloid fodour supervisor. der. It’s clear considering the emails from my friend and On the flipside, the accuser in the other case was the one the EEOC statistics that harassment cuts a wide swath who deserved to be disciplined after making a false sexual across the workplace. harassment allegation on the hunch that it would buy time The reality is that such a workplace promotes a culture before eventually being fired — which in fact happened — where few people — especially women — can thrive. 18 months later. The charges in both situations were the Employers shouldn’t mistake entertaining fiction from same; yet the circumstances were night and day. the 1960s for responsible, productive workplace environSeasoned HR leaders know that, as clear-cut as a charge ments today. may appear on the surface, there are two sides to every story, and both parties deserve a thorough investigation. Rick Bell is Workforce’s editorial director. To comment, email While one accuser’s charges rang hollow and the other led editors@workforce.com.
IT’S A CHILLING COMMENTARY ON THE STATE OF TODAY’S WORKPLACE THAT SEXUAL HARASSMENT AND BIAS DOMINATE THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION’S CASELOAD.
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