Author: Michelle Rafter

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Some EAPs Find That Online Therapy Clicks With Clients

When Dr. William Hapworth started offering psychiatric counseling and behavioral health services online, Google was a startup and MySpace, Facebook and Twitter didn’t exist.


That was in 2000, eons ago as far as online services go.


A lot has happened since then. Internet technologies got faster, smarter and easier to use, making people more comfortable doing all manner of things online: banking, shopping, dating—even sharing intimate details of their lives with total strangers. At the same time, companies started offering employees more inducements to stay healthy mentally and physically as a way to keep them working productively and curtail rising costs of health care and other benefits.


The confluence of these trends has given rise to Internet-based counseling and behavioral health services that are finding their way into company employee assistance programs alongside in-person and telephone-based therapies. The services use a variety of Internet-related platforms, including e-mail, instant messaging, live chat and, in some cases, Skype video calls or other Internet-based videoconferencing. Some providers even offer 24/7 service, so depending on who is running a company’s EAP, an employee could schedule a Skype counseling appointment at 3 a.m.


There’s no question Internet-based therapies are still a novelty. But vendors of the online services and the EAP benefit management companies they work with say they’re signing up more employers all the time and pitching others who are considering adding online therapies to their EAP benefits in the near future.


“Patients love the 24/7 access,” says Hapworth, an assistant clinical professor of psychiatry at New York University and founder of Treatment Online in New York City. “It’s treating patients where they are, not forcing them to comply with the idea that to get treatment they need to make an appointment to see me next month on a Tuesday.”


Treatment Online is currently rolling out an Internet-based therapy portal to 50,000 employees at the Cleveland Clinic, the nonprofit medical center. The online therapy provider already offers services to a portion of the approximately 1 million employees and dependents covered by Lubbock, Texas-based HealthSmart Preferred Care’s national PPO network.


Raleigh, North Carolina-based Workplace Options provides outsourced work/life counseling and other services for 150 EAPs covering 20 million employees and their families in 15,000 companies including Cisco, Pepsi and MetLife. Workplace Options has offered online therapy since 2002, “though it’s taken up to the last year or so for people to get comfortable” with it, says Alan King, the company’s president and COO.


Most of Workplace Options’ EAP providers offer their employer customers online therapy services for short-term problem-solving that would require up to six or eight sessions. Internet-based therapy doesn’t cost anything over and above what an employer would already pay. “For us, the e-platform is just one more mode of access,” King says.


One of Workplace Options’ clients is EAP Preferred, a private Phoenix company that provides work/life and other benefits to approximately 500,000 people who are mainly Arizona residents, including employees and dependents of public agencies, manufacturing and transportation companies. EAP Preferred president Paul Fleming started offering online therapy to 5 percent of his customers a year ago to see how it would take.


“I didn’t know how I felt about it,” Fleming says. “But after six months, use increased—to my pleasant surprise. Now customers are reporting great satisfaction from their employees. They like having the option of scheduling an Internet counseling session anytime it suits them.”


Over the next year, Fleming will begin offering online therapy to all existing and new customers. He now believes employers need to offer it to their workforces, especially if they want to hang on to Gen Y workers. “When you have a younger workforce that has been raised on Google, Twitter and e-mail, they work much better through Internet counseling,” he says.


As more employers consider online therapies, it’s causing vendors to jump into the business, including Internet startups such as MindSite.com, eTherapistsOnline.com and MyTherapyNet.com.


One new venture, MyTherapyJournal.com, withstood a grilling on the prime-time reality TV show Shark Tank in September to walk away with $80,000 in exchange for selling a controlling interest to two of the show’s celebrity investors. In a follow-up interview with AOL’s WalletPop finance blog, MyTherapyJournal.com co-founder Rodolfo Saccoman said the 2-year-old business accepted the deal because of the investors’ experience launching Internet companies. Because of the publicity, the company is now in “fourth-level” talks with Aetna to offer its service to the insurer’s corporate customers, and is in discussions with two other potential partners, Saccoman said in the interview.


Another startup, Breakthrough.com, gave the first public demonstration of its services at the TechCrunch50 technology showcase of Silicon Valley startups in September. The Palo Alto, California, company is currently talking to EAPs and other potential partners, according to founder and CEO Mark Goldenson, a former technology vice president at PayPal, the online payments company.


Providers say research done over the past few years in the U.S. and U.K. has shown online therapies to be as effective as counseling they would get in a therapist’s office or over the phone, if not more so. They also say because most providers offer it 24/7 via the Internet, it eliminates problems counselors encounter with patients dropping out of therapy because of embarrassment, lack of time or other issues.


But not everyone is convinced online therapy is ready for prime time. HIPAA regulations mean therapy companies must take steps to keep patients’ health care records private and secure. Many comply by channeling therapist-patient communications through an encrypted Web site, thereby preventing potentially sensitive messages from ending up in an employee’s work e-mail inbox.


State therapist licensing requirements are another potential stumbling block. Some states restrict therapists to treating only patients in the states in which they’re licensed. Other states bar therapists from treating patients online if they’re not also treating them in person.


About a year ago, Kellen Von Houser, a licensed professional counselor in Austin, Texas, bought the domain name MyOnlineTherapy.com and started an online therapy practice. She quickly discovered that therapists in Texas can treat people online only if they’re also treating them in person. Von Houser thinks the Texas law is unclear on exactly what’s allowed, and knows therapists who have chosen to ignore it. But she wasn’t willing to risk it and ended up shutting down her online practice. “We’re all waiting for a lawsuit to happen to settle those questions, but I’m not willing to be the guinea pig,” she says.


John Grohol was on the bleeding edge of online therapy when he started a company called HelpHorizons.com in 1999. The service was popular with therapists and patients, but Grohol and his partners didn’t have financial backing to go after EAPs, which at the time needed lots of coaxing to try the approach “We had a very uphill battle,” Grohol says. In 2006, he sold the business to Workplace Options, which incorporated it into its own online therapy offering.


Since then, Grohol has focused his energies on running PychCentral.com, a mental health information Web site. But he remains an online therapy fan and says the question isn’t getting companies on board—they’re all for anything that could potentially reduce costs while helping improve employees’ mental health. Rather, the sticking point is whether enough people will use it in lieu of face-to-face or even telephone counseling.


“Online dating or online banking are very different from having a therapeutic relationship” online, Grohol says. “The question is, have people gotten to the point where they’re comfortable enough in large enough numbers to understand the value of doing therapy online?”

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Special Report on Employee Relocation Barely Moving

The recession pummeled companies’ domestic and global mobility programs in the past year, magnifying changes that had been taking place for some time.


Inside the United States, HR departments continue to grapple with a real estate downturn that has led employees to resist job transfers because they can’t sell their homes. Overseas, multinational companies are curbing the costs of expat programs by cutting assignments short, restructuring expat compensation packages and, in some parts of the world, filling positions with local hires instead of relatively more expensive Western employees.


The fallout has reached some of the industry’s leading relocation outsourcers, which have reacted by laying off employees, filing for bankruptcy or selling operations. Although the domestic and international relocation issues are very different, they have the same root: a tanking economy that offers fewer options for organizations that need to get their employees from here to there.


Domestic decline
Julie Loubaton knows firsthand how the recession is changing U.S. companies’ domestic relocation policies. As director of recruiting and talent management for Consolidated Container Co., Loubaton helps move people for jobs at the Atlanta bottle maker.


Only this year there hasn’t been a lot of moving going on. The 3,000-employee private company stopped offering full relocation packages to new hires a while back and trimmed the number of existing employees it moved for transfers or promotions to seven so far this year, down from 10 in 2008 and 18 in 2007. The main reason: People can’t sell their homes, and there’s only so much cost that Consolidated Container is willing to take on to help.


“A lot of people are having a hard time accepting what their house is valued at,” Loubaton says. “They still think they can sell it for X, despite what an agent is telling them. We can’t afford to have them try for six months then come to us for more money.”


Things have eased up slightly since hitting bottom in the spring. Even so, Loubaton is revising her department’s relocation policies to better reflect the times, changes she spent months researching before bringing them to Consolidated Container’s executive committee in June for approval.


The situation Consolidated Container faces and the actions it is taking mirror what’s happening throughout the country as businesses large and small come to grips with the financial effects of the real estate bust and recession. Nationwide, fewer employees are willing to move for a job. Of 179 companies in a 2009 survey by relocation outsourcer Cartus, 79 percent said employees’ resistance to moving increased somewhat or a great deal over the past year. For 94 percent of those, worries over selling an existing home were the main reason.


“People are afraid of losing money or being underwater”—owing more on a mortgage than what they could sell their house for—says Lina Paskevicius, a consulting manager at Cartus. “If they’re moving, they’re waiting for some official word that the market has bottomed out, so they’re renting instead of buying at the new location, where traditionally they’d buy as soon as they got there.”


When companies do help employees relocate, they’re demanding tougher terms. Thirty-seven percent of 210 companies in a recent poll by Weichert Relocation Resources adopted tighter list-price guidelines or added list-price restrictions to relocation policies for the first time in 2008.


The news isn’t all grim. Last year, 40 percent of companies in Weichert’s survey added or increased loss-on-sale assistance, making up some portion of the difference between the original purchase price of a transferee’s home and its sale price. In the same poll, 34 percent of respondents increased the temporary housing allowance they offered. If a candidate is desirable enough, some companies will even pay a portion of the difference between what a transferee owes on a mortgage and what they can get for their house. “There’s no other way to get people to move,” Cartus’ Paskevicius says.


Consolidated Container, which cranks out 7 million plastic bottles, drums and canisters a day in 65 factories in the U.S. and Mexico, never used to set sales prices for homes of employees who had accepted a transfer. But given the current realities of the residential real estate market, the company revised the policy. Now the company requires that candidates list their home within 105 percent of the average estimated selling price, based on two independent real estate agents’ market analyses.


Aware that homes are taking more time to sell, however, Loubaton is extending how long the company will pay temporary living expenses, to three months from two. She’s also considering giving employees who sell within 90 days a bonus of 2 percent of the net sales price. “This way if they sell at less than they want we’re making up some of the difference, so it’s not as big of a hit mentally,” Loubaton says.


Halting relocation offers to outside candidates hasn’t deterred them from applying for jobs at the bottle maker, which despite the recession is still hiring in its factories and for openings among 450 salaried positions at its Atlanta headquarters. In fact, Loubaton says candidates for management positions—especially junior-level jobs—are willing to do without company help.


“In the old days they’d want a full relocation package. Now they say, ‘Don’t worry, I’ll make it happen if you give me the job,’ ” she says.


Loubaton uses Primacy, a Memphis, Tennessee-based relocation outsourcer, to perform the actual relocation work. She manages the program, and with so many changes taking place, “I’m on the phone with them five times a week. I’m tracking things weekly for our senior leadership team. I’m more involved than I ever thought I’d be,” she says. Like Consolidated Container, more companies are relying on outsourcers to manage relocation programs. Brookfield Global Relocation Services, which merged with GMAC’s relocation business in late 2008, found that about one-third of U.S. companies in its 2009 relocation survey use outsourcers to manage their domestic relocation programs. It’s the latest function being handed off to outsiders as HR departments economize, says Scott Sullivan, the company’s senior vice president.


With housing prices still in the doldrums in many regions and jobless rates continuing to climb, nobody’s predicting relocation policies will go back to what they were anytime soon. “Unless there’s a turnaround, it’s going to be more of the same reluctance to relocate,” says Paskevicius, the Cartus consulting manager.


Global changes
To see what’s happening to multinationals’ global mobility programs, look at China. The country has become a leading expat destination—No. 1 in the world, according to Brookfield Global Relocation Services’ 2009 global mobility trends survey—yet remains one of the most challenging destinations for international assignments.


Even in a global recession, China continues to be a manufacturing powerhouse, creating ongoing demand for management jobs, especially middle-manager positions. But assignments there can be tricky. Expats who live in post-Olympics Beijing maintain the city has become every bit as cosmopolitan as Singapore or Hong Kong—with the same high prices.


Other areas of the country are still considered second-, third- or even fourth-tier destinations based on their lack of infrastructure, options for housing and schools, and other Western-style amenities. This makes it difficult to attract expats. Even in cities such as Beijing and Shanghai, overcoming the twin barriers of language and culture continue to make assignments tough, according to HR managers, consultants and relocation outsourcers.


With revenue and profits beaten down by the recession, multinationals are curbing mobility expenses in a number of ways: ending expat assignments early, reducing compensation packages and perks, and choosing single employees for international stints over those with families, according to 2009 reports from Brookfield and other global relocation outsourcers.


These days, when expats are called home, their replacements are likely to be local hires whose total compensation can run well below what U.S. or European expats command, according to the reports and accounts from expat HR managers.


All these trends are evident in China, where multinationals are replacing departing expats with their pick of a growing population of foreigners already living in the country. “There was just an expat job fair here a month ago and a couple thousand people were there looking for jobs,” says John Lackey, a Beijing-based international HR manager for International SOS.


In more than a decade helping manage expat programs for such multinationals as Goldman Sachs and Microsoft, Lackey has had a bird’s-eye view of the changes taking place. He currently oversees HR for 85 expats working in Beijing for International SOS, which provides medical assistance, security services and international health care, including a chain of private medical clinics. The company has a global workforce of 6,000.


Today, about half of International SOS’ expat employees in Beijing are traditional expats from 15 countries, including the U.S., Germany and New Zealand; a quarter are local hires; and the balance are expats who rotate through positions on a short-stay basis.


While the total number has remained steady, Lackey predicts more expat positions will be filled by ethnic Chinese transferring from nearby countries or “half pats”—Chinese nationals returning to the country after living elsewhere for a long time.


“An [American] expat with a spouse and two kids making $100,000 a year can run $250,000 to $500,000 in costs, compared to a local hire you can pay $100,000 and that’s all you have to pay,” Lackey says. “The savings is easily at least half and could be up to 75 percent.”


Another attraction of local hires or half pats in China: their ability to fill in-demand middle-manager positions that require business experience and knowledge of language and culture, says Timothy Dwyer, client services director at Expaticore, a New York expatriate payroll outsourcer, and a former global mobility manager at Goldman Sachs and KMPG.


These workers may not be a multinational’s perfect candidate. But as cost plays a bigger role in hiring decisions, companies are willing to overlook some deficiencies, especially if candidates accept a hybrid compensation deal that’s less than what a traditional expat would expect, Dwyer says.


In addition to using local hires, multinationals are curbing costs of global mobility programs by cutting the length of long-term assignments by a year or more, creating more short-stay assignments of a year or less and sending employees on extended business trips of several weeks or months instead of moving them, says Paskevicius, the consulting manager at Cartus, which in addition to its domestic business also works with multinational clients.


All those changes mean HR managers must look across the globe for available candidates, and more are relying on relocation outsourcers for help. Overall, 38 percent of 180 companies in Brookfield’s 2009 survey outsource the management of their global mobility program. Cartus, for example, offers its clients a candidate assessment program that uses performance metrics and other data to pick the best pros- pects for international jobs.


Nevertheless, some organizations’ expat program managers prefer to go it alone. Lackey, who has worked with and for relocation outsourcers, acts as his own program administrator because of the flexibility it gives him. Outsourcers “tend to limit services to a fixed menu, whereas I can get a local company to provide services with no limitations,” he says. The global recession has put pressure on HR managers to justify how well global mobility programs align with a company’s overall business objectives. That means producing more data on the program’s operations “and more dialogue between HR and management about the outcome of assignments,” says Scott Sullivan, senior vice president at Brookfield Global Relocation Services, which acquired GMAC’s mobility division last year.


Those same financial realities have accelerated the demise of companies’ once standard practice of doling out cushy expat assignments to junior executives as part of their management training process, says Rebecca Powers, a Mercer global compensation and mobility practice principal.


Companies no longer feel the responsibility. It’s now employees who are eager to accept international postings, even in less than top-tier locations. They are also willing to make such moves for pay and benefits packages that are less than what they used to be, “as a way to boost their marketability,” Powers says.


Workforce Management, July 20, 2009, p. 23-27 — Subscribe Now!

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Relocation Providers Big Is Out, ‘Boutique’ In

When it came to being a relocation services provider, it wasn’t so long ago that bigger was better.


Vendors with the size and financial wherewithal to provide all-in-one services, including buying homes from their clients’ employees as part of a complete relocation offering, were positioned to take over the industry.


Then the bottom fell out of the real estate market, credit dried up and companies operating under recession-era budgets put domestic and international relocation spending on a diet.


Suddenly, big didn’t look so good. Major vendors with extensive real estate holdings “have this albatross around their neck that is now hemorrhaging money,” says Timothy Dwyer, a longtime relocation industry executive and current client services director at Expaticore, a New York City international payroll outsourcer and relocation advisor.


One of the first relocation outsourcers to feel the effects was Sirva Inc., the Westmont, Illinois, moving and relocation services enterprise formerly known as Allied Worldwide. After getting hammered by the housing crisis during 2008, Sirva was forced into a prepackaged bankruptcy in February. The reorganized company emerged from bankruptcy protection as a private concern in May.


In November, GMAC Financial Services closed the sale of its global relocation division and other real estate interests to Toronto-based Brookfield Asset Management Inc., which merged the businesses with its own real estate holdings, including Royal LePage, a relocation services provider in Canada. Rick Schwartz, former head of GMAC’s relocation outfit, is running the renamed Brookfield Global Relocation Services business. Because of the merger, it doubled in size to 900 employees and $100 million in annual revenue, according to Scott Sullivan, the company’s senior vice president.


Another affected major player in the U.S. and global relocation business is Cartus Corp., an arm of privately held Realogy Corp. In September and January layoff rounds, it let go a total of 124 employees, including some who worked at the company’s Danbury, Connecticut, headquarters, according to company reports.


As bigger vendors continue to grapple with recession fallout, their clients are eyeing deals with smaller specialists. “Boutique” firms focus on areas such as payroll, taxes, legal issues, household moves, cultural training and compiling statistics that companies use to set the cost-of-living per diems they pay expats.


And as the world becomes more Web savvy, HR relocation program managers are more interested in outsourcers who’ve got their Internet act together. Easy-to-use Web portals are high on some companies’ wish lists.


While she’s not unhappy with her current relocation partner, Primacy Relocation, Consolidated Container Co.’s Julie Loubaton is considering putting a contract out to bid when her current one with Primacy expires.


“I don’t have employees calling me with complaints, but I don’t like Primacy’s Web interface” and have seen others that look better, says Loubaton, director of recruiting and talent management at the Atlanta plastic bottle manufacturer.


Still, technology isn’t everything, says Expaticore’s Dwyer, who has worked on the client and vendor sides of the relocation business at Goldman Sachs and KPMG, respectively.


It’s easy to be dazzled by technology’s promise, then end up with more bells and whistles than you’ll use, Dwyer says. Only the largest multinationals that move thousands in their global workforce every year need the most sophisticated programs. Otherwise, it’s like owning a Lexus to drive across Manhattan “when a Hyundai will get you there just as well,” he says.


Workforce Management, July 20, 2009, p. 25 — Subscribe Now!

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TOOL Electronic Records Training 101

If you are helping to develop a system or are training employees on one, here’s what experts say you need to know:


• An electronic business record is information a company needs to keep for legal purposes, either because regulators require it, it addresses a business-related transaction, activity or issue, or it explains vital company policies or operations.


• A record could be made up of more than one electronic file or e-mail. For example, an employee’s personnel file, including a “résumé, job offer, e-mail correspondence about stock options, performance reviews and a bunch of other things could be a record,” says Brian Babineau, senior analyst with Boston-based Enterprise Strategy Group, an information management research firm.


• Employees need to be aware of the types of business records they create or work with in their jobs, and how those records should be retained.


• For the best results, electronic records management procedures and policies should be crafted by a cross-functional team including representatives from upper management, IT, legal, compliance and HR.


• The best time to train new employees on record management procedures and policies is during orientation. Existing staff should receive regular communications about electronic records management policies and procedures and be retrained after major technology or process upgrades.

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Taming Twitter Did They Really Just Say That

Perhaps by now you’ve heard of the PR guy whose snarky comments about Memphis, Tennessee, to his Twitter followers landed him in hot water with the Memphis-based client he was about to visit, a little company named FedEx.


    Or the congressman whose Twitter posts during a secret trip to Iraq had military officials worried he had compromised the mission’s security.


    And then there’s the very public and very profane exchange between a Canadian journalist and a product-marketing executive.


    As those instances show, organizations are using Twitter for almost anything and everything, often with unintended or even disastrous consequences. The social networking service, which lets people post messages 140 characters at a time to a circle of online friends, has grown so big so fast that it has outpaced companies’ efforts to create user guidelines—or in some cases understand what it is and how it works.


    If this sounds familiar, it should.


    Companies have covered this ground before, first with e-mail, then the Web and more recently with social networks such as Facebook and LinkedIn. In each case, advances in electronic communications forced organizations to decide what employees could or couldn’t do and revise corporate conduct guidelines or acceptable use policies accordingly.


    Although it’s still small compared with social networks like MySpace, Facebook or LinkedIn, Twitter is catching on fast. The 2-year-old service grew 900 percent in 2008 to approximately 6 million users, according to company officials and Internet industry analysts.


    Given the avalanche of things HR departments are dealing with right now—a recession-induced talent upheaval and a new U.S. president intent on revising workplace rules and regulations—they’re not investing lots of energy worrying about Twitter, says Jason Averbook, CEO at Knowledge Infusion, the Minneapolis HR management consulting firm.


    “They’re slammed to the gills just trying to survive, and writing a guide to social media isn’t on top of their to-do list,” he says.


    Maybe it should be.


    Because of how it works, Twitter can spread information exponentially faster than e-mail or blog posts.


    Think of Twitter as a giant chat room, but instead of person-to-person conversations, with a mouse click one person can instantly beam a message to however many Twitter users have signed up to “follow” them, whether that’s 20, 200, 2,000 or more. Any of those people can rebroadcast, or “retweet” the original message to their own network and so on and so on.


    Its viral nature makes Twitter powerful but also dangerous, says Michael Krigsman, CEO at Asuret Inc., a Boston IT consultant, and author of the IT Project Failures blog.


    “If a company does well, the positive effect can happen more rapidly than e-mail,” Krigsman says. “If a company doesn’t do something or isn’t responding to customers, the possibility of negative spiral is far greater too.”


    Some companies have responded by blocking employees’ access to Twitter with the same software they use to block gambling, pornography or other sites they’ve determined could hamper productivity or be perceived as harassment.


    But social networking experts agree that blocking Twitter will backfire.


    “It’s a hopeless battle,” says Steve Boese, an adjunct professor at New York’s Rochester Institute of Technology who teaches an HR IT course in the school’s HR master’s degree program. “You can issue blocks but you’ll be blocking more and more. It’s a game, and eventually you’ll give up.”


    Besides, social media and HR experts say, there’s nothing stopping an employee from using Twitter to talk about work from their home computer or personal iPhone.


    Some companies have taken the offensive and tapped designated employees to act as their official eyes and ears on the network.


    Comcast, for example, has at least a half-dozen customer service and public relations representatives on Twitter fielding customers’ questions and complaints about the company’s telephone, cable TV and Internet service. UPS, Bank of America, Wachovia, Southwest Airlines, Starbucks and Zappos, the online retailer, all have official corporate accounts on the network for customer service, marketing or both.


    At Yahoo, 25 to 30 employees act as the Silicon Valley tech giant’s official Twitter representatives. Many are product or community managers who get paid to spread information about new Yahoo products and services.


    In early February, Nicki Dugan, a Yahoo corporate communications senior director, became the official corporate voice of Yahoo on Twitter.


    But even tech-savvy companies like Yahoo haven’t sorted everything out.


    Although Yahoo employees have used Twitter in an official capacity for at least a year, the company has yet to revise 4-year-old employee electronic communications guidelines to include the new service.


    The only update has been a wiki Yahoo engineers created in 2008 to share advice on handling complaints customers post on Twitter.


    It’s definitely time for more, Dugan says.


    Although Yahoo hasn’t encountered problems, company officials are discussing creating a separate wiki to spell out Twitter best practices, and are also talking about ways to use Twitter for customer service, she says, adding: “We need to formalize it.”


    Having an electronic communications policy or employee-conduct guidelines that cover Twitter won’t mean much if employees don’t know they exist, according to HR and social media experts.


    Guidelines should be spelled out during new employee orientation. They should also be available in handbooks and online in multiple locations, such as on an internal company blog or on its HR employee portal.


    Most important, make sure employees realize Twitter is a public forum, says Krigsman, the IT failures expert.


    Employees may think they’re posting about minor company events, but you had better believe that competitors are out there, hanging on their every word. Says Krigsman: “Twitter is a competitive-intelligence dream tool.”

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LinkedIns Corporate Play Takes Aim at Recruiters

Depending on your perspective, LinkedIn Corp. couldn’t have picked a better time to launch an upgraded suite of products for corporate recruiters—or a worse one.


As U.S. companies lay off tens of thousands of workers, the newly unemployed are flocking online to post résumés and connect with friends and former colleagues in hopes of landing a job, and business networks such as LinkedIn are among their first destinations.


The influx of job seekers is helping the privately held Mountain View, California, company add 1.5 million new members every two weeks, essentially creating one of the biggest job boards around.


On the other hand, the very companies laying off workers are the prospective customers LinkedIn is targeting with its expanded suite of corporate recruiting products that went live February 2.


The suite, previously called Corporate Solutions but rebranded as the company’s new Talent Advantage division, revolves around a stand-alone software-as-a-service applicant tracking system called Recruiter that LinkedIn debuted in March 2008. The suite also includes a new internal LinkedIn e-mail marketing campaign tool, employment ads, annual subscriptions for job listings and customizable profiles that companies can use to display job information to LinkedIn members based on their network profiles.


Skeptics maintain that companies shedding jobs and reining in HR costs aren’t in the market for new recruiting tools. They also point out that many corporate recruiters already supplement formal applicant tracking systems with informal use of Facebook, Twitter and other social networks that cost nothing.


LinkedIn executives argue that they aren’t trying to displace applicant tracking systems. In fact, shortly after rolling out its upgraded corporate recruiting services, LinkedIn announced a deal with Jobvite to integrate the latter’s software-as-a-service applicant tracking system into the business network. Jobvite simultaneously announced similar deals with Facebook and Twitter.


Job boards are a different story. If companies are using fewer recruiters to handle more responsibilities, they need the most cost-effective tools to get them the highest-quality candidates. LinkedIn fits that bill better than traditional job boards because of its huge pool of passive job seekers, says senior marketing director Francois Dufour. “They can tap into talent that’s not on job boards, so it’s a better value and has better results,” Dufour says.


HR industry consultants concur that if LinkedIn successfully continues its push into recruiting, job boards will suffer the most. That fact isn’t lost on companies such as Monster.com, which in its own effort to stay relevant in today’s job market completely overhauled its Web site in January following a year that saw the $1.3 billion job board expand internationally, redo its technology and pump up sales efforts.


Even so, in a side-by-side comparison, LinkedIn wins because the company has changed the concept of what a job board is, says Dan Finnigan, CEO of Jobvite and former head of Yahoo HotJobs.


“The old model of posting a job in a database and hoping the active job-seeking audience finds it is insufficient. What LinkedIn is doing is innovative,” Finnigan says.


Waggener Edstrom sold on Recruiter
Apparently corporate recruiters agree. Since LinkedIn introduced Recruiter in March 2008, more than 900 companies have signed up for the pay-per-seat service. That has helped bring LinkedIn’s corporate recruiting offerings up to par with its other major revenue sources: premium accounts, individual job listings, advertising and market research.


One of those Recruiter customers is Waggener Edstrom Worldwide, a Seattle-based, public relations agency whose 820-person staff handles such clients as Microsoft, eBay and T-Mobile. Last year the agency filled 439 positions, including more than 300 external hires to staff up for new accounts. It was sourcing strategist Kristin Kalscheur’s job to act as an in-house headhunter and find candidates for the hardest-to-fill spots. Kalscheur started using LinkedIn shortly after its 2003 debut and over the years built up a network of 2,000 connections she regularly mined for prospective candidates.


Before Recruiter, using LinkedIn to search for candidates was a cumbersome process, Kalscheur says, because she couldn’t save searches or do mass mailings. Given that experience, it didn’t take a lot of convincing for her to try the Web-based software, which is a separate application from LinkedIn’s consumer service but dips into the same 37 million-member pool.


With Recruiter, Kalscheur can create customized searches that drop lists of potential candidates in her e-mail every day, send group e-mails to prospects and save correspondence and other data in folders she can share with colleagues—helpful so multiple recruiters from the same firm don’t contact the same prospect. The software has drawbacks: It’s not completely integrated with LinkedIn’s consumer service, nor does it work with the applicant tracking system from iCIMS that Waggener Edstrom uses, forcing Kalscheur to cut and paste information from one application to the other manually.


Despite those flaws, Kalscheur is a big fan—so big that she has foresworn using any kind of job board, even the one on LinkedIn.


“We get really bad candidates; maybe one in 40 is decent,” she says. “Our job titles can be misconstrued, so we get someone who is 20 years overqualified or the compulsive networker types.”


TiVo Inc. is another LinkedIn Recruiter customer, and because of it, the digital TV recording service didn’t need to use an outside recruiter in 2008 despite hiring 75 to 80 people, according to William Uranga, director of talent acquisition. That’s a major change from three years ago, when the company did 25 to 30 percent of its hires through agencies, a change that has translated into cost savings and more qualified prospects.


“Is it a silver bullet? No,” Uranga says. “But it’s certainly a competitive tool.”


As for LinkedIn’s other new corporate recruiting features, Uranga is cautious, especially about the company’s InMail e-mail marketing tool. “In social media, the moment you get into campaign mode and you’re doing large-scale messaging, people sense they’re losing specialness,” and that’s a turn-off, he says.


Management changes cap busy year
Kalscheur and Uranga are two of 521,000 corporate recruiters and a total of 829,000 HR professionals on the business network. LinkedIn is launching its Talent Advantage corporate division to convert more of those members into paying customers.


The new division’s launch comes on the heels of a busy year. In December, the company brought back founder Reid Hoffman as CEO to replace Dan Nye and added Silicon Valley veteran Dufour, who came from Yahoo, as well as several other senior execs from Google and Yahoo. In the past 12 months, LinkedIn also added numerous member features and, in addition to the Jobvite partnership, struck a deal to incorporate several IBM Lotus products into the service while introducing French- and Spanish-language versions.


During 2008, the company also raised $75.5 million in two rounds of venture financing, bringing its total funding to date to $103.2 million. Company officials won’t discuss finances in detail but say funds will be used to finance new products. In earlier news reports, LinkedIn officials have said the company has been profitable since 2007.


In better days, LinkedIn would be poised for an initial public offering and then a possible acquisition, according to industry analysts. In fact, the Silicon Valley rumor mill buzzed over possible acquisitions by Yahoo in 2006 and News Corp. in 2007, but neither deal materialized. While such a merger might make sense for a bigger tech or media player looking to bolster its social media play, in today’s market, “All bets are off,” says Bryon Abramowitz, principal consultant at Knowledge Infusion, a Minneapolis-based HR management consultant.


LinkedIn’s news hasn’t been all good. The company is down to 350 employees after laying off 10 percent of its staff in November—par for the course at a time when tech companies from Microsoft on down have announced cuts. Despite adding a new member every second, LinkedIn continues to run a distant fourth behind online networks MySpace, Facebook and Classmates.com.


Recent surveys and anecdotal evidence show people are using all four networks for work as well as socializing, although LinkedIn executives refuse to lump their service in with the rest.


“I won’t say we’ve never lost an opportunity to create value for our client because of another social network,” says Mike Gamson, a LinkedIn Talent Advantage division vice president. “But if we go in and talk to a company, to the best of my knowledge they haven’t come back and said, ‘We’re not using you; we’re using Facebook.’ “


Upstart Twitter, which lets people share messages of 140 characters at a time with their online connections, is catching on in HR circles too. While Twitter is still only a fraction of LinkedIn’s size, its user base jumped 343 percent in the 12 months ended September 30 to 2.4 million.


The bigger that LinkedIn and online networks get, the more fruitful they become for recruiters hunting for job candidates, says Jim Durbin, a recruiter and social media expert who pens the Social Media Hunter blog. At the same time, if recruiters misuse tools like Recruiter or LinkedIn’s other new corporate services, they’ll blow the opportunity and end up “trashy” like job boards, Durbin says.


“Ultimately it’s the behavior of the recruiters, not the tools,” he says. “The more people who come on, the less who know the rules and etiquette.”

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Portland Employers Find Its Easy Being Green

In Portland, Oregon, your company isn’t really green unless you’ve got a bike cage in the parking structure, a compost bin in the lunchroom, fume-free paint on the walls, recycled glass on the lobby front desk, and nary a plastic water bottle, paper cup or soda machine in sight.


Portland’s strict land-use laws, burgeoning renewable energy industry, mass transit system, bike culture, parks and clean water are only some of the reasons it has been voted “Greenest City in America” by Popular Science and “one of America’s top 10 cleanest cities” byForbes.


The everyday practices of local businesses have helped the Rose City earn its green bragging rights.

But companies have ulterior motives. Despite the recession, Portland employers have to tout their green know-how if they want to attract the best possible job candidates, according to Lois Brooks, HR committee chairwoman of American Electronics Association’s Oregon chapter and HR director at WebTrends, a Web analytics and online marketing company.

“It helps your brand in the marketplace,” Brooks told several dozen chapter members attending a November 2008 seminar on going green. When it comes to green initiatives, employees need an advocate, and HR can fill the bill, Brooks says.


Tripwire Inc. is a good example of green practices some Portland companies are putting in place and of the input that workers have in the process.


In November, the 12-year-old online security company moved 170 employees into new headquarters in 33,000 square feet on two rebuilt floors of a downtown Portland high-rise. At the same time the company was pondering moving, employees had begun requesting that managers step up their commitment to sustainability.

It eventually fell to HR generalist Barbara Salegio to coordinate the move and spearhead a newly created employee sustainability committee. One of the committee’s functions: help decide which green upgrades to buy with $1.2 million the company received from its new landlord for tenant improvements.


With the committee’s input and management’s blessing, Salegio opted to use the money for such things as an open layout that lets natural light into 90 percent of the area; low-volatile organic compound paints to cut back on fumes released during application; upholstered furniture made from skins and frames that can be taken apart and recycled; and a cafeteria with reusable dishes and utensils, dishwasher, composting bins, a minimum of disposable paper products and no garbage disposal.

The vending machines there don’t offer plastic water bottles or canned drinks. The espresso machine has a paperless filter. A cage in the building’s parking lot holds up to 18 bikes.


Going green hasn’t been 100 percent easy.

Tripwire chose not to apply for certification from the Leadership in Energy and Environmental Design Green Building Rating System because the additional expense wasn’t in the budget.


Despite Salegio’s best efforts, paper cups keep appearing in the lunchroom. And there’s a lot more on her wish list, including dual-flush toilets, light sensors throughout and using more renewable resources for the company’s energy-hogging 3,000-square-foot data center.


But it would have been difficult to have gotten even this far anywhere else, Salegio says. Originally from Chicago, she has shared some of her green lessons with HR colleagues there.


“They all think it’s nice and dandy, but they’d never adopt something like that. It wouldn’t look as right,” she says.


Portland’s green reputation has become a magnet for companies looking to improve their green practices, such as Vidoop. Every one of Vidoop’s 37 employees moved from Tulsa, Oklahoma, to Portland in September after CEO Joel Novell decided the 2-year-old security software company needed to be closer to its primarily West Coast customers.


After a search, Novell and his employees decided Portland matched their lifestyles better than Seattle or San Francisco.


Today, the majority of the company’s employees commute by public transportation, bike or foot, including Novell, who lives within walking distance of the firm’s headquarters in downtown Portland’s Old Town district.


“I had three cars in Oklahoma and I have none now,” he says.


Maybe the biggest testament to Portland’s green scene: Shortly after Vidoop moved, the economy tanked, requiring the company to let nine people go.


To date, none has returned to Oklahoma.


Workforce Management Online, March 2009 —Register Now! 

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Assessment Providers Scoring Well

You won’t hear assessment providers complaining about the recession. These bad times are good for firms that offer Fortune 1,000 and midsize companies the skills tests and behavioral assessments they use to screen job applicants to decide which ones are best suited for a particular position.


And screened they are. As layoffs increase, companies that still have openings are being inundated with résumés from out-of-work job seekers.


“One client opened a sales position and three hours later had 250 applications,” says Russ Becker, a managing partner at Kenexa, an applicant tracking and assessments provider.


Companies like Becker’s client are using assessments to make shorter work of processing all those applications. And in recent times, more are opting for assessments that can be given directly on their Web-based career centers and with the results funneled to an applicant tracking system or talent management suite, according to HR executives, vendor representatives and industry analysts.


As more companies demand assessments that can be integrated into their talent management technology, partnerships are cropping up between vendors of those two products—trends that analysts and HR industry watchers predict will continue and could eventually lead to mergers or acquisitions.


Insiders also predict that in 2009, interest will pick up in simulation-type assessments that use Web-based interactive media, role-playing and even video games to make tests more fun and interesting for job applicants. They also predict that, as with other aspects of their recruiting, companies will look to make assessments an extension of their corporate culture, so job applicants get a glimpse of what it’s like to work there from the get-go. If assessments are engaging enough, industry watchers say, they could turn job seekers—even those who don’t get hired —into loyal fans or possibly customers.


Assessments Gaining Acceptance
 Companies may be giving more assessments now that times are tough, but tests were already gaining a bigger foothold during better days. One reason: Assessments are more plug-and-play than they used to be, making them easier to administer and integrate into a company’s recruiting and talent management applications, according to Charles Handler, an industrial psychologist and proprietor of Rocket-Hire, an assessments consultancy.


Vendors have built on years of collected data to create deeper, more standardized offerings, so “you can be pretty sure that if you pull a sales assessment off the shelf it’ll have some level of accuracy,” he says. Those packaged or semi-packaged solutions generally cost less too, making them more attractive to midmarket companies, which is helping expand the market, Handler says.


As a result, more companies are administering more types of assessments, applying them to a larger universe of job categories and doing it online.


Dollar Tree is a good example. Three years ago, the $4.6 billion Chesapeake, Virginia-based discount store chain began using skills-based assessments to screen job candidates for certain administrative positions, including a corporate help desk that provides IT assistance to the company’s 3,572 stores. After adding assessments, turnover in those positions dropped significantly, says Julie Baldwin, Dollar Tree’s recruiting and placement director, though she wouldn’t specify by how much.


It was enough of an improvement to persuade Dollar Tree to add assessments to screenings for open positions among the company’s 700 corporate and branch-level managers—and put them online. Since July, job seekers can go to a career center on Dollar Tree’s Web site to see what management positions are open, apply online and, if they pass initial screenings, complete any necessary assessments. Those assessments include questions to elicit information on a prospect’s leadership and communications style, among other things, Baldwin says.


That’s gone well too—so well that Dollar Tree is working with Kenexa, its assessments provider, to develop two additional behavioral assessments for management job seekers that could be online in 12 to 18 months, Baldwin says.


In the past several years, more applicant tracking systems and talent management suites have partnered with assessment vendors to make it easier for the products to work together. Talent management vendor Taleo, headquartered in Northern California, signed a deal in November to incorporate assessments from Thomas International into its Taleo Business Edition suite for small and midsize companies. Authoria, the Waltham, Massachusetts, talent management software vendor, began offering an applicant tracking system seeded with competency content from DDI, a leading assessment provider, in January 2008. Roswell, Georgia-based assessments vendor PreVisor has integration deals with 19 applicant tracking system vendors.


Melding assessments into applicant tracking systems and talent management suites isn’t always cut and dried. That has opened the door for systems integrators such as Inscape, a Montreal company that bundles assessments from multiple companies onto one technology platform that works with a variety of applicant tracking and talent management software.


Regis was an early fan of integrating assessments with applicant tracking software. In 2006, the $2.7 billion Minneapolis chain of 13,500 hair salons in 30 countries switched to an Authoria applicant tracking system with built-in assessments. Before that, Regis relied on paper assessments, mailing completed forms to test providers and storing the results in individual paper or electronic files. Going from that disjointed system to an integrated database was “like night and day,” says Cherie Coenen, Regis’ corporate recruiting manager. The upgrade saved money too, with costs for assessments dropping $5, to $65 each, “which adds up if you’re doing 1,000 a year,” Coenen says.


Currently Regis uses assessments for support, management and director/senior manager-level positions at its 800-person corporate office and in the field for area supervisors. Expanding that to the company’s 65,000 full- and part-time stylists is one of Coenen’s goals.


Economy Driving Trends
 Because of the bad economy, HR departments are being asked to do more with less staff, and they’re using technology like Web-based assessments to do it, says Kurt Ballard, PreVisor’s chief marketing officer.


Certain types of assessments are more popular because of the downturn, HR sources say. Companies are looking for top-tier sales representatives to help bump up revenue, and they’re buying behavioral assessments to do a better job of identifying those individuals, according to test vendors. “Helping our customers to find and source better candidates is the No. 1 request we hear,” says Jason Blessing, Taleo’s Business Edition general manager.


In 2009, look for more simulation-based assessments as well as tests that use Flash and other interactive media, test vendors and other sources say. Kenexa is helping one client develop a video game assessment during which job hunters move a game piece as they answer test questions.


“It’s tailored to computer-savvy individuals. That’s not right for everyone, but for their brand it is,” says Becker, the Kenexa managing partner.


As companies merge assessments into talent management suites, experts predict that more of them will use test results to help new hires get up to speed in their jobs more quickly, as well as for training and succession planning. If assessment results indicate someone is management material but lacks skills in certain areas, a hiring manager could use that to tailor a specific course of training for that individual, says Peter Mann, Authoria’s corporate development vice president. “Companies are realizing that candidates outside their four walls and employees should be assessed in a consistent way,” he says.


Workforce Management, January 19, 2009, p. 24-25 — Subscribe Now!

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Planning for Benefits During a Divestiture

When a company spins off part of its business, making sure employees at the new entity keep their health insurance isn’t the first thing executives think about—or the second, third, fourth or maybe even 10th.


But the time does come during a divestiture when executives focus on workforce matters, including deciding things like how the new company will handle employee benefits.


Easy as it is to put off, getting started on the process sooner rather than later can make for a smoother transition for the new company as well as the one doing the divesting, according to HR executives, benefits consultants and other industry watchers.


Setting up HR for a spinoff has become a pressing issue at companies that have announced divestitures since meltdowns on Wall Street and in the retail, auto and real estate industries sent the economy into a tailspin. Experts expect to see even more divestitures in the next few months. “With the capital and credit markets what they are, a deal that started a year ago is a very different deal than today, but we’re still seeing companies spun off, ” says Craig Maloney, leader of Hewitt Associates’ HRO midmarket benefits division.


When it comes to spinoffs, there’s no right way to handle benefits—only the right way for the individual company, experts say. In a worst-case scenario, the divestiture happens quickly and a parent company immediately severs all ties with its former subsidiary, leaving it up to the HR leaders at the new business to make do on their own.


That’s the exception rather than the rule, according to HR executives and benefits consultants. In many cases, a company will keep employees of the spun-off enterprise in their existing benefits program while the fledgling business’s new HR staff hunts for a provider, a transition period that can last up to 12 months.


Outsourcing benefits to specialists such as Hewitt Associates or Fidelity Investments’ Fidelity Human Resources Services is already common at Fortune 1,000 companies, and more midtier businesses are adopting the practice. There’s plenty of reason to think newly spun-off companies of either size will follow in their footsteps, especially if they’re trying to grow quickly, experts say. Spinoffs, like other companies with limited time or HR resources, would rather focus on their core business and let outsourcers deal with back-office issues such as benefits, says Phil Fersht, a research director at AMR Research, the Boston outsourcing researcher. In cases where a spinoff is doing business globally and a small HR department has to manage a workforce scattered around the world, “outsourcing is the only way to do it,” Fersht says.


A divestiture can have a silver lining for the company shedding assets: an opportunity to re-examine an existing benefits program to renegotiate coverage for a newly downsized workforce or, in some cases, look for a different provider, according to the experts.


In the catbird seat
    When media conglomerate E.W. Scripps announced plans to spin off HGTV and its other cable TV and Internet properties into a separate company, HR was involved from the start. A big part of the reason was the Cincinnati-based company’s decision to pick Lisa Knutson, the company’s then-HR operations vice president, to manage both the separation and help design HR operations for the newly formed Scripps Networks Interactive.


E.W. Scripps was already looking into outsourcing some HR functions, including benefits, before the spinoff announcement. Because the company had a self-imposed deadline of nine months to complete the deal, executives decided to continue negotiating, with the understanding that E.W. Scripps would manage a benefits outsourcer relationship for both entities through December 2008. That way, Scripps Networks Interactive’s new HR staff could concentrate on designing benefits for fiscal 2009 “and not worry about getting up to speed on administering benefits for half of a year,” says Knutson, who has since become E.W. Scripps’ senior vice president of HR.


The spinoff had yet to take place when E.W. Scripps selected ADP as its benefits outsourcer, leading the media company to include language in the contract to ensure any divested business units remained covered for up to 36 months after a separation.


Although it made sense for the two companies to work together during a transition period, the demographics of the existing and new companies were very different, with E.W. Scripps’ 7,000 employees generally older and closer to retirement age than Scripps Networks Interactive’s 2,000 mainly Gen X’ers and Gen Y’ers. As a result, the companies are now revamping benefits separately to better meet their individual needs. For its part, E.W. Scripps has introduced a wellness program and started offering employees a health savings account. “It gives them an option of a portable health care account when they leave the company, and it’s a lower-cost model,” Knutson says. “We really encourage it, but SNI didn’t have that burning need.”


Changing benefits to better fit employees’ needs is a good way to make sure they stick around after a divestiture—whether a company is large or small.


When iCIMS, a Hazlet, New Jersey, recruiting software developer, originally spun off from IT staffing business Comrise Technology some years ago, it was a startup with only a handful of workers. At the time, changing benefits wasn’t high on the company’s list of priorities. Once the company’s workforce reached critical mass, though, it made sense to revamp benefits so employees got what they wanted, says John Teehan, HR director at iCIMS. To figure out what that was, Teehan conducted anonymous online surveys and held employee focus groups. Based on the feedback he collected, iCIMS started a vision care plan and switched group life insurance providers to one that offered a higher lifetime benefits cap—$275,000 instead of $50,000. The company also switched 401(k) plans to a provider that offered its 131 employees more investment funds and financial advisor services.


Throughout the process, iCIMS has relied on the same two benefits brokers that its former parent company used. This made sense since the two private companies continue to share the same majority owner, Teehan says.


Growing companies should check in periodically with their benefits provider or broker “because as you grow you might be able to get better deals for yourself,” Teehan says. “When you’ve been with a provider for a period of time, they have experience with you and a sense for what the potential expenses incurred by your employee population are” and may be willing to adjust rates accordingly.


Large companies tend to have highly customized benefits programs, but for reasons of size, time and money, it’s not always practical for a newly spun-off business to offer the same level of customization, says Hewitt Associates’ Maloney. Instead, spinoffs should focus on offering benefits that meet industry best practices, he says.


In planning benefits for a spinoff, HR should be open-minded about options and processes and urge employees who are going to be part of the new company to do likewise, says Maloney. “They may be long-tenured employees of the old company and accustomed to having things a certain way,” he says, “but just because it’s new doesn’t mean it’s bad.”


Workforce Management Online, February 2009 — Register Now!

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When HR IT Goes Bad

If there was ever a good example of a bad HR payroll implementation, it is the unfortunate case of the Los Angeles Unified School District.


    In January 2007, the district flipped the switch on a $95 million system built on SAP software customized by Deloitte Consulting. The system was intended to replace a mishmash of outdated technology with a streamlined system for tracking earnings and issuing paychecks for 95,000 teachers, principals, custodians and other district employees.


    But it was doomed from day one, done in by technology glitches, inaccurate and often conflicting data from the old system, inadequate employee training, and infighting and lack of internal oversight within the district, among other problems.


    The trouble was apparent from the first month the new software went live. Some teachers were underpaid, some overpaid and some had their names completely erased from the system. It took a year and another $37 million in repairs for the school district to work out the kinks. In November 2008, the district and Deloitte settled a dispute over the work, with the contractor agreeing to repay $8.25 million and forgive $7 million to $10 million in unpaid invoices to put the matter to rest.


    The real tragedy, according to HR industry insiders, is how often such HR IT implementation failures occur. While they might not be on the same large scale as the school district’s debacle, instances of payroll and other HR system upgrades gone wrong happen all the time.


    “Depending on the statistics you read, 30 percent to 70 percent of these projects will be late, over budget or don’t deliver the planned scope,” says Michael Krigsman, CEO at Asuret Inc., a Boston IT consultant, and author of the IT Project Failures blog. “It’s huge. It’s a horrible problem.”


    But it is possible to pull off a software upgrade or switch to a different technology provider without the level of problems the Los Angeles Unified School District had, experts say. For that to happen, companies need to plan ahead, put proper management and oversight in place, negotiate wisely, and if the situation warrants, get outside help, they say.


    “The reasons for the problems, generally speaking, are not technical,” Krigsman says. “They’re organizational, political and cultural in nature in almost every case.”


Off to a bad start
   The Los Angeles Unified School District started out on the wrong foot by not having a high-level executive with IT experience dedicated to the project, according to HR IT experts briefed on the situation. According to news accounts, the district’s original point person was a COO with little computer experience. The district’s CIO was involved but quit after disagreeing about the project’s direction. Then the CFO stepped in, but confusion remained over who was in charge.


    In instances where a company doesn’t have appropriate experts on staff, they’re better off working with a third party that can act as their advocate, HR IT consultants and insiders say. Whether that’s a team from one of the major HR consultancies or an advisor who runs her own shop, an advocate can help a customer decide what business problems they need a new system to solve and what the best technology is to do it. Depending on how involved a customer wants a third-party advisor to be, the consultant could help work up a request for proposals, interview prospective technology partners, negotiate a contract and oversee the implementation, according to HR experts.


    Another reason to get help from an outsider: While HR managers may know a lot about the systems they’re already using, they aren’t necessarily experts on all the newer options available in the marketplace, says Scott Showers, an HR technology consultant with Watson Wyatt’s technology administrative services group in Dallas. Too often, corporate execs assume HR “can jump in and start interviewing vendors and move forward and there won’t be issues. That couldn’t be further from the case,” he says.


    Getting an outsider’s opinion can also help a company avoid making unreasonable requests of technology vendors, although “that doesn’t mean they’ll always listen to you,” Showers says.


    If a company works with one of a technology vendors’ preferred system integrators, they may be able to get the vendor to review their implementation plan, says Jacqueline Kuhn, proprietor of a Chicago HR IT systems integrator and former HR IT manager at Office Max. “You bring them in and almost have them bless the plan,” Kuhn says. “They say, ‘Go ahead’ and it’s almost like they have some skin in the game” in the event something goes wrong, she says.


Garbage in, garbage out
   Another thing that tripped up the Los Angeles school district’s new payroll system was bad data. According to news reports, the district’s old payroll databases were riddled with inaccuracies that weren’t resolved before the new system took over. An exceedingly complicated pay structure—much of it negotiated under multiple union contracts—only added to the problem.


    Computer systems are only as good as the data they have to work with, so if a public agency or company starts out with bad information, there’s not much a new system can do about it, HR experts say. Payroll is about the hardest HR system there is, especially for large enterprises or companies with employees in multiple countries that have to accommodate different languages, cultures and government regulations because of it, says Michael Custers, marketing vice president at Northgate/Arinso, whose HR systems integration business works with midsize to Fortune 100 companies.


    Besides that, payroll has to be on time and has to be right, and if it’s not, you hear about it, Custers says. Gary Reece, Northgate/Arinso’s Houston-based U.S. sales lead, tells the story of one 20,000-person company that encountered problems implementing a new system and couldn’t run payroll.


    “The CEO had to hand sign checks, and he made the executive responsible hand-deliver them to the people in town,” Reece says.


    Companies also run into trouble because they select a software application or technology platform based on a presentation by the systems integrator’s A team, only to have the C team do the actual work, Reece says.


    Companies that accept a lowball bid in an effort to save money can also land in hot water. If three vendors say they can do a job for $1 million and the fourth bids $500,000, something in bid No. 4 will be missing, says Kuhn, the Chicago HR systems integrator. “I don’t understand it, but I’ve seen it forever,” she says. “When it comes to work life, people don’t necessarily use the same logic they do at home, and it baffles me.”


    When it comes to negotiating contracts with HR IT vendors, HR managers should draw upon the expertise within their company for help. When she was still at Office Max, Kuhn says she used to let the company’s legal and IT departments hammer out HR IT contracts. They had more experience, and it allowed her to start building relationships with the vendors’ reps with whom she would be working “and not deal with the other noise,” she says.


    Contracts should include incentives for systems integrators and technology vendors to complete a job on time and penalties if they don’t, Krigsman says. Without them, a company and its integrator may be working at cross purposes, with one wanting the job finished as soon as possible and the other looking to drag it out in order to collect a higher fee.


    “Companies need to make sure both the software vendor and system integrator understand their absolute intention that the project be performed on time and within budget,” Krigsman says. On the flip side, “You must make sure your own house is in order as well.”


    Even when everything goes right, HR managers have to have realistic expectations, and expecting a new payroll or other HR IT system to perform perfectly out of the gate isn’t realistic. Says Watson Wyatt’s Showers, “If you expect to buy software and three months later everything will be better, it’ll never happen.”