Author: Samuel Greengard

Over the last few years, Joe Da Via has heard the reengineering mantra repeated more times than he’d care to recall. It’s in the literature, it’s at conferences, and it’s part of the collective psyche of the corporate bean counters. So about a year ago, when the human resources manager began exploring ways to engineer greater efficiency into operations at W.H. Brady Co., a Milwaukee-based manufacturer of identification products such as signs, labels, tapes and software, he saw himself staring down the barrel of a fully loaded project that was going to cost hundreds of thousands of dollars and provide only marginal benefits.

That’s until he discovered the fastest route to HR reengineering was through employee self-service. By deploying interactive voice response (IVR), kiosk and PC-based systems that would allow workers to retrieve and update their own records, choose benefits and make changes to their 401(k) plans, he realized he could crumple many of the inefficiencies of telephones, paper and pencils. As a result, the company, which racked up $315 million in sales in 1995 and has 2,400 employees worldwide, could slash a couple hundred thousand dollars a year from its HR budget alone. More importantly, “It puts the responsibility for data where it should reside, in the employee’s hands. And that allows human resources to become much more of a strategic player in the organization,” he explains.

End the paper trail.
Employee self-service is more than a trend. It’s one of the most significant changes sweeping through the corporate world. And few departments are as big a beneficiary as human resources. Although the idea of employee self-service has existed for more than a decade—interactive voice-response systems and kiosks have allowed employees to take ownership of their own data—the technology now is ushering in a wide range of self-service applications, including open enrollment and benefits plan selection, internal job placement and skills inventories. Sophisticated client/ server computing systems and the emergence of corporate intranets are further automating workflow and driving fundamental changes within human resources departments. They’re eliminating the need to print material and field an endless stream of phone calls.

At W.H. Brady, for example, there’s no longer a need to hire entry-level HR personnel to handle administrative and clerical duties. Computers eliminate virtually all the paperwork. When the department does hire new employees, says Da Via, they’re mid-career professionals who can provide analytical and consulting expertise—”people who are better equipped to find solutions and create greater efficiencies.” The net result? An HR department that’s shrinking by five to 10 employees a year, while playing a growing role in corporate affairs.

The story is much the same at thousands of other companies. “A lot of organizations suddenly are realizing that employee self-service can pay huge dividends, and that it’s a higher priority than outsourcing, reengineering or installing new HRMS systems,” says Joel Lapointe, Chairman and founder of ESSENSE Systems Inc. of Peabody, Massachusetts, a pioneer and leading vendor in the self-service arena. The reason is simple: “Self-service technology can automatically drive changes in these other areas and directly lead to improvements,” he says.

The popularity of self-service isn’t difficult to understand. Because employees control approximately 70% of HR data—names, addresses, dependents, benefits selections and 401(k) selections, to name a few—it clearly makes sense to shift the responsibility for maintaining accurate records to them. After all, who knows better than an employee how to spell a child’s name or enter a new address? Self-service also is valuable for handling basic queries, often referred to as FAQs (frequently asked questions). But these days with so many choices, choosing the right mix of technologies is no simple task. “The system must be accessible to employees, be easy to use, and it has to work as advertised. Without the proper hardware, software and implementation, the entire system can become cumbersome and frustrating to use. It can create problems instead of eliminating them,” says Debby Love-Sudduth, a Santa Clara, California-based consultant for the Hunter Group, which helps companies sort through the maze of self-service technologies.

Employees make their own choices.
The upsurge of this self-service movement can be traced to the mid-1980s. That’s when the first generation of IVRs hit the business world. By pushing buttons on a touch-tone phone, an employee could suddenly make choices about how to invest in a company’s stock-ownership plan or choose insurance benefits. The same employee could find out how many vacation or sick days were available. Over the years, IVRs have become increasingly popular… and sophisticated. In some cases, corporations now link employees directly to an HMO or mutual-fund provider. In such instances, it’s possible to shift money between funds and change the contribution percentage by punching numbers on the telephone keypad. It’s instant, there’s no human intervention, and such a system usually is available nights and weekends.

But IVRs have a couple of glaring drawbacks. First, they’re slow—a user must listen to a variety of menu options before making a single choice. Second, it’s excruciatingly difficult to spell words and input alpha data on a telephone keypad—a problem that’s magnified for those using rotary dial phones.

One alternative to IVR is the kiosk, a networked PC that frequently offers touch-screen capabilities. It can be placed in a lobby, warehouse or factory floor. Using specialized software or a Web browser, it allows users to see the information they’re inputting, and even view reports and print them out. A change of name or address is easy—especially if a keyboard metaphor is provided. And reviewing benefit selections, payment information, a company handbook and even companywide job openings is simple. “If it’s a well-designed system, it requires no training on the part of users. They simply walk up and begin using it to make changes or check on information,” says Deb Edlund, brand manager for human resources at Lawson Software, a Minneapolis company that markets self-service applications.

Leapfrog to intranets.
Because they’re easy to use, kiosks have skyrocketed in popularity in recent years. Nevertheless, many companies have recently opted to leapfrog kiosks altogether or supplement them with direct PC access. In some cases, that translates into electronic forms and e-mail self-service through programs like Lotus Notes and Microsoft Mail . However, many are now turning to intranet solutions that use Web browsers such as Netscape Navigator or Microsoft Internet Explorer . That makes navigation graphical and simple.

The big advantage to a corporate intranet is that it’s easy to use, yet powerful. Since the Web browser is platform independent—it can run on PCs or UNIX or Macintosh operating systems—there’s no problem sharing data across networks, including the Internet. Desktop access also provides access to records and data, any time and from almost anywhere—assuming that a company offers dial-up access. In fact, some vendors are beginning to offer links to third-party insurance and mutual-fund providers.

The emergence of corporate networks and intranets also is fueling new ideas about what types of self-service options to offer. Skadden, Arps, a New York City-based law firm with 3,500 employees worldwide, isn’t only offering employees the ability to check personalized benefits information and update their records, it’s venturing into the world of online directories and handbooks, applicant tracking and electronic pay stubs for direct deposits. More than 90% of the firm’s employees, mostly attorneys, have access to the company’s intranet through desktop PCs. Others can tap various HR functions through dedicated workstations in common areas. “We’re concentrating on improving the workflow and using staff to counsel and audit,” says Angie Sorscher, the company’s payroll manager.

At Eli Lilly and Company, an Indianapolis producer of pharmaceutical products, the self-service concept includes an internal staffing component. Using IVR and the company’s computer networks—including Internet access—employees can surf through available jobs before they’re offered to the outside world. According to Paul Johnson, the company’s executive director of human resources, the immediate access offers a number of distinct advantages. Not only can employees locate open positions more quickly and efficiently, they’re able to see what skills they need to move up in the organization. By reading online job descriptions and maintaining their own online resumes, they can focus their efforts on specific jobs or categories.

For the company, the system is reducing costs associated with hiring new employees, and helping Lilly fill open positions with more highly qualified personnel than ever before. “It makes it easier to find the right person for the right job,” says Johnson. “From an employer’s perspective, it generates a far more diverse candidate pool and ensures that managers aren’t overlooking the best person for the job.”

Zero in on the right mix of technologies and solutions.
Despite its advanced capabilities, an intranet can’t help those who work on a shop floor or drive a truck and have no access to a PC. A kiosk is essentially useless for those working in remote locations or retirees who no longer frequent the premises. And an IVR is too slow and cumbersome for many applications. Even if a company installs a system, it’s no guarantee that employees are going to use it. “There’s no single technology that suits all employees. It’s important to find the right mix,” says Jonathan D. Miller, chief operating officer at Interactive Corporate Communications Inc., an intranet software vendor headquartered in White Plains, New York. Adds ESSENSE System’s Lapointe: “Each media has its strengths and weaknesses. You also have to deal with varying levels of computer literacy.”

At present, the Hunter Group estimates that approximately 5% of companies use kiosks, 15% rely on interactive voice-response systems, 20% have turned to intranets and 50% use their own e-mail or electronic forms. However, Love-Sudduth notes the use of intranets is increasing while e-mail and electronic forms systems are losing favor, partly because of compatibility problems that can clog workflow and produce greater redundancy. “You want 100% assurance that data is going to get to where it’s directed. Frequently, if you have duplicate names or nonstandard e-mail addresses and formats, you can wind up with problems.” What’s more, she argues that an intranet is far more intuitive—a fact that usually translates to lower training and administrative costs.

In fact, advancements in intranet/Internet technology—including tighter security—are making it a more attractive option all the time. Whether employees view data off a kiosk or a Web browser, new plug-ins that integrate seamlessly with Netscape Navigator and Microsoft Internet Explore rare opening the door to a universe of new capabilities. ICC’s Miller notes that programs like Quicktime and Real Audio allow users to access video and audio on demand. And the use of Jav programming language on client PCs brings greater intelligence to the entire process. For example, a program can instantly inform a user when he or she makes an error while filling out an electronic form. And once a particular type of medical insurance is requested, the form will automatically offer only the relevant information and ask the appropriate questions. “It’s becoming far more sophisticated and automated,” says Miller.

Whatever approach an HR department takes, Love-Sudduth believes that one of the keys to success is to ensure that a solid workflow application is installed on the front end—so that data is routed efficiently. That means establishing a standard set of business rules that are stored in a central repository. “Employees don’t care what’s on the back end and how the information is pulled out of databases,” she notes. “The whole idea is to make it so simple to use that people get the information they need, and that data is getting routed back to the proper database with little or no intervention on the part of the human resources department.”

However, automating processes doesn’t necessarily translate to cost and time savings—even if it’s under the banner of self-service. Says Lapointe: “If you use electronic forms but fail to take work out of the flow, you’ve only muddled the process. If you develop a correction and approval loop, then you haven’t reengineered any work. In fact, you may have actually added work to the entire process. Self-service is about streamlining and eliminating inefficiencies. When that takes place, everyone prospers.”

Self-service pays dividends.
Not surprisingly, the cost of installing the hardware and software for employee self-service can vary wildly, depending on the scope and complexity of a company’s needs. Interactive voice-response systems are available for $50,000, although third-party providers increasingly are offering IVR services at no additional cost. And many companies are able to purchase integrated solutions or build a self-service component atop existing HRMS systems at minimal expense. A packaged solution can typically run anywhere from $10 to $100 per employee—or in the neighborhood of $150,000 for a complete package. Custom solutions easily can double the tab. Kiosks generally cost $3,000 to $10,000 each. And, for companies that opt for an intranet, the cost of licensing Web browsers can range from free to $30 a copy. Of course, many companies already have PCs and browsers on every desktop and can add intranet capabilities at virtually no additional cost.

The payback for self-service can be startlingly fast. W.H. Brady has recovered the cost of its system in less than a year. At the current clip, the HR department will slash more than $1 million in labor, printing and telephone costs over the next five years. At Advanced Network & Services Inc., an Armonk, New York, not-for-profit company that promotes education through high performance computer networks, CFO Bob Harris estimates it will take about two years to fully recover the cost of the organization’s investment in hardware and software. But he points out that Advanced Network’s intranet—accessible inside the company and as a dial-up from outside—offers many intangibles that are difficult to measure in dollars and cents. “Employees know they can get information quickly and easily. The intranet also frees up HR to get involved in issues and problems that are crucial for the growth of the organization,” he says.

Experts caution that employee self-service isn’t a replacement for all human contact. Although employee acceptance of the self-service concept has exceeded all expectations, Lapointe notes that few things irk users more than not being able to reach a customer-service or HR representative when necessary. He also argues it’s essential to promote new programs and raise awareness through constant marketing.

Concerns notwithstanding, it’s clear that employee self-service is changing the face of human resources. Nearly all Fortune 1000 companies already have installed self-service systems or plan to in the months ahead. “The future,” says Miller, “is linking more and more types of information and putting data ownership in the hands of those who ultimately are responsible for it. There’s no reason why human resources must serve as a middleman. Employee self-service gets HR out of the administrative shuffle.”

Computer-based training and reference:
CBT allows learning to take place at the desktop, on demand, without the expense and delay of travel.

Testing software:
Provides the means for learners to self-assess their progress or mastery, for instructors to ensure a “level playing field,” and for management to measure training effectiveness. Testing software can be provided via generic testing packages, or built into other computer-based training systems.

Electronic performance support tools:
The performance support point of view states that rather than attempting to fill people up with knowledge and skills and then put them to work, companies should instead put them on tasks much sooner and provide the supports that allow them to perform while they develop personal competency. Performance support “tools” are task-focused and modest in scope, but big in impact.

Electronic performance support systems:
Like “tools,” only bigger. Performance support systems apply the performance support point of view to major, mainstream business computer systems for customer service, sales, etc. By building coaching and reference support directly into the software application, employees have all the assistance and information they need while doing their jobs. The best systems can actually detect when employees make mistakes and give them immediate feedback and suggestions.

Distance learning:
In addition to satellite broadcast, many other approaches to long-distance learning have emerged recently. Most significant among these is the World Wide Web and its corporate “Intranet” sites.

Interactive direct broadcast television:
There’s nothing better than direct broadcast to reach a large, dispersed audience in a short time. But for training purposes, the approach has suffered by not interactively engaging participants. Using a remote-response keypad system of individual keypads and microphones, such as One-Touch, changes all that. Now, when an instructor asks a question, everyone has the opportunity to answer it.

SOURCE: Prepared with the assistance of Stanley E. Malcolm, founder of Performance Vision, Marlborough, Connecticut.

Electronic mail has changed the workplace in more ways than almost anyone could have imagined just a decade ago. Today, information is zapped from one computer terminal to another instantaneously—creating a digital trail of conversations, thoughts and ideas. As with any technological revolution, society’s ability to adapt to this new tool has lagged. Although 80% of all organizations communicate and share business information via e-mail, only 36% have policies addressing proper e-mail usage. More disturbing is the fact that only 34% have written workplace privacy policies. That’s the finding of a recently released survey conducted by the Society for Human Resource Management (SHRM).

“Many organizations are unsure how to address privacy and technology concerns without interfering with the tremendous benefits of a tool such as e-mail—increased efficiency, teamwork and flexibility,” says Michael R. Losey, president of SHRM. But this laissez-faire approach can land an organization in serious trouble. In many cases, workers are confused about what is acceptable behavior and what isn’t, as well as what their boss considers acceptable for requesting information and carrying on business. Is informal networking with an associate through e-mail deemed personal or professional? Is an occasional message to a friend or family member verboten?

“While employers believe they have the right to access e-mail messages, employees tend to believe their communications are private,” writes Jeffrey A. Van Doren, a Pittsburgh-based labor and employment law attorney in a recent issue of HR News. “Implementing an e-mail policy can go a long way toward clarifying who legally owns and has the right to access and review e-mail system messages in the workplace.” Indeed, a growing number of employees who feel their rights have been violated are taking such cases to court. And although the overwhelming majority of decisions have come down in favor of the company, the cost of defending such actions can be expensive, he asserts.

That’s why DHL Systems, a Burlingame, California-based technology service company that’s part of DHL Worldwide Express, decided to formulate a policy nearly one year ago. “We felt it was important that everyone knows exactly what the rules are. The idea was to be upfront and honest about what behavior is acceptable and what isn’t,” says Linda Giusti, human resources manager for the company. So, she and the firm’s HR director and legal counsel, Margaret Phillips, began scanning articles, case law, legal memos and other companies’ policies to glean ideas and ensure they weren’t missing anything.

After several weeks of research, they created a draft policy. Then they asked staffers for feedback and additional ideas on creating a policy that would be realistic and fair. “That was a crucial step,” says Phillips. “Having everyone’s comments up front meant we could act proactively rather than reactively. It helped us deal with issues before they became problems.” At the same time, the company had internal experts in HR, finance, legal and technology review the document to ensure it was accurate and would work. The final result? A single-page document that concisely spells out the organization’s policies governing e-mail and online access—a policy that borrowed on other companies’ experience but meshed with DHL Systems’ own culture.

DHL Systems is an example of how a company can generate a policy so that everyone wins. It spells out that the company’s e-mail isn’t to be used for “communications of a discriminatory or harassing nature, or for obscene” messages or chain letters. It notes that occasional nonbusiness use is acceptable, but “employees may not abuse the privilege for any significant amount of personal business or pleasure.” And it clearly states that information created on company computers is generally considered private, although the company reserves the right to review electronic files and messages “to ensure that these media are being used in compliance with the law and with company policy.” Other parts of the document cover hacking into other employee’s files and protecting confidential information when sending e-mail to outsiders or posting it online.

That’s a good start. But as Don Harris, manager of HR systems for the New York Times Co. and chair of the International Human Resources Information Management Association puts it: “Companies get into problems not only because of a lack of policy, but also due to poor policy implementation. It’s crucial to follow the guidelines.” His committee is working to develop a set of professional guidelines for the use and protection of HR information in computers and other forms of electronic media. But, “ultimately, it’s people who protect information, not policies. That’s why people must understand policies and take responsibility for them,” he says.

Amid all the discussion about respecting employees rights, it’s important to remember that e-mail and other forms of online communication can pose a serious security risk. Even ardent privacy advocates agree that electronic communication provides an easy way for a disgruntled worker to zap information to himself or a friend outside of the company. The bottom line? “It’s important to strike a balance. If you suspect there’s a problem, it’s a good idea to monitor an employee. But randomly monitoring e-mail just to see what’s going on can lead to enormous problems,” says Laura Pincus, director of the Institute for Business and Professional Ethics at DePaul University.

Less expensive? Software driven? Separate fact from fiction.

1. Client/server is less expensive to operate than a mainframe.
Probably not. Some companies are able to save money with a client/server system, but don’t bet on it. Although hardware costs are sometimes lower, software, troubleshooting and training often make client/server architecture 20% to 30% more expensive in actual technology costs. However, client/server can generate enormous long-term gains in productivity and revenue.

2. The client/server environment is easier to use for the end user.
True. A graphical user interface such as Windows combined with user-friendly software eliminates arcane codes and highly structured work patterns tied to mainframes. It’s important to choose well-integrated software solutions, however. An added bonus: training costs should drop over time as employees learn to use the system.

3. Reengineering is an automatic outcome of client/server architecture.
False. Client/server provides many of the basic tools for redesigning work and business processes, but it doesn’t happen automatically. Most companies find that teams or committees must study the technology and internal processes to find new ways to get work done more efficiently.

4. Application software drives a client/server system.
False. There’s no question that software is a key component, but client/server is an incredibly complex mix of technologies. Not only must the network be configured efficiently, it’s crucial to have solid servers, PCs optimized for the environment, a highly compatible relational database and solid applications running on the desktop. Bottom line? “Processes must be aligned with the infrastructure,” says James Greene, a market strategy consultant at Summit Strategy Inc. in Newbury, Massachusetts.

5. It’s important to make client/server decisions based on the needs of the enterprise.
True. It’s easy and tempting to service the squeaky wheel of an individual fiefdom or LAN. Fact is, it’s nearly impossible to negotiate companywide standards on a case-by-case basis, explains Sidney Diamond, a Stevenson, Maryland-based consultant. Likewise, it’s crucial to control computing platforms, operating systems, software and training. It’s certainly possible to mix and match components, but it must fit into an overall plan. Think long term.

6. Human resources is at the vanguard of the client/server movement.
True. Because of the transactional nature of many HR tasks, human resources can benefit greatly from the technology. And, make no mistake, HR is among the first to adopt many client/server applications, including scanning, imaging, interactive voice response, kiosks and workflow technology.

7. Peer-to-peer networking spells death for client/server.
True. Well, someday anyway. But then, the universe may eventually end, too. Client/server will be around for years, although it’s just beginning to evolve into a mature computing environment and may, or may not, be applied to HR computing needs. So called peer-to-peer networking—which spreads processing power and data throughout the organization over many PCs—has advantages in certain businesses and industries, but also presents many problems and is still experimental.

Many breaches in privacy and confidentiality occur because companies haven’t established adequate security measures or they’re simply careless. A formal policy that outlines practices and expectations is a good start, but according to experts, such as Claudia Terrazas, an attorney at the Privacy Right Clearinghouse at the University of California, San Diego’s Center for Public Interest Law, “It’s important to think through all sorts of situations and realize how easy it is for information to leak out.”

One of the most common ways highly confidential information winds up in the wrong hands is that key documents aren’t shredded when they’re thrown away. Attorneys, insurance companies and others routinely hire “dumpster divers” to sift through mountains of paperwork and find key documents about employees whose cases they’re involved with. Thieves also comb through trash to find Social Security numbers and financial records that can be used to fraudulently obtain credit cards and loans in someone else’s name. And it isn’t just paper-based documents that are a threat. Diskettes, data storage tapes and other forms of magnetic and optical media are just as big a threat. In many instances, it’s necessary to completely demagnetize or reformat a disk to expunge the data.

Faxes, telephones and voicemail also pose a threat. If the recipient doesn’t have private access to messages, it’s possible that others will see or hear them. The Privacy Rights Clearinghouse suggests that anyone sending sensitive data determine if it’s acceptable to leave a message on a person’s answering machine or fax, verify the accuracy of the phone number and then check transmission reports—or better yet check with the recipient—to ensure the information was received. Cellular and cordless telephones require extra care because anyone with a radio scanner can listen in.

Record keeping is another troublesome area. Two-thirds of all companies use Social Security numbers to identify employees. All too often, the number is also displayed on time cards, parking permits, employee rosters and even mailing labels. But, “Social Security numbers are extremely sensitive, because they can be used for financial fraud and other invasions of privacy,” says Don Harris, manager of HR Systems for the New York Times Co. and chair of the International Human Resources Information Management Association.

Harris also points out that employees sometimes pass out private information unwittingly. “If there’s an illness or a holiday card list, home addresses and phone numbers may be circulated without checking with the individuals involved. The intent is positive, but someone might perceive it as an invasion of his or her privacy. There’s also the possibility that someone outside the organization could get their hands on the information. In many cases, if someone perceives it’s an invasion of privacy then their privacy has been invaded.”

The idea of creating an automated, paperless office has always been alluring. The problem is, however, every time someone figures out a way to eliminate a piece of paper, everyone else manages to generate a dozen more. Every time an efficiency expert discovers a way to streamline a process, three or four other processes are thrown out of sync. Yesterday’s vision of office utopia has become today’s computerized quagmire.

But that’s changing. Thanks to client/server architecture, innovative new software and a convergence of peripheral technologies—including scanning, desktop video and online communication—office automation is fast becoming a reality. And nobody is leading the charge more than Pleasanton, California-based software producer PeopleSoft, which, with the help of San Ramon, California-based Ramos & Associates (workflow automation specialists), has established the noble, though some might say foolhardy, goal of establishing the world’s first paperless office within its own human resources department. The underlying idea, of course, is to showcase the company’s own products and boost sales.

PeopleSoft’s client/server system allows employees to use interactive voice response (IVR) for benefits enrollment and records updates. Later this year, employees will make all their changes online, using PCs in the office or at home. It has created online directories, handbooks and booklets—including a Lotus Notes database that offers an up-to-the-minute list of primary-care physicians, dentists and other professionals. Benefits statements, including an employee’s 401(k) balance, can be requested through another IVR system, and is sent automatically via e-mail.

The Lotus Notes network also offers links to sundry mutual-fund providers. Once inside the company’s web site, it’s simple to view a prospectus or Morningstar reports on various funds. Employees can even view a video clip of the fund manager discussing his or her investment philosophy. And employees who participate in the firm’s employee stock-purchase plan can enroll electronically using a Lotus Notes form that automatically links to brokerage firm Charles Schwab.

Managing benefits is only part of the picture, however. Sophisticated workflow technology routes promotions, salary increases, transfers and other forms through the organization to the proper managers for approval. As one person signs off, it’s routed to the next. If anyone forgets to process a document, a smart agent issues reminders until the task is completed. Training materials—including video—are almost entirely online, and all payroll checks are distributed electronically.

But the company’s hiring process may be the most futuristic aspect of all. Applications sent via the World Wide Web or fax are automatically deposited into a database; those submitted on paper are scanned into the computer and plugged into the same database. Once a hiring manager has selected an applicant for an interview, the system phones that person and asks him or her to select an interview time by punching buttons on a touch-tone phone. At the end of the call, the client/server database notifies the interviewers of the appointment, and even offers a reminder the day of the interview. It’s all handled without human interaction. And an orientation program for new hires works much the same way.

“This is a showcase, not so much for technology, but practical, pragmatic business solutions,” says Steve Zarate, PeopleSoft’s chief information officer. “We want to blow away underlying assumptions and show how far it’s possible to go in a well-managed client/server environment. By creating a paperless office, we’re forcing people to think outside the box.” So far, it seems to be working. The firm, with 1,500 employees in 14 countries, has realized clear-cut gains. While the average company has about one human resources staffer for every 50 employees, it’s supporting a ratio of 1:110. That already translates into millions of dollars a year in payroll savings. And by the year 2000, when it expects to be completely paperless, the company wants to boast an HR-to-employee ratio of 1:500. “Client/server is driving incredible change. It’s bringing tremendous power to the desktop,” says Zarate.

In recent years, the datamining gold rush has reached frenzied proportions. Hundreds of companies now collect data on individuals, and then pass that information on to other database companies and employers interested in finding out who they might be hiring. Problem is, it’s often fool’s gold, because a lot of data is old, inaccurate or just plain wrong. And that takes an onerous tone if you consider that a report might include information on everything from liens to criminal convictions.

It’s not difficult to understand why nearly half of all credit reports contain mistakes, and why the Federal Trade Commission reports more complaints about the accuracy of credit reports than any other consumer issue. Although information is distributed digitally, someone must manually type the information into the system. That is where the majority of the problems lie. A clerk who inverts two digits on a Social Security number or enters the wrong middle initial can unwittingly merge the records of two different people and generate a trail of misinformation. “A person’s life can easily be ruined. They may not be able to get a job,” says Evan Hendrix, publisher of Privacy Times newsletter.

How can an HR department ensure data is accurate and that it isn’t opening the door for a lawsuit? First of all, Hendrix suggests that a human resources department obtain as much information as possible directly from the applicant and then let that individual know the company conducts background checks. “Be open and upfront about what you need and what you’re going to check,” he suggests. “If someone chooses not to participate in the process, he or she can say so and not have to feel as though his or her privacy has been invaded.”

Another option, says Hendrix, is to let an applicant obtain a credit report on his or her own, and then forward it to the company. That way, if there’s an error, the applicant can attach a note of explanation and the matter can be investigated further. As an alternative, a growing number of companies are showing credit reports and background checks to applicants who are turned down. Again, if there’s an error that might sway the hiring manager to reconsider, the issue can be resolved without conflict. “The main thing,” says Shreveport, Louisiana-based privacy infringement attorney David Szwak, “is to be honest and upfront about what you’re checking and make sure the applicant has an opportunity to correct mistakes.”

Finally, it’s crucial to use only the information that’s relevant. That sounds simple enough, but many companies don’t follow the rule. That means turning to a motor vehicle check or credit report only if it applies to the position an applicant is seeking. That means avoiding other data—perhaps on a tax lien or a divorce settlement—that has no bearing on the position. Says Szwak: “It’s important to think about whether you’re solving a problem or creating a bigger one by gathering information about a potential hire.”

When Deputy Chief David Gascon talks about the Los Angeles Police Department, you get the idea he wouldn’t mind returning to the less-fettered days of Adam 12 or Dragnet. It was an era when officers were respected and the bad guys were easy to identify; a time before Rodney King, the L.A. riots, O.J. Simpson, Mark Fuhrman and even the actions of Police Chief Willie Williams began to raise ethical questions and erode morale. “Beleaguered” may not be a strong enough word to describe the department that has been broadsided by an ongoing array of problems throughout the 1990s. It’s one thing to become the world’s most famous law enforcement agency, and it’s another to become the most famous and most reviled.

Gascon, a 25-year veteran of the department and a deputy chief who oversees the human resources bureau, knows no amount of dreaming will ever return things to the nostalgic days of yesteryear. He knows the LAPD is caught in an enormous cross-fire between the public, the media, the courts, and a city and nation undergoing profound changes. “The department must adapt,” he says with a sense of urgency and resignation. “We must always find ways to continue to improve.”

Today, the LAPD is trying to reinvent and refashion itself to boldly march into new territory. During the last several months, the department of more than 10,000 has stepped up recruiting, tightened hiring practices and provided more training for officers. It has tried to slash bureaucracy and boost productivity—while making a far greater effort to sensitize itself to the needs of the community and its own officers. It’s working to become less tolerant of racism and sexism, and it’s attempting to boost morale and stem a hemorrhage of officers fleeing the force. Amid all the turmoil, one thing is clear: The city’s future rides on its ability to change and adopt successful human resources practices.

Move to adopt corporate HR standards.
Whether it’s succeeding with those changes—and whether the new practices are enough to turn things around—depends on one’s perspective. The department certainly has its fair share of critics, many of whom claim it isn’t doing enough to change its stodgy thinking. And its actions over the last few years have certainly done little to dissuade such sentiment. “The department is mired in a paramilitary mindset that doesn’t work in today’s world,” remarks Carol Sobel, senior staff counsel for the American Civil Liberties Union, which has filed a class action suit against the LAPD charging sexual discrimination.

States Rabbi Gary Greenebaum, former president of the Los Angeles Board of Police Commissioners: “The department can claim the press and politicians beat it up, it can claim the public doesn’t understand, but incidents continue to happen.” Greenebaum says he would like to see the organization subject to the same HR standards as any major corporation. “Most of the people who hold top positions don’t have any real training. They’re running things by the seat of their pants. They aren’t career human resources professionals—they’re cops who have been promoted.”

Make no mistake, the force has endured a persistent battering by the press, politicians and the public, all of whom have questioned its commitment to eliminating racism, sexism and a litany of other nagging issues. But for Gascon, 46, who took over the HR helm in October of 1994, the focus remains forward and the outlook remains up. “The department has always been a command-and-control structure. There has always been a thick hierarchy,” he says. “But this isn’t the same police department it was in the past. We’ve changed and we’ll continue to change as it’s appropriate. We’re working hard to enhance officers’ skills, build a department that’s cohesive and strong, and remain true to our mission: to help people and prevent crime. There’s a lot of issues to tackle, but there’s also an incredible opportunity.”

Learn from the past.
If the events of the last few years have taught the LAPD’s top brass anything, it’s that the force must undergo change. The department’s public lashing over the Rodney King beating and the clear embarrassment it suffered at the hands of Mark Fuhrman during the O.J. Simpson trial have signaled a need to deal with officers who harbor racist attitudes and adhere to less-than-professional standards. As Rabbi Greenebaum, puts it: “The recent problems raise serious questions about hiring, screening, training, retraining and many other practices. Although the LAPD has a core of officers who are dedicated and professional, it’s very much in disarray.”

One of the department’s toughest challenges has been to hire enough officers to maintain adequate staffing—a problem that transcends morale. A decade ago, LAPD officers were among the highest paid in California. Not anymore. According to a 1993 survey conducted by the Los Angeles Police Protective League, the department ranked 78th statewide out of 100 law enforcement agencies. In fact, LAPD officers typically earn 10% to 20% less than their counterparts in surrounding communities. Consider this: The maximum tenured salary for an LAPD officer, with benefits, is $45,431 a year. A few miles away in Glendale, a community with only 190,000 residents, officers top out at $56,700. “That has put us at a tremendous disadvantage for recruiting and keeping officers,” states Gascon.

Help is on the way, though it might be too little too late. A $43 million federal grant is providing funding for 643 new officers on top of the current 8,622 (the LAPD also employs 2,842 civilians). But continuing high turnover has made that task difficult, to say the least. Many officers simply find better working conditions and higher pay elsewhere. In fiscal year 1994-95, for example, 486 officers left the force, a whopping 110 more than the year before. Even more disturbing: 140 of the cops were below retirement age. “We’re trying to increase the LAPD’s numbers to a higher level than ever before at a time when we’re coping with negative publicity and attrition. Officer morale isn’t what it should be,” admits Dan Schatz, commanding officer of the Los Angeles Police Department’s personnel division.

Marketing the force.
Human resources is attempting to combat the recruitment problem with new strategies. It has begun recruiting aggressively and using techniques that might have once been considered wacky. Instead of limiting the search for new officers to job expos, football games and ex-military personnel, it now makes the rounds at universities, community events, ethnic gatherings, gay parades, even hot-air-balloon festivals and concerts. It also has begun raiding other police departments, landing trained officers who don’t need to learn police work from the ground up. “We’ve taken the position there’s nothing beyond the reach of the LAPD’s recruitment efforts,” says Gascon. The department also has put together a series of commercials that now appear on late-night local television.

Attracting large numbers of recruits is a start, especially if one considers less than 5% manage to graduate from the academy and hit the streets. That works out to recruiting 1,200 to 1,500 applicants to fill a class of 80 at the academy. But even successful recruiting doesn’t eliminate many of the nagging problems the department has endured. For instance, a 1981 federal consent decree mandates local law enforcement agencies hire according to the ethnic and gender composition of their communities. The LAPD, along with many police departments, has scrambled to raise the numbers to acceptable levels.

The department largely has succeeded in reaching federal standards—only 40% of new recruits are white males compared to more than double that number three decades ago. Today, Hispanics account for 27% of the force, 15% of it are African Americans and 4% are Asians. However, the City of Los Angeles wants the department to boost the hiring of female officers to match the levels of the county workforce. That would push the number of women up from the current 25% to more than 43%. But finding qualified female applicants who are interested in police work and who are able to pass stringent physical tests has proven vexing, says Gascon. Women, perhaps because of social and cultural issues, still don’t seek careers in law enforcement with the same interest level as men.

Another sticking point has been the applicant-screening process itself. Critics contend that the LAPD’s background checks and psychological screening haven’t done a good enough job in pinpointing potential problems. More emphasis needs to be placed on ferreting out racists and sexists before they’re ever handed a badge, they say. “Mark Fuhrman isn’t an isolated phenomenon,” says Sobel. “Although the problem isn’t as great as it was 10 years ago, there still are too many bad apples finding their way into the LAPD.” Fuhrman, of course, was the lead detective responsible for collecting evidence at the Simpson estate after the murders of Nicole Brown Simpson and Ronald Goldman two years ago. He gained particular notoriety after recordings of racist remarks he had made were played during O.J. Simpson’s trial.

Commanding Officer Schatz admits the LAPD’s selection practices aren’t perfect, and that a partial revamp has taken place as a result of the Mark Fuhrman incident. (The LAPD also works with the City of Los Angeles to handle personnel matters relating to hiring, such as overseeing the process.) Moreover, the department is asking tougher questions and probing more thoroughly into applicants’ backgrounds than ever before. In addition to a written exam, interview and various medical/psychological tests, candidates must pass a background investigation that includes an examination of work history, financial records and personal references. Candidates can be disqualified for any racist, sexist or homophobic comments or behavior. (See “Are You Well Armed to Screen Applicants?” in Personnel Journal’s December 1995 issue.) “The bottom line is you can look around the country and see the fallout when stringent hiring practices aren’t in place. Departments that have lowered their standards have found themselves in a lot of trouble,” he says. In fact, the Chicago Police Department recently faced the public humiliation of discovering gang members on the force, while the Miami Police Department found it had hired several ex-felons—some with drug convictions.

Adds Gascon, who has faith in the basic integrity of the system: “We don’t want anyone on this force who shows a lack of tolerance for anyone else, and we don’t want anyone who displays a propensity toward violence. Still, no matter how carefully you check, a few individuals who harbor racist or sexist views are going to sneak through. There’s no perfect system. Some people are very adept at concealing the truth.”

The LAPD seems to be responding. In fact, some say the effort to tighten hiring practices has gone too far and that the department is now overreacting. In February, the Los Angeles Times chronicled a story of a candidate, Randy Mehringer, who finished third in his academy class, volunteered 2,000 hours as a reserve officer, and earned praise in the police union’s newsletter and a guest spot on the television show Cops. But after making a racial joke about the Million Man March and later admitting it during a background interview for the LAPD, he was told he didn’t meet the department’s standards for “respect for others.” The decision was questioned by many, including a deputy mayor and city councilwoman, who openly wondered whether the police department was setting unrealistic standards and focusing on a single incident at the expense of a candidate’s history.

What all this points out, of course, is just how sensitive the issues of diversity and race are in Los Angeles. In a community in which more than 50% of the population now is Hispanic, Asian, African American and other minorities, the bar clearly has been raised to greater heights—and the LAPD is now trying to leap over the hurdle. It’s all complicated by the department’s long and festering history with minorities, who have accused it of harassment and unequal protection and enforcement. Although the LAPD has deployed officers who speak Spanish, Korean, Chinese and other languages into the field, critics contend the department still hasn’t adapted to the community’s needs and requirements.

Good cops, bad cops.
Whether the LAPD’s personnel problems are a hiccup or a full-blown epidemic depends on who one talks to. Critics like Sobel argue that despite the department’s public stance of adopting a zero-tolerance policy toward bad officers, too many problem officers remain. She’s able to rattle off a list of lawsuits now directed at the department. Former Police Commission President Greenebaum echoes the sentiment. “Saying the force has a zero-tolerance policy doesn’t eliminate the problem. There must be greater accountability and a greater willingness to discipline than presently exists.”

Indeed, one of the loudest criticisms leveled at the LAPD is that it isn’t punishing bad officers and aggressively weeding out problems. How, ask critics, could the likes of Mark Fuhrman exist on the force for years? How could certain officers land promotions and continue to deal with the public after highly questionable incidents? And there’s plenty of evidence to support their claims. After the 1991 Rodney King beating, former Mayor Tom Bradley established the Christopher Commission, a blue-ribbon panel designed to offer recommendations on ways to reform and improve the department. Until recently, 33 of the 44 officers identified as problems by the commission still were on the force, and 19 were working the streets.

In September, one of the questionable cops, Andrew Teague, confessed to forging an important document in a murder case and promptly handed in his badge. Last July, another of the 44 officers, Michael Falvo, shot and killed a 14-year-old Latino boy. Police say Falvo responded to a report of teens brandishing a shotgun. But witnesses claim the boy had thrown the gun over a fence and only was holding a flashlight when police approached him. Falvo was temporarily assigned a desk job following the incident.

Gascon admits there have been problems. Yet, he also believes the media and critics have been too quick to issue blanket condemnations. “The fact is, you have to judge each individual and each incident on a case-by-case basis. You have to provide officers with due process. There’s no question some officers require psychological referral and evaluation. There’s no question discipline hasn’t always been handled appropriately by the organization. But you can’t go back and punish someone for something they did five years ago. We’re attempting to educate our personnel and crack down on problem officers.”

In fact, the department is battling the problem on several fronts. One of the most significant things it has done is establish a series of programs to deal with attitudes and values. In recent months, the LAPD has held seminars, sent out memos and held staff meetings designed to help officers identify colleagues who are beginning to experience problems. Anyone suffering from stress or personal problems is encouraged to voluntarily seek counseling, which is kept confidential. Officers can receive up to 10 sessions at no cost. In fact, if a superior feels that an officer needs attention, he or she can politely ask that person to attend sessions on a voluntary basis. If the officer refuses, it’s then possible to order the individual to take a behavioral evaluation and receive counseling—though confidentiality no longer is provided.

The department also uses peer counselors—other officers who have excellent service records and years of experience—to informally mentor troubled officers. More than 200 currently exist, and each receives three days of training. In 1994, 3,828 officers received peer counseling, a 12% increase over the year before. “It’s becoming more acceptable; officers are recognizing the value of sharing their problems and learning from the expertise and experience of others who have been through it before,” says Sergeant Frank Virgallito, the LAPD’s employee wellness coordinator and a peer counselor himself.

In fact, Virgallito believes the department is undergoing a profound change of values. Not only is it becoming acceptable—even desirable—for officers to use the peer counseling program, newer cops who attend the training academy are accustomed to both men and women in patrol cars—something that many older officers have never entirely adjusted to. “There’s no question that when men and women started sharing patrol cars in the 1970s, there was tremendous resistance,” says Virgallito. “There were a lot of men who had a difficult time accepting the fact they had a female partner willing to get into a bar brawl or gunfight. There was a tremendous distrust of their abilities. We still have a few dinosaurs, we still have a few harassment problems and gender discrimination, but the department is operating in a solid fashion.”

Finally, there’s the issue of training and retraining officers. Although new recruits continue to receive seven months of training, the organization also is beefing up training for existing officers. In the past, LAPD personnel received a minimum of 24 hours of ongoing professional training every two years—a figure that Gascon sees as inadequate. He now hopes to add 18 days of additional training per officer over the next 18 months. The department also is embarking on an ambitious project to provide training to desk officers who now are being redeployed into the field. More than 300 desk jobs and administrative functions now are targeted for civilian employees—including previously taboo areas like internal affairs and front-desk positions in stations. As a rule, civilians don’t require the extensive background check and training of a peace officer and often are paid a lower salary. In fact, most civilians work at desk jobs or in labs that have nothing to do with actual policing.

Regain past glories.
It appears the Los Angeles Police Department is making progress. In 1995, it hired a record 1,164 new officers—nearly 11% above the goal set forth in Los Angeles Mayor Richard Riordan’s Public Safety Plan. The department also received $26.9 million in additional funding from the City of Los Angeles to increase police staffing. Officers on the beat say while morale is still a problem and the department often lacks leadership and vision, things aren’t quite as bleak as a couple of years ago. “It appears the department may be turning the corner and moving forward,” says one 10-year veteran who prefers not to be identified. “The city and the department’s top brass are beginning to understand it isn’t business as usual. Times are changing and the department must keep up.”

Gascon is certainly optimistic. A slide in funding that lopped the LAPD’s portion of the city budget from about 35% in the mid-1970s to below 25% in the 1980s has begun to turn around. Old and obsolete equipment also is being replaced. And, through it all, the department has learned to manage resources more efficiently and accomplish more with less. “We haven’t lost sight of our basic mission: to serve and protect the citizens of Los Angeles. Crime is the top priority, and we’ve done a good job of battling it,” he says.

Yet whether the LAPD’s chief and top administrators—including Gascon—can guide the department into the future while regaining the glory of the past remains a giant question mark. Whether the department is successful in beefing up training, instituting tougher disciplinary procedures and revamping the performance evaluation process to help weed out the Mark Fuhrmans in the force is anyone’s guess. The LAPD’s problems probably aren’t as bleak as some would suggest, and its future certainly isn’t as dim, but the road ahead requires deft leadership and HR skills. It requires a change from a reactive mindset to a proactive approach.

“We’ve had some problems and made some mistakes,” says Personnel Director Schatz. “But we’re now making major strides. Despite all the negative publicity and controversy, the LAPD is still considered one of the best police departments in the nation.” Adds Gascon in a matter-of-fact tone: “There are a lot of challenges ahead, but we’ll tackle them.”

Here are some tips to help you get results on the ‘Net:

1. Provide content.
   Users browse a corporate site looking for information. If they’re considering an organization for employment-or simply want to know more about it-then they want to find information about the company’s philosophy, its mission and goals, what kinds of benefits it offers and what employment opportunities exist.
2. Keep it organized.
   There’s nothing worse than trying to navigate a site that has information and data poorly organized. The idea isn’t to force a user to browse the entire site, it’s to provide them with the data they need as quickly as possible. If you’re putting together a particularly large site, consider setting up a table of contents page with hypertext links or create a search engine.
3. Stay current with technology.
   The capabilities of the Web are growing at break-neck speed. Today’s state-of-the-art site is tomorrow’s hopelessly outdated homepage. Be aware of what other top sites are doing. And be sure to use the latest HTML features. Make sure they work with the majority of those browsing the site and provide a less spectacular display for those who don’t have the viewing capability built into their browser.
4. Provide needed tools or offer links.
   If you’re going to post positions online, make sure the applicants can find your e-mail address. Better yet, provide an online resume form that routes the data into your department’s e-mail or database. If you want to provide a video clip or an audio message, make sure the necessary viewers or players are available for download from your site, or provide direct hypertext links to sites where they’re available.
5. Make it attractive.
   Like it or not, the Web is supposed to be hip and cool. Although a site doesn’t have to look like a return to the psychedelic ’60s or a scene from an MTV video, colors and graphics do count. Make the site look corporate, but lively.
6. Avoid overly elaborate graphics.
   Yes, graphics are what makes the Web so appealing. But waiting three or four minutes for an image to load is downright annoying. Make sure a logo or graphic element loads within 30 to 60 seconds at 14.4k bps and provide text to view while the image is loading. If it’s necessary to offer a large graphic image, allow the user the choice whether or not to view it: provide a thumbnail or offer a text only option.
7. Update often.
   Old job listings and outdated company information does more harm than good. A site that isn’t maintained looks like a poorly maintained house for sale: it’s unattractive and unlikely to garner much interest. Your credibility rides on the data that appears on your site.
8. Create a feedback form.
   Sometimes overlooked, a feedback form is a valuable way to glean information about how users perceive the site, and it’s a way to receive suggestions and ideas for improving it.
9. Provide necessary information.
   It’s amazing how many sites promote a company’s products and even offer job listings but don’t include a telephone number or physical mailing address. An e-mail address is an excellent start, but it definitely shouldn’t be the only way for someone on the Web to contact your organization.
10. Get registered and indexed.
    Domain names-the address you use to identify yourself to those using the Web-should be intuitive (such as www. microsoft.com). If the site resides on your own company’s server, the domain name should be that of your own firm. If you’re leasing space on another server, it might be necessary to provide a pointer from the host service to your company. Either way, you need to register your domain name with the Internet Registration Service (mailserv@rs. internic.net), which currently offers the service for free. Finally, let the Web’s well-used search tools-Yahoo!, Lycos, WebCrawler and others-know you’re out there. That’s how Web surfers find a new site.

Elizabeth Van Ella cringes at the thought of today’s sophisticated gangs. They’re more than young, inner-city males dressed in baggy pants and Oakland Raiders caps loitering at a street corner. They’re more than a subculture obsessed only with graffiti, rap music, handguns and drive-by shootings. Van Ella, president of James E. Van Ella & Associates, a Chicago firm that conducts applicant screening for a Who’s Who of corporations, describes a new wave of gangsters who boast college degrees, participate in global crime empires and actually hold jobs in the warehouses, offices and even the police departments of America. “It’s beyond the scope that most people could ever imagine,” she warns.

The latest dose of farfetched paranoia? Not possible within the hallowed walls of your company, you say? Better think again. A recent University of Chicago study found that gangs increasingly are adopting a middle-class appearance, while duplicating techniques used by organized crime. According to the FBI, more than 400,000 gang members live and work in 700 cities nationwide. And you can pretty much double or triple that number if you factor in wannabes and affiliates. Although the crime committed by gang members accounts for a small fraction of the estimated $120 billion a year in workplace theft, gangs also are impacting our companies by setting up shop for extortion and drug sales. Members increasingly cloak their illicit activity behind the legitimacy of the workplace. And, according to Van Ella, many also seek health benefits to cover huge medical bills that can result from gang-related shootings and other activities.

No industry or company is exempt. The growing list of firms that have had scrapes with gangs is shocking. Many are household names or are among the Fortune 500. Even the U.S. Military and Chicago Police Department have discovered gang members in their ranks. In Chicago, a major pharmaceutical firm recently discovered it had hired gang members in mail delivery and computer re pair. The crooks were carting off close to $1 million a year in computer parts and then using the mail department to ship them to a nearby computer store they happened to own. The same gang also was peddling drugs on the premises. Nearby, a well-known hospital discovered that a supervisor in the laundry department was a gang member who used the position to obtain Social Security numbers for undocumented workers, and then extorted money from them every payday.

This new breed of gang member includes all races and increasingly involves women. The gangsters are smart, and they have connections. They may not live up to the big screen image of Robert De Niro and Joe Pesci—stuffing bodies into a car trunk or dumping them into a river—but they can be as highly organized as any business. Some street gangs send their leaders to college so they can understand high finance and business practices. Another tier of gangs—Asian and sometimes South American—use their education and knowledge to steal electronics and high-tech components. Many have overseas connections and associates in the United States who operate legitimate businesses, thus making distribution easy.

The crimes they commit also are becoming more violent and brazen. Gangs have taken to hijacking trucks and storming factories in pursuit of microchips and electronic components that have become more valuable by weight than gold or diamonds. During the first half of 1995, Silicon Valley, California firms alone were hit with more than 50 armed robberies, and the average heist netted robbers $400,000. “There’s a growing level of sophistication and opportunism,” says Keith Lowry, a detective in the High-tech Crime Unit of the San Jose Police Department. Adds Van Ella: “Many of today’s gangs operate along the lines of what’s normally thought of as organized crime. They’re becoming harder to detect and more difficult to weed out during the hiring process.”

Look beyond stereotypes.
Experts say that nearly any company can become a target—or at least be viewed as an attractive place for gangs to engage in illegal activities like theft, extortion and dealing drugs. And because there’s no law against being a gang member, HR and security face a complex set of concerns and challenges. As a result, it’s essential not only to understand how gangs function, but also the clues they leave behind. “Gangs know how to get inside companies and exploit vulnerabilities. They have learned that they can get a lot further—and make more money—by appearing legitimate, articulate and well-dressed,” says Frank Johns, director of risk assessment services for Pinkerton Security Services located in Arlington, Virginia.

One of the biggest problems, he points out, is that the workplace of the ’90s isn’t the same as in years past. “There are some subtle changes in society that make penetrating a company today much easier than it was 30 years ago. Despite a greater emphasis on screening applicants and providing security, there’s greater opportunity for abuse,” he adds. To be sure, it’s easy enough to tick off a list of contributing factors: a decline in loyalty, higher turnover, stricter and more narrowly defined labor laws, and the growing trend toward outsourcing—which can often translate into less control over exactly who has access to merchandise, files and information.

Sometimes, disgruntled or loose-lipped workers simply provide the information that a gang might be looking for over a few drinks at a local watering hole. In other instances, money might change hands or thieves might pry hot information by knowing a worker’s specific weakness: infidelity, gambling debts or a problem with drugs or alcohol. Some gangs are successful at planting members within a company—often inside dispatching, shipping or accounting—and others gain access by posing as temporary workers or using their position with an outside vendor to make their way into a steady stream of companies.

Despite the fact that many organizations now are aware that such problems exist, the bar constantly is rising to greater heights. Gangs often figure out ways to short-circuit screening procedures, such as using friends as references or listing jobs at businesses that have shuttered their doors. Many of these individuals also change cities on a regular basis and use a fellow gang member’s address as their own. Knowing that many company’s conduct nothing more than a cursory check of local records, these applicants don’t expect their convictions in other cities to show up. Moreover, it appears as though they have lived in the community for months or years.

Mara Wassar knows just how huge a challenge it is to keep the gangs out. The director of loss prevention at Elek-Tek—a Skokie, Illinois company that operates a chain of 10 computer superstores in the Midwest as well as a large mail-order business—concedes that the company has unwittingly hired gang members. Elek-Tek spends $45 to $65 per employee to conduct pre-employment screening, a criminal background check and drug testing. Still, “there’s absolutely no way to know that some of these people belong to gangs. They don’t wear gang colors or markings, they appear well-educated, and they have spotless records,” says Wassar.

That’s a far cry from a decade ago, when gangs proudly wore their colors and prominently displayed their markings—even at job interviews. However, gang members almost always remain true to their nature. “Although they’re more sophisticated and appear more respectable, it’s only a matter of time before they flash a gang signal, mark something with graffiti or intimidate another employee at work or offsite,” says Richard H. Williams, a former Chicago police officer who now works as vice president of investigation and security at James E. Van Ella & Associates.

Don’t underestimate the level of sophistication and violence.
Of course, the growing wave of gangs that hijack trucks and storm factories have no intention of being subtle. Although they too depend on inside information to know when to pull a heist—often paying off shipping clerks or casing the facility with the help of a temp worker—they use ruthless techniques to get the loot they desire. Security guards have been pistol whipped and shot, and employees have been severely beaten and had plastic bags tied over their heads. “Not only is the crime organized,” says Mike McQuade of the American Electronics Association, “it’s organized to the point that gangs are stealing to fill orders. They understand the electronics business, they know what they want and they know how to get it.”

They also know how to skirt the law. Consider that a microchip weighing less than an ounce can easily fetch a couple hundred dollars on the street. A SIMM strip (single in-line memory module) that carries several chips can run into several hundred dollars. And a Pentium 133-megahertz processor—the brain that runs many of today’s personal computers—weighs just over an ounce and is worth upwards of $800. It’s possible to stash more than a dozen Intel Pentium chips into a briefcase and unload them on the gray market within minutes. In fact, a legitimate computer store can easily buy from a gang posing as a distributor without knowing it.

Unlike cocaine or heroin, there’s no law against possessing semiconductors or CD-ROM drives. “A police officer who stops someone with a briefcase full of SIMMs can’t assume they’re illegal. There are many legitimate people in the business who carry chips around, just the way diamond brokers in New York City carry around their goods,” explains the San Jose Police Department’s Lowry. And while it’s possible to request paperwork, that can prove time consuming and ultimately ineffective because the crooks easily can disappear in the interim. What’s more, most chips aren’t traceable as they make their way through distribution channels, and the vast majority of police officers don’t have the training to understand this type of crime.

That’s why some law enforcement agencies, like in San Jose, have begun to establish special units. The FBI also has created a task force to deal with the situation. Their goal is to focus on this problem by creating teams of specially trained officers and agents who understand technology and are better equipped to conduct investigations. By working together, law enforcement is better able to focus on both national and international implications.

Tracking down the crooks is truly vexing. The chips can change hands several times—sometimes within several hours. They wind up in computer stores that gangs own and operate, as well as other major stores and outlets that are completely legit. Ultimately, the chips can appear in a PC that you buy at your local computer store, or be shipped off to an overseas destination. They also end up at swap meets and computer expos. Because the demand for chips is so great and prices are high, many buyers don’t ask questions. They look at less expensive chips as an opportunity to save money and earn a greater profit. The Chubb Group, an insurance company based in Warren, New Jersey, estimates up to $8 billion in components are stolen each year. It pays out $10 million a year in claims related to high-tech theft.

Gang robberies take place more often than you might expect. In May of last year, more than a dozen Asian men attired in sport coats and ties pushed their way into Centon Electronics—an Irvine, California firm—and carted off an estimated $9.9 million in chips, making it the largest known semiconductor heist in history. The Asian gang ruffed up employees and threatened several at gunpoint, before disappearing into the night. A later theft at a nearby company almost identically matched the Centon robbery. Neither case has been solved.

Dallas-based Cyrix Corp., a leading producer of microprocessors and a competitor of Intel, is still smarting from a hit it took in December 1994. At approximately 11 p.m. on a Sunday night, more than half a dozen armed men overpowered an employee who was outside for a smoking break. They grabbed his access card and forced their way into the facility, where they blindfolded and tied up several other workers. After forcing everyone to lay on the floor, they ransacked two caged areas, grabbed $379,000 worth of 4×86 Cyrix chips, and then headed out an employee entrance and into an awaiting car. The case remains unsolved.

Gang-related crimes such as those at Centon and Cyrix are a relatively new phenomenon. As a result, many companies have found themselves unprepared for the rash of robberies that have rippled through the industry. But that’s beginning to change. Chubb Insurance and the American Electronics Association have both begun a campaign to educate companies about the growing threat. And many firms, like Cyrix, take the threat of gangs seriously after having endured the pain and turmoil of an armed robbery. “It’s not necessary to create a Fort Knox—but you do have to discourage thieves and make [robbery] a challenge that’s not worth their time and effort,” explains Karl Flusche, the company’s director of security.

Indeed, Cyrix has beefed up its physical security and now boasts one of the best systems in the industry. One strategy was to install maximum security turnstiles, which allow only one person per access card to enter a restricted area. The company also has installed double doors that make entering and exiting the building a much slower process. It banned smoking outside the building. A new smoking patio was built—and it’s protected by fencing, gates, alarms and video surveillance. And all visitors now wear bright red ID cards that draw attention to the fact they aren’t employees. “That makes it easy to spot someone who’s loitering or engaging in suspicious activities,” says Flusche.

Of course, ensuring that trucks get to their destination with cargo intact can be a bit more challenging, since it’s difficult to control what happens on public highways and byways. Many gangs have resorted to overpowering a truck driver and hauling off hundreds of thousands of dollars of computer components, auto parts and any other product that can be sold on the gray market. As a result, many trucking companies are closely scrutinizing applicants and instituting far more stringent guidelines. They’re also working to educate drivers about how to spot potentially dangerous situations, and equipping them with cellular phones.

Arm yourself with effective HR weapons.
Of course, much of the solution lies within the universe of human resources. Background checks and screening procedures are more important than ever, and experts say there are subtleties to detecting crooks. For example, many thieves and gang bangers earn their GED in prison, a fact that might not be apparent without a little digging. And because many gang members move from one city to another, a local criminal check can be almost worthless. Many firms that offer screening services for $10 or $15 simply don’t pick up past convictions outside the local area.

“Many companies are lax about screening applicants, and others are hesitant to spend the money,” says Peter Rosen, vice president of HR at Norrell Corp. in Atlanta, a leading provider of managed staffing and personnel used for outsourcing. “They say they’re conducting reference checks and background checks, but if you actually map the process you see they’re cutting corners and doing things in a haphazard fashion. Ultimately, they can wind up spending more money and experience bigger headaches trying to deal with the aftermath of the problem.”

Rosen will go to great lengths to ensure that prospective employees have a solid work history. He spends as much as $60 per applicant to gather background data. He also refuses to yield to time pressures, waiting the 48 to 72 hours it takes to get information back about an applicant. And by letting prospective employees know that the company conducts thorough checks, some applicants take themselves out of consideration immediately. Depending on the exact position, an outside firm reviews past employment records, driving history, Social Security data and conviction records—the latter over a minimum of a five- to 10-county area.

But it’s Sun Microsystems that has developed one of the most sophisticated and effective methods for screening out crooks and gangs members. The Mountain View, California company, with more than 14,000 employees in 145 locations worldwide, has developed Sunscreen, an internal program that allows it to investigate job applicants for about $50 each, compared to the $75 to $250 the company used to spend for an outside service. Two full-time Sun employees trained in full background checking to verify degrees, references and driving and criminal records, if applicable. According to Joe Chiaramonte, the firm’s senior manager of corporate investigations, Sunscreen has saved the company $500,000 to $800,000 a year. More importantly, it has weeded out approximately 8% of all final applicants because of questionable backgrounds.

However, Sun Microsystems doesn’t limit Sunscreen to its own applicants. Outside contractors, consultants and temporary workers also are subject to the process, depending on how much time they spend inside Sun and what areas of the firm they have access to. “Temp agencies tell you they’re conducting checks,” says Chiaramonte, “but when you do your own check you find out they’re often not doing an adequate job.” Although HR has the final word on whether to accept or reject any applicant, the findings of the two trained staffers are given considerable weight.

Sunscreen isn’t the company’s only strategy for fighting crime, either. Last November, the Silicon Valley computer hardware and software firm held a special meeting for all its vendors and clients to discuss ways to discourage gangs, after one of its suppliers had a gang follow a truck from the facility. In that case, the driver was alert enough to realize he was being followed by a van with no license plates, so he drove the truck and its $5 million cargo into a police station parking lot. For the workshop, Chiaramonte brought in FBI agents, a representative of the District Attorney’s office and an array of other experts who discussed ways to increase awareness and minimize problems. “The problem affects everybody, and unless companies work together it’s only going to get worse,” he says.

Educating employees about how to spot gang activity and how to deal with it also is crucial. Elek-Tek’s Wassar has found that employee meetings and training sessions are essential. Not only is it important to teach workers about gang signals, graffiti and drug dealing, it’s essential to help them understand how it could affect them. “We try to communicate that it’s their workplace that’s being violated and that it’s a threat to their safety and well-being,” says Wassar. Indeed, Elek-Tek offers a toll-free number so workers can anonymously report problems and concerns. And it encourages open channels of communication between sales clerks and supervisors. Finally, the company has a zero-tolerance policy toward any crime. Not only does that reduce the risk of violence against employees and customers, it limits liability and keeps insurance costs in check, according to Wassar.

And if a robbery or violent event does take place, experts say it’s essential to provide immediate counseling. Besides the tremendous anxiety and distress over the event, morale and productivity can plummet. In many instances, valued employees simply quit, while others require ongoing medical and psychological treatment to deal with the trauma of the event. “The effects can linger on and can wreak havoc for weeks, months or years,” says Van Ella.

Unfortunately, the problem isn’t likely to disappear anytime soon. As gang members become better educated and more organized—hiding behind legal businesses in the United States and forging broader links to international crime syndicates in South America, Asia and Europe—the scope of the problem is likely to grow. “A lot of these people, particularly those from other countries, don’t have arrest records, and many of them are extremely smart,” says Pinkerton’s Johns. “They are raising the stakes and becoming increasingly bold. They’re learning to mimic techniques used by organized crime.”

Yet, as Cyrix, Elek-Tek, Sun Microsystems and many other companies have learned—sometimes the hard way—there’s no reason to look down the barrel of a loaded weapon. It is possible to battle gangs and come out the winner. Van Ella explains: “You can’t deny employment to somebody because he or she belongs to a gang. But you certainly can use background checks, advanced security techniques and employee education to create an environment in which gangs can’t flourish. It’s an ongoing battle, but it’s one that a company must take very seriously.”