Author: Shari Caudron

In its report, “Nonstandard Work, Substandard Jobs,” the Economic Policy Institute (EPI) based in Washington, D.C., documented the fact that certain nonstandard work arrangements result in jobs of distinctly inferior quality in terms of wages, benefits and job security. Moreover, groups of workers who already face discrimination and low wages are disproportionately employed in nonstandard work arrangements of the lowest quality.

“Even workers who need or prefer these arrangements,” the authors of the report conclude, “should not have to accept low wages, few benefits and heightened job insecurity for fewer or more flexible work hours, nor should they have to forego the basic protections afforded regular full-time workers with respect to unemployment insurance, anti-discrimination protections and collective bargaining.”

As the recent UPS strike indicates, workers in nonstandard work arrangements are now in a position to make their anxiety and demands known to companies. EPI suggests several new public policies are needed to safeguard workers in nonstandard arrangements. While many of EPI’s recommendations are intended for public policy-makers, some of them can be adopted by employers that wish to take the first step in making nonstandard work arrangements more equitable. These include:

1. End pay discrimination based on work arrangement, part-time/full-time status, or job title.
2. Index the minimum wage so that it rises automatically with inflation or average wage growth.
3. Expand family and medical leave to include workers in smaller firms or those working less than 1,250 hour per year.
4. Maintain affirmative action and EEO policies.
5. Improve fringe benefit coverage for nonstandard workers and make benefits more portable.
6. Make child care affordable and available.
7. Offer more flexible schedules for regular full-time workers.

I started my journalism career working as a business reporter for a daily newspaper in Chico, California. Located about three hours north of San Francisco, Chico is the kind of small town where main street merchants still host concerts in the park on Friday evenings.

As a young reporter, one of my responsibilities was to attend ribbon cuttings held by new chamber of commerce members. We’re not talking Lucent Technologies or American Express here. Instead, typical ribbon cuttings were held at hair salons, print shops and travel agencies—the kind of businesses that support urban refugees who seek simpler, small-town living. My personal favorite was a combined dress shop/public relations firm owned by an eccentric older woman who read magazines while dining at restaurants with her husband.

Although my only obligation was to get a brief quote from the owners, the way they carried on, you’d think I was a member of Kenneth Starr’s investigating team. I heard about dreams, future plans, community contributions, marketing strategies, customer service, signage, parking and why dresses in a PR firm made perfect sense. In short, I heard passion. These budding entrepreneurs cared about their companies. Their work had meaning.

Today, I write about Corporate America, not small business, and what I miss most is the enthusiasm of the smaller companies. Rarely do I hear corporate employees describe work as a place where they live out their dreams.

This is why I wasn’t too surprised when I read a recent report by Catalyst, a corporate research and advisory firm based in New York City, that explained why so many women are leaving the private sector to start their own companies. While the glass ceiling is part of the reason—and a significant one, at that—the real reason women are leaving 401(k) plans and vending-machine lunches behind is to find work that means something to them.

According to the report, women are becoming entrepreneurs in record numbers because they have good ideas, they seek challenge, and they want their contributions recognized. In fact, when asked about their reasons for leaving corporate employment, the allure of business ownership, including flexibility and independence, was cited almost three times more often than glass-ceiling issues. Considering all of these factors, you begin to realize that women aren’t running away from the corporate world so much as they’re running toward work that matters to them.

But women with the desire to have an impact aren’t just opening their own businesses. They’re also leaping off the corporate ladder into smaller start-up firms and non-profit organizations. Take Rebecca Chekouras, who spent years selling mayonnaise and other products for a major food company. Although she made a pile of money, she was miserable. “I felt as if I was in a flywheel and had flung so far off center that I didn’t know who I was anymore,” she explains.

Today, Chekouras is the director of development for The Women’s Philharmonic based in San Francisco. When she describes her work, she uses words like values, recognition and making a difference. “When I thought about what was more important culturally to our society—mayonnaise or music—the choice was very clear to me,” she says.

Women are leading the way.
Chekouras and the thousands of women like her aren’t merely a trend in and of themselves. Their movement away from Corporate America isn’t only a glass-ceiling issue, and it isn’t only a women’s issue. I believe they’re actually harbingers of a greater societal change in which more people—men included—are more willing to trade their unfulfilling jobs in large companies for more meaningful work in smaller organizations.

Let me explain. Women have long been society’s leading indicators of change. Their collective actions have had an impact on politics, on the media and on business. Thanks largely to the influence of women, corporate management is now more collaborative, corporate benefits include work/family programs and sexual harassment policies are strictly enforced.

Just as these women have changed society over the last 30 years, their search for more fulfilling work is creating a national dialogue about what makes work personally meaningful—a dialogue that increasingly includes men. As Peter D. Moore, author of The Caterpillar Doesn’t Know: How Personal Change is Creating Organizational Change (Simon and Schuster, Inc., 1998), explains: “As women migrate away from large institutions out of a desire for more personal growth, we’ll absolutely see more men making similar choices.”

There have already been signs of this occurring. Last year, Jesus Leon gave up a senior executive job with a global telecom company—complete with a $200 million budget, two assistants and six weeks of vacation—to head product development at Ciena, a newly public company based in Baltimore. With this change of employment, he gave up five weeks of vacation and 25 percent of his salary because he wanted an entrepreneurial challenge.

On his new job, Leon was quoted in Fortune magazine saying: “I love it. Instead of looking after 1,200 people whose names I don’t know, I get to be an artist. I get to paint what Ciena will be.”

Economically, the time is right for both men and women to be making these choices. The job market has never been better, opportunities at start-up companies abound, and the majority of corporate employees now have working spouses, which gives them both the kind of safety net needed to get out of boring, repetitive and uninspired work situations.

Keeping employees by helping them find meaningful work.
This growing search for fulfillment will obviously have a profound effect on the way companies go about retaining employees. Competitive compensation and regular promotions may have kept people in the past, but not anymore. To retain good, productive employees, employers have to find ways of making work more meaningful.

Granted, this is much easier said than done; what makes one person want to leap out of bed in the morning may cause another to sink under the covers in anguish. For example, opening a hair salon just wouldn’t do it for me. The trick lies in helping employees uncover what is meaningful for them and then helping those employees find that meaning somewhere in the current work environment.

To use the “Horse Whisperer” metaphor, you have to recognize who the employees really are—not who you think they should be—and what they need to be happy. How? By asking them. You see, few employees will complain directly to management about the unsatisfactory aspects of their jobs. They’d rather grin, bear it and search for new opportunities. But instead of waiting until the exit interview to find out what might have kept them, doesn’t it make sense to find out what they need while still employed?

The number of women-owned businesses grows exponentially each year—they now employ 35 percent people more than the Fortune 500 combined—and the number of men who are willing to make similar values-based career choices is increasing right along with them. HR better take notice. The search for meaning isn’t just a new-age, end-of-the-millennium personal growth phenomenon. It’s a business reality with potentially serious bottom-line repercussions.

I was recently talking with some college friends at a reunion about how the stresses in our lives had changed over the last 20 years. After all, we met each other at a time when our main concern was waking up in time for accounting class. Looking over our glasses of wine at each other, each of us confessed that jobs—either our own or our spouses—were by far the biggest cause of stress in our lives.

What’s interesting to me about this conversation is that instead of talking about why work had gotten so out of hand and whether or not there was anything we could do about it, the talk focused on how we accommodated this stress by postponing vacations, working late and spending endless hours at the dinner table complaining about the problem.

Apparently, we’re not alone. According to the 1997 National Study of the Changing Workforce by the Families and Work Institute in New York City, jobs are the biggest stressor for most Americans. In fact, job and workplace stress are three times more likely to affect a person’s emotional well-being than children, aging parents, spouses, commuting, housework or any other personal demands. Despite this, employers appear to be doing very little about it.

Take the case of Merck & Co. Inc., the pharmaceutical giant based in Whitehouse Station, New Jersey. Three years ago, when the company was honored by Working Mother magazine as one of the 10 best places to work in America, Perry Christensen, who was then the company’s director of HR strategy, was thrilled. The company had spent a lot of money on work/life programs—including a $7 million expansion to its on-site day-care facility—and Christensen felt the award was worth a bottle of champagne.

Employees, however, weren’t so enthusiastic. “We got a lot of flack from employees who wondered how we could be acknowledged as a family-friendly company when the work load was so demanding and relentless,” Christensen admits. The disconnection between his desire to celebrate and the employees’ need to vent was so great that for the first time, Christensen and his colleagues were forced to recognize that work/life issues aren’t just about dependent care and flexible schedules. Important as these are, if companies truly want to help employees lead more balanced lives, they must also be willing to pay attention to the work itself. Today, Merck’s HR team is one of the few in the country that’s serious about redesigning jobs, eliminating unnecessary work and alleviating workplace stress.

I believe what Merck is doing is something other companies need to seriously consider and not just because most everybody I know would like less stress in their lives. Instead, companies need to think about reducing job stress because, in the language of business, it can generate great economic returns.

Work redesign lowers stress and increases productivity.
Simply put, as job pressure rises, productivity drops. While everyone can handle a certain amount of stress, if you give employees too much for too long, they won’t be producing at their peak. Furthermore, according to the National Safety Council, on an average workday, one million employees will be absent from work because of job stress. This costs companies an estimated $200 billion a year in medical costs, worker’s compensation claims and lost productivity.

Put all this together and you begin to see that job problems affect the bottom line to a much greater extent than personal problems do. While work/life programs are vital in helping employees lead more balanced lives, they aren’t enough because they don’t address the work side of the equation.

The complaints my college friends shared brought this to light. For example, one of them is a social worker whose flexible schedule is a real plus, but it doesn’t alleviate the heap of paperwork she’s required to complete at home on weekends. Another woman’s husband has a high-paying sales job that allows him to work from home, which is great because they have three young children, but she wonders about the corporate culture, where it’s OK to send employees on out-of-town trips with less than a day’s notice.

You see, companies that are serious about becoming an employer of choice—and boosting corporate productivity in the process—must be willing to take a hard look at what they’re asking employees to do each day. As Ellen Galinsky, director of the Families and Work Institute, explains: “Helping employees solve problems in their personal lives by providing special assistance programs without also reducing the extent to which jobs contribute to these problems may severely limit the overall impact of work/life programs on job performance.”

Unfortunately, even companies that do appear to recognize the problem of job stress are more likely to offer stress counseling than to address the root cause of the problem. I recently asked Nancy Board, director of account management for ComPsych Corp., an EAP provider based in Chicago, whether or not her clients are taking a serious look at job-related stress. “No,” she replied. “Employers are asking us to help their employees deal better with stress, but they’re not working to make jobs any easier.”

Granted, in an age of global competition, incessant customer demands and rapidly changing technology, it’s not easy to think about working smarter. It’s easier to throw stress counseling or flexible work policies at employees than it is to redesign their jobs. But you may be surprised at the kinds of things employees need to feel better about work.

Don’t just throw money at the problem.
Last fall, Boston-based WFD Consulting was called in by a large financial services firm to reduce turnover in two of the company’s major call centers. Managers thought the problem was related to money, and that employees were going down the street for jobs that paid 50 cents more an hour. But individual interviews with employees revealed money wasn’t the issue—job stress was.

Employees complained of such things as inadequate training, frequent schedule changes, poor new-hire screening, lack of communication, a misguided reward system and a dingy work environment. But they didn’t just complain; they also offered workable solutions. Why? “Because we asked,” explains Christensen, who left Merck a year ago to work with WFD. By assigning employees to teams devoted to solving these problems, the company was able to identify and implement solutions to the most pressing issues within just three months. The first quarter after changes were implemented, turnover had slowed from 45 percent to 32 percent, and it continues to drop.

As this experience shows, work redesign doesn’t have to take years and cost millions of dollars to be effective. Simply by asking employees about their specific stressors and how they might reduce them, HR professionals can go a long way toward alleviating the biggest source of productivity loss in Corporate America today.

But to be effective, HR must take the conversation farther than my college friends and I did. Instead of merely acknowledging that stress exists—and whining about it—you must also acknowledge that something can be done about it. Work/life programs were an excellent first step toward helping employees manage their personal lives. Now it’s time to help them out at work and reap effective bottom-line benefits.

Applied Materials Inc. is a $4 billion global company that’s growing an average of 30 percent a year. Like so many other high-tech, high-growth companies in the Silicon Valley, the Santa Clara, California-based employer has a difficult time finding skilled technical and managerial talent. To keep up with the rapid growth rate, the company’s HR professionals can’t sit around and hope that experienced professionals will knock on the door looking for a job. They have to grow the skills and capabilities they need internally.

Company leaders recognized this need, and approximately four years ago, they set out to determine what technical and managerial skills were needed to keep up with the rapid growth. Then, armed with a list of these characteristics, the company’s HR professionals embarked on a massive organizational development effort designed around a new entity known as Applied Global University (AGU). Established just two years ago, AGU is an internal organization dedicated to building the capabilities the company needs to be successful.

AGU, which is part of the HR department, oversees $30 million worth of annual training and development activities. Its mission? “To make employee development visible, efficient and strategic,” explains Jim Hessler, managing director of AGU. In so doing, everything AGU does is lockstep with the rest of human resources. The organization is involved in recruitment, performance management, retention—even reorganization, if necessary. “By working with HR, all development activities are more closely aligned with the business process,” Hessler explains. “This way, we don’t have training that’s separate from what we’re trying to achieve as a company.”

It wasn’t always this way—at Applied Materials or any other major U.S. corporation. Training, although a part of HR, has long been an independent operator. Training professionals have traditionally stitched together a patchwork of training programs with little thought given to overall corporate objectives. The training developed for manufacturing employees was different from the training for technical employees, which was different still from the training offered to managers. Not only that, employee development was rarely linked to other HR activities. Employees often were hired based on one skill set, promoted based on another, and trained on yet other competencies that may or may not directly impact their job performance. This mishmash of efforts was costly, wasteful and unproductive.

Fortunately, all this is changing now as HR professionals begin to realize that to stay competitive, training and all other HR activities have to work together to support and reinforce corporate strategy. “In high-performing companies, HR departments are more closely integrated,” explains Kerri Folmer, director of the Human Capital Group at Watson Wyatt Worldwide in San Francisco. By forgetting about ownership and turf battles, Folmer says HR professionals can more clearly identify the people practices needed to help the company reach its strategic goals.

Why training and other HR activities are becoming more closely aligned. According to Alice J. Pescuric, vice president of the Workforce Effectiveness Practice at Development Dimensions International (DDI) in Pittsburgh, companies are becoming savvier about the need to integrate training and other HR practices for a number of reasons.

First, there’s tremendous pressure on all fronts to do more with less. Naturally, the way this is done is by becoming more efficient and eliminating redundancies and unnecessary work. Why should three separate training programs be developed for management, technical and manufacturing employees if the course content is the same throughout? By working together, each HR group can take advantage of established capabilities.

Second, enterprisewide technology and reengineering are making it possible for the entire HR department to become integrated in a way never before possible. Today, information on recruitment, benefits, training, performance management, skill sets, payroll and succession planning all can be stored and accessed in the same information system.

The third reason HR and training are working more closely together is because of the pressure felt by every corporate function to become strategic bottom-line business partners—or get outsourced. This not only applies to HR as a whole but to every activity within HR, including training.

“When put together, all of these factors are forcing HR to pool its resources and take a holistic look at business objectives,” Pescuric says.

Interestingly enough, in many organizations, it’s the training department that’s spearheading this integration. As companies strive to become learning organizations that are capable of adapting quickly to market changes, training professionals are giving up their old role as classroom trainer. Instead they’re becoming “performance consultants” who work to boost productivity in a variety of ways of which traditional classroom training may play only a small part.

“Trainers are starting to talk about the entire business process,” Pescuric explains. This is because not all performance problems are training problems. “If, when holding a gun to an employee’s head he or she will perform for you, the problem isn’t a training problem,” she says. It may be a problem with the rewards or performance-management systems, a problem of unclear roles or a lack of information. Because there are so many things that impact performance, trainers are becoming more intimately involved in—or at least aware of—other HR activities.

How training integrates with other HR functions. One of the ways trainers are taking on a more strategic, performance-oriented mindset is by working with the rest of HR to train line managers in HR responsibilities.

At the Sony Technology Center, a San Diego-based division of Sony Electronics Inc., trainers consider themselves consultants to the line organization. They work to help managers throughout the company understand their HR responsibilities. Instead of HR bearing the burden of hiring and performance management, for example, Sony’s executives believe better performance occurs when individual managers are responsible for these activities.

Debby Swanson, manager of training and organizational development at Sony, says Sony’s training consultants are helping supervisors and line managers by:

1. Training them how to hire employees using DDI’s targeted selection process, which is a competency-based approach to hiring. By helping managers learn how to effectively interview candidates based on a predetermined list of job competencies, trainers empower managers to make smart hiring decisions on their own.
2. Working with the company’s equal employment opportunity administrator to provide annual updates on departmental affirmative-action goals. The trainers hold regular informational sessions for managers about their roles and responsibilities in maintaining affirmative action in the company.
3. Training managers how to develop performance plans and conduct performance reviews. “We teach managers the skills and processes necessary to conduct performance reviews, attack performance-improvement problems and conduct performance-planning discussions,” Swanson says.

In addition to partnering with HR to give managers HR skills and responsibilities, trainers are working hard to change the way training is delivered. “Because of the speed of change and the pace of work today, people don’t have as much time to come to training,” Swanson says. “They don’t have time for role plays. They want real-time, short-version, bottom-line, value-added tips they can use right away.” At Sony, for example, trainers are starting to put together short meeting topics that can be delivered in less than an hour. They also are looking at putting resources and reminders on the company intranet so employees have just-in-time access to information.

The trend toward alternative delivery methods has certainly created changes at BASF Corp., a chemical company based in Mount Olive, New Jersey. Three years ago, as part of a reengineering process, the company’s HR function identified a strong need for an employee career-development system. “We needed a system that balanced employee career-planning needs with the talent requirements of the organization as a whole,” explains David Wight, manager of career development. In creating the system, HR chose not to develop employees through traditional training but through work-related development opportunities. “Adults learn by doing,” Wight says. Although the career-development system is still evolving, BASF’s trainers probably won’t be training employees in order to fill skill gaps. Instead, they’ll be working with HR to educate managers on the importance of supporting employee development through special assignments, work rotations and other on-the-job development opportunities. To support this new direction, the company’s other HR systems, including internal job posting, performance management and incentive compensation, are being revamped. “We need to make sure HR is pulling in the same direction,” Wight says.

But even trainers who continue to provide regular classroom training are becoming more strategic and mindful of overall HR objectives. For example, HR professionals at Transamerica Life Companies in Los Angeles have spent the last two years identifying the skills and capabilities needed to achieve the company’s overall business strategy. “We needed some kind of model to look at the way we manage, assess and develop people,” explains Michael Wolfe, vice president of corporate human resources. In doing so, the company executives identified job competencies that are needed companywide. These include such skills as communication, accountability, initiative and collaboration. They also identified competencies such as technical knowledge or value focus that are needed only in certain business units. These competencies will be used by HR to make hiring, promotion and compensation decisions. Furthermore, all employee training and development activities will be linked to the competencies.

According to Wolfe, when employees are assessed based on their individual competency profile and that profile is compared to corporate requirements, development needs become clear. Thus, trainers can begin to develop training based on clearly identified employee needs.

“In the past, training was delivered based on a shotgun approach,” he says. For example, every manager might be sent to training on how to interview applicants, regardless of whether or not all managers demonstrated a need for that kind of training. “Today, the training is tailored and targeted to an individual’s development plan.”

Consider an HR generalist approach. The fact that Transamerica no longer has a training “department” is proof of the company’s commitment to link training with other strategic HR objectives. “We reengineered HR three years ago, eliminating the training department,” Wolfe says. This allows the company’s HR professionals to serve as generalists who are more concerned with overall corporate strategy than individual administrative responsibilities. Today, these generalists provide the necessary training.

The HR generalist approach may be a good one for other companies to consider, especially those in which silos still exist between human resources functions. The best way to integrate training with hiring, performance management, compensation, benefits, job posting and other facets of HR is by eliminating the barriers between them. As Wolfe explains: “Today, we’ve broken down the walls and have a fully integrated approach to managing the employee asset. Selection, development, pay and training are all connected to a set of criteria that’s common to that individual. We no longer hire under one criteria set, pay under another and train under another. We’re fully integrated, and as a result, HR as a function has become more of a consultative, facilitative group rather than a back-room, paper-pushing function.”

Obviously, this kind of structure won’t be easy for organizations that have yet to start down the path toward integration. Turf battles are common throughout Corporate America and HR is no exception. What advice do experienced HR professionals have about getting started? “Focus on the business objectives,” Swanson says. “I don’t mean to be trite about it, but if you’re constantly looking at your internal customers’ needs, then out of that you have to align. Instead of focusing on internal responsibilities within HR, focus on external objectives. This way, you can’t help but connect with each other. At least, it works that way when we do it.”

When I began to research this story, I assumed that cool would be defined very differently depending on the region of the country in which you worked. What I discovered is that the characteristics of cool companies — diversity, integrity and respect — are universal. A company in Omaha could, believe it or not, be just as cool as a company in San Francisco.

Take Milwaukee-based Harley-Davidson, a Rust Belt manufacturing company if there ever was one. Employees just love building them “Hawgs” because the company is such a great place to work. Voluntary turnover is just 3 percent annually.

However, I also discovered that there are slight differences between geographic regions in terms of the attributes of cool that are considered most important.

Lynn Taylor, vice president and director of staffing at Robert Half International Inc., one of the world’s largest specialized staffing firms, put a call out to her regional directors to find out if the characteristics of cool employers differed much by region. Here’s what she discovered:

“In [California’s] Silicon Valley, the bar has been raised as far as coolness,” Taylor explains. “People here are already accustomed to a high level of progressive practices, so companies have to be even more entrepreneurial than usual to attract top-notch people.”

Here, the coolest companies are those whose managers support the latest technology. They don’t necessarily have to be producing the technology to be considered cool, but they must be using the latest technology in the workplace. Lifelong learning also is essential, and progressive ideas, outside-of-the-box thinking and creativity must be allowed to flourish. While these attributes are exaggerated in the valley, they tend to be true of cool companies all up and down the California coast.

In the Midwest, cool employers are financially stable and are experiencing rapid growth. The coolest companies are those that offer solid advancement opportunities as well as more flexible work options, flexible schedules, casual dress and telecommuting. “In the Midwest, cool companies aren’t quite as wacko as they are in Silicon Valley, but they do keep employees informed and involved,” Taylor explains. Pioneer Hi-Bred International Inc., based in Des Moines, Iowa, which markets and sells seed corn around the world, is considered to be one of the coolest of the region’s cool. Why? It fosters teamwork, creativity, innovation and extensive employee communication.

On the East Coast, particularly in the Northeast, the coolest companies tend to be those that are involved in exciting industries such as advertising, entertainment and high tech. Why? Maybe because it’s easier to push the envelope in creative companies. The Rockwell Group, a New York City-based design firm that specializes in entertainment architecture (clients include Disney, Sony and Planet Hollywood) is considered one of the best. Here, employees are even allowed to bring their pet dogs to work.

Workforce, April 1998, Vol. 77, No. 4, p. 54.

Picture the 1950s organization man: the man in the gray flannel suit. Picture the slightly graying, neatly trimmed sideburns. Picture a slim leather briefcase, metal filing cabinets, rotary phones and time clocks. Picture order, predictability and sameness. Picture Ward Cleaver.

Fast forward to 1998. Imagine an employee wearing a baseball cap and running shoes — at work. Picture office furniture on rolling wheels and meetings that take place on the Internet. Picture computers, chaos and Koosh(R) balls. Picture smiles.

Other than feeling like you’re comparing black and white to color, what’s the difference between these two companies — the corporate hierarchy of yesteryear and the colorful chaos of today? In a word, today’s companies, the most successful ones anyway, are cool, otherwise known as “ku,” “clutch” and “tasty” (for the younger set) or “with it,” “far out” and “groovy” (for you older folks).

Yes, cool. To succeed at the end of the millennium, it’s not enough for companies to be profitable, pay well and offer competitive benefits. As important as these factors are, if companies really want to attract, retain and motivate the best employees, they must also be cool places to work. In short, cool is to human resources what hip is to fashion: It’s what sets you apart.

Now if you’ve been in the corporate world for any length of time, you may argue that cool is only possible in certain industries — high tech and entertainment, for example. Or you may think cool is the province of certain regions, say Seattle or California’s Silicon Valley. You may even dismiss the idea of cool as something that’s only attainable in small, entrepreneurial companies. Sorry. With all due respect, you’d be dead wrong on all three accounts.

Any company in any industry in any location can and should strive for coolness. Why? Because it’s great for the bottom line. Best of all, your company may already be cooler than you think. Even if it’s not, there’s a lot human resources professionals can do to cultivate coolness.

What’s cool?
Before we talk about what it is exactly that makes a company cool — and how it benefits HR — let’s talk about what the word itself means and why, once again, it has become part of our national lexicon.

Alan Liu, an English professor at the University of California, Santa Barbara, has been studying the culture of cool for some time. (Yes, believe it or not, there are people who research this sort of thing.) As he explains it, the word cool as a slang term originated with the jazz scene in the 1920s. In speakeasies and smoke-filled rooms, jazz and blues musicians would relax after a hot set by opening the back door and letting in the cool night air. The word cool soon grew from a way to describe the breeze coming in the door to a term that described the whole jazz scene to a term that described anything that, like jazz, was rebellious, nontraditional, cutting-edge and outside of the mainstream. And in a sense, that’s what the word still means today.

Cool as a slang term has been reborn several times over the years. Jack Kerouac and the beat generation of the ’50s used it to describe their own particular brand of beret-wearing, filterless-cigarette-smoking counterculture. In the 1960s, cool referred to anything anybody in a suit or over 30 wouldn’t understand. And while cool disappeared from use during the polyester days and disco nights of the ’70s, and the preppy, get-ahead Reagan years of the ’80s, today, in 1998, it’s back with a vengeance.

Credit the Internet for flashing the word back into our vocabulary. Every other Web page has a reference to something that’s considered cool. This time around, however, cool doesn’t refer to a particular subculture or style, but to anything, anywhere, that’s new, different, nontraditional, not the status quo, avant-garde, cutting edge, and most especially, forward-thinking. And cool even refers to what’s happening in Corporate America.

In the 1990s, we have casual dress, Halogen lights, onsite massage, lattes in the lunchroom, virtual teams and domestic-partner benefits. The triangular corporate hierarchy has collapsed. We want employees to speak their minds, not toe the line. Management is bottom up, not top down.

What has happened is that traditional ways of working have been tossed out the window, at least in progressive companies, and employees have responded. Fancy that. It turns out workers like such things as flexible schedules, onsite day care and the ability to express an opinion. Today, the corporations to work for are those in which managers and employees act least like you’d expect them to act. And this is cool.

Are you cool?
So how does a company become a cool place to work? What are the dimensions that turn your run-of-the-mill company from a money-making machine into a cool place of employment? For starters, the company must never, ever, do something because that’s the way it has always been done. That kind of attitude is the very antithesis of cool. As John Challenger, executive vice president of Challenger, Gray & Christmas, a Chicago-based outplacement firm, explains, “Cool companies are revamping the traditional notions of business.”

But what does this mean, exactly? While cultivating cool is far more art than it is science, there are common denominators shared by cool companies. Any one of these dimensions, on its own, isn’t enough to brand a company as cool. To become the coolest of the “kew-el,” a company needs to possess nearly all of them. These dimensions are:

1. Respect for work/life balance. Bruce Tulgan, founder of RainmakerThinking Inc., a New Haven, Connecticut-based consultancy that helps businesses understand Generation X, conducted more than 1,300 workplace interviews with employees age 35 and under. Searching his database of transcripts using the keyword “cool,” he discovered that the HR practices most employees find cool are those that support the notion that employees are individuals who have lives outside the office.

   “In cool companies, the old-fashioned distinctions between ‘home’ and ‘work’ aren’t there,” he explains. These companies recognize employees have pressures outside of the office — and that’s OK. Cool companies work to ease these pressures by providing such benefits as flexible work schedules, part-time jobs, job sharing, telecommuting, sabbaticals, onsite day care, dry cleaning and banking.

   Among the leaders in the work/life arena are Deloitte & Touche LLP, Eddie Bauer and the City of Phoenix, the 1998 winner of the Workforce Magazine Optimas Award in the Quality of Life category.

   But really cool companies don’t just help employees manage their lives outside work. They also enable employees to bring life into their work. How? By allowing them to express their individuality on the job through casual dress and personalized office decor, and by allowing them to play while at work.

   OddzOn Products, a toy manufacturer based in Campbell, California, has practically institutionalized the notion of having fun at work. Granted, it may be what you’d expect from a toy company, but how many companies do you know have closed the office and taken all 100 employees to a movie in the middle of a workday?

   Human resources managers at companies such as OddzOn understand that the majority of working adults spend the majority of their time at work. If these adults have any hope of getting cool into their lives, it’s not by dropping out altogether. That’s so impractical. It’s by working for companies that allow employees’ individual sense of cool to flourish. It’s by working for companies where they can be slightly nontraditional and nonconformist while at work. “Today, coolness isn’t outright rebellion,” Liu explains. “It’s rebellion from within. It’s the ability of a person to say, ‘I work here and I’m cool.'”

2. A sense of purpose. According to Robert Levering, co-author with Milton Moskowitz of the Fortune 100 list, Best Companies to Work for in America, cool companies are those in which employees feel connected to the product, to the corporate mission or to the overall vision of the industry. “In these companies, employees are energized by the sense that they’re somehow making a contribution,” Levering explains.

   Referring to his list of the 100 Best, which he also considers to be the 100 Coolest, Levering believes cool companies are like Harley-Davidson Inc., the motorcycle manufacturer based in Milwaukee, Wisconsin. Here, employees are so excited about the product that many of them have tattooed the company’s name on their bodies.

   Cool companies also are companies like Interface, a carpet manufacturer based in Atlanta. In an industry known for its environmental unfriendliness, Interface is setting itself apart from the competition by working to become the cleanest carpet manufacturer around. CEO Ray Anderson is leading this charge, making environmentalists out of employees by convincing them, “We’re screwing up royally as a human race.”

   Merck & Co. Inc., the giant drug manufacturer based in Whitehouse Station, New Jersey, also has fostered a devoted workforce by working to always “put patients before profits.” Here, according to Levering, “employees take obvious pride in the fact that Merck provides a low-cost anti-AIDS drug and gives away medicine in developing countries that prevents [a disease known as] river blindness.”

3. Diversity. An increasingly important dimension of coolness, according to people who observe Corporate America in action, is diversity. Not just politically correct diversity, as in affirmative action, but also real-life diversity. J. Walker Smith, managing partner with Yankelovich Partners in Atlanta, explains that cool companies are “a part of the world, rather than apart from the world.” They’re places where employees feel it’s safe to express their differences, whatever those differences may be, including gender, race, sexual orientation, work style, temperament and opinion.

   Allstate Insurance Co., based in Northbrook, Illinois, is one organization that takes its diversity missive seriously, and as a result, is considered pretty cool by some of the leading corporate list makers. The company has received extensive national recognition for its work to provide opportunities to women, Hispanics and disabled individuals. Among those bestowing the honors are: Working Mother Magazine, Hispanic Magazine, Business Week and the American Society for Training and Development.

   But when it comes to cool, diverse demographic numbers are only part of the story. Jerry Hirshberg, president of Nissan Design International Inc., in San Diego, California, believes his company is successful — and highly cool — for the very reason that diverse personalities aren’t only nurtured, but expected. His company, which lists the Nissan Sentra and Pathfinder among its many design credits, hires people especially for their unique cognitive sets and work styles. “Then, we work very hard to allow people to maintain those differences,” Hirshberg says. “This isn’t easy, but it’s more real and has a lot more built-in stimulation, the kind that’s necessary for creative work.

   “I think of two kinds of parties,” he adds. “An uncool party is one where people are invited for the sole reason of having a proper and impressive guest list. A cool party, on the other hand, is one where people are invited because they provide a stimulating and enjoyable mix, regardless of whether or not they have the right credentials.” Admit it: Which party would you rather attend?

4. Integrity. Tired of all the lying, cheating and stealing they read about in the news, today’s employees also find the idea of integrity a real turn-on. They don’t want to be forced to check their value system at the front door of the office. As Tulgan discovered in interview after interview: Integrity is where it’s at.

   Integrity refers to the ability of a company to communicate the truth to employees — whatever that truth may be. But, Tulgan says, it’s also much, much more. Integrity also refers to a company’s ability to care about the quality of its products and services. Companies with integrity want employees to do a great job, not just get the job done. Companies with integrity also allow employees to stand up for what they believe in.

   J.P. Morgan & Co. Inc., the Wall Street banking firm that ranked 44th on Levering’s Best Companies list, earned that honor, in part, because of its high ethical standards. If integrity is possible on Wall Street, this kind of cool can certainly be achieved elsewhere.

5. Participatory management. Lynn Taylor, vice president and director of research at Robert Half International Inc., the Menlo Park, California-based specialized staffing firm, decided to do her own research into what makes a company a cool place to work. Putting a call out to her regional directors, Taylor asked them which of the firm’s clients were considered the coolest places to work — and why. Their coolness had to be demonstrated by the fact that temporary workers were just dying to work there. (This is important because a majority of temps use these assignments as a way to shop for traditional jobs.)

   Taylor discovered one of the primary characteristics of today’s coolest companies was a participative management style. “These are companies that have realized employees on the front lines often have the best ideas, and that it’s often counterproductive to tell them what to do.” You see, in companies with a participative management style, collaboration may be the norm, but it’s still also possible for individual employees to have an impact. Who was on Taylor’s list? Nantucket Nectars, a juice company based in Cambridge, Massachusetts. Here, the style of management is so participatory that there’s no established hierarchy and no secretaries.

6. Learning environment. Another thing Taylor discovered when she set out to separate the cool from the merely tepid, is that cool companies promote lifelong learning. “These are companies in which employees leave at the end of the day knowing more than they did when they started,” she says.

   Anybody who has recruited on college campuses lately knows that the ability to continue learning is foremost in the minds of today’s young workers. “New graduates want to know your training budget,” Tulgan says. And why wouldn’t they? You’ve told employees they have to be responsible for their own career growth and development, and guess what: They believed you. Now, it’s up to human resources to keep up its end of the bargain by providing opportunities for that growth.

   Companies that do this, including Motorola, a training powerhouse based in Schaumberg, Illinois, and Trident Precision Manufacturing Inc., in Webster, New York, are considered very cool places for the knowledge thirsty.

Why cool matters.
If you can take all this — the telecommuting, tattoos and diversity, and blend them with ethics, empowerment and education — then yours would truly be a killer company to work for. But what’s the benefit? Why should HR care?

Because being cool — I mean, really, really, cool — makes it much easier to attract, retain and motivate the best employees around.

Let’s start with recruitment. For years, the Kwasha Lipton Group/hra of Coopers & Lybrand LLP, in New York City, ran your basic line-up of traditional recruitment advertisements. You know, the ones that promote competitive benefits, a good salary, growth opportunities, yada-yada-yada. For each newspaper ad, they’d receive approximately 100 responses from which they’d identify one good candidate — maybe.

Realizing the ads weren’t working, the company’s HR people began to look at what they really had to offer employees: a unique and challenging environment in which the expectation was for individuals to perform, not conform; an environment in which individuality was allowed to flourish.

HR revamped its ads to more accurately reflect the workplace. One headline reads: “Sell your expertise. Not your soul,”. As a result, Kwasha Lipton started receiving approximately 350 responses per ad, from which the HR staff hired an average of five to seven top-notch employees. According to Rosemarie Bruno, director of human resources in the company’s New York metro region, “The ads work not only because they’re a more accurate portrayal of what it’s like to work here, but because people want to work in this kind of environment.”

Netscape, the Mountain View, California-based maker of Internet software, also has been able to capitalize on its cool image to attract some pretty cool employees. In fact, Margie Mader, whose responsibilities include worldwide staffing and recruiting, isn’t called the staffing director. Her title is Director of Bringing in the Cool People. Why? “Because with all the competition in hiring right now, you need to give yourself an edge. You need something that describes the working environment and that’s intriguing to the candidate pool. Cool is appealing,” says Mader.

Another advantage to becoming and then marketing yourself as a cool company is that you’ll be attractive to employees who want to work at cool companies — and that’s a good thing. According to Mader, employees who are attracted to cool companies are less motivated by the money than the work. They’re interested in the level of work they’re doing and in their own personal career development. They’re people who are taking cool out of the arena of “neat clothes and nice car” and using it to refer to a contribution of intellect. In short, she says, “cool appeals to bright people who are asking questions that force companies to think differently.”

Bruno agrees. “The candidates who responded to our new recruitment ads were different from other candidates, especially in terms of their creativity. These people want to use their creativity at work. They think it’s cool to be able to work in a corporate setting and still be able to use all of their intellect, experience and expertise.”

But, you’re wondering, can you keep them around? Are cool employees the type to stay put? How does all this affect retention and the bottom line? Let’s take a look at the numbers. Using the Levering and Moskowitz research on the 100 Best Companies as a benchmark, today’s coolest companies possess a turnover rate considerably lower than the national average: 6.9 percent versus between 11 percent and 12 percent. Not only that, but if you average the top 100 companies together, the typical best or cool company increased its workforce by 23 percent in the last two years and receives more than 63,000 applications per year. In short, people want to work for cool companies; when they get there they stay; and they help companies grow. What more can HR ask for?

So, for all the Ward Cleavers of the world who think cool is only for young Californians who wear very small eyeglasses, very large pants and work on computers, think again. Cool is not about youth; it’s not about location; it’s not about fashion; and it’s not about technology. It’s a way of thinking — and a profitable one at that.

Workforce, April 1998, Vol. 77, No. 4, pp. 50-61.

The aging of the workforce will affect each company differently depending on the type of company it is and the kinds of workers it employs. A Rust Belt manufacturing company, for example, that employs many 50-something, blue-collar workers will face different issues — and face them much sooner — than a high-tech company that employs predominantly young, college-educated professionals.

According to David B. Friend, a physician and senior partner in Watson Wyatt Worldwide’s Boston office, in the not-too-distant future, such a manufacturing company will probably face increased health and disability costs, as well as a severe shortage of skilled workers. The high-tech firm, on the other hand, also will suffer from the labor shortage, but the most pressing issue will be one of employee retention.

Friend suggests that human resources professionals who don’t want to be caught off guard by issues related to the aging workforce should undertake an “aging diagnostic,” in which they evaluate:

• The age composition of the workforce currently, as well as five years ago. “Companies will also want to project the age distribution five years from now taking into account such potential events as mergers, acquisitions and downsizings,” Friend says. “These events can radically alter a company’s age distribution.”
• Employee turnover rates.
• The kind of work employees are doing. For example, does it require manual labor or highly sophisticated technical skills?
• How employees are compensated, including benefits and the cost of providing those benefits.

Completing the diagnostic will help HR professionals uncover the issues they’re likely to face as their workforces age, as well as the financial implications of those changes. With this information in hand, companies can begin to align corporate human resources strategies with labor-force strategies.

For example, a company that relies on a lot of manual laborers might want to encourage people to retire early, whereas a company that relies on knowledge workers might consider flexible-employment options that allow employees to work past age 65. That same company might also consider changing the compensation system from one that’s seniority-based to one that’s performance-based.

“With the aging workforce, there’s no longer a bountiful supply of fish out there,” Friend says, “and companies have to think harder about using each of their people more strategically.” The aging diagnostic will help them do just that.

Workforce, December 1997, Vol. 76, No. 12, p. 44.

At age 71, Michelangelo was appointed chief architect of St. Peter’s Cathedral in Rome—work he supervised until his death at age 89. Adolph Zukor was chairman of Paramount Pictures until he was 91. And George Abbot, the great Broadway actor, writer, director and producer, brought “A Funny Thing Happened on the Way to the Forum” to Broadway at age 75. He then topped that with the revival of his first hit, “Broadway,” when he was 100 years old.

These later-life achievements used to be the exception to the rule. For the last 60 years or so, the majority of working Americans have chosen to retire at age 65, buy a condo in the sun and invest an absurd amount of money in golf club memberships and vacation cruises. Productivity? Forget it. Retirement was a time for leisure—period. Only a small minority of people remained gainfully employed in life’s later years.

But it’s all changing now as baby boomers—that teeming mass of humanity that popularized rock ‘n’ roll, the sexual revolution and recreational drug use—hurtle toward retirement age. Thanks to the sheer number of them, baby boomers have profoundly affected American life at every step along the age continuum.

When boomers hit school age in the 1950s, classrooms couldn’t be built fast enough and many schools went into double sessions. When they went off to college, the number of college students nearly tripled to 9 million and 743 new colleges were opened. As corporate employees, they made casual dress the rule and demanded more flexible work arrangements and family-friendly benefits. Now, with the first boomers set to hit early-retirement age within the next four years, they will no doubt redefine the nature of that time-honored institution as well.

“Boomers make up 52 percent of the working population and are of an age at which they’ve reached managerial and executive positions,” explains Rebecca Chekouras, vice president of research services for marketing solutions and information provider Age Wave Communication Corp. in Emeryville, California, and a baby boomer herself. “As the adult governing population, we’re in charge. What we do sets the tone for corporate life,”—and for corporate retirement.

With one boomer turning 50 every eight seconds, a rate that will continue for the next 10 years, retirement issues are being pushed to the forefront of the national consciousness. But how will retirement be redefined? And why should it? Aren’t a nice pension check and loud Bermuda shorts the goal of all burnt-out corporate employees?

Well, yes and no. Sure, we all want more leisure time, but not everyone can afford a fat and happy retirement. Furthermore, not everyone will want to stop working at age 65, especially boomers who derive a significant part of their self-esteem from their jobs. But regardless of what boomers decide to do about retirement, these aging workers will have a tremendous impact on corporate human resources. In fact, they already are. From recruitment and retention to compensation and benefits, every facet of HR management is being challenged as the average age of workers continues to rise, and the first boomers stand on the precipice of their retirement years.

Why the structure of retirement is changing.
In the “old days”—which still exist to some extent—Americans spent the first part of their lives, from birth to their early 20s, educating themselves in preparation for work. This period of education was followed by employment, often with just one or two companies, that lasted until workers were eligible for full pension benefits at 62 or 65. Upon retirement, Americans settled into a time of leisure and inactivity.

“This model of the life cycle is rapidly becoming obsolete,” explains Richard Judy, a senior research fellow with the Hudson Institute Inc. in Indianapolis, and co-author of the 1997 study “Workforce 2020-Work and Workers in the 21st Century.” In the not-too-distant future, Americans will be more likely to combine work, education and leisure throughout their lives, instead of breaking them up into three distinct periods.

This is happening for several reasons. First, people are living longer, healthier lives. When Congress set the official retirement age at 65 in the 1930s, the average life expectancy was only 61.7 years. But today, men can expect to live to 81 and women to 85—and these are just averages. Millions of Americans will live far beyond these mileposts.

Because older Americans today are healthier, by and large, than their parents and grandparents were, they’re physically able to do more in later life. When he was 70, Jack LaLanne completed a 1 1/2 mile swim in Long Beach Harbor, handcuffed and shackled, towing 70 boats full of friends and reporters. LaLanne may be an extreme example—after all, plenty of 25-year-olds couldn’t complete this feat—but he shows what the body is capable of when it’s treated right. Boomers, who led this country’s health revolution, will be physically capable of working and producing much later in life than any previous generation simply because they’ve taken care of themselves.

Of course, the ability to live and work longer has been helped significantly by advances in medical science that have virtually eliminated the life-threatening nature of many diseases. And as Judy says, “Because medical science isn’t standing still, longevity may continue to increase even more.”

With all those years standing in front of them upon retirement, many boomers will want to remain productive, especially because “purpose” has always been a driving force in their lives. “This generation has always sought meaning in their lives and in their work,” explains Helen Dennis, director of the Andrus Institute of Gerontology at the University of Southern California in Los Angeles. “Boomers will look at retirement as a time of personal reinvention,” she says. Instead of getting out of the rat race altogether, boomers will search for new opportunities—be it in employment, volunteer work, education or perhaps even starting a business.

It will be easier for boomers to pursue new opportunities not only because they’re healthier, but also because increasingly, the work that’s available relies not on physical power but on cerebral strength. Our burgeoning knowledge-based economy means that people will be able to work longer because the work itself isn’t so exhausting. “People will find they can still be on the top of their professions in later years, unlike manual laborers who are simply fed up by age 55,” Judy says.

But the picture isn’t all rosy. While many aging baby boomers will be eager and healthy enough to continue some form of productive work well into their 70s or 80s, many boomers will have to remain working because of significant financial pressures. At this juncture, the future of the Social Security system has never looked so grim. Fortune reports that Social Security will be paying out more than it brings in by the year 2013—just 15 years from now—and will run out of money altogether by 2030. This is because the 76-million strong baby boom was followed by just 59 million baby busters, or Generation Xers as people in this group have come to be called. Because it takes approximately 3.2 workers to support each retiree, there will be far fewer workers than necessary contributing to the system.

But Social Security is not the only support system that’s in jeopardy-pensions also are imperiled as more and more companies realize they simply can’t afford the high cost of providing retirement income to their employees.

Because the crumbling pillars of federal aid and fat pensions can’t be counted on for support, retiring boomers increasingly will have to rely on their personal savings. For many boomers, that won’t be enough. The national savings rate dipped to an all-time low in 1993—just 2 percent of gross domestic product, down from 8 percent 20 years earlier—and it has only recently started to rise. Given their longer life spans, boomers have a lot of catching up to do if they hope to have even a bare-bones retirement income.

Put all this together and you begin to see what a good thing it is that boomers will want, and be able, to work in their later years. If current projections come true, they may not have a choice.

How retirement will be redefined.
So how, exactly, will retirement be redefined? Many different scenarios aren’t only possible, but likely, to occur depending on the needs of workers and their employers. The first crop of baby boomers to reach early retirement in the next few years will be in a better position financially to take full retirement if they so desire. Why? Because they’ll still be able to take advantage of company pensions and a relatively intact Social Security system.

But because they’re still healthy and energetic, the more likely scenario is that boomers will choose to leave their place of primary employment when their employers say they have to (usually around age 65), and then they’ll take whatever pension they have and direct their skills and energy toward more meaningful employment opportunities elsewhere.

“It sounds like a contradiction, but increasingly, employment is being seen as a viable option in retirement,” says Dennis. Her opinion is supported by a 1993 survey conducted by the National Institute on Aging in Bethesda, Maryland, that revealed nearly three-quarters of older workers would prefer to retire gradually, phasing down from full-time to part-time work instead of retiring abruptly as many now are forced to do.

In the next 20 years or so, there’s likely to be a great number of boomers working as independent contractors or consultants, taking part-time positions, starting small businesses or even working full-time for their existing employers if the companies will allow it.

Taking a longer-term view, the entire work/life cycle is likely to undergo a major shift, suggests Roger Herman, a strategic futurist and CEO of Herman and Associates Inc., in Greensboro, North Carolina. “I’m forecasting a series of mid-career retirements in which people work for eight to 10 years and then take a year off to pursue additional education, travel, open a new business, or [start] new careers,” he says. “By interspersing work and leisure time throughout their lives, people can continue this pattern until well into their 70s or even 80s.”

Boomers will impact HR.
But retirement or not, the aging baby boomers are going to have a significant impact on human resources in the next few years-just as they’ve affected every other facet of American life they’ve come in contact with thus far. Depending on their actions, they could:

• Create a crippling labor shortage
• Swell corporate benefits costs
• Make flexible employment arrangements the norm
• Ease the scarcity of knowledge workers
• Revamp the traditional retirement structure
• Create massive changes in this country’s health insurance system.

And these are just the beginning.

In fact, there’s no single element of human resources management that won’t be affected by the stampede of baby boomers heading toward retirement. The only way to minimize the effect of those changes is for HR professionals to begin now to analyze their companies’ workforces, anticipate the problems they’ll face and then develop strategic long-term strategies to combat those problems.

A key advantage HR pros have in meeting this massive demographic shift head on is that many—if not most—of this country’s top human resources executives are themselves members of the baby-boom generation. As representatives of their companies and of their generation, they’re in an ideal position to accommodate the retirement desires of their compatriots while also meeting the business needs of their employers. But it will require our nation’s HR managers to make some of the most difficult decisions they’ve ever had to tackle because it will bring into question the very nature of what employers can and should provide, what workers want and need, and what society will support. The social impact will be enormous. But the HR opportunity will be equally monumental.

George Burns, who performed as a comedian right up until his death at age 100, once had this to say about retirement: “Retirement at 65 is ridiculous. When I was 65 I still had pimples.” As the baby boom fast becomes an elder boom, no doubt many members of this energetic and rebellious generation would agree with Burns. Boomers know what they want out of retirement. It’s now up to business to decide what it can provide.