Sometimes irritating behavior is under-reported by co-workers; more often, the story grows in the telling. One of the worst things you could do is to confront an employee with bad or insufficient information. Doing so can has a negative impact on the employees, their perception of you and your organization, and negates the effectiveness of the intervention.
In most cases, such as with the employee you describe, there’s more than one distinct behavior to be changed. Only so much can be accomplished at one time. Trying to deal with too many problems at once will only increase frustration for everyone and may actually undermine your coaching effort.
Telling someone what they are doing wrong is only part of the solution. Tell the employee what you want clearly and in enough detail that they will get the picture of what desired behavior sounds and looks like. It is best to share several specific examples of each desired behavior with the employee.
Meet privately with the employee to discuss the needed change, the advantages to the employee if changes are made, and the specific behaviors you want to see—and to develop a plan to monitor those changes as they occur.
One final thought: If all you are hearing is complaints, it may be time to take a critical look at your team. Good teams do more than complain; they pitch in and help one another succeed. Do your employees truly understand that they are empowered and are expected to help others? Do they have the assertiveness and coaching skills needed to do so well? Enhancing co-workers’ abilities in these critical areas will result in more team cohesiveness and better overall results.
Technology Companies Are Behind the Talent Management Times
Technology and telecommunications companies employ outdated tactics for recruiting and retaining talent, according to a new report from professional services firm Deloitte.
The study of more than 150 technology and telecommunications companies in North America found that most firms in those sectors rely on financial incentives to attract and retain employees. But today’s workforce values greater freedom in schedules and control of where and how they work over financial compensation, Deloitte said in the report, released Wednesday, March 5.
“The conflicting perspectives between technology and telecommunications employers and employees suggest that the respondents are significantly challenged in how they capture their fair share of talent in the near term,” Jeffrey Alderton of Deloitte Consulting said in a statement.
The report comes amid mixed signals regarding the technology and telecommunications job market. According to the U.S. Department of Labor, U.S. payroll employment in the computer and electronic products sector dipped by 1,200 jobs from December to January, to 1.26 million. Between January 2007 and January 2008, employment in that sector fell by 35,100 jobs. In addition, payroll employment in the telecommunications sector dropped by 9,200 between January 2007 and January 2008, to 1.03 million jobs.
But payroll employment in computer systems design and related services rose by 78,500 between January 2007 and January 2008, to 1.39 million jobs.
The Deloitte survey, conducted last spring, found upbeat hiring expectations. Two-thirds of respondents expect their workforce to grow by at least 6 percent over the next 12 months, and only 6 percent expect their workforce to shrink, Deloitte said.
Even so, technology and telecommunications companies surveyed are generally less worried than companies in other industries about a prolonged global labor crisis, Deloitte said.
“This may be due to the fact that technology and telecommunications companies are considered ‘sexy’ and, therefore, have an easier time attracting talent,” Deloitte said. “It may also be attributable to their younger workforces, which are less affected by baby boomer retirements.”
In the report, Deloitte said that 71 percent of companies surveyed said they use financial rewards and incentives to attract and retain talented employees. That was by far the most-mentioned strategy. Training and development programs, cited by 48 percent of respondents, was second, followed by implementation of career growth plans, mentioned by 36 percent.
Deloitte cast the focus on financial tactics as behind the times. “Workers today aren’t as interested as they used to be in hefty compensation packages and fancy retirement plans,” Deloitte said. “What they really want—more than anything else—is direct and personal control over when, where and how they work.”
The report also argues that young “Millennial” workers aren’t the only ones interested in a significant say over their jobs. “It turns out that recent retirees who are re-entering the workforce want many of the same things as their younger counterparts,” Deloitte says. “So do ‘Gen Xers,’ although they are probably too afraid to ask.”
Many companies have taken steps in the right direction, Deloitte says.
The survey found plans to ramp up such things as mentoring and training. The next step, according to the report, “is for companies to develop such programs as mass career customization that make personalized career development a standard operating practice, rather than a one-off exercise reserved for special circumstances.”
—Ed Frauenheim
Study More Firms Say Hiring Will Be Off in 2008
Recruiting consultancy CareerXroads released its annual Source of Hire Study, and for the first time in its seven-year history, more respondents are saying they will make fewer hires than in the previous year.
Almost 35 percent of respondents predicted they would have fewer hires in 2008, compared with 32 percent in 2007. Forty-four percent of respondents said the number of hires will remain the same. Only 22 percent of participants predicted more new hires.
Additionally, the No. 1 source of all hires is internal transfers and promotions, which mimics last year’s results, according to the survey released Wednesday, February 27. The survey included 49 employers with workforce populations of 5,000 that made 303,000 hires in 2007, according to Gerry Cris¬pin, principal at CareerXroads. The data was collected in January.
Internal transfers and promotions accounted for 30 percent of the hires that survey participants made in 2007. Some respondents said that as much as 50 percent of their hires were derived from internal transfers and promotions.
Despite such practices, the study finds, companies are not bragging about it to potential candidates. It’s a missed opportunity, Cris¬pin notes, particularly because career development is one of the key factors that prospects take into account when evaluating a job offer.
The study also notes that referrals make up 28.7 percent of all external hires. The study shows employee referrals are by far the largest contributor of candidates in this category. Twenty percent of survey respondents said one out of two employee referrals result in a hire.
About 26 percent of hires attributed to job boards, including a company’s own site. There are some promising changes under way in the area, Cris¬pin says. Companies in the survey showed an increased awareness of the flaws that lie in using online pull-down menus to determine where job seekers initially learned about a vacancy.
Fifty-two percent of respondents said they ask a candidate source-of-hire questions during the interview. And 26 percent of participants ask source-of-hire questions to employees during the onboarding process.
Direct sourcing, or proactively finding leads, contributed to 9.4 percent of hires—which was up from 6.4 percent in 2006. Cris¬pin believes the rise of direct sourcing is related to the reduction in agency hires. Third-party placement agencies now bring in 3.3 percent of hires, according to survey participants. This has been declining steadily, from 4.8 percent in 2006 and 5.2 percent in 2005.
Media print ads are falling, accounting for only 4.6 percent of hires among survey respondents, compared with 6.9 percent in 2006. CareerXroads believes newspaper ads will eventually bottom out at between 3 percent and 4 percent.
—Gina Ruiz
House Passes Mental Health Parity; Difficult Conference Looms
Legislation that would bolster mental health benefits gained strong House approval Wednesday night, March 5. It now heads for what could be difficult House-Senate negotiations to produce a final bill.
In a 268-148 vote, the House passed a measure that would prohibit companies that offer mental health and substance-abuse benefits from charging more for them than they do for medical and surgical benefits.
The bill expands current parity law, which requires equal annual and lifetime dollar limits. Under the House measure—and a Senate companion—co-payments, deductibles, and out-of-pocket expenses also would have to be equal.
Unlike the Senate bill, the House version would mandate coverage for all conditions listed in a diagnostic manual published by the American Psychiatric Association.
Critics say that provision would force companies to finance treatment for disorders like jet lag and caffeine addiction. Advocates argue that broader coverage prevents “discrimination by diagnosis.”
The Senate bill, which passed that chamber unanimously last fall, has the strong backing of business groups. Their House allies criticized the Democratic majority for not allowing a House vote on the Senate bill. The Bush administration opposes the House bill and supports the Senate version.
Rep. Howard “Buck” McKeon, R-California and ranking member of the House Education and Labor Committee, faulted the House bill for providing “preferential treatment for mental health benefits.” He said it “has little chance of becoming law.”
The measure may put all benefits in jeopardy. “Some employers may choose to drop their mental health coverage rather than comply with burdensome mandates,” McKeon said.
Rep. Robert Andrews, D-New Jersey, disputed McKeon’s assertion. “There is not one shred of empirical evidence” that employers have discontinued mental health coverage in states that have stronger parity laws than the one the House approved.
Rep. Patrick Kennedy, D-Rhode Island and one of the bill’s authors, also dismissed McKeon’s argument. “No one questions when you get a broken arm, but when you have a mental illness, it’s discriminated against,” he said. “[His bill] is not preferential treatment.”
Kennedy, who has had his own battles with substance abuse, characterized the measure as a “truly landmark piece of civil rights legislation.”
Whether it will survive a House-Senate conference is a different matter. Kennedy’s father, Sen. Edward Kennedy, D-Massachusetts and chairman of the Senate Health Education Labor and Pensions Committee, will be one of the negotiators. He and Sen. Pete Domenici, R-New Mexico, are the authors of the Senate measure.
Both lawmakers praised the March 5 House vote. But in a press conference following unanimous approval of the Senate measure last fall, Domenici emphasized that businesses, insurers and mental health advocates not only backed the bill but had spent years crafting it.
“We’ll go to conference carrying that with us, knowing that it makes the bill pretty passable,” Domenici said in September.
In contrast to accolades for the Senate bill, the House version drew opprobrium from business groups. They said it would negate medical management practices, mandate out-of-network coverage, subject businesses to different coverage rules in different states and raise insurance costs.
“One of our member companies has pre-existing contracts with more than 150 plans, all of which would require amendment or renegotiation, severely disrupting the entire spectrum of benefits offered,” wrote Edwina Rogers, vice president of health policy at the ERISA Industry Committee, in a letter to House members.
Another bill that has drawn less criticism from business, the Genetic Information Nondiscrimination Act, was added to the parity legislation. The measure, which was approved 420-3 by the House in April 2007, prohibits health insurers from canceling or denying coverage based on a person’s genetic information.
But a coalition of employers warns that the bill could subject companies to excessive punitive damages for paperwork mistakes when keeping health records.
—Mark Schoeff Jr.
Ford Rewards Employees With $1,000 Bonus
Ford Motor Co. is paying every U.S. and Canadian employee a $1,000 bonus even though the automaker lost $2.7 billion last year.
In a companywide e-mail to all employees on Wednesday, March 5, CEO Alan Mulally said that although Ford fell short of its sales goals for 2007, the automaker “met or exceeded” its objectives in every other category.
The bonus also will be paid to managers outside the U.S. and Canada. Mulally said the “performance awards” are based on improvements in cost performance, quality, automotive cash flow and financial results.
“The board of directors believe it is important to reward employees for delivering significant results and keeping the company on track to become profitable again by 2009,” Mulally’s e-mail said.
The bonuses will be paid this month.
Ford also said Wednesday that salaried employees’ merit increases, originally scheduled for April 1, will be delayed until July 1. Merit increases, unlike bonuses, are based on an individual’s performance for the present year.
Ford said hourly workers who worked at least 40 hours and were active employees through the end of last year will receive the bonus. Ford spokeswoman Marcey Evans would not say how much the bonuses will cost Ford.
Filed by Bernadine Williams of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
CEO Turnover Up 50 Percent at Big North American Businesses
CEO turnover at the 500 largest companies in the world jumped 10 percent last year from the level in 2006, driven by financial instability and a huge wave of mergers and take-privates, according to a report by public relations firm Weber Shandwick.
Top executives at 81 companies left their jobs in 2007.
Exits from North American companies jumped 50 percent from a year earlier, to 27 in 2007. The fourth quarter was particularly tumultuous for North American CEOs, with 13 leaving office in that period, the report found.
Turnover was highest in the telecommunications industry and in financial services, where the subprime meltdown claimed several CEOs, including Citigroup’s Charles Prince and Merrill Lynch’s Stanley O’Neal.
CEOs at large companies typically leave for “traditional” reasons—retirement, succession planning and the like. But last year, there was a sizable bump up in the number of chief executive departures attributed to nontraditional reasons, such as mergers, private equity buyouts, interim term completions and corporate governance restructuring.
More telling, nearly a third of the departures were against the CEO’s will, up from 28 percent in 2006, Weber Shandwick found.
The report showed that insiders, or those who have worked for a company for three or more years, are still preferred when searching for a new CEO. In 2007, nearly seven out of 10 newly named CEOs were insiders.
The average tenure of CEOs who exited office last year was six years, down from six years and five months in 2006. North American CEOs’ average tenure declined to six years and eight months from eight years and six months.
Filed by Matthew Quinn of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
Pensions & Investments East Coast Defined Contribution Conference
Event: Pensions & Investments East Coast Defined Contribution Conference
When: March 3-4, 2008
Where: PGA National Resort & Spa, Palm Beach, Florida
What: Defined-contribution plan sponsors, providers and consultants come together to discuss compliance, best practices and the changing regulations in retirement benefits.
Conference information: For information about Pensions & Investments, go to www.pionline.com.
Day 2—March 4, 2008
Compliance complaints: Day 2 kicked off with Deanna Garen, senior vice president, relationship management, at Prudential Retirement, lamenting all the new rules and regulations confronting 401(k) plan providers.
“If only we could spend as much money on innovation as we do on compliance,” she said as several people in the audience nodded their heads.
Preaching to the choir: Keynote speaker Raymond Martin spent the first half of his keynote speech discussing the retirement savings crisis in America—a concern that wasn’t new to attendees.
However, benefits managers’ ears pricked up when Martin, president and CEO of CitiStreet Advisors, chastised them for only automatically enrolling new hires into their 401(k) plans and not current employees.
The three biggest reasons companies say they do not automatically enroll current employees is they are afraid of increased liability, more costs associated with offering an employer match to more participants, and a fear of increased complaints from employees, Martin said.
But if companies comply with the Pension Protection Act on default funds for employees, liability shouldn’t be an issue, he said. And proper communications and education should address complaints from employees, he said. And what about increased cost?
“My sense is that the savings companies are seeing from changes in their pensions and health care plans are more than the increase cost associated with the employer match,” he said.
Martin also gave an earful to 401(k) plan providers for making it so difficult for employees to roll over their assets from a 401(k) plan to an Individual Retirement Account. This is a particular issue as young people are switching jobs more often, he said.
“It is just absurd how difficult financial institutions make it to roll over money,” he said. As a result, employees often just cash out of their plans.
Even legislators—none of whom were in attendance—got a talking-to from Martin in his speech. As people are living longer, these individuals are going to need to figure out how to pay for their health care in retirement, he said. Martin called on Congress to allow for tax-free withdrawals from 401(k)s to pay for health care.
“This could be yet another incentive to get employees participating in their 401(k) plans.”
Day 1—Monday, March 3, 2008
More news on the horizon: Plan sponsors and providers who thought they could relax now that the Pension Protection Act has been enacted were in for a rude awakening from the opening speaker of the conference.
James Delaplane, a partner at the Washington law firm Davis & Harman, is a regular speaker at the P&I events and is known for waking up attendees by listing a number of important issues being batted around Capitol Hill. This conference was no different.
A pressing concern for both plan sponsors and plan providers is the Department of Labor’s pending regulations on fee transparency.
First, the DOL is planning to establish regulations on how plan providers should disclose fees to plan sponsors. This, however, may not be limited to just defined-contribution providers, Delaplane noted. As it currently stands, health and welfare providers and defined-benefit providers would also have to disclose this information—which came as news to several attendees.
“Many people are saying that they should break this out into different buckets,” Delaplane said in an interview after his presentation. It remains unclear what the Labor Department will do.
Even more pressing for employers, however, is what will happen with the current discussions both at the DOL and on Capitol Hill on how employers should disclose fees to plan participants.
Right now, the DOL, the House of Representatives and the Senate are all looking at this issue. The potential good news for employers, according to Delaplane, is that while the House is likely to pass a bill, the Senate is not. This means the Labor Department will likely be the source of the rules on how companies should disclose fees to plan participants.
Without predicting who our next president might be (at the last conference, he predicted that Mitt Romney would be running against Hillary Rodham Clinton), Delaplane also discussed the various implications for employers if Clinton, Obama or McCain became president.
Regardless of who becomes president, there will be much discussion in coming years about how to take care of the baby boomers as they retire, Delaplane said.
The national concern about reaching people who are not covered in retirement plans is only growing.
And the question that all companies are going to be wrestling with is what happens to those retired employees and their management of money after they leave the company, he said. “Are you ready to take that on?”
Effective marketing for 401(k)s: Sitting outside over breakfast, Ross Servick, head of consultant and research relations at Schroders Capital Management, discussed one of the most effective strategies of increasing 401(k) plan participation that he had ever witnessed.
Twenty years ago, when he was just starting to work at MFS Investment Management, the HR person gave him and the other new employees two forms.
They were told that one was to fill out now and if they didn’t want to do that, they could fill out the second one when they turned 65. The first form was a 401(k) application. The second? An application to work for McDonald’s.
Needless to say, everyone signed up.
—Jessica Marquez
Study 401(k) Automatic Enrollment Grows
The number of employers offering a 401(k) plan automatic enrollment feature continues to grow, with 44 percent of employers now doing so, up from 36 percent in 2007, a study shows.
The Hewitt Associates study of 190 midsize and large U.S. employers—released Monday, March 3—also found that of the employers that do not offer automatic enrollment, 30 percent said they are very likely to add the feature this year, while 27 percent are somewhat likely to do so.
Automatic enrollment is aimed at those employees who don’t elect or decline to enroll in their employer’s 401(k) plan. Under automatic enrollment, such employees are told that they will be enrolled—with a specified percentage of their salary deferred to the 401(k) plan—unless they object.
Such programs have grown rapidly in recent years for several reasons, including the passage of legislation in 2006 that pre-empted any state laws that could have interfered with the programs.
In addition, as more employers phase out their defined-benefit pension plans, 401(k) plans increasingly have become employers’ sole retirement savings plans. Adding an automatic enrollment feature increases the likelihood that more employees will have at least some retirement plan savings.
Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
Few Public-Sector Employers Pre-Fund Retiree Health Plans
Few state and local governments are pre-funding their retiree health care plans, which could have liabilities as high as $1.6 trillion, the Government Accountability Office reports.
In its report, the GAO said that based on its discussions with public-sector executives, there are several reasons why few public-sector employers pre-fund retiree health care benefits.
One reason, the GAO was told, is that many of the plans were established at the time when health care costs were low, so paying the benefits as a yearly expense was not considered burdensome.
Additionally, since there are fewer restrictions in cutting retiree health care benefits—compared with pension plans—employers are reluctant to commit funds to a benefit that may be reduced or eliminated in the future, the GAO was told.
Currently, on average, retiree health care benefits costs are equal to about 2 percent of what public employers pay for employees’ salaries. By 2050, that expense will be affected by a growing pool of retirees and health care inflation and is expected, on average, to equal about 5 percent of salary, “adding to budgetary stress,” the GAO said.
That will mean public employers “may face even greater pressure to reduce benefits or shift the costs of benefits to beneficiaries,” the GAO said.
Indeed, in the private sector, the percentage of employers offering retiree health care has plummeted in the last decade, while in the auto industry—one of the last bastions of rich retiree health care coverage—the Big Three Detroit automakers reached agreements last year with the United Auto Workers to walk away from those commitments in exchange for tens of billions of dollars in contributions to special health care trusts that the UAW will control.
Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
In the Midst of Deep Global Job Cuts, Unilever Combines Divisions, Shores Up Overseas Leadership
Unilever announced on Friday, February 29, its biggest senior management shake-up since Patrick Cescau became CEO in 2005, combining its home and personal care unit with its foods division under a single executive and leaving the Anglo-Dutch company with no English or Dutch executives in its uppermost ranks.
The overhaul of the world’s No. 2 advertising spender expands the roles of two key Indian executives—and the odds one will eventually succeed Cescau, 59, a Frenchman, as CEO. The company is in the midst of 20,000 job cuts globally and in the process of trying to sell its North American laundry detergent business.
Vindi Banga, 53, now president-foods, will also oversee home and personal care following Unilever’s annual shareholder meeting in May. Harish Manwani, 54, currently president-Asia/Africa, will add Central and Eastern Europe to his duties, putting most developing and emerging markets under his leadership.
Manwani, who was president of North American home and personal care for about a year prior to assuming his current post in 2005, like Banga began his career with Unilever’s $3 billion Hindustan Lever business in India.
Doug Baillie, 52, born in Zimbabwe, will move from CEO of Hindustan Lever to president of Western Europe, which will now operate as a separate unit from the rest of Europe.
Two longtime executives are retiring: Kees van der Graaf, 57, a Dutch executive who is now president-Europe, and Ralph Kugler, 51, a Brit who is now president-home and personal care.
“We thank Kees and Ralph for all they have done for … and we wish them well,” Michael Treschow, the Swedish non-executive chairman of Unilever, said in a statement.
The moves complete a near-total overhaul of senior leadership at Unilever the past three years, including Treschow’s appointment last year. The balance of top managers includes James Lawrence, 54, an American and veteran of General Mills who was appointed CFO in September; and Michael Polk, 46, an American and veteran of Kraft Foods and Procter & Gamble Co. who became president-Americas in 2006.
Just over three years ago, Unilever was led by British and Dutch co-chairmen and a mostly Anglo-Dutch leadership group.
Filed by Jack Neff of Advertising Age, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.