Author: Site Staff

Although provisions of a landmark pension bill approved by Congress don’t take effect until 2008, companies may start increasing payments into their plans immediately to achieve better terms for completely shoring up underfunding in the future.

The bill, which was approved by large margins in the House and Senate and has been sent to President Bush, requires that companies fund 100 percent of their pension promises over seven years. But the healthier a plan is by September 2007, the more time it will receive to make the transition — perhaps a total of 10 or more years.

“There will be a real incentive to fund these plans over the next 12 months,” says Kevin Wagner, retirement practice director in the Atlanta office of Watson Wyatt.

Generous transition means the Pension Benefit Guaranty Corp. probably won’t eliminate its $23 billion deficit anytime soon, according to Bradley Belt, former PBGC executive director.

Belt, who helped formulate Bush’s stringent pension proposal, gave the congressional reform a mixed review.

“It’s a partial long-term solution,” he says. “In certain key areas, it’s an improvement over current law. It’s clearly not a panacea. It won’t ensure that the taxpayers won’t bail out (the PBGC) over the long haul.”

After years of effort, Congress finally reached agreement on the complex bill in late July. Legislative activity has been fostered by several recent large pension defaults and estimated total pension underfunding of more than $300 billion.

The pension bill prohibits the use of credit balances in plans that are less than 80 percent funded. It subtracts the balances to determine the funding level. It forces companies to pay higher “at risk” premiums if plans are below 80 percent and slip to less than 70 percent, assuming that workers eligible to retire in the next 10 years do so as early as possible. It reduces interest-rate smoothing to 24 months. And it proscribes increasing benefits if a plan is below 80 percent funding.

In a concession to airlines, carriers will receive between 10 and 17 years to reach 100 percent funding, depending on how they have frozen their pension plans.

“You still have a hodgepodge of rules,” Belt says. “It’s a reflection of the sausage-making process.”

Analysts agree that the new sausage will be spicy — in the form of higher payments, either to meet the 100 percent funding mandate or to avoid costly “at risk” status.

“Plan sponsors are much more focused on staying above these trigger points,” says Jon Waite, chief actuary of SEI Global Institutional Group. The new rules “are going to drive a lot more money into pension plans.”

Waite estimates that a $100 million plan funded at 90 percent, the requirement of current law, would pay an extra $2 million annually, or a 30 percent to 40 percent increase, to meet new funding targets.

Despite the rise in costs, companies are relieved to have certainty after years of limbo.

“This bill in and of itself doesn’t make plans onerous,” Wagner says. “This should stop some of the momentum (to dump defined-benefit plans) because we know what the rules are.”

—Mark Schoeff Jr.

A national debate on immigration reform has stoked the employee verification market.

USIS, a provider of background screening services, launched its I-9 product in May, while Premier Employment Screening Services added an I-9 feature to its line in June.

The timing is propitious, as congressional action—and massive immigrant marches in the spring—raised the issue’s profile. If final legislation emerges this year, it is likely to include tougher border security and work-site enforcement provisions, two areas on which conservatives and moderates agree.

“It’s a pretty safe bet that I-9 is going to be part of the solution,” says Timothy Dowd, president of USIS’ commercial services division. “Having (immigration) on the front page every day and the ambiguity of (potential) outcomes creates a lot of interest in what we’re doing.”

Premier accelerated the development of its verification product because of a high volume of inquiries about employment eligibility compliance, says Chris Baker, the company’s CEO.

“The majority of Premier’s I-9 verification clients are utilizing the service now in order to be proactive ahead of anticipated increased penalties for noncompliance,” Baker says.

Immigration reform may put the same kind of fear into companies that has been generated by the Sarbanes-Oxley overhaul of financial controls.

“The I-9 debate is prompting many employers to decide that it’s in their best interest to retain an independent, nongovernmental entity to conduct I-9 audits as a preventative best practice,” Baker says.

Premier plans to charge $12 to $18 for each employee verification. The standard price is $8 per screening for the USIS product.

The House and Senate versions of immigration legislation would require employers to verify the legal status of their employees and would impose large fines and criminal sanctions on companies that knowingly hire illegal workers.

The USIS product will submit a request to search Social Security and Department of Homeland Security files after receiving employee information from a company. It claims a turnaround time of 24 to 72 hours, and a maximum of 10 days if results are contested.

The Basic Pilot electronic verification system established by the Department of Homeland Security has been called flawed, inefficient and unreliable by critics. About 8,600 companies have signed up for the pilot program. Immigration legislation would require every U.S. employer to join the electronic system.

But before any final measure can pass, it must first be approved by a House-Senate conference committee. House conservatives have balked at Senate provisions for guest worker programs and for establishing a path to naturalization for undocumented workers.

The process will not begin until after a series of national hearings on the Senate bill that House committees are holding this summer. With a fall start, the conference may have to conclude during a lame-duck session following the election.

“The American people need to know what’s in the bill and we need to hear directly from them about it,” says House Speaker J. Dennis Hastert, R-Illinois.

One business advocate of comprehensive reform says the House hearings may help her cause.

“We think bringing these hearings to the field might engender more support for getting the conference together,” says Laura Reiff, co-chair of the Essential Worker Immigration Coalition.

—Mark Schoeff Jr.

The low-cost labor route may dead-end in tomorrow’s economy. So says scholar Edward Lawler, co-author of the just-released book “The New American Workplace.” The book aims to update a seminal 1973 study about work in America, and Lawler discussed the findings at the Society for Human Resource Management’s annual conference in June.

As he does in the book, Lawler argued to his SHRM audience that companies focused on cutting costs through measures such as low wages and skimpy benefits will struggle to adapt effectively in the fast-moving global economy. You can go “only so far” with a low-cost approach, he said.

Lawler wrote the new book with James O’Toole, the principal author of the original “Work in America” study more than 30 years ago. The new book was financed in part by SHRM.

The 1973 study, sponsored by the federal government, cited evidence that too many Americans were engaged in narrow, repetitive and routine jobs, especially in manufacturing, and that was leading to mental and physical health problems.

In “The New American Workplace,” Lawler and O’Toole say executives in the 1970s and 1980s redesigned some jobs to make them more challenging and satisfying, automated other tasks, and exported many of the remaining “bad” jobs. Now, they say, the U.S. has chosen to have the most capital- and knowledge-intensive industries in the global economy.

But the country faces a number of challenges. To survive competitively, the U.S. economy must be in a state of constant change, where inefficient products, companies and industries are continually replaced.

The country is not creating enough new good jobs, Lawler and O’Toole say. They also see evidence of decreasing economic mobility. And while workers face a wider array of choices than ever before, the authors say that most American workers bear increased risk in areas such as employment security, health care and retirement.

The topic of economic insecurity in America has been getting more attention in the past few years, as companies distance themselves from traditional pension plans and corporate giants such as General Motors announce major layoffs.

In the wake of the traditional bureaucratic, hierarchical management model, Lawler and O’Toole see three alternatives today. One is what they call “low-cost operators,” which concentrate on trimming costs in a bid to keep prices low. Work there, they write, is in many ways “similar to the routine, low-level tasks that were the norm in manufacturing in an earlier era.”

The companies Lawler and O’Toole call “global-competitor corporations” are large and geographically spread out, and they compete for financial capital, skills, knowledge and technology. The firms may pay employees well and offer opportunities to develop new skills, but the relationship between such companies and employees is “transactional, not one based on loyalty.”

Then there are “high-involvement companies,” which provide workers with challenging jobs, a voice in the management of their tasks and a commitment to low turnover and few layoffs. The authors say employees in these firms tend to share in company profits or from gains in productivity and enjoy generous benefits.

During his presentation, Lawler said that the latter two management styles make the most sense. But, he said, “Our hearts and minds are with the high-involvement approach.”

—Ed Frauenheim

Mercer Human Resource Consulting is under investigation by Texas authorities for allegedly violating state laws by receiving rebates from insurance companies and for not disclosing commissions paid by insurance companies to Mercer’s parent organization, Marsh & McLennan Cos. 

The Texas Department of Insurance filed a notice July 11 saying it is considering disciplinary action against the company, which also operated as a life and health insurance counselor without a proper license, according to the notice. Mercer says the allegations in the letter are unfounded.

The investigation in Texas is partially attributable to a string of problems that has beset Marsh & McLennan since New York Attorney General Eliot Spitzer alleged that Marsh, the world’s largest insurance broker, had steered business to insurers in exchange for illegal payments. Marsh paid $850 million early last year to end the investigation without admitting wrongdoing, though several Marsh executives faced criminal charges and a handful pleaded guilty to criminal charges of fraud. 

It was through the investigation by Spitzer that Texas officials found payments totaling $125,000 paid to Marsh by the insurance companies whose business Mercer steered toward them. Such an arrangement constitutes fraud and creates a conflict of interest between Mercer and its client, says Robert Walt, an attorney for the Texas Department of Insurance.

The events leading to the Texas investigation began in 2000, when Mercer was hired by the Houston Independent School District to restructure the school system’s health benefits administration. 

During the next five years Mercer was paid more than $20 million to outsource the school system’s benefits. School officials, who are not under investigation, say they have saved money, but a portion of those savings came from $800,000 in rebates Mercer received from insurance companies. Though the rebates were passed on to the school district, receiving them is illegal in Texas, Walt says, as it is in several other states.

“To paraphrase, Mercer said to the HISD, ‘You will save beaucoup bucks if you go with us because you will get lower [insurance] rates’ ” and savings in the form of rebates, Walt says. 

Mercer also allegedly brokered deals between insurance companies and the school districts that it worked for, passing commissions from those deals to the schools, which saw the money as part of their savings. A competing insurance broker, Richardson-Eagle, complained to the Department of Insurance, saying such an arrangement was only possible because Mercer was foremost a fee-based consultant, not a broker, and so could afford to pass commissions on to its clients. In its notice, the Department of Insurance said Mercer violated state law by engaging “in an unfair method of competition.”

The Houston Independent School District also created a purchasing coalition with other nearby school districts. The other districts paid a fee to join the purchasing coalition in hopes of receiving lower insurance rates. But Texas insurance officials contend the plan was intentionally misleading because each school district is rated by health insurers separately and therefore cannot realize savings by joining purchasing coalitions. 

Nonetheless, officials from the other school districts in Dallas, Aldine and Katy have said the coalition saved them money.

A Mercer spokeswoman, Stacy Bronstein, wrote in an email that once the department of insurance “understands our arrangement with the school district, we are hopeful that they will conclude that we are in compliance and that the Department should be supporting, not challenging, a cooperative structure that saves money for the districts and their taxpayers.” 

The investigation in Texas has been a boon to plaintiffs in three civil lawsuits filed against Mercer by former employees of the school district and Richardson-Eagle, says Jim Reed, the plaintiff’s attorney in the cases. Reed is an attorney with Looper Reed & McGraw in Houston. Before the Department of Insurance issued its letter, one of Reed’s cases against Mercer was dismissed by a state court in pretrial summary judgment, a decision Reed is appealing.

“We believe the Texas Department of Insurance letter confirms every one of our allegations,” Reed says. 

Texas officials told Workforce Management that they are waiting to meet with an attorney representing Mercer before proceeding.

—Jeremy Smerd

 

The United Steelworkers of America, the country’s largest manufacturing union, and the Sierra Club, the nation’s largest environmental group, may seem unlikely bedfellows.

But in June, the organizations announced the formation of the Blue/Green Alliance, the first formal partnership ever between a labor union and an environmental group.

The groups established an official relationship because they see a need to address how environmental issues are relevant to the U.S. economy, says David Foster, the alliance’s executive director.

Specifically, the alliance will focus on showing how good environmental practices can create jobs and result in safer workplaces. The groups will also launch campaigns highlighting the loss of manufacturing jobs to countries with poor environmental and labor standards.

“We recognize that we need to have a joint voice to be more effective in managing how workers’ rights are protected and in advocating that environmental protections are maintained,” Foster says.

The partnership may be the first of a larger movement by labor unions to raise awareness around environmental issues, says Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts.

“This is a great platform for the union because it’s difficult to argue against protecting the environment,” he says. “This is a way for unions to prove that they are relevant again.”

Just as unions rallied around the civil rights movement of the 1960s, this represents another social issue that puts them on the moral high ground, says Tom Walsh, a partner in the White Plains, New York, office of Jackson Lewis.

During the next few months, the alliance will launch its “New Vision for America Tour,” in which it will hold events at cities across the country whose mayors have embraced the Climate Protection Agreement, a movement of mayors who have vowed to take action to support the Kyoto Treaty on global warming.

The alliance expects to reach out to other unions in the manufacturing space to join its cause, Foster says. “We expect this to be a catalyst for more unions and environmental groups getting involved,” he says.

Esmeralda Aguilar, a spokeswoman for the AFL-CIO, says environmental issues are a focus of some of the labor union’s campaigns, but it doesn’t have immediate plans to launch a formal alliance with an environmental group.

The Change to Win Coalition, a group of several unions that broke from the AFL-CIO earlier this year, plans to launch a campaign in the next several months focusing on the environmental hazards facing truck drivers at ports nationwide, says Carole Florman, a coalition spokeswoman.

Many of these drivers, particularly in the Los Angeles area, are working in dangerous environmental conditions, she says.

Increased labor activity around environmental issues will likely take the shape of corporate campaigns focused on specific employers, labor lawyers say.

To address this, companies need to not only make sure that they are abiding by best practices so they are as clean as possible, but they also need to be proactive, Walsh says.

“If employers feel that this is an issue for them, they can get out in front of it and team up with environmental organizations themselves,” he says.

—Jessica Marquez

Organizations representing women and minorities contend that the federal agency responsible for fighting discrimination in the workplace is being gutted by the Bush administration.

The government counters that its redesign of the Equal Employment Opportunity Commission is adding more people to the battlefield.

The opposing views are coming into stark relief as the federal budget wends its way through Congress. The American Federation of Government Employees and 10 other groups are protesting a proposal to cut $4 million from the EEOC budget.

Coming on top of reductions in the organization’s workforce since 2001, the union says the latest round of cuts demonstrates the administration’s intention to starve the EEOC to death.

Activists say the agency lacks staff and resources as the caseload piles up.

“This plan would send a loud and clear message to employers—go ahead, do whatever you want,” says Edward Coyle, executive director of the Alliance for Retired Americans. “Rather than the EEOC playing the role of policeman, it would instead be acting like the lookout man at a bank robbery.”

A Latino group says it is underserved by the EEOC. “We are no longer confident that our members or their cases are getting the attention they deserve,” says Cesar Moreno Perez, executive director of the Labor Council for Latin American Advancement.

The agency asserts that the reorganization plan it implemented in January is designed to better help people who walk through its door with complaints.

“We are increasing the number of frontline staff doing investigations, mediations and litigation, delivering a more streamlined and efficient structure with greater customer service and more public accessibility,” says Charles Robbins, EEOC director of communications. The EEOC is moving 100 positions from its headquarters in Washington, D.C., to field offices.

The number of cases on the EEOC agenda draws different interpretations. The government union calls it a “backlog” and says that the number will grow to 48,000 in fiscal year 2007.

Robbins says that the EEOC’s “pending inventory of cases remains at a manageable level, below projections.” It totaled 39,000 at the end of March.

A couple months ago, the EEOC announced an effort to target systemic discrimination, taking on class-action cases that affect entire companies, industries and economic sectors. The commission hopes to widen and deepen its impact through investigations and litigation involving thousands of workers.

But interest groups charge that EEOC budget cuts undermine the nascent systemic effort, which requires more investigators, lawyers, economists, statisticians and other experts.

“To the extent we don’t have resources, we won’t be in a position to take on these broad, sweeping cases of a systemic nature,” says Gabrielle Martin, president of the National Council of EEOC Locals.

One leader of a major women’s group questions the EEOC’s commitment to pursuing class actions, asserting that the agency tries to make its numbers look better by taking on many individual complaints.

“The reality is that they’re filing fewer pattern-and-practice cases,” says Kim Gandy, president of the National Organization for Women.

—Mark Schoeff Jr.

Late Friday night, the House passed a bill that would require companies to fund 100 percent of their pension promises within seven years beginning in 2008. But the Senate may fail to take similar action this week, which could halt the first major overhaul of pension rules since the mid-1970s.

House and Senate negotiators late last week reached an agreement on the legislation, but its fate may be bound to an unrelated measure extending a number of tax cuts, reducing the estate tax and increasing the minimum wage.

The House-Senate conference committee did not produce a final report because a bipartisan group of senators wanted to include the tax-cut extenders. Instead, House Republicans split off the tax cuts off from the pension agreement and put them in the separate tax bill.

They took advantage of the opportunity to force Democrats to vote on an estate tax cut by linking it to raising the minimum wage. For the most part, Democrats decry the estate tax measure as a break for the rich, but see minimum wage as a winning issue in this fall’s elections.

The House approved the pension bill 279-131 and the tax bill 230-180. In the Senate, a motion to end debate on the tax package was set to be filed Wednesday, August 2, according to an aide to Senate Majority Leader Bill Frist, R-Tennessee. That would set up a Senate vote on Friday–first on the tax package, then on the pension bill.

“The pensions bill is must-pass,” Frist said in an Aug. 1 speech on the Senate floor. “If we fail to act, billions of dollars of new debt will be thrown on the federal treasury. That’s just irresponsible. The Senate must clear the pensions bill, clean, so the president can sign it this month. We will act, and pensions will get done, without amendment.”

But Senate Democrats, who have already stopped estate tax reform this year, are gearing up to defeat the tax bill. If they do, the Senate might then re-attach tax extenders to the pension measure, which represents perhaps the last vehicle for tax reform this year.

Such a move would require the pension bill to return to conference negotiations for reconciliation with the bill the House passed on Friday.

“I can’t imagine the Senate taking up the pension bill as a stand-alone bill,” says Robert Davis, senior manager of Deloitte Consulting in Washington. “Even if it were to come out of the Senate, it would be lit up like a Christmas tree (with tax provisions).”

Among the highlights of the House-passed pension bill:

Requires companies to fund 100 percent of their pension promises within seven years.

Prohibits the use of credit balances in pension plans that are less than 80 percent funded and, for the most part, subtracts them from assets when calculating “at-risk” status.”.

Requires increased pension payments that are deemed “at risk.” They fall into that category if their plans are less than 80 percent funded and fall to less than 70 percent after subtracting credit balances and assuming that workers eligible to retire within the next 10 years retire as early as possible.

Reduces the smoothing of interest rates to a 24-month average of the yield on the top three grades of corporate bonds.

Prohibits increasing benefits if a plan is less than 80 percent funded.

Gives airlines 17 years to meet 100 percent funding of their pensions.

Protects companies from age discrimination suits if they establish cash-balance pension plans, but does not provide safe harbor for existing plans.

Permits financial advisors for company-sponsored 401(k) plans to provide advice to employees based on a computer model certified by an independent party.

Provides incentives for automatic enrollment of employees in 401(k) plans.

Makes permanent the federal income tax credit for the first $2,000 of annual contributions to an IRA or qualified pension plan.

Allows companies to use excess pension funds to finance retiree health benefits.

The business lobby, which has warned Congress not to make pension funding more volatile and onerous, is lukewarm toward the bill emerging on Capitol Hill. The Pension Coalition, a group of about 200 companies, remains neutral on the bill.

“The success or failure of the legislation will be judged over time,” says Martin Reiser, manager of government policy for Xerox and spokesman for the coalition. “There are individual companies within the coalition that have endorsed it, including Xerox. But there are others who have concerns.”

—Mark Schoeff Jr.

Walter J. Cleaver
President and CEO
Human Resource Planning Society

As head of the Human Resource Planning Society, a 3,000-member organization composed mostly of senior HR executives from large corporations, Walter J. Cleaver is in a position to help shape the dialogue about the profession. This year the society, which wants to strengthen HR’s strategic outlook and practices, helped fund a study, “Achieving Strategic Excellence: An Assessment of Human Resource Organizations.” Cleaver recently spoke with Workforce Management staff writer Mark Schoeff Jr.

Workforce Management: What is the biggest HR challenge facing corporate executives today?
 
Walter J. Cleaver: Engaging the workforce is one of the most important. We have to reach out to the organization and establish a climate of trust. If price is driving everything, CEOs are realizing that human capital is the only differentiator. It is taking center stage. The opportunity is as great as it ever has been for HR to add value to an organization.

WM: What is the best way for HR to contribute to business strategy?

Cleaver: HR leaders need to understand all the details of the business—the nature of the business, leadership needs, how to develop bench strength in an organization. Companies that year in and year out achieve their financial goals invest in their leadership over a long period of time.

WM: Explain the HRPS value proposition and your five areas of focus: HR strategy and planning, leadership development, talent management, organizational effectiveness and strategic human resources.

Cleaver: Everything we do is through that lens. We don’t do compensation; we don’t do compliance issues. We talk about the strategic value of those five areas. We’re also a networking organization. Our position in the market is to go after the top vice president or the person who reports to that person. A SHRM will go after all the functional areas. SHRM is always the 500-pound gorilla. We’re looking for people who have a strategic focus in this job.

WM: How is the HR profession changing?

Cleaver: As HR has evolved and become a topic for a degree in college, people are coming into that strategic role a lot sooner. So, we’re looking at (connecting to) that next generation of leaders. As HR is outsourcing the functional areas, you’re seeing a broader range of experience in terms of the HR executive.

WM: You often talk about sustainability. How do you define that term?

Cleaver: Sustainability is not just looking at the short term; it’s building for the long haul. A lot of companies are looking at the financial, social and environmental impact of what they do. Starbucks pays more for coffee beans because it donates a certain amount to the farmers and schools (of a foreign country) so they can keep a good supply source. A company’s long-term existence is in many ways connected to how the public perceives it in terms of values. Companies are looking to HR to help them be more accountable in this area. One of the ways you engage people is by having them work for a company they’re proud of.
 
Workforce Management, July 31, 2006, p. 7 — Subscribe Now!

I

n an industry ripe with competition, how did one national insurance provider improve their ability to attract and retain top talent? They streamlined their overall recruiting processes through an automated applicant tracking solution. As a result, the company has saved millions of dollars on recruiting and search fees, and reduced cost-to-fill and time-to-hire. The company has also been able to improve the candidate experience by eliminating a lengthy application process, and providing timely and responsive feedback to job applicants.

With 6,600 employees across more than 90 locations, Great-West Life & Annuity Insurance Company provides financial security for millions of customers through a full range of health plans, life and disability insurance, annuities, and retirement savings products and services. Headquartered in Denver, Great-West is a national employee benefits provider with expertise in creative health care management solutions as well as a leading provider of retirement savings plans.

Lack of Process and Policy Contributes to Inconsistency in Hiring Process

Although Great-West recognized the imperativeness of attracting and retaining talented employees to provide their customers with top quality products and services, their internal hiring processes were complicated and inconsistent across the organization. Without a centralized process, hiring managers often turned to outside agencies to fill open positions before notifying internal recruiters, resulting in high search firm and agency fees as well as skyrocketing relocation costs. While Great-West did have a homegrown, legacy system in place, the solution was not meeting the needs of the recruiters or candidates and did little more than accumulate resumes.

Through the legacy system, resumes were culled from internal applicants and cumulated from external candidates, but the solution did not offer the ability to prescreen applicants for minimum qualifications. Without any type of prescreening, the largely manual process of sorting through resumes delayed getting them to the correct hiring manager. This process also meant that recruiters focused more on administrative tasks, potentially missing out on qualified applicants, and spending time reviewing unqualified candidates rather than hiring talented individuals to meet the needs of the business.

Without a way to quickly identify quality, external candidates, the company was often forced to limit their talent pool to internal hires. The lack of an automated talent management process also meant that candidates were left in the dark as to where they stood in the process and, if they were selected for an interview, an 11-page application hindered the experience.

“Recruiting expenses were through the roof, and our paper-based application process proved to be a major weakness for the company,” said Tony Blake, senior manager of Recruiting for Great-West Life & Annuity Insurance Company. “External candidates seldom got feedback and felt that their online applications were being ignored. Plus, it was nearly impossible to identify the best candidates through the crush of paper. We wanted to streamline our recruiting efforts while creating the best possible experience for candidates applying to open positions at Great-West.”

Premium Process Results from Automated Applicant Tracking Solution

After reviewing several applicant tracking solutions in an effort to improve their recruiting process, Great-West chose iRecruiter™ from iCIMS based on the solution’s scalability, flexibility, comprehensive reporting features and intuitive user interface. iCIMS provides recruiters with collaborative tools that help them attract, screen, and hire the best talent, giving them an edge over the competition. iRecruiter allows organizations to streamline the entire hiring management process in a single, configurable, and cost-effective solution.

“Flexibility was by far one of the most important attributes we considered when looking for an applicant tracking solution,” said Blake. “iRecruiter enables us to simplify many of our core processes while delivering a solution that is able to scale and accommodates our needs as they change. In addition, the solution delivers a more user-friendly experience for applicants, recruiters and hiring managers alike.”

Underwriting Success: Online Solution Improves Candidate Experience and Time-to-Fill

In the three years since implementing the solution, Great-West has experienced a significant return on investment moving from a paper-based process to an automated solution. Processing over 3,500 applications per month, and hiring one out of every 24 applicants, Great-West has realized a 71 percent reduction in cost-per-hire as a result of streamlining their processes – equating to $6.6 million in savings! Cost-per-hire, including print advertising, agency fees and relocation costs, has gone from over $5,500 in 2003 to just $1,600, while external hires have also increased 82 percent during the same time period. In addition, external relocations have dropped from 43 transfers to just 13 since implementing iRecruiter, with total relocation costs declining from $2.9 million to $1.2 million.

The iRecruiter solution provides a centralized repository for applicant and recruiting data, easing both reporting and decision-making. The solution enables Great-West to automatically screen online applicants with “knock-out” questions, so recruiters only look at candidates who fill the minimum requirements for the job. By looking at only qualified candidates, Great-West is able to reduce the amount of time it takes to review applicants for each job requisition, improving the organization’s speed-to-fill for open positions. The benefit of automation also ensures that qualified candidates are presented to hiring managers while they are still active candidates. The candidate experience has also improved significantly and feedback has been positive with applicants noting that they appreciate the system’s communication center, a feature that lets candidates know where they stand in the process. In addition to being better informed, the improved online application process has also contributed to an more positive experience by reducing the amount of time it takes candidates to complete an application.

“Previously, it took candidates 30 minutes online for each application and the in-person interview required the completion of 11 pages of forms,” said Blake. “Now the entire online application takes less than five minutes and our in-person application has been reduced to a two-sided page. It is incredibly easy for job-seekers and, by having their information stored online, we can actually review resumes, immediately communicate to prime candidates, and ultimately make a more informed hiring decision.”

“The iRecruiter solution has allowed us to streamline the recruiting process and create an open dialogue between candidates, hiring managers and recruiters,” concluded Blake. “It is the backbone of our recruiting operations and has made us more efficient. Through the solution, we have realized a significant return on our investment, and are able to meet our needs for attracting and retaining top talent to deliver outstanding service to our customers.”

About iCIMS:

iCIMS, Inc. is a provider of Web-based recruitment management solutions for HR and recruiting professionals. iCIMS’ iRecruiter™ is a state-of-the-art Hiring Management Solution that creates a one-stop recruiting resource to streamline internal recruiting operations, saving corporations time and money through integration, automation and collaboration. iRecruiter was ranked as the #1 ATS for 2003, 2004, & 2005 for mid- to large-sized corporations and is consistently recognized by industry analysts as one of the most intuitive and easy-to-use solutions available today. Learn more about how iRecruiter will help your organization by visiting: http://icims.com/demo.

Monster and Philadelphia Media Holdings—the new proprietor of The Philadelphia Inquirer, the Philadelphia Daily News and philly.com—are joining forces and launching a co-branded job search and recruitment Web site. The partnership effectively severs ties that Philadelphia Media Holdings had with job board titan CareerBuilder. Both of those companies had been linked with the McClatchy Co.

The genesis of Philadelphia Media Holdings came after McClatchy agreed to sell a group of Knight Ridder publishing properties to a team of investors earlier in the year. Meanwhile, CareerBuilder is owned by a consortium of newspaper companies that include McClatchy, Gannett and the Tribune Co. Under the McClatchy umbrella, the entities had been working in tandem on classified advertising efforts.

The two will officially go their separate ways August 14. That is when Philadelphia Media Holdings and Monster’s co-branded Web site goes live, according to Brian Tierney, chairman and CEO of Philadelphia Media Holdings.

“We had the option to stay with CareerBuilder or to go with any other job board in the market,” Tierney says. “At the end of the day, we decided on Monster because it offers the most powerful brand and great customer services.” Calls to CareerBuilder were not returned by deadline for this article.

The deal, which took less than two months to iron out, is the first of its kind for Monster. The company decided to partner with Philadelphia Media Holdings because of its vast reach in the local market and strong brand, according to Douglas Klinger, president of Monster North America. The publisher enjoys daily newspaper circulation of 500,000, and its Web site, philly.com, receives 2 million unique monthly visitors.

Monster, based in Maynard, Massachusetts, anticipates the partnership will advance its strategy of growing the brand through diversification into multiple channels of distribution, Klinger says. Recently, Monster launched a channel geared to professionals in the marketing industry.

“The move speaks volumes about which job board is perceived to have the higher quality and brand,” says Jim Janesky, managing director of research at Ryan Beck & Co., an investment bank and brokerage firm based in Florham Park, New Jersey.

Philadelphia Media Holdings hopes the alliance will help to expand its base of revenue. From the looks of things, it appears that other publishing organizations with similar aspirations may soon follow in its footsteps. Jody Lodovic, president of MediaNews Group, a privately held newspaper publisher, recently announced that the company is in talks with Yahoo HotJobs about forging a cooperative relationship in the arena of online classified advertising.

MediaNews has agreed to buy four newspapers from McClatchy, which means if the relationship between MediaNews and Yahoo HotJobs comes to fruition, it may also represent a loss for CareerBuilder. Janesky, however, does not anticipate a mass exodus from CareerBuilder, particularly because dozens of newspapers remain inextricably tied to that job board.

The portal philly.com/monster will offer job seekers and recruiters the same features that are available through the Monster Web site, including online career advice, access to broad databases and the ability to post jobs. The difference is that the content will be geographically specific.

“We already have a brand that is well-recognized and big,” Klinger says. “What we hope to accomplish with this project is to localize and personalize our brand.”

For now, Monster’s primary focus is ensuring that its partnership with Philadelphia Media Holdings is prosperous. The company, however, is constantly on the prowl for other opportunistic ventures, according to Klinger.

—Gina Ruiz