Author: Site Staff

SHRM54th Annual Conference & Exposition June 23-26, 2002 Philadelphia, Pennsylvania

Click on the links below for special offer coupons redeemable at this year’s show:

Peopleclick Booth501
	Visit Peopleclick at SHRM 2002 and find out how our Recruitment, Workforce and Affirmative Action solutions can work for you.
SPECIALOFFER!
BrassRing Booth1001
	Helping enterprises engage and deploy talent to maximize advantage. Visit booth 1001 to see Enterprise 5.0 and enter to win a free gift!
SPECIALOFFER!
BestSoftware Booth1525
	Register to win a FREE Blackberry at SHRM’s 54th Annual Conference and Exposition. Stop by Best Software’s booth 1525 for details.
SPECIALOFFER!
BigbyHavis Booth1139
	We are solution providers for employee selection and development with an emphasis on web-based delivery. To see an online demo, go towww.envision.bigby.com/wf. Please click below to learn more about our services.
SPECIALOFFER!
BernardHodes Booth949
	It’s an art. And some of the finest examples are on exhibit at booth #949 at the upcoming SHRM conference. Until then, you can sample our style at:www.hodesiq.com/real/workforce20
SPECIALOFFER!
EddieBauer Booth1431
	Discover the Eddie Bauer advantage, a leader in the Awards and Incentives industry providing versatile programs designed to fit your needs.
SPECIALOFFER!
HireCheck Booth519
	Industry leaders HireCheck and SAMI are now one – offering the most flexible and responsive background checking and substance abuse programs! SHRM Booth 519
SPECIALOFFER!
HalogenSoftware Booth439
	Halogen Software provides eAppraisal, e360 degree feedback and eSurvey software. Helping HR Professionals simplify their workflow in a cost effective and timelymanner. www.halogensoftware.com
SPECIALOFFER!
Shumsky Booth1603
	Finally – there’s an affordable ONLINE solution to employee service awards programs. Discover the hassle-free program that requires less HR administration at booth 1603.
SPECIALOFFER!
LifePoint Booth2208
	See the newest technology in saliva-based onsite drug and alcohol testing at booth # 2208. For more information, visitLifePoint: www.LifePointInc.com
SPECIALOFFER!
Workforce Booth1325
	Visit Workforce and get your hands on the most comprehensive HR Vendor Directory available. It’s a MUST HAVE anyHR professional.
SPECIALOFFER!

Hewitt/Exult might have to start watching its back. Towers Perrin and EDS have joined forces to create a new human resources outsourcing company, and observers say it could be a formidable competitor to Hewitt, the current top dog in the business.

EDS, with more than more than $20 billion in annual revenue, has deep roots in technology outsourcing. Towers Perrin, meanwhile, is a brand name in benefits administration. EDS will own 85 percent of the company, and Towers Perrin will hold the remaining 15 percent. EDS will pay an estimated $420 million to Towers Perrin as part of the agreement, which if approved by Towers Perrin shareholders would close by the end of the first quarter.

The new company, not yet named, will be an appealing option to some senior executives, says Stan Leteak, a director at Equaterra, which advises companies on in-sourcing/outsourcing decisions. “It’s certainly a step in the right direction,” he says. “EDS is not known for human resources outsourcing–EDS gets human resources knowledge and a human resources brand.”

Towers Perrin, Leteak says, needs EDS’ infrastructure. “This would be a good fit.” Also, he says, some customers who outsource their IT work to EDS might be able to negotiate a bundled price.

Still, Leteak says, there are always question marks when two companies marry. “I think it makes them more appealing on paper. But obviously they have to execute. They have to go make it work,” he says.

Steve Bohannon, currently with EDS as its vice president of HR services, will be CEO of the new company. He says the firm will be stronger globally, particularly in Europe, than its competitors. He also says that Towers Perrin “has better depth and quality” than other vendors.

Towers Perrin managing director Don Lowman expects the company to be one of the top three or four largest human resources outsourcers, with $600 million in revenues from its inception. He says that senior executives in workforce management who want to outsource will benefit because “they can go to one provider now” for all services. As for competitor Hewitt, Lowman says it “doesn’t have the same technology capability. EDS is a world-class technology provider.”

That’s news to Lisa Rowan, an analyst with IDC. “That’s their take, and they’re welcome to it,” she says, “but Hewitt’s been managing benefits administration for eons.” Bryan Doyle, who heads up Hewitt’s outsourcing business, also begs to differ, saying that Hewitt has “more HR technology than anybody else.”

Rowan adds that EDS has scaled back its workforce and doesn’t have the legions of people it had two to three years ago. Last fall, EDS announced that it was reducing its workforce by the thousands, partly through early retirements. It has opened up a 12-person in-house workforce management office to get a better handle on whether the employees it is keeping on board have the skills they need to carry out EDS’ business plan.

Still, Rowan is very positive about the EDS venture, saying that it’s another option for workforce management executives and a great sign that big money is flowing into the human resources field. “Bottom line, I think this is a good thing,” she says.

—Staff report

Managers value interesting work with decision-making authority more than they value external rewards such as compensation, according to a new study on retaining management talent by the Center for Hospitality Research at Cornell University.

The research center surveyed 2,800 graduates of Cornell’s hotel administration school. Authors Masako S. Taylor and Kate Walsh learned that “hospitality professionals are looking for challenging jobs that offer growth opportunities, competent leadership and fair compensation. Foremost among those factors is the chance to gain career growth through increasingly challenging assignments.”

According to Taylor and Walsh, “While a substantial number of respondents were motivated by external factors, such as compensation, most of the respondents find the greatest motivation from the internal aspects of the job, including the opportunity for personal and career growth and the chance to make a contribution to the organization. To the degree that those desired job features are in place, hospitality managers’ commitment levels will rise. Managers’ commitment to performing challenging work especially reduces their likelihood of leaving their companies and the industry.”

Some sample quotes from managers surveyed by Cornell:

• On what they want from their careers: “Continuous opportunities for advancement, ability to retire at a reasonable time in my life, always learning something.”

• On what they want from their companies: “An environment that fosters growth, teamwork and an emphasis on staff retention and training rather than staff burnout and rehiring. Appropriate compensation. Strong policies and support for difficult decisions made in accordance with those policies.”

• On what they want from their jobs: “To be challenged; to learn and progress; increased responsibility, and with that, increased compensation. To have a strong foundation in what I do and always take that with me going forward.”

• On what they want from their industry: “To challenge me to continue learning, be more creative, find new solutions, and present growth opportunities along the way.”

The Cornell study finds that some recent graduates feel forgotten in their jobs. They’ve been in the same positions much longer than promised and have been looking elsewhere for opportunities. In fact, during the four months that Cornell conducted two surveys, more than 20 percent of respondents had changed jobs.

American business owners say they’re more stressed out than a year ago. But their counterparts are much more likely to indicate that their stress levels have either increased or increased significantly over the past year.

The Grant Thornton International Business Owners Survey queried more than 6,300 owners of medium-sized businesses from 24 countries during fall 2004. Many respondents say a major source of stress is the lack of leisure time and not having enough time to spend with friends and family.

In some countries, stress levels are rising and so is economic growth, and the pressure’s being caused by the effort necessary to keep up with customer expectations and tough competition. This group includes business owners in India, South Africa and Russia.

In other places, including Taiwan, Japan, Hong Kong, the Philippines, Singapore, Mexico and Turkey, the economies are not as hot. In addition to the stress of competition, business owners in these countries are worried about the economy and pressure on cash flow and profits.

Countries or regions ranked by the percentage of respondents who indicate that their stress levels have increased or increased significantly over the past year:

1. Taiwan: 69%
2. Hong Kong: 54
3. Mexico: 54
4. Turkey: 54
5. India: 53
6. Philippines: 53
7. Japan: 51
8. Russia: 51
9. South Africa: 50
10. Singapore: 46
11. Ireland: 41
12. Greece: 39
13. Poland: 39
14. Germany: 37
15. Spain: 37
16. France: 36
17. Australia: 34
18. United States: 34
19. United Kingdom: 33
20. New Zealand: 32
21. Italy: 30
22. Canada: 26
23. Netherlands: 25
24. Sweden: 23

Dear Tightfisted:



Businesses measure two kinds of costs: fixed costs, which remain unchanged, and variable costs, which fluctuate depending on given factors. Separate these two pieces, then add them back together at the end of your calculation.

Variable costs are easier to adjust and manipulate than fixed costs, which usually involve long-term assets or investments, even salaries.

Calculate fixed costs only if they are dedicated 100 percent to trainees. If these resources are used for other purposes, you’ll have to understand that usage rate as a percentage. For example, if Mary the Administrative Assistant spends 50 percent of her time in Center A and the remainder handling non-training duties at the company front desk, calculate accordingly. Don’t allocate all of Mary’s costs to training.

Fixed costs can include:

• Building leases/mortgages
  
• Equipment (already purchased/leased/owned)
  
• Overhead salaries (management, office staff, etc.)
  

Variable costs are considered directly related to a particular training class and may include:

• Rental equipment
  
• Training materials (supplies, copies, etc.)
  
• Food and sundries
  
• Salaries and/or temporary-employee costs
  
• Room rental
  

Annualize each of your fixed costs and add them together. For example, if you lease Center A for $2,000 per month, your annual cost would be $24,000. Separate your costs per center, along with the cost of classes delivered at each site. You don’t want Center A subsidizing the costs of Center B. If there’s a large cost differential between centers, you won’t see your real costs, thus hampering your decision-making ability.

Next, annualize variable costs and add them together. If you use one flip chart per class at a cost of $10 each, and you deliver 10 classes per week for 50 weeks, you’ll spend $5,000 on flip charts alone. Sure, some classes may involve more flip charts than others. However, depending on the volume of classes, the variation may be too small to make a notable difference.

Finally, divide the total fixed costs by the number of trainees. Divide total variable costs by the number of trainees. Add these two figures together to obtain your cost per trainee. Keep the costs separate but part of the equation.

For example, let’s presume that you incur the following fixed annual costs:

• Rent for all centers: $100,000
  
• Management and training professional salaries: $500,000
  
• Equipment and computer amortization: $25,000
  

Likewise, we’ll presume these variable costs per year:

• Training materials: $25,000
  
• Contracts with training professionals: $10,000
  
• Food and beverage: $10,000
  

Here’s how you’d compute total fixed costs:
$625,000 divided by 1,000 trainees = $625 per trainee

For variable costs, the breakdown looks like this:
$45,000 divided by 1,000 trainees = $45 per trainee

Combined, your total cost per trainee equals $670 per year.

SOURCE: Don Gaile, principal, dmg consulting company, New York, New York, March 10, 2004.

LEARN MORE:The First Three Things HR Should Measure.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Ask a Question

Dear Workforce Newsletter

Dear Committed:



Request the authority to create a benefits committee in a powerfully written, persuasive memo. For instance:

Memo to Senior Management on Formation of a Benefits Committee:

“The cost of our employee benefit programs is soaring and represents our single-largest employment-related expense after direct compensation. The most significant contributor to our benefit-program costs has been our health plan, for which we have had double-digit increases in each of the last few years. Making matters worse, there’s no prospect that this trend will abate in the near future. As a company, we need to get these costs under control, while recognizing the major role that benefits play in recruitment and retention. To that end, I suggest formally establishing a benefits committee to help us plan for this important challenge.

Benefits operate in a highly regulated environment. Newly enacted privacy rules about employees’ “protected health information,” or PHI, require us to review and monitor how health data is handled. They also mandate that we establish a training program for employees who deal directly with this data.

Consider what we face as a company. We need to optimize our benefits spending, but without breaking the bank. Moreover, we can’t neglect the impact our benefit plan has on our ability to recruit and retain talent. Throw in the numerous government regulations with which we must comply, and you can see that this is a major undertaking. To that end, I suggest formally establishing a benefits committee to help us plan for this important challenge.”

(Now describe the complexion of this committee.)

“Our chief human resources officer will serve as the committee chair and knowledge leader. The department heads will participate, which will facilitate the introduction of any necessary program changes. On the legal front, our counsel will make sure we understand and meet our compliance obligations. Members of the communications team will ensure that the right messages get conveyed to the right people. Last, benefits consultants bring added value by educating us about vendor costs, competitors’ benefit programs and the current innovative strategies related to benefit plans.

To sum up, we believe that forming such a committee will help us get buy-in from company managers on benefit changes needed to contain costs. This committee also would help us gain a broad picture of employees’ benefit needs and desires that can then be balanced with the company’s organizational goals. Thank you for your consideration.”

SOURCE: Norman Jacobson, senior vice president and health consultant, The Segal Company, March 5, 2004.

LEARN MORE:The Battle over Benefits.

The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

Ask a Question

Dear Workforce Newsletter

B elow are the mission and values of the Dow Chemical Co., which has annual sales of about $33 billion and about 46,000 employees.

Mission
    To constantly improve what is essential to human progress by mastering science and technology.

    The Mission Statement can be broken into three components:

    Constantly Improve–This concept is bedrock to Dow’s culture and has been since H.H. Dow first said, “If you can’t do it better, why do it?” It underscores our drive to become an ever better and bigger company.

    Essential to Human Progress–The products we make find their way into products that provide people the world over with improved lifestyles. All of us at Dow must understand and take pride in this. We must also use this concept to further connect Dow with the external markets we serve. When we think in terms of the markets we serve, we become more outside-in focused and we can better seek growth opportunities.

    Mastering Science and Technology–We must put our science and technology to work to create solutions for our customers and for society.

Values
    Our mission will be accomplished by living according to values that speak to the economic, social and environmental responsibilities of business and society.

    Integrity–We believe our promise is our most vital product; our word is our bond. The relationships that are critical to our success depend entirely on maintaining the highest ethical and moral standards around the world. As a vital measure of integrity, we will ensure the health and safety of our communities and protect the environment in all we do.

    Respect for People–We believe in the inherent worth of people and will honor our relationships with those who let us be part of this world:

    We, the employees of Dow, are the engine of value creation; our imagination, determination and dedication are essential to growth. We will work to celebrate and reward the unique backgrounds, viewpoints, skills and talents of everyone at Dow. Respect for people is measured by how we treat each other, by the contributions that flow from our diversity, by the productivity of our relationships, and by a job well done, no matter what the job.

    Our communities are our neighbors; their acceptance of us is vital to our ability to operate.

    Our customers are our partners in creating value; their loyalty is our greatest reward.

    Our shareholders are the beneficiaries of our success; their ongoing commitment to us is based on returning to them superior profits over time.

    Our respect for people also extends to the consumers whose lives we touch. We will strive to answer people’s most vital needs: for food, water, shelter, transportation, communication, health and medicine.

    Unity–We are one company, one team. We believe that succeeding as one enterprise is as important as succeeding independently. Balancing empowerment and interdependence makes us strong.

    As one company, Dow’s impact on the world is far greater than the impact of any one of its parts. We will work together, building relationships to create ever greater value for the customers and consumers we serve.

    Outside-In Focus–We believe that growth comes from looking at opportunity through the eyes of customers and all those we serve. Taking an “outside-in” view ensures that our efforts are always relevant and that our unique talents are applied to “real world” opportunities. We will see through the eyes of those whose lives we affect, identifying unmet needs and producing innovative and lasting solutions. We will bring to this task all of our experience and knowledge as the unique individuals we are.

    Agility–At Dow, we believe our future depends on speed and flexibility–mental, emotional and physical. Responding resourcefully to society’s fast-changing needs is the only road to success. We will meet the forces of change with power and grace. We will make course corrections that demonstrate flexibility as well as courage, and that highlight our ability to keep ourselves aligned with a world in motion.

    Innovation–We believe that meaningful, productive change–solving problems–only comes by looking at challenges and opportunities from new angles and exercising our curiosity.

    In the name of innovation, we will make science a way of living. We will not only master the science of the physical world, but the science of the mind and heart. Our job is to unlock answers that make a fundamental difference to people’s lives. We will use technology to help lead society forward. We will conceive, design, engineer and execute solutions that remove barriers to human potential and productivity.

Reprinted with permission of the Dow Chemical Co.

T he National Labor Relations Act of 1935 was once considered the crown jewel of Franklin Roosevelt’s New Deal.

    The National Labor Relations Board, which it created, was supposed to ensure that workers enjoyed the same freedom of association in the workplace that they did in the political arena. By guaranteeing that workers could organize without being fired or threatened, it redressed the growing imbalance of power in the workplace. By encouraging the growth of the labor movement, it stilled the fires of revolutionary socialism and Huey Long’s populism and laid the foundation for a new democratic pluralism by giving workers a seat in Washington next to business.

    For 45 years, the act worked reasonably well. The ranks of labor swelled without threatening the profitability of U.S. business. The gap between rich and poor, which had widened in the 1920s, was reduced. The AFL-CIO, courted by Republican and Democratic administrations, became part of the Washington consensus.

    But, in the 1980s, that consensus began to fall apart when the Reagan administration drastically cut the NLRB’s funding–causing huge backlogs of cases–and when its appointee to the board chipped away at employees’ bargaining rights and at penalties for unfair labor practices.

    Bill Clinton tried to undo some of the damage, but George W. Bush has resumed Reagan’s approach. Since becoming a majority in 2003, his appointees to the NLRB have taken business’ side in more than 25 controversial cases. None of these rulings was earthshaking, but together, they presage an erosion of workers’ ability to organize.

    To cut costs, business and public institutions have increasingly replaced full-time employees with temporary or apprentice workers who are not paid comparable wages or benefits. Nonstandard workers like these now make up about a quarter of the workforce. Labor unions have begun to organize them, but employers have objected, and the Bush board has taken their side—ruling, for example, that a union at an Oakdale, New York, long-term care facility cannot organize and represent both workers employed directly by the facility and workers who are employed by the facility but were sent there by a temporary staffing agency. It also blocked organizing of disabled janitors (because they are really engaged in rehabilitation rather than work) and artists’ models (who are seen as independent contractors because they own their robes).

    According to a study of 400 union election campaigns in manufacturing plants by Cornell sociologist Kate Bronfenbrenner, 51 percent of employers in 1998 and 1999 threatened to close a plant if a union won an election, and 25 percent fired at least one worker for union activity.

    Bush’s NLRB has balked at penalizing such companies–even though it is exactly these tactics that the act was created to outlaw. In 2000, a judge determined that Smithfield Food used 36 different illegal tactics in trying to block unionization at its plant–including firing 11 organizers–and ruled that the company would have to hold a union election, allow union organizers to post notices on workers’ bulletin boards, and let them talk to workers in “nonwork” areas of the plant. On appeal, however, Bush’s NLRB ruled that the union should be denied what it termed “extraordinary access” to the company’s workers.

    Union membership has plummeted from 23 percent in 1979 to 12.5 percent today. Some of that drop is due to a shift from unionized manufacturing industries to nonunionized white-collar services, but most of the decline stems from the NLRB’s acquiescence to aggressive–and often illegal–employer tactics.

    American workers are, of course, the principal victims of labor’s decline. (Union workers enjoy a 15.5 percent advantage in wages over nonunion workers with comparable skills and are 18.3 percent more likely to have health insurance.) But our democratic system as a whole is also a victim. Unions are an interest group, but one whose scope and concern allows it to speak for the public interest. And, because of its numbers and electoral influence, labor has been able to check the often narrow interests of Washington’s powerful business lobbies. Without labor’s clout, it’s unlikely that Medicare would have been enacted in 1965 or that the minimum wage would have been raised repeatedly over the last 50 years.

    With labor’s power ebbing, business has increasingly been able to dominate public policy issues, from taxes to environmental protection to Social Security. That might not bother Bush, Tom DeLay and Karl Rove, but it’s not a good thing for the rest of us.

Written by the editors of The New Republic, where this originally appeared.

Consolidated Freightways Corp. will pay $2.75 million as part of a settlement of an employment discrimination lawsuit.

The suit concerns 12 African-American dockworkers at a Kansas City, Missouri, facility. The U.S. Equal Employment Opportunity Commission alleges that co-workers subjected the employees to displays of hanging nooses in the workplace, as well as assaults, threats of physical harm, racially offensive graffiti and other harassment.

The EEOC says that Consolidated knew about the harassment but did nothing to stop it, and that it disciplined an employee who complained about it. The company denies the allegations.

Whether the employees and their attorneys will actually see the full monetary amount remains to be seen. Consolidated filed for Chapter 11 bankruptcy protection in 2002.

Lynn Bruner, director of the EEOC’s St. Louis district office, says, “By continuing to pursue this case even after the company filed for bankruptcy, EEOC hopes to alert employers everywhere that it considers this issue to be extremely serious and will act accordingly.”

Only 12 percent of companies are significantly using workforce management metrics such as employee engagement or productivity to meet their business goals. But 84 percent expect to use such metrics more over the next three years, according to a Conference Board study.

The study, sponsored by PeopleSoft, involved business executives based mainly in North America. Most respondents were in the human resources field, either as vice presidents or directors of human resources. Only 16 percent say that human resources professionals receive “good” or “extensive” training on how to make the link between people metrics to business strategy.

Some companies that the Conference Board says are actively using workforce management metrics include:

• CNA Insurance, which is trying show how employee skills, training investment, employee commitment, internal movements and other measures affect net operating income.

• Intel, where high-level executives review human resources metrics every quarter. These range from turnover rates for employees in their first year to ratings showing how satisfied employees are with their relocations.

• Corning, whose research found that its most “pivotal talent” was midlevel employees–not upper-management executives–and structured its recruiting, training, leadership, recognition, rewards and career development programs accordingly.

• Outrigger, which “encourages its staff to think creatively about ways to improve its business.” The hotel/resort company’s innovations have improved check-in and check-out procedures.

• Cascade Engineering, where senior managers and employees review data on leadership development, safety and more on a monthly or quarterly basis.
  
  
• Priority Health, which provides managers with special training and coaching on retaining key employees and calculates bonuses partly based on managers’ retention results for those crucial employees.