Author: Todd Raphael

Who’s to say that you can’t align your company party with your business’s goals?Cysive, Inc., a Reston, Virginia-based software company that specializes inmobile networking systems, organized a company-wide bowling competition. Thetrick was this: The firm’s 200 employees are scattered throughout the country.

To connect them at the September bowl-a-thon, Cysivewill be using the same technology it sells to its customers.

Teams of four to five bowlers each will be given teamnames, uniforms, and a personal digital assistant similar to a Palm Pilot. Thedevice is connected to the company data-bank over a wireless connection usingsoftware that allows each employee to keep score as he or she bowls. The systemautomatically keeps track of everyone’s score and standing (in real time).

“We were trying to come up with some good, cost-effectiveways of getting all employees together on the same day for the same event,”says HR manager Kristy Brown.

At the same time, the company gets a chance to usea free panel of consumer testers. “It’s also a great way to introduce thenew product we’ve been developing and to make any modifications if necessary,”Brown says.

Workforce, September 2001, p.22 — SubscribeNow!

T hey say that Social Security is the “third-rail” of American politics. Any politician who tries to touch it does so at his or her peril. Retirement plans are, in many ways, the third-rail of HR benefits. A 401(k) used to be a nice thing, but now many employees consider it an entitlement, and messing with the formula doesn’t sit well with the workforce.

Nothing going on in the economy suggests that the trend away from defined-benefit (traditional pension plans) to defined-contribution plans such as 401(k)s will slow. After all, the circumstances that led to the movement in first place — regulatory costs of defined-benefit plans, a more mobile workforce, and more employee decision-making autonomy — haven’t changed.

The economic uncertainty is likely to accelerate this trend, if anything. Since defined-benefit plans require that a certain benefit be paid in the future, it can be a bigger risk for the employer. A bad economy is not a good environment for taking risks, thus creating an incentive for a company to move to defined-contribution.

It’s rare for employers with defined-contribution plans — 401(k), 457, or 403(b) — to make changes to a plan during tough times. Employer matches, waiting periods (before new employees can join the plan), and vesting periods aren’t prime areas for cuts.

“Overall, employers are staying the course,” says David L. Wray, president of the Profit Sharing/ 401(k) Council of America. “And they have through previous slowdowns. The fixed matches are serious company expenses, but companies haven’t changed the plans. They’d lay people off first.”

“It’s a very powerful benefit for us,” says Connie Russell, Sun Microsystems’ director of total pay and rewards. “We’d rather not touch that.” Sun matches 100 percent of the first 3 percent of an employee’s contribution, and 50 percent on the next 2 percent.

Despite the risks, there still are some ways to trim 401(k) costs:

The variable match: One cost-cutting option is to move from a fixed match, like 50 cents on the dollar, to a variable match, based on company profits. Lucent Technologies had a match of 66 2/3 cents on the dollar, and three years ago moved to a 50-cent match. At the same time, the company added a variable component, so employees shared more in company profits. During the first year, the variable match was more than $1. The second year, it was about 84 cents. Last year, it was zero.

For those plans with fixed matches, the most common match is 50 cents for each employee’s dollar. In 1999, 49 percent of employers matched 50 cents, according to the Profit Sharing/401(k) Council of America. Another 21 percent of employers matched a full dollar, and 18 percent matched 25 cents.

Look behind the numbers: When comparing your 401(k) plan to your competitors’, look behind the numbers. When your competitors say they match 75 cents of an employee’s compensation, what do they define as compensation?

Many employers — about 79 percent of those with 50 to 199 employees — include overtime in the definition of compensation for the purposes of calculating their match. Another 40 percent include bonus payments, and 39 percent include commissions. The end result: Depending on how you define compensation, you could be matching a much smaller amount than your competitors, or a much larger amount.

A final warning: Wray, of the 401(k) council, notes that it’s still a tight labor market for quality workers in most cities, and it’s no time to cut down on a popular recruitment/retention benefit. “You don’t have that kind of flexibility. Anything under 5 percent unemployment means as an HR person you have to scrape to get new people.”

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Salary & Benefits Studies:

Deloitte & Touche

2000 Annual 401(k) Benchmarking Survey

Profit Sharing/401(k) Council of America

Annual Survey of Profit Sharing and 401(k) Plans

Employee Benefits Research Institute

Several Reports on retirement and other benefits

 

Workforce, September 2001, pp. 42-44 — Subscribe Now!

How many of these questions can you answer? Careful – sometimes theconventional wisdom isn’t so wise. The answers are below.

    Also, remember that the information contained in thisarticle is intended to provide useful information on the topic covered, butshould not be construed as legal advice or a legal opinion. State laws maydiffer; check with your statelabor department.

1. Ifan employee is on salary, does that mean he or she is exempt from overtime?

2. Isit OK for you to ask an applicant if he drinks alcoholic beverages?

3. Isit OK for you to ask an applicant when she graduated from high school?

4. Can17-year-olds deliver pepperoni pizzas?

5. Youremployee provides you with an obviously forged doctor’s note in connectionwith his Family and Medical Leave Act (FMLA) request. You fire him for thedishonest act. Can he win a retaliation suit against you?

6. Youremployee lives approximately 15 miles from your offices. You’re movingyour offices to a suburban location on the opposite side of the city. Howfar do the new offices have to be from the employee’s present residence inorder for a move to a new residence to be allowed as a tax deduction?

7. Ifyou fire a 60-year-old because her salary is too high and replace her with a35-year-old at a lower salary, is that age discrimination?

8. Howlong after you terminate someone do you have to keep his I-9 form?

9. Shoulda sexual harassment policy indicate how long an investigation could take andwhen an answer can be expected?

10. Canone of your employees talk on a cell phone in Brooklyn?

 

Salaries and overtime:

Employers often move employees from hourly to salary, in hopes of avoiding overtime-pay requirements. This sometimes gets them introuble. There’s nothing in the law that says that because an employeereceives a salary, that employee is automatically exempt from the overtimerules. It depends on other factors. For more information, try the DOL.

Alcohol:

Generally, an employer can ask about a candidate’s drinking habits, solong as the questions aren’t likely to elicit information aboutalcoholism. For more information, try “InterviewQuestions: Legal or Illegal.”

High school:

This isn’t expressly prohibited under the law, but itmay not be such a great idea. You may want to ask, “Did you graduate from high school?” instead, although even that may notbe such a swell idea. For more information, try “InterviewQuestions: Legal or Illegal.”

Pizza delivery:

According to the DOL,driving is one of the 17 hazardous non-farm jobs off-limits to people under18.

Phony note:

He can sue you for retaliation, but you’ll probably win. Clickhere for more info.

Relocation:

The new offices have to be at least 65 miles from the employee’s presentresidence in order to qualify for a deduction for moving to a new residence.Learn the “50-miletest.”

Age discrimination:

Not necessarily. In one case, the court found that where the motivatingfactor was salary, there was no age discrimination. Moreon age discrimination.

Immigration forms:

According to Matt Miklave and Jon Trafimow of Epstein, Becker & Green,I-9 forms should generally be held for three years after hiring or one yearafter the date of termination, whichever is later. So if you terminate anemployee one year after hiring him, you keep his I-9 for two more years.

Harassment:

Indeed, length-of-investigation is often included in harassmentpolicies.

Cell phones:

Not if your employee is driving in Brooklyn, Ohio, which is one of several places that ban phones (unless headsets are used) whiledriving. The states of Florida, Massachusetts, and California have minorrestrictions on cell-phone usage as well. TheNational Council of State Legislatures in Washington, D.C. has moreinformation.

Theinformation contained in this article is intended to provide useful informationon the topic covered, but should not be construed as legal advice or a legalopinion. State laws may differ; check with your statelabor department.

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Alarge multinational oil company found that productivity in its Mexican plant was off 20 percent. It hired a U.S. manager to go there to figure out what the problem was.

The manager did some digging, surveyed employees, and found that the company used to have a monthly fiesta in the parking lot for all the employees and their families. Another American manager had decided this was a poor use of time and money, and canceled the parties.

“The message employees got was that the company didn’t care about our families anymore,” says C. Philip Bamberger, vice president of J. Howard & Associates, a Boston firm that served as a consultant for the oil company.

The fiestas were reinstated. Productivity and morale soared.

Glaring examples like this of cultural misunderstandings are expected to become more frequent and to affect business results more dramatically in the coming years. The Hispanic population in the United States grew by 53 percent between 1980 and 1990, and then another 58 percent between 1990 and 2000-totaling 35 million people. New census data shows that half of that population is under 26, indicating that the trend will continue.

These new census statistics also show the number of Hispanic employees in the workplace rising not just in the southwestern United States but also in places like Milwaukee. Employers are making sure they create workplaces where people from different cultures are comfortable working, and want to stay. American employers sometimes see this growing population as a monolithic group. Nothing could be further from reality. Hispanics represent a wide variety of cultures and languages. Even within countries, there is broad diversity. In Mexico, for example, Indians often speak languages unrelated to Spanish.

Still, there are some values in Hispanic cultures that tend to be commonly held. As the oil company learned, families and extended families are often at the social center of the culture.

Gender roles are frequently different. Women in some Latino countries are raised not to look directly in the eye of a superior, whether the person is female or male. And many are taught not to bring up issues or questions that could draw attention to them. With this in mind, employers may have to work at getting feedback from their employees.

Hispanics generally gravitate to “brand name” companies with titled positions and defined careers. Companies offering trendy benefits and flat organizations are not usually as popular.

Hispanic employees also tend to give more direction and need a higher level of information than their non-Hispanic coworkers. “Hispanics tend to appreciate and rely on a much higher level of personal interaction in the workplace,” says Shawn Mood, director of recruiting services for LatPro. “This is important for managers to understand.”

Despite the diversity within the Hispanic population itself, there are some things employers with a large number of Hispanic employees can do to improve satisfaction and workplace productivity.

• Publish HR materials in English and in Spanish.
• Put supervisors and managers through Spanish language classes.
• Communicate how important confidentiality is to the company.
• Try to take into account extended family.
• Create a diverse workforce.

As important as it is to understand cultural differences and not to make assumptions, Bamberger emphasizes that nothing is as critical as getting to know individuals. “The real way to do it is to build personal relationships with people and not to generalize.”

Workforce, September 2001, p. 19 — Subscribe Now!

How to improve productivity and job satisfaction for Hispanic employees.

• Publish HR materials in English and in Spanish. This means not just company-written materials, but also those from outside vendors. Retirement, EAP, and health vendors, for example, can hold question-and-answer sessions in both languages. The EAP should be able to provide counseling in Spanish.

  
  

• Put supervisors and managers through Spanish language classes. Joelle Davis, a human resources assistant for the Oregon Child Development Coalition, which serves a primarily Hispanic population, says too many employers have the attitude that ” ‘if they’re coming to this country, they’ve got to learn the language, or I’m not interested in dealing with them.’ We stand to gain so much more in meeting Latinos halfway in the struggle to assimilate into American culture.”

  
  

• Communicate how important confidentiality is to the company. It’s extremely important to maintain complete confidentiality in programs such as EAPs, and to make sure employees know you’re keeping private information absolutely private. If not, Davis says, “employees won’t trust that the management will find out about whatever issues are troubling them.”

  
  

• Try to take into account extended family. Employers with heavily Hispanic workforces might consider extending family leave, bereavement leave, and other benefits beyond the nuclear family.

  
  

• Create a diverse workforce. “People like to work where they are understood and where there are other people with similar backgrounds and interests,” Mood says. “Even if a workplace is not hostile toward minorities, it might be a far less appealing place to work than the company across the street that has hired people with a wide range of backgrounds. Latinos now make up over 12 percent of the U.S. population. Who can afford to ignore a segment this large?”

  
  

Alarge multinational oil company found that productivity in its Mexican plant was off 20 percent. It hired a U.S. manager to go there to figure out what the problem was.

The manager did some digging, surveyed employees, and found that the company used to have a monthly fiesta in the parking lot for all the employees and their families. Another American manager had decided this was a poor use of time and money, and canceled the parties.

“The message employees got was that the company didn’t care about our families anymore,” says C. Philip Bamberger, vice president of J. Howard & Associates, a Boston firm that served as a consultant for the oil company.

The fiestas were reinstated. Productivity and morale soared.

Glaring examples like this of cultural misunderstandings are expected to become more frequent and to affect business results more dramatically in the coming years. The Hispanic population in the United States grew by 53 percent between 1980 and 1990, and then another 58 percent between 1990 and 2000-totaling 35 million people. New census data shows that half of that population is under 26, indicating that the trend will continue.

These new census statistics also show the number of Hispanic employees in the workplace rising not just in the southwestern United States but also in places like Milwaukee. Employers are making sure they create workplaces where people from different cultures are comfortable working, and want to stay. American employers sometimes see this growing population as a monolithic group. Nothing could be further from reality. Hispanics represent a wide variety of cultures and languages. Even within countries, there is broad diversity. In Mexico, for example, Indians often speak languages unrelated to Spanish.

Still, there are some values in Hispanic cultures that tend to be commonly held. As the oil company learned, families and extended families are often at the social center of the culture.

Gender roles are frequently different. Women in some Latino countries are raised not to look directly in the eye of a superior, whether the person is female or male. And many are taught not to bring up issues or questions that could draw attention to them. With this in mind, employers may have to work at getting feedback from their employees.

Hispanics generally gravitate to “brand name” companies with titled positions and defined careers. Companies offering trendy benefits and flat organizations are not usually as popular.

Hispanic employees also tend to give more direction and need a higher level of information than their non-Hispanic coworkers. “Hispanics tend to appreciate and rely on a much higher level of personal interaction in the workplace,” says Shawn Mood, director of recruiting services for LatPro. “This is important for managers to understand.”

Despite the diversity within the Hispanic population itself, there are some things employers with a large number of Hispanic employees can do to improve satisfaction and workplace productivity.

• Publish HR materials in English and in Spanish.
• Put supervisors and managers through Spanish language classes.
• Communicate how important confidentiality is to the company.
• Try to take into account extended family.
• Create a diverse workforce.

As important as it is to understand cultural differences and not to make assumptions, Bamberger emphasizes that nothing is as critical as getting to know individuals. “The real way to do it is to build personal relationships with people and not to generalize.”

Workforce, September 2001, p. 19 — Subscribe Now!

By milling around HR trade shows, I hear a variety of buzzwords, catchphrases,and clichés. I thought I’d examine whether three I heard this summerhave any validity.

“When you communicate, always be polite.”
Our society — and in turn, our workplaces — has gottenso sensitive about what we say that we often fail to communicate what we reallymean.

We don’t have to work so hard at sugarcoating.

“If you want a workplace that’s very innovativeand moves fast, people have to cut to the chase and say what they really mean,”says Peg C. Neuhauser, a corporate culture guru. “I’m not advocating rude.But you’re going to have to find a way to tell it like it is.”

One of Neuhauser’s clients was a large company thathappened to be in the HR consulting business. Every time this company held ameeting, she says, “When someone made a statement and the group disagreed,the others would say, ‘Let me build on what Todd just said,’ instead of ‘Todd,you’re a full-blown idiot.’ ‘Let me build on’ was code that you were going togo into a 180-degree direction.”

Neuhauser isn’t advocating name-calling. But she triedto get the company to come up with a more direct phrase than “Let me buildon….” Instead, she suggested: “That’s not exactly the way I seeit.”

The company didn’t adopt the expression, but it diddiscuss the issue of being more straightforward. Staff members still use thewords “let me build on,” but when they do, everyone laughs. “Thecompany’s culture changed on a dime,” Neuhauser says. “What it’s doneis use humor as a springboard for being more open and honest with one another.”

“Everyone should be strategic.”
Even if everyone could be strategic — which is nevergoing to happen — it probably wouldn’t be a great idea. That’s because strategiesare a dime a dozen, but two things prevent many of them from going anywhere.

First of all, many organizations have a hard time convincingtheir workforces that they should really care about the strategy, really embraceit.

“A lot of organizations have strategies, but theystay pretty much on paper rather than in the hearts and minds of people,”says Colleen O’Sullivan, a leadership director at AchieveGlobal, a major internationaltraining company. O’Sullivan says management has to present a better argumentfor a strategy than the fact that it might make money.

Second, even if employees buy into a strategy, unfortunatelythey often aren’t trained in the skills they need to carry it out. “IfI don’t know it, I don’t care about it, and most important, I’m not competentto do it, it won’t happen,” she says.

“Make your employees feel like the office is a home.”
Businesses have invested tremendous energy in makingemployees feel like their offices are their homes. Employers are blurring thelines between work and home by providing discounts on sporting events and travel,time for naps, and benefits like dry-cleaning and concierge services, as wellas letting employees bring their pets to work.

That’s all great, but it carries two risks.

First, when employees feel like the office is a home,it raises their expectations so high that the employer may never be able tofulfill them. They may forget that money spent on all that dry-cleaning doesn’tcome from thin air.

“Installing expensive programs the corporationcan’t afford and people really don’t need is not only foolhardy, it’s the antithesisof caring, because someday somebody’s gotta pay for that stuff,” says BillCatlette, author of Contented Cows Give Better Milk.

Also, it’s probably a lot more painful for employeesif they are let go. The employees lose not just a job, but a second home.

A homey environment makes such decisions harder foreveryone, Catlette says. “In those corporations where layoffs are beinginflicted, it surely hurts more, at least for the folks who have to leave, andfor those whose duty it is to deliver that message.”

Workforce, August 2001, pp.— SubscribeNow!

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Other columns by Todd:

• Ecology,the Next Apartheid
• YouDo Want a Higher Minimum Wage
• TheWorld Doesn’t Revolve Around IT
• WhySenior Citizens Should Fly
• Walkin Her Boots, Mr. President

Would you think I’m nuts if I told you that a minimum-wage increase this summercould be good for your business? Probably. After all, opposition to the wage floorhas been the linchpin of 63 years of HR and business lobbying. The minimum wage’sexistence has led directly or indirectly to an entire industry of powerful lobbyinggroups that many of you are involved in — the National Federation of IndependentBusiness, the U.S. Chamber of Commerce, the National Retail Federation, and soon.

    These groups believe the minimum wage is the devil’s evil twin. Philosophically,it represents everything they oppose. Businesspeople believe that governmentshouldn’t set a company’s wages. On top of that, they argue that the wage floorcosts jobs, not just at McDonald’s and Kmart, but also for those without minimum-wageemployees, because the whole wage scale is ratcheted up when entry-level wagesrise artificially.

    Republicans in Washington understand the laws of economics (if the price of laborgoes up, you will be able to afford less of it), and therefore agree with thebusiness lobbyists. So do most sane economists.

    Democrats, on the other hand, note that — adjusted for inflation — the $5.15minimum wage is far below what it was in the 1960s. The minimum wage has variedfrom a maximum of 76 percent of the poverty level in 1968 to only about 50 percentof the poverty level now. This comes at a time when CEOs get $37 million for quitting.

    Democrats also argue that $5.15 is so paltry that a person who’s supporting herselfon $10,300 a year (what you earn working full-time at the minimum) isn’t goingto be able to eat in your restaurants and shop in your stores. And if she’s supportinga family — fuhgeddaboutit.

    Most voters agree with the Democrats. The President and Congress want to get re-elected,so they’re going to have to vote to raise the wage floor. The final vote couldbe counted this summer, and would likely increase the minimum by $1 to $6.15,over the course of a year or two. In allowing the minimum wage raise to go through, the Republicansdon’t want to alienate their supporters — businesses.

    Ahhhh. That’s the kicker. The Republicans will add loads of sweeteners to thebill to help you to swallow the bitter minimum-wage potion. If you lobby yourrepresentatives, the final mix could include gazillions of dollars for labor-relatedtax cuts, and long-sought-after changes to labor laws.

    Does this theory that the minimum wage will become a Christmas tree full of HRgifts sound like a cynical and convoluted idea that may or may not be true inthe real world? Think again, because I’m more positive than a Robert Downey Jr.drug test.

    A Washington lobbyist, after calling the Republican leadership (Senators TrentLott of Mississippi and Don Nickles of Oklahoma), tells me that Congress mightbe willing to include such goodies as changes to overtime rules, which would makemore salespeople exempt. They also might make the changes to the bonus rules thatmany of you have been fighting for. This would allow employers to pay bonusesto hourly employees without the pay increasing the employee’s wages, thus triggeringbig overtime costs.

    Your senator may even be willing to throw in a clarification of the definitionof the infamous “serious health condition” in the Family and MedicalLeave Act. Can’t hurt to ask.

    The last minimum-wage increase, which boosted the wage floor from $4.25 in 1996to $5.15 in 1997, arrived with a bubbly pool of cash to offset employers’ pain.Like $21 billion worth. And that was under a Democratic president.

    “Typically, what’s happened in the past is that the tax cuts have been muchgreater than what’s needed to offset any potential impact of a minimum-wage increase,”says Molly Rowley, an aide to Democratic Senate leader Tom Daschle.

    Those tax cuts probably will happen again, and you’ll be the beneficiary.

    On June 24, 1938, the night before President Franklin Roosevelt signed the firstminimum-wage bill — 25 cents an hour — he held one of his fireside chats. “Donot let any calamity-howling executive with an income of $1,000 a day . . . tellyou . . . that a wage of $11 a week is going to have a disastrous effect on allAmerican industry,” he declared.

    Roosevelt’s rhetoric may have been a bit inflammatory, but his message still holdstrue.

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Other columns by Todd Raphael:

OnGore and Bush TheYear HR Became Cool Thoughtsfor the New Leaders of the New Dot-coms LetRocker Talk To:All E-mailers From: Todd Holidays:Some Minor Revisions WeWish You a Merry Winter Whata $252 Million Contract Means to You Walkin Her Boots, Mr. President TheWorld Doesn’t Revolve Around IT

Laser vision correction surgery is hot, and it’s sure to get hotter.

    This year, an estimated 1 to 1.5 million people will get the procedure.That’s only a drop in the bucket of the more than 100 times that many Americanswho wear contacts or glasses. The procedure, which was approved by the FDA in1995, was first thought of as uncovered elective surgery, like cosmetic surgery.

    Now, employers and insurers are realizing what huge demand there is, and areworking on incorporating it into benefits plans.

    For one thing, it gives them a staffing advantage over competitors.”This is a heck of a recruitment and retention tool,” says BillGurzi, marketing director for Work/Life Benefits, a Lakewood, CA-basedconsulting company.

    Secondly, it meshes with the business results of the organization. If youremployees are firefighters, astronomers, or surgeons, helping them see bettermay be money well spent.

    Among the options for employers wishing to offer the benefit:

Discounts on surgery
    A few years back, surgery could cost as much as $6,000 for both eyes, andthose insurers who were cutting deals with employers were offering significantdiscounts to employees.

    The employer gets a usually free opportunity to offer something new toemployees. The insurance company or vision plan gets a chance to market to thecompanies’ employees — a much more targeted form of advertising than commercialsand such.

    Now, however, the price of surgery has gone way down, to sometimes as low as$1000 for both eyes. Discounts have gotten smaller, or non-existent, in somecases.

    When discounts are offered, it’s often at a 15-25% discount. VSP, forexample, which is the nation’s largest provider of eye-care coverage, struck adeal with CIGNA earlier this year to offer CIGNA participants 20-25 percentdiscounts. Patients must go to certain doctors and laser centers to receive thediscount.

    Shelly Weber, work/life manager at Ericsson Inc., in Dallas, Texas, saidEricsson looked into offering the benefit after receiving requests for thebenefit from employees. Ericsson partnered with The Laser Center and is offeringa $600 discount per eye to all employees and their extended families. The LaserCenter isn’t the cheapest place to get the procedure done, but Weber says”I’m trying to get them to lower their price.”

    The employer usually doesn’t pay anything to offer a discount. In cases wherethey do (e.g. self-insurance), it can be unexpectedly costly. Mitch Bramstaedt,a Chicago, Illinois-based health care consultant for The Segal Company, saysthat “there are instances where the first-year costs are much higher thanwas expected because of the pent-up demand. As a result, vision correctionsurgery can be a very expensive benefit.”

Flexible spending accounts
    These are IRS-approved accounts into which employees can withhold a certainamount of their paychecks into a tax-free account. Employees can then tap intothat money to pay various out-of-pocket medical expenses.

    This year, the IRS updated their regulations to specifically state that it’sOK to use a flexible spending account for laser eye surgery.

    Let’s say an employee sets aside $3,000 during the year for laser eyesurgery, and they live and pay taxes in California. If they’re in the 28%federal income tax bracket and 7% California tax bracket, they save $1,280 forthe year (they avoided 28% federal + 7% state + 7.65% FICA taxes). It’s acheaper way of paying for surgery than by handing the ophthalmologist $3,000 incash.

As an option in high-end health plans
    Employers who want employees to have the laser-surgery option in their healthplans can offer a Cadillac plan during enrollment season.

    Employees can thus choose to pick that more-expensive plan — sometimes aspart of a vision plan, sometimes as part of a general health plan — and get thelion’s share of their laser surgery expenses taken care of.

    The deputy sheriff’s association in California, for example, uses BlueCross’s HMOs and PPOs. If sheriffs choose the high-end Blue Cross PPO, he or shecould have laser vision surgery entirely or almost entirely paid for as part of theirmedical plan. The plan provides $1,500 per eye toward the surgery.

Education and safety
    Employers planning on offering the benefit should consider a certain amountof education on the safety of the procedure.

    “Employers have to explain to their employees the risks involved,”says Lita Weinstein, director of employee benefits for the 10,000-employeeDenver Public Schools.

    The school system has offered a discount for about two years. Weinstein saysher organization partners with a laser center to send brochures out about theprocedure, and invites the laser center to open-enrollment meetings in order to educateemployees.

How long does it take a multi-billion dollar, Fortune-500 company to reducehiring time and improve manager satisfaction? Not as long as you might think.

    Like any large corporation, Nationwide is rather complicated. It essentiallyis in three different businesses–personal property/casualty insurance,financial services, and commercial services (helping other organizations withrisk management, workers’ compensation, and a variety of other areas).

    Workforce recently caught up with Patti Cotter, vice president of recruiting& staffing for Nationwide Insurance in Columbus, Ohio, to discuss how herteam is making life easier for managers at those three divisions:

Well, let’s do a little before and after. First, the “before.” Tellme how things were at Nationwide.

Culturally, it took awhile to hire people here. We didn’t have a step-by-steprecruitment process. People didn’t go through a defined process. Typically, ifsomeone would respond to an ad, his resume might sit somewhere. By the time weget to them, they’ve moved on to the next ad. When we did call them, we wouldsay on Monday, ‘can you come in on Friday and interview.’ It was all too long.It took 45 days to get someone in the door.

 

What did you to improve things?

Well, backing up…in December 1999 I went into the database and said, ‘Ineed the name and zip code of everyone who’s hired anyone in the last year.’Anyone who has hired someone was sent a satisfaction survey. I asked veryspecific questions about responsiveness, time to fill. Going into 2000, and wehad a 63, 63, 79 rating in our three divisions (personal property/casual,financial services, commercial). We asked in the survey how we could improve.Some of it was purely education. Some people thought it should take a week tofill a job.

 

In your industry — should it take a week?

Sometimes no. I got all the benchmark information in our industry — what’srealistic, how long it takes. I found out quantifying time-to-hire really varies. Somepeople include the whole time until you see the whites of their eyes. Othersit’s when the job is accepted.

 

Ok, let’s talk about you changed things to try to get those satisfactionnumbers up.

We used to not post jobs to our employees first. That frankly created a lotof bad will. Employees would think, ‘If the human capital here is the mostvaluable thing, why don’t you give us a chance before you put the jobs out andblast them out all over the world?’

 

So you gave an edge to the internal candidates. What else did you do toimprove your processes?

We weren’t screening enough, so it wasn’t uncommon for a hiring manager toget 14 to 15 internal candidates. Generally your hiring manager wasn’tcomfortable calling 11 of them saying ‘you don’t meet the qualifications.’ Theburden of the internal process fell very heavily on the hiring manager. Managers would say, ‘Thisjust isn’t right. I can’t weed through all these people.’Now, we send them three qualified candidates. The top three candidates go to the hiring manager.

 

And you’re improving communication between managers and recruiters?

Now, all of our recruiters — within 48 hours of receiving a requisition –arerequired to contact the hiring manager. They say, ‘Joe, I just want to make sureyou know I got your job posted, and I’ll let you know as soon as I get somecandidates.’ If it’s a higher-level job, they might say, ‘We need to talk aboutthis in more detail.’

 

Have you made any online changes?

We’ve done a lot with our Web site to really enhance our careeropportunities. ‘Careers’ is in the upper-right hand corner of the Web site. My Webpeople tell me that’s prime real estate. They say they’ve done studies and saythat’s where people gravitate. If we want to continue to keep and attract newpeople, you want to put us there, not a product.

 

I bet you had to sell that.

Yeah, when you do a Web site, you’re fighting all the product people.

 

What else did you do online, with your site?

The previous biggest compliant I got was the resumes fell in a black hole. Weget about 15 to 20,000 expressions of interest a month. We cannot possibly havepersonal contact with those people. Since they weren’t getting any kind ofacknowledgment, the frustration was creating a lot of calls to us. A light bulbgoes off — we really need to figure out a process that assures people don’tfall off.

 

So now there’s more contact with the candidate.

It’s nice from an applicant standpoint. You search jobs, and if you want toexpress interest, you cut and paste your resume, and hit submit. You get a noteback, and it will say ‘Todd, thank you for your interest in Nationwide.’ Within24 hours you’ll get another acknowledgment at your e-mail address: ‘Todd weappreciate your interest in Nationwide…’

 

What’s your next step with the site?

What we’re going to do is build a better technology to search that database– asearch query that could be done at night. We’ll say, ‘Give me all the resumes that are 90-days old.’ Everyone that has no workflow — in other words, they haven’t had aformal opportunity to be interviewed at Nationwide. We’re going to e-mail atthat point and say, ‘Todd, about three months ago you expressed interest inNationwide. We’re sure you’re a talented person, and if you’d like us tocontinue to search for the right job for you, let us know.’

 

That’s cool.

That kind of personal touch will foster great relationships. I would venturea guess they would continue to be a loyal customer if they’re treated with thatamount of dignity and respect. Many of our candidates are probably customers.

 

What were the results of all this — the screening, the favoring of internalcandidates, the site, and so on?

We reduced the time to fill internal jobs over 30 percent. Before, itactually took longer to hire internal candidates, including sourcing,identifying, interviewing, hiring, and starting an internal candidate than itdid to hire external talent.

 

Wow. 30 percent.

It was 49 days to fill a job internally in the past. Last quarter we were atabout 32 days for internals.

 

How about the manager satisfaction surveys you talked about. How did thoseimprove?

Our goal for finishing up 2002 is 80 percent, 80 percent, and 85 percentsatisfaction in our three companies. I really believe anything less than 80percent is unacceptable. I think we’re at 79, 84 and 85.

 

I saw you in San Diego and you were saying you hire people on the spot. Ithought that was pretty unusual for a $100 billion company.

You should put an asterisk in there. It depends on what industry you’re in.In insurance and financial services you have to comply with (background-check)rules. When we do a really targeted job fair with very specific jobs we’ll havea pre-screener and then an actual interviewer, then pass them on to the head ofthe relevant business — people who have the actual openings. If they say it’s a’thumbs up,’ then we say to the candidate ‘we’re preliminarily interested inoffering you a job.’

 

So they’re practically hired.

Yeah, I call it getting the hook. You get the hook in their mouth. Then weproceed with the things we need to have — a background check, a drug test. We doit quickly. In fact, when we make a job offer, you have to take a drug testwithin 48 hours.

 

What positions do you do this for and how?

We’ve used this strategy in the IT world. We’ll hold a job fair — not alwaysin our work site. We actually did it at a bar/restaurant offsite. Some peoplehave concerns about going to other employers’ offices. They’re worried theiremployer might see them in the parking lot and think, ‘what are you doing here?’It’s got to be at a good location, got to be at a good time. We do it 4-8 p.m.We have appetizers, snacks, and a welcome table. It’s very casual.

 

Is hiring on the spot common in the insurance industry?

We’re a little more aggressive than your tradition financial servicescompany. We get the hook in. We’ve gotten it together to where the commitment isthat we can turn people around in a five-day period. You come on Monday tointerview, and if you want to come work the next Monday, there’s a good chanceyou can do that.

 

And hardly anyone fails the background check, so it’s basically a formality,right?

Right, it’s the exception. If you’re holding up the whole process for theexception, you’re making a mistake. Do it fast, respond fast, and keep theprocess moving quickly.

 

I’m a job candidate in Columbus. Let’s say I’m an IT person. Why do I want togo work for Nationwide when I could work for a start-up?

You know, the economy is working in our favor now. We’ve been in existencefor 75 years. We’ve had a stellar reputation in Columbus for being what we usedto call an employer of choice. Now it’s called a ‘great company to work for’ Iguess. We’ve always been viewed as a family place. You can come in and grow,have a career. That’s a little of a double-edged sword.

 

Double-edged sword? How? Doesn’t every company want to be seen as an employerof choice, and all that good stuff?

One of the paradigms we had to break in the last two years was that manypeople on the outside felt that nobody leaves Nationwide. They felt like youcan’t get through that huge wall. You’ll get hired only if you know somebody. Wehad to break out of that paradigm. I mean we have 600 to 700 jobs open on agiven day. We’re always looking for quality talent — the best and the brightestall the time.

 

How else do you get folks to work there? Other than what you said –the abilityto have a career there and such.

We have so many different businesses (divisions) it’s almost like working fordifferent companies. You don’t have to leave to have a different experience. Wejust need to help recruits understand we do have different opportunities andthat they can get in.

 

Let’s talk about layoffs.

We really don’t do layoffs. We had an all-employee meeting yesterday. Our CEObroadcast live in Nationwide Arena, simulcast around the world. He said we don’thave plans to do layoffs. That doesn’t mean no one’s going to be displaced orlose their jobs. But we’re still in a growth mode. At any given time we have atremendous number of jobs open. People want to work for a company that cansurvive the good AND the bad times. If we feel we are in an overstaffedsituation, we’d say ‘as those jobs attrition, let’s not fill them.’

 

So you haven’t downsized.

Just normal changes. My division had a whole “internal displaced jobfair.” We had a little systems group that was eliminated — 30 people. Hiringmanagers from each of our divisions came in and did interviews. I believe everysingle person among the 30 who wanted to stay with Nationwide did so.

 

But there is no “nationwide lays off 5,000 people” type thing.

The economy isn’t affecting us to the point we’re reading about it. We don’thave these massive hiring freezes. We haven’t put these strict processes inplace where every single requisition must go by someone. With these big layoffs,how many times do companies turn around and get contract workers, which they paythree times their own employees’ salaries, or they hire the same people back ata higher salary?

 

In an economy like this, instead of bringing on more FTEs, do you ever go adifferent route?

Temporary employees, leased employees, contractors. We’re doing more ofthat. It gives you the flexibility where you can let that flexible work staff gowithout having to fear paying severance, etc., and still have the opportunity tore-staff with an alternative solution.

 

I guess it’s not cheap paying severance at a company like yours.

You begin laying off people with 15-20 years employment and that costs yousome money. If you’re a department manager and you’re meeting your budget, thehighest cost of the business is the people costs. We’re a company withhigh-tenure people. Plus, there’s the intangible attitude (of survivingemployees) saying, ‘I am the next one?’

 

What do you pay for an employee referral?

It depends on the job — it’s a flex program. If we have a job that’s ahard-to-fill job, we can go to that manager, and say ‘are you willing to pay$5,000’ and if they say yes, we can advertise that.

 

Is that typical?

Typically you can earn $500-$1,000 for referring a hire, depending on the joblevel. You can get some of the payment when you start and some later, about 90days.

 

At the conference where I saw you, someone suggested referrals based on”leads.” So you’d pay someone for a phone number, even if the candidate wasn’t hired.

I’m thinking about that. It doesn’t have to be huge. And you don’t have topay, you can reward. For every referral, you can give everybody two sets ofmovie tickets. Also, with our referral program, we want to improve thecommunication. We want to be much more timely. New employees may not know of theprogram, and referrals can be your number one source of hires.

 

Also, communicating with the employee who does that referring.

I haven’t set that up but that’s kind of where I’m going. Let’s say Toddrefers an employee. Now does he want a note in the mail? Does he want to callBill himself? I’m going to ask our employees. I don’t think recruiters have allthe intelligence. Just because we should be experts doesn’t mean we have all theanswers. You need to go to the people participating in programs and ask them.

Recruiting Resultsat Nationwide
Recruiting Staff:	40
Jobsfilled per month:	300-400(appx. half from within)
Reduction intime-to-hire:	30%
Managersatisfaction:	up from63% to 80%

Workforce Online, April 2001 — Register Now!