strategy – Page 9

February 19, 2019June 29, 2023

Do You Know How to Spot an Employee at Risk for Violence?

Early Friday afternoon, Henry Pratt Co. informed one of its employees, Gary Martin, of his termination.

Shortly thereafter, he opened fire with a .40-caliber Smith & Wesson, killing five of his co-workers and wounding five police officers. Martin himself was the sixth casualty, killed in a shootout with police.

After the news of this tragedy broke, reports surfaced of Martin’s history of violence —s ix prior arrests by the local police department for domestic violence, and a decades-old felony conviction for aggravated assault.

All of which begs the question, should this employer have known that Martin was prone to violence, and, if so, should it have taken added measures in connection with his termination.

A criminal history of violent arrests and offenses is not necessarily a predictor of workplace violence. Still, there are certain warning signs for which an employer can look to help determine whether an employee is at risk for potential violence.

According to ESI Group, these warning signs include:

A chronic inability to get along with fellow employees
Mood swings and anger control issues
Expressions of paranoia or persecution. Being a “victim”
A history of problems with past jobs and and/or personal relationships
An inability to get beyond minor setbacks or disputes at work
A fascination with guns, weapons, or violent events
A sudden deterioration in work habits or personal grooming
Signs of stress, depression, or suicidal ideation
A major life problem, such as divorce or legal problems

If one more of these red flags surface, it is recommend that you refer this employee to an employee assistance program, for assessment and treatment.

If you are compelled to fire an employee who you think poses a risk of violence, it is recommended that you take further steps to mitigate against the risk of your termination transforming into a workplace tragedy.

ESI Group recommends the following:

Consider a professional threat assessment
Consider using a neutral manager or outside security consultant to carry out the termination
If there is manager or supervisor who has been the object of threats or anger, that person should not be the person to conduct the termination
Have security nearby—not in the same office, but close enough to hear signs of a problem and to act
Do not take a break. There are numerous instances of an employee asking for a bathroom break or time to compose him- or herself, and using the break to retrieve weapons
Wait until the end of the workday to terminate, if possible. This protects the dignity of the fired employee and minimizes the number of employees on hand should a situation escalate
Minimize any reasons why the employee would have to revisit the workplace. Mail a check; have uncollected belongings sent to the person’s home via a delivery service
Allow the person as much dignity as possible, but be brief and to the point. Do not get into a back and forth
Emphasize any severance benefits and outsourcing help that may be available. Some organizations decide they will not contest unemployment or offer the option of resigning.

As with most issues in the workplace, the proverbial ounce of prevention really matters. While there exists no foolproof way to protect your workplace against these kinds of tragedies, a few preventative steps can go a long way to putting you in the best place to deter and respond.

February 6, 2019June 29, 2023

President Trump Calls for Federal Paid Family Leave During State of the Union

February 5 was the 26th anniversary of the Family and Medical Leave Act being signed into law.

During last night’s State of the Union Address, President Trump called for Congress to make paid family leave a federal law.

I am also proud to be the first president to include in my budget a plan for nationwide paid family leave — so that every new parent has the chance to bond with their newborn child.

The devil is very much in the details. We have zero idea what this law would look like.

Who will pay for the leave — employers, directly via payroll, or employees, indirectly via a tax the funds a government benefit pool?
How much paid leave will the law provide — 6 weeks, 12 weeks, more, less?
What family issues will be entitled to paid leave — just childbirth, the same scope as the FMLA, or will be it broaden protections to other parental issues such as school-related events?
Which employers will it cover — those with 50 more more employees, 25 or more, or even smaller?

Before we heap too much praise on this effort, we need to know details. Still, the United States remains the only industrialized nation that does not guarantee working mothers paid time off after childbirth, and we lag behind most of the rest of world on other paid family leave.

Frankly, it’s embarrassing, and it’s high time we joined the rest of world on what appears for everyone else to be a non-controversial issue. Anything that moves this debate forward is an effort worth applauding.

February 5, 2019June 29, 2023

How to Recover a Stolen Computer From an Ex-employee in 7 Easy Steps

As many as 60 percent of employees who are laid off, fired or quit admit to stealing company data.

Sometimes they download information on their way out the door. Sometimes they email information to a personal email account. And sometimes they simply fail to return a company laptop or other device that contains the data. In the latter case, according to the Ponemon Institute, it costs an average of $50,000 for an employer to replace a stolen computer, with 80 percent of that cost coming from the recovery of sensitive, confidential and proprietary information.

When you put this data together, it becomes increasingly apparent that businesses must take proactive steps to protect their technology and data.

In light of these stats, let me suggest a seven-step plan to recover your devices and the crucial information stored on them after an employee leaves your organization.

1. Institute a strong electronic communication and technology policy, making clear that all data and equipment belong to the company, and must immediately be forfeited upon the end of employment. Or, better yet, have employee signed an agreement affirming their obligations regarding the confidentiality of your data and confirming the obligation to return everything at the end of employment.
2. Cut off an employee’s e-access to your network as soon as you have notice that an employee has departed.
3. Remind employees upon termination or resignation of their absolute duty to return all data and equipment, including laptops, mobile devices and removable storage devices.
4. To the extent you have the capability, and you have confidence that you have your own backups of the employee’s data, remote wipe any unreturned devices.
5. If any data or equipment is missing, enlist the aid of an attorney to send a clear message that unless everything is returned immediately, the company will litigate to get it back.
6. Enlist the aid of a computer forensics expert to determine if, when, and how any data was stolen, and, if so, of what that data consisted.
7. Sue.

Notice that a lawsuit against the employee is step seven, not step one. In most cases, going to court is the last resort. It is expensive and time consuming.

Yet in many instances it is unavoidable. And depending on the scope of the suspected theft and the data at issue, it may quickly move up the list.

January 25, 2019June 29, 2023

Labor Issues a Costly Concern During Acquisitions

When a company is considering a merger or weighing the idea of an acquisition, it is crucial to assess the impact on operations and, specifically, on labor and employment issues.

Deal attorneys and bankers focus on the underlying value analysis and purchase documents, which clearly are important.

However, liability for labor and employment issues can be created by acts or omissions and rarely is avoided solely by virtue of indemnification clauses or seller warranties in deal documents.

Put simply, our legal system operates in large part to protect the “little guy,” which in the employment context, means the employee, not the company. This means that, despite the iron-clad separation of entities from a financial perspective, if operations continue following deal closure, an acquiring entity may be held liable for workplace obligations agreed to by the seller-predecessor or for acts or omissions creating liability prior to the close of the purchase.

The Employee’s Right

How can this be, you ask? Remember the little guy. If they felt like they were wronged before the deal closed, they will chase both companies (especially if the selling entity was in financial distress). From a legal standpoint if, from our employee’s perspective, nothing changed after the deal closed — same physical office, same managers, same processes — it is possible the buyer may be found liable for the wrongdoings of the predecessor entity.

The idea is that a company should not be able to escape liability to its employees solely by changing its corporate name and closing a deal. Someone needs to make sure the little guy’s wrongs are righted. The way the courts often do it is by extending that liability to the “new” entity. The question is, how does “NewCo” avoid this? Ensure labor and employment are key components of due diligence, including the following:

Wage and hour. If you are the seller, conduct internal policy and practice audits on wage and hour issues as part of due diligence. These audits can reveal existing procedural violations that could mushroom into “bet the company” class actions if not cured (or expressly carved out of the purchase price!). Some examples of such issues are pay stub compliance, meal/rest break issues, and employee or contractor misclassification. One of the most frequently overlooked areas of exposure is unpaid vacation or paid time off for employees of the selling entity — all of whom would technically be terminated (and thus owed these monies) in an asset purchase. Even if the buyer hires every one of them.

Employment agreements. Know your obligations to employees, no matter the role. High-level executives who are key to the transition often have change in control or severance provisions in employment agreements that trigger significant payouts in an asset deal. If the buyer wants to retain these folks, the terms of new employment should be agreed-upon before closing. The buyer also should be conscious of any restrictive covenants — if key personnel are departing as part of the deal, make sure you are protecting your assets by limiting their ability to go across the street and start a competing concern. Even in California, noncompetition arrangements are available for limited purposes in the context of a purchase or sale of a business.

Turnover/hiring practices. Prepare yourself for WARN Act obligations, which require extended notice/payout periods, even if employees are not going to miss a day of work because they are being hired by NewCo. Diligence should include a discussion of which entity will be handling WARN and COBRA notices. And once NewCo takes over, to help avoid the type of pass-through liability described above in the context of an asset deal, it should follow standard hiring practices for each of the “old” employees. Assess them like any other new hire, and ensure all paperwork is completed to establish the new business relationship.

Labor union issues. Make sure you know about the seller’s union agreements or activity. Ask whether there have been organizing drives or union activity. If there is any organized labor, ask to see all collective bargaining agreements and review all grievances. The CBAs may contain clauses obligating the buyer to assume the terms contained therein and the seller to expressly disclose the potential of a deal. If you are not planning to transition the organized operations to NewCo post-close, you may be responsible for posting a bond to cover the withdrawal liability for the multi-employer pension plan into which the seller previously contributed. This can be hundreds of thousands (or even millions) of dollars, and it is held in escrow for five years.

Immigration. Understand your employee base. Does the selling entity have employees for whom it has sponsored work visas? If so, there needs to be an assessment of transferability and a discussion regarding that process. Does the deal involve international payments or taxes or transfers of operations that will necessitate analysis of non-U.S. issues?

Any company considering a merger or acquisition is acutely focused on the potential effect on its balance sheet from a pure numbers standpoint. It is axiomatic that a business’s largest asset (or liability) can be its workforce. Remember that effectively transitioning operations requires careful planning and educated decision-making as to how, or if, NewCo will be adopting the prior workforce and the policies and practices that applied to it. In order to make responsible decisions regarding the value of any prospective transaction, and the risks associated with it, both sides should look beyond the balance sheet to the people on the ground.

As these issues highlight, diligence regarding matters of potential exposure stemming from the labor and employment function is crucial when assessing the true net impact of a potential deal on your company’s bottom line. The little guys can have a huge impact; don’t overlook that in your focus on the paperwork.

January 22, 2019June 29, 2023

Labor Relations in the Public Sector, Part 2

Despite the Bureau of Labor Statistics reporting that 10.7 percent of all wage and salary workers in the U.S. are union members in both the private and public sector, union membership of public sector employees at the federal, state and local levels is well above that at 34.4 percent.

Just in local government, the rate of union membership is 40.1 percent and includes teachers, police officers and firefighters. In contrast, only 6.5 percent of private sector employees belong to unions. That number is significant because average private sector compensation costs average $34.19 per hour, compared to an average of $49.23 per hour in state and local government — a 30 percent difference in private to public employment costs.

So how do public sector unions achieve such important gains when some of these same unions don’t have the ability to strike? First, let’s take a quick history lesson.

The New York state Legislature was one of the first states to pass labor laws protecting women and children. Labor unions continued to gain strength in the subsequent decades, resulting in the passage of the Railway Labor Act in 1926, allowing railroad employees to unionize, and the 1935 National Labor Relations Act, which guaranteed basic rights of private sector employees to organize into labor unions and encourages collective bargaining — generally defined as the negotiation between an employer and a labor union on issues of wages, hours and working conditions.

Notably, the NLRA did not extend those protections to employees in the public sector for fear that public employees would strike, leading to paralysis of government until their demands were met. In 1943, the New York Supreme Court in Railway Mail Ass’n. v. Murphy, said, “Nothing is more dangerous to public welfare than to admit that hired servants of the state can dictate to the government the hours, the wages, and conditions under which they will carry on essential services vital to the welfare, safety and security of the citizen.”

Please read: Labor Relations in the Public Sector, Part 1

Today, most states have laws that formalize the bargaining process for some or all public employees, and some states permit only “meeting and conferring” on work-related issues. Only 11 states allow public employees to strike. Of those, most prohibit striking for essential employees and in cases where striking would endanger public health and safety.

For example, New York’s Taylor Law grants public employees the right to organize and elect union representatives, but also makes work stoppages punishable with fines and jail time. Some states prohibit collective bargaining for teachers while others prohibit all public sector collective bargaining.

The Power of Public Sector Unions

Without either limited or no ability to strike, public sector unions may try to leverage their power to help elect the very politicians who sit across from them at the bargaining table and influence legislation that affects public employees’ wages and availability of jobs. According to the California Fair Political Practices Commission, the California Teachers’ Association spent more than $211 million from 2000 to 2009 on political campaigning — more than any other donor in the state and as much as the pharmaceutical industry, the oil industry and the tobacco industry combined. In 2005 alone, the CTA spent $54 million to defeat initiatives intended to cap the growth of state spending and make it easier to fire underperforming teachers.

Politicians who attempt to limit the power of public sector unions and their lobbying arms need to come to the table prepared to make realistic changes. A case study of how not to negotiate with a public sector union is the Chicago Teachers’ Union strike in 2012, which was in response to some of Chicago Mayor Rahm Emanuel’s initiatives. Emanuel campaigned to improve the education of Chicago schoolchildren and used his political might to pass an aggressive education-reform bill without consulting the teachers’ union.

The CTU brought other public unions to their cause and engaged in a 10-day strike. After an unsuccessful attempt to get a court order to force teachers back to work, both sides reached an agreement. While Emanuel did get a longer school day and longer school year, the teachers got an average raise of 17.6 percent over four years, health insurance increases, seniority pay increases and raises for additional education.

In jurisdictions where striking is prohibited, there are ways to reach final resolution of negotiations if parties disagree. These include arbitration, mediation, fact-finding and bargaining without a final resolution mechanism.

In arbitration, a neutral third party facilitates discussions, examines the facts and makes a binding determination. In mediation, the parties agree on a professional who facilitates discussions and proposes solutions that both parties can accept or decline. In mediation/arbitration, the parties jointly choose a mediator and if both parties fail to come to an agreement, the mediator becomes the arbitrator. Fact finding is a labor dispute resolution measure where an independent “fact finder” examines the arguments of both parties and offers a nonbinding resolution. In the public sector, as many state and local governments are in poor financial health, the fact finder generally sides with the employer and finds the unions’ proposals unreasonable to allow the employer to control costs.

Unions strive to secure good outcomes for the employees they represent during the initial stages of negotiations. Allowing a dispute to lead to arbitration takes the decision away from management and labor. Since arbitrators must adhere to certain standards, the awards are somewhat predictable. Generally, arbitrators reach decisions that neither labor nor management view as the best solution. In a world where labor-management cooperation has become so important, having someone with no vested interest in the outcome decide a union and agency’s fate is a poor outcome that can take years for the parties to repair.

It is encouraging to see that some state and local governments and unions are using tools borrowed from the private sector that help lead to voluntary agreements. The following are important methods that increase the likelihood of fair, voluntary agreements:

• Engage employees at the workplace.

• Use interest-based bargaining techniques in contract negotiations, where both sides declare their interests and then work together to draft agreements that align common interests and balance disparate interests.

• Share information and consult with unions on long-term strategies. Since most labor agreements are in effect for at least three years, a government’s labor relations strategy should align with its own short- and long-term financial planning and overall strategy. Given the repetitive nature of the bargaining process, successful labor-management relationships have management communicate with and involve stakeholders regularly, not just during negotiations.

Bargaining involves transparent communication between labor and management regarding terms and conditions of employment. Effective bargaining is usually measured by whether labor and management can reach an agreement without involving a third party. By demonstrating interest in building rapport, exploring alternatives, refusing to put limits on the number of topics for negotiation, and coming to the table with the goal of a solution, management can maximize the chance of a favorable outcome without compromising the operations of government.

January 22, 2019June 29, 2023

Labor Relations in the Public Sector, Part 1

Animosity and being at odds no longer have to be the norm when coming to the table to negotiate public sector union-labor agreements.

By creating an environment that supports greater collaboration and problem-solving, the needs of both labor and management can be better understood. A climate of trust will grow when collaboration includes opportunities to increase employee engagement. Based on the input of three labor-relations experts, there are multiple ways to increase employee engagement and improve the effectiveness of labor relations.

Jeff Ling, executive vice president of human resources consultancy Evergreen Solutions LLC, suggests three best practices that sustain a culture of engagement: transparency in communication, allowing employees to partner with you and asking for assistance to finding solutions to organization problems.

Labor relations that are built on trust and open dialogue create lasting partnerships that are more meaningful and focused on mutual results. Employee engagement flourishes in an environment of transparency where knowledge and organization information is frequently shared. For labor relations to remain strong, communications must be ongoing, transparent and meaningful.

Ling, who has worked in HR consulting for more than 25 years and leads Evergreen’s HR consulting practice, has devoted a majority of his career to advising public sector clients in all HR areas including employee engagement.

He said that transparency can only be achieved when leadership is willing to engage in ongoing communication. It is also important to share successes (what the organization is doing right) and failures (how the organization has learned from its mistakes).

Also read: Labor Relations in the Public Sector, Part 2

Ling added that it is important to openly share the reasons behind changes in key leadership roles and the overall strategic direction. At the municipal level of government, public-safety budgets can garner a larger portion of the organization’s overall financial resources. Establishing trust between organization and labor union leaders is the key to having a sustainable long-term financial outlook.

Ling also added that transparency in communication is key to having strong levels of engagement.

“It’s necessary to provide future direction and strategic outlook during non-negotiating years,” Ling said.

Engaging Employees in Key Decisions

Including represented groups in organization focus groups on employee matters helps fuel ongoing collaboration. Offering employees the opportunity to influence changes in employee benefits or policies actively involves them in organization decisions and increases overall engagement.

Jackie Wehmeyer, human resources director for the city of Margate, Florida, described a time when an economic downturn resulted in decreased revenues as the city’s health care costs continued to rise. It was important to educate the union representatives on the drivers behind the cost of insurance and invite them to be part of a working group to evaluate plan design options, she recalled.

Although the design of the insurance plan isn’t a subject of labor negotiation, the act of asking for input demonstrated the organization’s commitment to employee engagement and willingness to seek their input on matters of importance.

Involving union representatives in other key decisions such as procuring new technology, vehicles, equipment and employee insurance coverage also is important to the organization’s ongoing commitment to employee engagement.

“It’s all about trust,” said Wehmeyer, who has 15 years of labor-relations experience representing management in multiple successful collective bargaining processes. “When employees and union representatives have the freedom to provide input, they feel more compelled to work together effectively.”

Collaborating to Find Solutions

Leaders from both sides need to challenge the status quo and begin to lean on employee groups to creatively solve problems and develop solutions to increase collaboration. International Association of Fire Fighters Union President Brian Powell experienced this firsthand when a prolonged recovery from an economic recession resulted in some cities not being able to deliver meaningful pay increases that were needed to motivate union employees.

Powell, who is president of Local 3080 of the IAFF in Broward County Florida, said that instead of making unrealistic requests, union representatives collaborated with city leadership to identify other sources of funds (including the use of state funds for benefit enhancements) that could help subsidize the cost of the pay increases.

“The union has to be willing to sit down and listen and the city’s leadership needs to do the same,” Powell said. “It’s important for each side to prove the request is fair and have ongoing dialogue to develop possible solutions.”

This strategy helped both sides meet existing challenges and enabled pay increases to be delivered sooner.

Without collaborative labor-management relations, productive dialogue is limited and results in longer, less effective negotiations. When labor unions are willing to develop a broader understanding of financial limitations, such as the need to have adequate financial reserves for unforeseen emergencies, the dialogue can become more solutions-oriented.

Based on these shared experiences, human resources professionals who are seeking a more effective labor relations strategy should consider opportunities to increase employee engagement levels.

“Building relationships needs to begin long before the start of labor negotiations,” said Powell, who has more than 15 years of collective-bargaining experience. As a union leader, he negotiates collective-bargaining agreements with multiple municipal organizations in South Florida. “Collaboration and open dialogue help build trust and increase mutual understanding,” he said.

Focusing on communication, involving employees in key decisions and collaborating to solve organization problems are all best practices for building a foundation of trust that leads to stronger employee engagement.

Positive outcomes will increase during labor negotiations when organization and union leaders seize opportunities to collaborate, learn from each other and remain committed to open and honest communication.

January 16, 2019June 29, 2023

Gillette’s Toxic Masculinity Ad Isn’t the Problem; Toxic Masculinity Is the Problem

Gillette is facing a lot of praise, and a lot of backlash, over its recent ad slamming toxic masculinity culture.

The ad offers two views of men.

The first — a boy bullied and called a “sissy,” a man grabs at a woman’s behind, a businessman condescending to a female employee. During, a voice over notes that men make “the same old excuses”: Boys will be boys.

Then, vignettes of men doing better — intervening against sexual harassment, being attentive fathers to their daughters, promoting peace over violence.

The tagline: “Bullying. Harassment. Is this the best a man can get? It’s only by challenging ourselves to do more, that we can get closer to our best. To say the right thing, to act the right way.”

This message should not be controversial. But it has been. Very.

Fox News pundit Greg Gutfeld: “It’s almost as if the people who make products for men, hate men!”

Piers Morgan: “The subliminal message is clear: men, ALL men are bad, shameful people who need to be directed in how to be better people.”

A slew of folks on Twitter who are calling for people to #BoycottGillette.

Here’s the thing. Gillette’s add calling for an end to toxic masculinity isn’t the problem. Toxic masculinity is the problem.

We men can, should, and must do better. #MeToo isn’t a catchphrase, it’s a philosophy. Equality should not be controversial.

And yet, it is. Until we men do better — until we stop bullying those we see as weak or un-masculine, until we stop grabbing and groping, until we stop condescending to those who we view as different or weaker, and start treating women as equals, intervening to stop harassment, and being better role models — harassment and discrimination will continue to plague our society and our workplaces.

I fully recognize that a sizable portion of my readers will take issue with my stance on this commercial and this issue. And that’s OK.

The ad is designed to spark debate. So let’s have a debate. Defend your position that the ad insults men. Without debate nothing will change.

And on issues of gender equality and sexual harassment, change is long overdue.

January 11, 2019June 29, 2023

Public Sector Workplaces Turning to the Cloud

When Alex Smith was hired as the chief human resources officer for the city of Memphis in 2016, she had never previously held a public sector job — one of the reasons she was selected.

City leaders wanted to bring fresh eyes to the team to address the ongoing problem of how to attract and retain the best talent to city jobs. Smith found that many of the city’s human resources processes were still paper-based and data was stored in siloed databases, which added time and confusion to hiring and talent management.

“I knew we needed to automate some of these processes,” said Smith, who previously held private-sector HR jobs with Brightstar Corp. and Target Corp. One of her first suggestions was to implement a cloud-based HR technology system that would streamline hiring and better manage candidates and employee data. After some negotiating, the chief information officer and head of finance agreed, and they adopted a cloud-based human capital management system from workplace software giant Oracle.

“It was a huge win,” Smith said.

The technology eliminated many of the manual tasks like copying addresses into multiple databases and producing monthly trend reports.

“Now I can focus on tasks that matter the most and I can track hiring data in real time,” she said. It also streamlined the candidate experience and helped her expand the city’s social recruiting and brand recognition. “It is helping us to be more proactive in attracting talent,” she said.

A few years ago, this kind of story — of a public sector agency investing in cloud-based HR technology and social recruiting platforms — would have been unusual. The public sector has a reputation for being slow to adopt HR technology to empower workers and streamline HR tasks, said Sean Morris, a principal at Deloitte covering human capital trends in the public sector. “There is a history of under-investing in human capital by government due to limited budgets.”

Public sector HR people also don’t have a seat at the funding table, which means there is no one to champion their cause, said Sean Osborne, vice president of product management for public companies for Acendre, a cloud-based talent management software company that serves the public sector. “We often find that HR doesn’t have the budget or authority to effect real change.”

Even when these agencies have funding for technology upgrades, the siloed nature of government agencies and opposing funding priorities can quickly push HR investments to the end of the line, Smith added. “If HR is competing with the police or fire departments for project funding, police and fire will always win.”

This lag effect is about more than just money. There is also a change management challenge. In government, many senior leaders and IT staff have been in those roles for years and they have a set way of doing their jobs and making decisions. Moving to the cloud is a completely different way of managing technology and data, and there is a lot of resistance to change, especially from employees who fear their jobs will be at risk.

Technology and Talent Are Getting Old

These delays have had a long-term impact on recruiting talent management trends across the public sector. Many public sector agencies still rely on paper-based recruiting and onboarding steps, which are cumbersome and can add weeks to the hiring process. “Millennials and Gen Z don’t understand why it would take that long,” Morris said, noting that the negative experience may cause them to look elsewhere for work. These organizations also lack tools and transparency to effectively support career development, or to use people analytics as part of business and talent decisions. All of this is making it difficult for public sector agencies to attract and retain talent, said Morris. “That has put them in the situation they are in now.”

That situation is a rapidly aging workforce and a recruiting environment that makes it difficult to attract and retain young talent. Data from the Office of Personnel Management shows that less than 7 percent of the federal workforce is millennials, even though they make up 35 percent of the workforce nationwide; and 44 percent of federal workers are over the age of 50, which means they are inching ever closer to retirement with few younger staff ready to take their place.

“If HR is competing with the police or fire departments for project funding, police and fire will always win.”

— Alex Smith, CHRO, City of Memphis

This combination of aging talent and outdated technology is making it difficult for them to compete for young talent, said Daniel Torrens, global public sector HCM strategist for SAP SuccessFactors. “Candidates have a lot of choices today, and public sector organizations haven’t been building their brand or engagement strategies.”

These pressures are forcing public sector agencies to shift their attitude about cloud-based HR technology and to prioritize these transitions as they consider their future talent development and workforce management needs.

“Government CIOs no longer question whether they should move to the cloud, it’s all about, ‘How do we get there,’ ” Torrens said.

That’s good news for vendors. Torrens noted that four years ago, these agencies were still paying off their on-premise solutions and wouldn’t even consider a move to the cloud. But in the past 18 months that has changed. “We are having a lot more conversations about how to build a business case and get funding to adopt the cloud.”

Talent Needs Force the Issue

Fully 81 percent of public sector respondents now consider the cloud to be one of the top three technologies for ROI potential, according to the 2018 SolarWinds “IT Trends Report.” Almost as many (79 percent) see cloud as a top three solution to achieve productivity and efficiency benefits.

To support these interests, many public sector organizations, including government, education and health care, have adopted a cloud-first policy to replace legacy systems and design new more agile service-based solutions, said Sherry Amos, director of market development for education and government at Workday.

HR is also gaining more visibility in decision-making as public organizations acknowledge that talent management is a strategic issue that needs to be addressed. “In the past, finance drove all of these acquisitions,” Amos said. “But HR now has a seat at the table.” This is giving public sector HR leaders an opportunity to shape the future of workforce management and the technologies their organizations will use to support them.

This is where the challenge of moving public sector HR into the cloud shifts to the vendors, Morris said. The decision to move to the cloud is only the first in many steps for public sector clients. “If a vendor wants to support customers in the government cloud space, they have to federalize their tool.”

FedRAMP and Title 5

The majority of government organizations have to meet a very unique set of rules and requirements for adopting any cloud-based solutions, and they rely on vendors to adapt their systems accordingly. These include ensuring all data centers meet FedRAMP, the Federal Risk and Authorization Management Program requirements, which include an extensive list of rules for security assessment, authorization and continuous monitoring of cloud products and services.

“Meeting FedRAMP is a high barrier to entry in this space,” Osborne said. Vendors also have to adapt their platforms to meet Title 5 rules regarding administrative personnel, which cover issues such as pay schedules, job titles and priority hiring for veterans and people with disabilities. It can take months and a significant financial investment to adapt current HR platforms for a public sector workplace environment.

The majority of civil government organizations have to meet a unique set of rules and requirements for adopting cloud-based solutions.

Vendors also face a ton of pressure to get it right — because if they screw up things like data security it could result in national security risks. “Any time you move a large swath of data to a new environment you have to do your research because no system is foolproof,” Morris said.

The challenges are significant, but the effort to meet regulations and cater to this clientele is clearly worth it. “The federal government is the largest employer in the country,” Osborne said. And since most of these agencies are only just now considering cloud-based HR technology solutions, the commercial opportunities are bountiful. “The time is ripe right now for public sector organizations to move to the cloud,” said Eva Woo, global vice president of solutions management for SAP SuccessFactors.

Public Sector Tipping Point

The enormous sales potential is causing vendors across the HR technology industry to pay closer attention to the needs of public sector clients and to prioritize meeting regulatory requirements and adapting their customer management processes for a public sector environment. That includes adapting their sales and marketing strategies for longer procurement cycles.

“It can take two years just to secure funding and execute procurement,” Amos said. Public sector clients also tend to pursue a phased approach to their transition to the cloud, starting with low-risk systems to demonstrate safety and performance before moving to more mission critical systems that support HR and finance.

Morris noted that SAP and Oracle were among the first HR cloud-based solution providers to embrace public sector clients and their regulatory and procurement needs, though other vendors have been quickly following suit. He believes that the next three to five years will see a flurry of cloud-based HR projects across the public sector, including local and federal government, education, health care, and other agencies that need a better, faster and more transparent HR solution to deal with their recruiting and talent management needs.

Morris encourages vendors to make the continued investments in meeting regulations and to hire people with experience in public sector HR and IT who can help them navigate the complex procurement process. “The public sector is a massive market, but you have to play the long game,” he said. These agencies know they have to make investments in cloud-based HR solutions, but they will need vendors who can help them get there.

Vendors may also need to provide more IT support and education. City of Memphis’ Smith noted that many public agencies don’t have the head count or expertise to manage a cloud transformation on their own, so they will rely on vendors to fill gaps. “Having partners who will support training and change management needed on these projects is very important.”

These clients may have more needs than private sector companies, but the vendors who can support them and prove they understand how the public sector environment works will be will be best positioned to win these clients in the future.

January 10, 2019June 29, 2023

Human Resources Gets Its ISO Approval

The first-ever ISO standard for human capital reporting was passed in November 2018. Officially titled the “Human Resource Management — Guidelines for Internal and External Human Capital Reporting,” it was scheduled for publication Dec. 18.

Some background: ISO is the International Organization for Standardization. It is a worldwide federation of national standards bodies — the ISO member bodies.

The member body for the United States in the ISO is ANSI — the American National Standards Institute. The work of preparing international standards is normally carried out through ISO Technical Committees. In this case, the work was done by Technical Committee 260.

In 2011-12, there was an ANSI effort to create a human capital reporting standard for the United States. Those of us involved in the early ANSI work were disappointed when it failed to progress; we had hoped that an ANSI standard would eventually lead to an ISO standard. Although the ANSI effort was ultimately tabled, a subsequent ISO group formed to tackle the issue, resulting in the standard that was finalized Nov. 22.

Having an ISO standard is a much bigger deal than merely having an ANSI standard. Here’s what Jac Fitz-enz, who is often referred to as the Grandfather of HR Analytics, has to say about standardization: “An ethical code, a body of research, specialized education and performance standards are the basis of a profession. The adoption of ISO standards supports human resources’ claim to be a profession. It’s been a long, difficult journey from the founding of the American Society for Personnel Administration by 28 far-sighted people in 1948, but now the goal is within reach.”

Why Standardization?

We’re willing to guess that HR professionals are asking some variant of one or more of the following:

• I work in a small firm, nonprofit organization or government agency; how can this possibly be relevant to me?

• Can I just ignore this?

• Is this standard a threat to me (and/or my employer)?

• Is there some way that I (and/or my employer) can benefit from this new development?

In order to answer these concerns, let’s first discuss some additional background that helps put this standard into context.

Why Has This Standard Emerged?

The fundamental source of value creation in advanced economies such as the United States has shifted from tangible assets to intangible assets. Tangible assets have a physical form — machinery, buildings, land and inventors — whereas intangible assets are nonphysical, such as patents, goodwill and brand recognition.

Financial services firm Ocean Tomo reported that in 1975, 83 percent of the market value of S&P 500 firms was accounted for as tangible assets, with the remaining 17 percent of assets attributable to intangible assets.

Also read: Human Capital Disclosure May Soon Be Mandated By the SEC

A mere 40 years later, this ratio had flipped: In 2015, only 16 percent of the market value of S&P 500 firms was accounted for as tangible assets and the remaining 84 percent was attributable to intangible assets.

Since human capital is the fundamental source of most intangible assets, there is a much greater need today for measuring, monitoring, tracking and understanding how well people are being managed and developed. A broad array of stakeholders — executives, investors and employees themselves — want to know more about the people side of the businesses with which they are involved.

In light of this, “Workforce reporting is rethinking how organizational value should be understood and evaluated,” said Stefanie Becker, HR project director, HR strategy and planning for SAP SE. Becker also convened the working group initiated by the German Mirror Committee in the ISO Technical Committee 260 and oversaw the drafting of the human capital standard.

“The new ISO standard about workforce reporting assists organizations to move toward a more data-driven decision-making process across all facets of workforce management,” Becker said. “By using it for the public reporting, organizations can also fulfill the requirements of investors and other stakeholders by offering more transparency on their most valuable resource, human capital.”

And, indeed, investors are beginning to demand more insights on the people side of business. For example, the Human Capital Management Coalition, which is led by the UAW Retiree Medical Benefits Trust and includes 26 influential institutional investors representing more than $2.8 trillion in assets, “engages companies with the aim of understanding and improving how human capital management contributes to the creation of long-term shareholder value,” according to the coalition’s mission statement.

Cambria Allen, corporate governance director for the UAW Retiree Medical Benefits Trust, said, “The Human Capital Management Coalition filed its rule making petition with the U.S. Securities and Exchange Commission in 2017. We presented the investor case for more effective disclosure of human capital information from our portfolio companies and urged a multi-stakeholder effort to develop reporting standards that would provide shareholders critical access to relevant and reliable quantitative and qualitative data.

“This data will allow us to better understand and assess how well portfolio companies are managing their talent,” Allen said. “The work of the ISO represents an important contribution to this dialogue.”

In short, if there was doubt previously about demands in the investor community for reporting on the people side of the business, it is now clear investors view such information as central to their work. The time has more than come for a standard for reporting on the people side of the business.

Overview of the Standard

Before getting into the details of the standard, a high-level view reveals some key facts that inform answers to the previous list of questions. First and foremost, the standard is about guidelines. There is nothing mandatory or compulsory about it, so there’s no need for anyone to get up in arms about it.

Second, the standard provides guidelines for both internal and external reporting and for large and small businesses, so there is something here for everyone. Some components are more appropriate for internal reporting or more relevant only to larger businesses.

Third, it represents the culmination of a tremendous amount of effort by a large and well-informed group of HR leaders from a wide range of backgrounds. There is a lot of wisdom, free advice and counsel built into it.

And fourth, the standard is very broad. So there may be parts of it that seem irrelevant for your organization. Our advice is not to be tempted to throw out the baby with the bathwater. Use what you can and what will be most valuable for your organization.

The standard provides guidelines on the following core human capital reporting areas:

• Compliance and ethics.

• Costs.

• Diversity.

• Leadership.

• Organizational culture.

• Organizational health, safety and well-being.

• Productivity.

• Recruitment, mobility and turnover.

• Skills and capabilities.

• Succession planning.

• Workforce availability.

Lee Webster, who served as the secretariat of the ISO Technical Committee 260 that created the standard, said, “This document is a first step. It will evolve, and additional definitions and formula will be added in future versions. We’re only at the 50-yard line. There’s still lots more work to do.”

What the Standard Suggests for Internal and External Reporting

The standard is a 44-page document that contains lots of narratives, definitions and background discussion. Most useful for beginning to understand what it’s all about is Table 2 of the standard, which provides a summary of the recommendations for both internal and external reporting for both small and large organizations. The table on this page summarizes the standards’ recommendations for external reporting.

What This Means to Your Organization

The demands for better management, accountability and transparency with regard to human capital will only continue to grow in the coming years. This is the inevitable result of the increasing role that human capital plays in the creation of economic value. Within that context, the standardization of human capital measurement and reporting is a natural development.

This is good news, we believe, for those HR professionals and employers who have a good story to tell. But there is no getting around that this is not a happy development for some: those who would prefer to be able to keep stakeholders in the dark regarding their “people track record.” So this is not a universally positive development for everyone. But it is certainly one that will benefit the “good guys.”

Our advice is to give the new ISO Standard careful consideration. There may be components of it that are not relevant to your organization (at least currently). But it is also the breadth of the standard that ensures there is something for every type of organization, including yours.

December 1, 2018June 29, 2023

Taking Office Gossip Off the Lunch Menu

With millions of American workers eating lunch at their desks, in a car or not taking a lunch break at all, one startup is going all in to make lunchtime more engaging for its staff.

Nikki Sucevic, head of recruiting and training at online children’s clothier Mac & Mia, said the company provides lunch for four randomly chosen employees from different departments. There’s just one request of the staffers selected to go to lunch together: Do not talk about work at all; instead get to know each other.

“When you start to create bonds beyond work, you feel more empathy for your co-workers, and want to work harder for them,” Sucevic said.

Sucevic said her office hasn’t collected formal feedback on the program, which was implemented this fall. Anecdotally she noticed a more positive atmosphere in her workplace of 30 employees. Sucevic thinks lunching with colleagues can work for other companies as well.

“A lot of times, companies have happy hours or one-day events, and this is a quick Band-Aid,” Sucevic said. “Instead of doing one big thing now and then, we want to create a culture of this and start to make little adjustments every day. [Our] lunch lottery plan is one of our cultural shift plans to build relationships, empathy and cross-functional respect.”

Also read: A Desk for One for Lunch

According to a May 2018 survey conducted by workplace hygiene brand Tork, employees can have multiple reasons for not taking their lunch break. Nearly 20 percent of North American workers worry their bosses won’t think they are hardworking if they take regular lunch breaks, while 13 percent worry their co-workers will judge them. Some 38 percent of employees in the study also said they don’t feel encouraged to take a lunch break.

Making a lunch program with co-workers or even just eating with someone voluntarily can go a long way, said Laura Hamill, chief people officer at employee engagement company Limeade.

Also read: Give ’Em a Break: Employees Want Their Lunch Break Back

The Bellevue, Washington-based company, aside from sharing a similar program with Mac & Mia, has another program where they have new hires start their first day at lunch time and have a meal with their new co-workers. Hamill said this program has received exceptional feedback.

“I had someone who just started on my team and she wrote an email to me sometime this week and she said she felt like a welcomed part of the team and felt like she had another family now,” Hamill said.

Limeade’s marketing team wrote an article last year about the benefits that come from having lunch with co-workers. Those benefits include boosting productivity, building better relationships, making leaders more accessible and improving well-being.

“It’s about being a human being, not talking about work and learning what your co-workers are up to and what their lives are outside of work,” Hamill said. “It has to do with the idea of relationships. The more I think we get to know each other as human beings, we begin to trust each other more and understand the perspective people are bringing to work.”

David Chasanov is a Workforce editorial associate. Comment below or email editors@workforce.com.