Category: Staffing Management

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Working Time

How can we organize working time to achieve maximum productivity while promoting human happiness? Of all the various aspects of work/life balance, this is one of the trickiest and most interesting.


Not so long ago, working time was decided by the hours of daylight. Then came the Industrial Revolution, when electricity and artificial lighting made it possible for hard-faced factory owners to keep their machines running into the night, whatever the cost to their workers’ health. By the mid-19th century, millions of British and American workers were putting in a mind-numbing 3,500 hours a year—almost 10 hours a day, every day of the year. Of course, such gross exploitation was short-lived, as were the unfortunate workers themselves.


In the 20th century, Henry Ford, the pioneer of “welfare capitalism,” introduced first the 48-hour week, then, to the outrage of his fellow capitalists, the 40-hour week. Since then, trade unions all over the world have fought a largely successful campaign to ensure that working hours are reasonable and that workers have suitable breaks.


Today, it is the South Koreans who work the longest hours among developed countries, typically 8 a.m. to 7 p.m. At the other extreme, the French have yet to give up entirely the 35-hour week introduced by their socialist government in 2000. Meanwhile, the whole question of working hours has been turned upside down by globalization, 24-hour news and the Internet.


In developed countries, working hours have almost ceased to be an issue, at least as far as the time of day is concerned. Flextime has been a familiar concept for a few decades, and more and more organizations are learning to adapt their routines to accommodate parents with school-age children and others with special requirements. In many cases, it is helpful to have people using offices at different times because you actually need less space. We are well aware of this at my company, Regus, where we manage workspaces. We would be overwhelmed if all our customers turned up at once.


There are still, of course, organizations where the old competitive and hierarchical systems still apply, and ardent young climbers know that if they want promotions, they had better be in the office before their bosses, and make sure to leave later so that they can tidy up whatever loose ends remain.


But this routine, which was the norm in investment banking throughout the 1980s and 1990s, is dying out as the world wises up to the shortcomings of that macho, male-dominated and soul-destroying culture which actually created so little value for shareholders, employees or anyone else.


Nowadays, those whose health is most at risk from working excessive hours may well be the harassed executives or middle managers who have to answer to bosses in different time zones. If you work in Asia for a European company, or in Europe for an American company, for instance, you will be under local pressure to follow the normal working day where you live—not least, perhaps, for your spouse’s benefit. Then, just as you get home or begin to unwind for an evening with the family, you hear the dreaded ping from your phone or PDA and you know that your masters to the West need you to respond to some urgent development that is unfolding in the middle of their working day.


There is no swift answer to this kind of dilemma except to negotiate so that you protect your sanity as well as your job prospects. In the end, if you take on a certain kind of work, you have to accept that you may be called upon at almost any time of the day or night, except when you turn off all of your communication in order to sleep. In these circumstances, working time becomes so flexible as to be almost impossible to measure.


If we accept, for some of the reasons I have discussed, that working time must nowadays be flexible, then must we simply ensure that it is added up properly, so that people are appropriately rewarded for the hours they put in? Far from it, in my view. And this is where I see one of the most radical developments in the whole world of work.


As an employer, I am not interested in the number of hours someone puts in. All I care about is whether they use their time productively and achieve the tasks I have set them. I would far prefer to have employees who always overachieve on their allotted tasks, even if they manage this in just 10 hours a week, than someone who works round the clock yet fails to achieve what is required. I can’t believe that I’m the only boss who holds this view.


This is how I see the whole question of working time resolving itself over the coming decades: People will need to be connected to work throughout their waking hours. They will work when they want to, and they will be judged and rewarded by what they achieve. In years to come our grandchildren will mock our commitment to the daily commute and tolerance of “normal working hours.”


Workforce Management Online, April 2010 — Register Now!

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Financial Advisors Once Again Open Doors to Interns

In an early sign that the worst days of the recession are behind them, financial advisory firms once again are hiring summer interns, with the hope of grooming young prospects to become full-time professionals.


“There was a falloff last year, but this year, we’re placing kids like crazy,” said Deena Katz, associate professor in the Division of Personal Financial Planning at Texas Tech University and chairman of wealth management firm Evensky & Katz.


She noted that 90 percent of the 60 students seeking internships have been placed with employers so far this year, compared with 70 percent a year ago. By the end of spring, Katz predicted, every student seeking an internship will get one.


Although it is still early in the hiring season, other organizations are seeing similar spikes. At internships.com, the number of financial services internships is up 250 percent compared with last year, according to spokesman Josh Morgan, who would not provide specific numbers.


The Wharton School of the University of Pennsylvania reported an 80 percent increase in off-campus internships being posted so far this year compared with a year ago, according to Michelle Antonio, director of Wharton MBA Career Management.


About half of the 65 to 75 students at Virginia Tech seeking internships have been hired, Ruth Lytton, a professor of financial planning, wrote in an e-mail. She said it is still early in the hiring season, and she expects that nearly all will be placed. Last year, about 42 students found internships.


“We are also seeing a trend for firms offering internship opportunities for the first time, which offers new potential for both the firms and the student interns,” Lytton said.


For advisory firms ramping up to hire interns this spring, the process requires more than simply posting an ad on a college campus bulletin board or Web site. To be successful, advisors must perform the same kind of due diligence they use with other hires to identify good fits.


They must also be ready to train their interns, with specific projects in mind, both to introduce them to the business and see whether they might make a good full-time addition to their firms down the road.


Identifying the right students is the biggest challenge, according to Natalie Pine, COO of Briaud Financial Planning Inc. in Bryan, Texas, which manages $450 million. Her firm halted its internship program a few years ago after several of its interns fled the advisory business for other careers.


“It was frustrating,” Pine said. “We’d train them and give them work experience, and a lot of them left for other industries.”


This year, for the first time, Pine is working closely with professors at Texas A&M University to screen student candidates and find ones who are committed to the financial services industry. She has not hired an intern yet but will start interviewing candidates soon.


Partnering with universities to recruit interns is also key for Jon Yankee, a partner at Fox Joss & Yankee in Reston, Virginia, which manages $275 million. He visited Virginia Polytechnic Institute and State University recently to meet with planning students and speak to two financial planning classes about the industry. He said these recruiting trips help the firm become better known among students and faculty members.


“Part of our goal has been to establish our firm’s reputation so students think of us as the firm to go to,” he said. “When that happens, we’ll have a choice of the best students.”


For advisory firms far from universities or colleges with planning programs, hiring a top-notch intern can be much more of a challenge. For example, Rick Kahler, a certified financial planner and owner of Kahler Financial Group, said his firm’s Rapid City, South Dakota, location is a major disadvantage when recruiting interns.


“It’s hard for me to find any student that wants to come to Rapid City,” Kahler said. “And there’s no college within 400 miles of my location that has a financial planning program.”


This year, however, Kahler got lucky: A student from Iowa State University who’s getting her master’s degree in financial planning will join him this summer because she has family in the area.


Once advisors have selected an intern, it’s critical that he or she be assigned meaningful work and be allowed to get a real feel for the job; relegating interns to administrative work such as filing or making coffee has little long-term value for the firm or the intern.


For example, interns at Burns Advisory Group in Oklahoma City, which manages $400 million, work with the firm’s research team analyzing new clients’ portfolios, crafting projections for those clients and analyzing companies’ 401(k) costs, founder John Burns said. Allowing interns to help with these kinds of tasks also gives firms a better idea of whether they’re good candidates for full-time employment after college.


“You get to see the work ethic, their attitude, what they bring to the table,” Burns said.
In fact, Burns’ firm hired its most recent intern, Jarrod Sandra, who graduated last year from the University of Central Oklahoma, as an investment analyst. Sandra impressed his bosses by overseeing a major project—moving the firm’s portfolio data to its customer relationship management system, said Joy Parduhn, chief compliance officer and COO.


Lee Munson, a certified financial planner with Portfolio LLC, a registered investment advisory firm in Albuquerque, New Mexico, with $100 million in assets, gives his interns assignments such as writing research reports on funds and fund managers that are eventually posted on the firm’s Web site.


While most firms—including Burns Advisory, Fox Joss & Yankee and Briaud—pay their interns competitively, Munson said he believes he can still snag top-notch interns without compensating them.


“If you pay them, I feel it discourages their passion to learn and really suck it up,” he said. “If they’re not on the clock, they can be there because they really want to be there, and you can let them roam free and spend hours expanding their intellectual curiosity.”


Advisors who aren’t paying their interns should be careful they don’t run afoul of state and federal labor laws, which in most cases require that interns be paid. 


But Munson said that when an intern impresses him, he tries to hire him or her with competitive pay and benefits. He recently hired former intern Bryon Giron, who graduates next month from the University of New Mexico, to become a trader at the firm.


 


Filed by Lisa Shidler of InvestmentNews, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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All I Ever Needed to Know About Performance Management I Learned From Little League Baseball

Dave Ulrich. Jack Welch. Patrick Lencioni. All are big names that have something to teach us about the art of people management and motivating talent to perform at a high level in your organization. You’ve heard of them, paid money for their books and been attracted to conferences they’ve headlined.


I’m adding Kelly Leak and Tanner Boyle to that list. But you won’t find them signing books or pulling down 20-large to speak to your local SHRM chapter.


Instead, the modern-day versions of Kelly and Tanner are more likely to be playing Xbox with your kids or threatening your cat with a pellet gun. Before you call the police, wait! Although they’re neighborhood kids (and maybe hellions sometimes), you can learn more from them than you can from the HR thought leaders. You just have to take time to stop, watch and listen.


Today I’m simply here to tell you that all I need to know about performance management I learned from 9-year-olds and Little League baseball. Here’s the scenario that made the connection for me:


• I’m currently coaching a baseball team of 9-year-olds.


• We look pretty good, but we lost a recent game and our outfield was struggling. Really struggling. Like Bad News Bears struggling.


• We had practice the next night. We did outfield drills that were pretty simple in concept. Run and catch the ball, and if you can’t catch it, don’t let the ball get by you. Rinse and repeat.


• No one could catch or stop the ball. It was bad.


• I let it go on for about 10 minutes, feeling like the most inept coach in the history of sports.


• Then I thought, it’s scoreboard time.


• I said the following to the kids: “Guys, we’re going to make this a competition. If you catch the ball in the air or stop it from going to the fence, you get a +1. If you drop the ball or the ball gets by you, it’s a -1. After 15 minutes, we’ll stop, add up the scores and declare a winner. Winner gets to watch the others take a hard lap around the field and soak in the glory of their win.”


• The result: Intensity went up 500 percent, and the kids kept competing even when they dropped a ball. We were keeping score, and as a result, the kids had skin in the game.


The lesson from a performance management standpoint is clear: That which is measured and communicated gets results. Competition is good. Never apologize for setting up a system where everybody competes and, as a result, the players perform their best.


If you don’t fully appreciate the connection between your organization and a bunch of 9-year-olds on a scrubby baseball field, it’s probably because you don’t have kids, or have never been a volunteer youth coach. I’m using baseball as my example, but I’m positive the lessons are seen in non-athletic activities as well.


Regardless of the youth activity, the challenges are the same. You’re a volunteer. The kids aren’t paid to be there. You’re competing against 101 other things for the attention of Kelly and Tanner and the other Bears. If it goes poorly, you have two choices. One choice is to muddle through the season and celebrate when it’s over. The other choice is to work to improve the performance of the kids.


Let’s stay with the baseball example, since I’m currently living it. Here are some other lessons my Little League team is currently teaching me in ways my workforce can’t:


1. The power of praise: One of the most underrated skills involved in being a performance coach in corporate America is the power of the positive comment. I’m not talking about your formal recognition program or the clichéd certificates of recognition some managers seem to focus on. Instead, I’m talking about the concept of “saying it when you see it.”


In Little League baseball, you generally have to praise good skill, effort or attitude before a kid is going to respond to your efforts to improve their skill. A good rule of thumb is three “spot praises” (you give the quick, positive feedback immediately when you see good stuff) for every attempt to correct them or improve their performance in any way. The praise becomes the currency between you and the kids that allows you to coach them for improvement. You should try that in the office sometime.


2. Coaching isn’t telling: I know I’ve done my job on the baseball field when a kid tells me why they missed the ball or overthrew first base by six feet before I coach them on a given play. That means I’ve invested the time to help them understand a skill at a level where they know the steps that are required, but also can troubleshoot their own performance as well. Powerful stuff.


You know what the role of a coach is when this self-assessment happens on the field or in your office? You just praise the player. She doesn’t need you as much because you’ve taken the time to teach her, rather than simply tell her repeatedly.


3. The same words that motivate Kelly don’t work for Tanner: In corporate America, you have a hammer called at-will employment. You pay employees to work for your company, and as a result, even the most progressive managers have a tendency to talk the same way to all employees on their team. After all, you have a job to do and time is limited.


That one-size-fits-all approach won’t work on the youth baseball field. Talk the same way to Tanner as you do to Kelly, and Tanner shuts down. Youth activities remind you quickly that customized coaching is necessary to improve the skills of individuals and get the best team results possible.


The next time a high-potential employee is struggling in his first role as a manager of people, don’t buy him a bunch of business books on management. Save your money, and instead require him to coach a youth sports team.


If newly minted managers open their eyes, they’ll learn lots from the kids—things like calming talented individual contributors down when they’re upset, breaking up unproductive meetings and teaching the kids how to stay humble when they’re riding a hot streak.


You know, the important stuff.


Workforce Management Online, April 2010 — Register Now!

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Using Exit Interviews to Protect Trade Secrets

Conducting an exit interview of a departing employee serves a number of useful purposes. At times, one of those purposes is to further the employer’s goal of protecting its trade secrets and other confidential and proprietary information from misappropriation. With that purpose in mind, here are some practices to consider when conducting exit interviews.


     Prepare for the interview: Special thought should be given to an interview that is going to be conducted with a departing employee who has had access to the employer’s confidential information. Before the interview occurs, the prospective interviewer should consider, with input from the employee’s supervisor:


• The specific confidential information at issue, such as customer information, technology or negative research.


• The agreements in place with the departing employee that serve to assist the employer in protecting that confidential information, such as a confidentiality agreement, a covenant not to compete, a non-solicitation agreement, or an agreement not to retain any confidential information.


• Any intelligence the employer already has on the employee’s future plans, such as whether the employee is taking a position with the employer’s competitor where the employer’s confidential information would benefit the competitor.


• Any intelligence the employer already has that the employee has engaged in disturbing, dishonest or suspicious behavior. For instance: The employee has made unusual downloads of confidential information or the employee is taking a job in violation of a covenant not to compete that is enforceable under the applicable law. If these circumstances are present, the employer’s attorney should be consulted before the interview occurs, if possible.


Before the exit interview occurs, also consider the particular employee’s personality and how best to conduct the exit interview to keep the employee chatty and relaxed.


Likewise, consider who is best to conduct the exit interview in light of the employee’s personality. Although HR may routinely conduct exit interviews, the employee’s supervisor is likely to have more substantive knowledge about the confidential information and the employee’s work and will be better able to determine whether the employee is a threat to the employer’s confidential information. On the other hand, the supervisor may make the employee nervous and less forthcoming.


Although, in theory, HR and the supervisor could conduct the exit interview together, the more interviewers there are, the more likely the employee is to “clam up.” There should be no firm rule as to who should conduct an exit interview. Instead, the particular circumstances (including the employee’s personality and relationship with the supervisor) should be considered in deciding who is best to conduct the particular interview.


The interview should be planned with all of these special factors in mind. Otherwise, the employer may miss a potential opportunity to further its goal of protecting its confidential information.


The exit interview: The exit interview can and should be used to remind employees of their ongoing obligations related to the protection of the employer’s confidential information, and to attempt to determine whether the employee will abide by those obligations.


Often such obligations are based on agreements with the employee. Consider reviewing those agreements with the employee at the exit interview in order to assess:


Whether the employee has an overly narrow view of his or her obligations.


• Whether the employee considers confidential information to be in the public domain.


• Whether the employee asserts that the agreements are unenforceable.


Consider asking employees to sign at the exit interview an acknowledgement of:


• Receipt of copies of any such agreements that they may have with the employer.


• Their understanding of the ongoing nature of the obligations.


• Their confirmation that they intend to abide by their obligations.


Any refusals to sign such an acknowledgement may signal that there is a threat to the employer’s confidential information.


The obligation for the employee not to retain confidential information should be addressed in detail at the exit interview. The interviewer should not simply ask, “Have you returned all company property?” Instead, the interviewer should review with the employee the various items of company property that the employee needs to return. Then the interviewer should consider probing even further.


The interviewer should make clear to the employee that the obligation includes confidential information maintained (including in electronic form) at home, in the trunk of a car, on a personal computer, on a cell phone and on a hand-held device.


The interviewer should also make clear that the obligation includes the obligation not to retain any copies. For instance, the fact that the employee gives the employer a copy of a confidential customer contact list is not sufficient. Instead, the employee must make sure that he or she does not retain any copies on a personal computer, personal e-mail account or cell phone.


After that, if the interview reveals that the employee has in fact retained confidential information—inadvertently or otherwise—the interviewer should not, as a knee-jerk response, tell the employee to destroy the documents or files. Instead, the interviewer should say he or she will get back to the employee about how the employer wants to address the outstanding confidential information. Depending on the circumstances, the employer may want to make copies of the documents or files retained by the employee and any related metadata. These steps will help the employer see if the confidential information was forwarded to anyone else, which may be useful in the event of future litigation.


The interviewer may want to take notes during the interview. At the same time, however, the interviewer should not take such copious notes that the employee becomes uncomfortable or gets suspicious and stops talking. The interviewer will want to keep the employee engaged and talkative during the interview.


On the other hand, if the employee says something that indicates there is a threat to the employer’s confidential information, the interviewer should not make light of it simply to keep the interview going. In the same vein, the interviewer should take care to not agree, even inadvertently, with the employee’s assertions that the employer’s agreements or policies are invalid, unenforceable or unclear.


To that end, the interviewer should take care to avoid nervous or unintentional use of “OK,” “Yes” or “Yup.” Although such words are natural in conversation, they are dangerous in the context of a dispute between the employer and employee. The employee may attempt to use such statements by the interviewer against the employer in future litigation.


Under no circumstances should any misrepresentations be made to the employee. Those misrepresentations may keep the employee talking, but they will only lead to trouble for the employer in the future. If a difficult subject comes up during the exit interview that was not contemplated during preparation, the interviewer should just say, “I will have to get back to you on that.”


Also, the interviewer should be careful about making demands on the employee during the exit interview in an effort to protect the employer’s confidential information. For example, while refusing to give the employee his or her final paycheck until all company property is returned may seem to be a logical step, such a refusal may violate labor laws. Accordingly, the interviewer should consult with the employer’s legal counsel to consider whether any proposed steps comply with law and are best suited for the situation at hand.


The interviewer should listen carefully to the employee’s answers, questions and comments during the interview and consider follow-up questions rather than blindly follow a set list of questions. The interviewer should not simply check the box and move on. For example, if the employee states that “career opportunities” were a factor in the decision to leave the organization, the interviewer should consider asking what those career opportunities are and then, if appropriate, probe into the nature of the employee’s new position to ascertain whether there is a possibility that the departing employee may misappropriate the employer’s confidential information.


If the new position raises concern, the interviewer may also want to consider asking the employee how the employee can do the new job without breaching the obligations to the soon-to-be-former employer. The employee’s answer may provide valuable admissions for use in litigation to demonstrate that there is an actual threat to the former employer’s confidential information. Ordinarily, it will not be easy to get such an admission and the interviewer will need to approach this area with some finesse. For example:


• Interviewer: “Yes, we need the customer contact book back for our records, but is that going to be a problem for you in your new job?” Employee: “Gee, I made a copy of the customer book to consult it in my new position.”


• Interviewer: “How can you do that new job without using our customer information?” Employee: “I can’t—so I plan to use it. But I don’t agree with you that the customer information is the employer’s confidential information.”


The interviewer also should consider fishing for evidence that the employee has already started work for the new employer in breach of a duty of loyalty to the employer. For example, the interviewer could ask: “When do you expect to start with your new employer? Can we get your new contact information there? Is that contact information effective now?”


If the interviewer asks questions about the new employment, care should be taken not to solicit from the employee any of the new employer’s confidential information. The interviewer should consider expressly instructing the employee that he or she is not to disclose any of the new employer’s confidential information and that none of the interview questions should be construed as calling for such information.


Follow-up: If an employee denies during the exit interview that he or she has ongoing obligations to the employer, those statements can assist the employer in establishing in litigation that there is a threat to the employer’s confidential information. In turn, this can allow the employer to obtain an injunction against the employee. Consider memorializing such statements by the employee during the exit interview in a memo to the employer’s counsel. The interviewer should consider, with guidance from the employer’s counsel, preparing a second, non-privileged memo to be placed in the employee’s personnel file.


Further, any repudiation of the employee’s obligations to protect confidential information should be brought to the attention of the employer’s attorney immediately so counsel can assess what action is appropriate in response.


It is important that threatened misappropriation be addressed immediately. Misappropriation can cause irreparable harm to the employer if not prevented—as the saying goes, you can’t unring a bell. Further, the employer’s attorney might recommend marshaling and preserving evidence so it is not lost as the company goes about normal post-termination activities, such as wiping the employee’s hard drive and reassigning the computer to another worker.


Exit interviews differ depending on the particular circumstances at hand. The conversations can be hard to predict, and at times exit interviewers will simply have to use their best judgment. But with these guidelines in mind, they’ll be better able to shape the conversation with the end of protecting valuable company information.


Workforce Management Online, April 2010 — Register Now!


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

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Majority of the Time, Minority Staffing Firms Find Allies Among Non-Minority Companies

Joe Tucker has spent 20 years in the staffing industry, 18 of which have been running his own firm. Yet he admits all that experience doesn’t make him an expert.


Tucker recognizes there are plenty of things he can learn, and he can’t do everything alone. So the African-American president and CEO of Victory Personnel, a small Milwaukee-based firm, turned to Manpower, a much larger, non-minority-owned company, for help.


Manpower has indeed helped Tucker in the decade that the two have worked together. Tucker says Manpower has helped with quality control and provided a deeper understanding of financials, insurance and risk management. Manpower also has helped his company reduce its paper use through automation.


“There is not any aspect of the business that they have not helped me with,” he says.


It may seem odd for a $15 million minority-owned company to partner with a multibillion-dollar non-minority-owned global company, but it works. Tucker gets to grow and improve his firm and Manpower has a chance to work with a company that helps the staffing giant meet its diversity objectives.


Before Tucker started working with Manpower, his company never got over the $3 million mark in annual revenue, he says. But in 2007, Victory hit the $26 million mark, something Tucker says he couldn’t have achieved without Manpower’s help. Manpower has “treated me with the utmost respect and never made me feel like the little guy,” he says. “They’ve always treated me with value.”


If a minority-owned staffing firm partners with a non-minority-owned staffing agency, what’s the best way to do it? What are some tips, tools and techniques that can help ensure that the partnership is successful?


Both companies need to do their homework, says Jorge Perez, senior vice president of staffing for Manpower, who oversees its diversity supplier program. Each company should know as much as possible about the other. Also, each company needs to fully understand the other company’s perspective and what it wants to achieve in the partnership, Perez says.


Both companies need to have a clearly defined business mission and objective, says Michael Larkins, vice president of sales for Lafayette, California-based Zempleo, whose Hispanic-owned company partners with non-minority-owned staffing giants Corestaff, Volt and Kelly Services.


The two companies need to decide what kind of relationship they want to have, Larkins says: Is it going to be mentor-protégé or more transactional?


Also, both companies should designate an internal champion, says Larkins.


“There has to be a vested owner in charge of managing the relationship and making sure it’s healthy,” he says.


Larkins, who used to work for Corestaff, has been on both sides of the minority-owned/non-minority partnership.


Carmen Adames—who is of Puerto Rican descent and owns Philadelphia-based Adames Personnel Service, which has worked with Kelly Services to fill receptionist and customer service jobs—says it’s important to have a written contract between both companies.


Once a contract has been created, read it carefully, says Gene Waddy, the African-American CEO of Diversant, whose New York-based company partners with non-minority-owned staffing giant TAC Worldwide.


“If you’re going to partner with your competition, you really have to read the fine print,” he says.


Review the payment terms, volume discounts and tenure discounts, Waddy recommends.


“The contract might say, ‘We only pay our vendors every 90 days,’ or ‘We only pay our vendors after we get paid,’ which can be difficult for a small minority-owned firm. If you don’t read the fine print, you don’t know these things. You have to understand what you’re signing up for,” Waddy says.


Both companies should establish a sales referral fee before doing any kind of sales work, suggests Tom Kosnik, president of Chicago-based consulting firm VISUS Inc.


“If someone is not willing to sign a referral fee, they are not worth doing business with,” he says.


Both companies need to put together a tactical road map that spells out who is going to do what and when, Kosnik points out.


“The key there is the execution of the agreement,” he says. “The devil is in the details.”


It’s also important for both companies to know each other’s strengths, and there shouldn’t be a lot of competition between them, says Artech Information Systems CEO Ranjini Poddar, a native of India whose Cedar Knolls, New Jersey-based staffing firm partners with more than 50 non-minority-owned firms.


Trust is another key element. Both companies must trust each other from the beginning, says Tucker.


“Trust is huge in order for partnerships to really work,” he says. “Without trust, you can’t get anything done. You have to trust each other. You need to trust that the other party will hold up their end of the bargain and do what they say they’re going to do.”


Both companies must share similar values and culture, Perez points out. He says Manpower won’t work with a minority-owned company if there isn’t a values and culture match.


“My experience has been that values and ethics are probably the most critical thing when a staffing firm is looking to partner with a minority-owned business,” says VISUS’ Kosnik. “There has to be a values and ethics match. Nobody thinks about it. What is going to happen is conflict is going to arise with services, internal employees and paychecks. If you’ve got companies that have different values and ethics, it’s going to be next to impossible to get those companies to reconcile.”


Both companies should have like-minded services or areas of focus, Kosnik says.


“It’s like starting another business unit,” he explains. “If you don’t have similar sectors, it’s going to be a lot more challenging. It’s not impossible, but if you do it in a different sector, it’s just like a new business unit. It’s going to take the same amount of time, focus and energy.”


ZeroChaos CEO Harold Mills, an African-American whose company partners with a number of non-minority-owned firms, says both companies need to be involved and take responsibility. Sometimes a firm will say it is “partnering” with a minority-owned firm, but in reality that firm is doing all or most of the work, Mills points out.


“The relationship has to be substantive,” he says. “They [the non-minority-owned firm] can’t give [the minority-owned firm] the scraps. They can’t give them all the jobs they can’t fill.”


Mills calls that process window dressing.


“Window dressing happens, and it ruins the whole philosophy around growing minority companies,” he says. “If they aren’t doing any of the work, they aren’t developing capabilities for themselves. Credibility really matters.”


India native Sonu Ratra, president of Sunnyvale, California-based IT staffing firm Akraya, says that what matters most when working with a non-minority firm is quality of service, timing and delivery.


“You never want to work with a company that makes promises and doesn’t keep up with them,” she says.


Ratra also is looking for a company that is going to partner with Akraya for a long time. She makes sure the company has good cash flow and offers good benefits for employees.


Amy Bingham of Bingham Consulting Professionals says the best opportunity for a non-minority firm to partner with a minority-owned firm is when the non-minority-owned firm is functioning as a managed service provider for a large user of contract labor and has diversity requirements to meet.


“A non-minority firm selling managed service solutions should actively seek out and negotiate partnerships with diversity suppliers in advance of the sales process because of the intense focus large corporations have on meeting diversity objectives,” she says. “Even if diversity isn’t a mission-critical objective for the MSP prospect/client today, it likely will be soon, as large corporations continue to expand their diversity focus.


“Having subcontractor agreements in place before an account is sold can create a competitive distinction for the MSP supplier. It also avoids having to replace good non-minority suppliers with diversity firms after the MSP is implemented, simply to meet a client’s new diversity objectives. The bottom line: Form alliances with diversity firms today and avoid headaches tomorrow.”


Diversant’s Waddy, whose company has worked with Adecco, ProUnlimited, Bartech and Agilent in an MSP capacity, says it’s important to have a vendor-neutral model, favorable payment terms, real-time access and reasonable pass-through fees in this kind of partnership.


“A 5 or 6 percent pass-through fee could be almost half your profit,” he says.


Challenges
What challenges do minority-owned firms face when they partner with non-minority-owned staffing firms?


One challenge is that non-minority firms tend to be larger and have more bureaucracy, so the decision-making process takes longer, says Kosnik of VISUS. A small minority-owned company has to accept this reality and work through it, says Victory Personnel’s Tucker. “You just have to get smart about it—what it is, what it means, how to deal with it.”


Another challenge is risk mitigation, says Zempleo’s Larkins. “Smaller companies can’t take as much of a risk,” he says.


Markup also is a challenge, says Tamerra Buckhanan, who is African-American and president of Chicago-based BPS Services. Often minority-owned staffing companies don’t have enough markup in the partnership to make it profitable, she says, noting that the best scenario is when the client allows the minority-owned company to have a markup that makes them money.


Buckhanan’s firm has partnered with non-minority-owned firms for at least 15 years.


“It can be a good opportunity for everyone,” she says. “The clients are certainly stronger because of the diversity. They want diversity. This is a good way to make sure it happens by working with a minority vendor.”


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Dear Workforce We’re Developing Onboarding for New Managers. What Should Be Included

Dear Change Manager:

The transition to new teams, and especially to first-time leadership positions, can be the most difficult that an associate will make in his or her career. Moving into leadership for the first time is the most stressful life event in a person’s professional career. An onboarding process to ease that anxiety is a great step toward ensuring an employee’s success in the new role.

Conduct a selection review discussion
The onboarding process is not only for the associate—you should help new leaders by providing them with any available assessment data you have from the selection process (360 feedback, tests, assessments, batteries, etc). By arming new leaders with this information, they can help create a short-term (roughly six weeks) development plan with their associates. Leaders need to help their new team members make a strong start—they need to encourage networking, coach for success, guide them as to how they can leverage their strengths, and help them understand their development needs.

Interpersonal skill development
There are a number of critical interpersonal skills that will help these associates successfully make that transition—skills such as the ability to embrace or lead change (depending on their new role/level), move beyond conflict, provide and receive feedback, and value differences in the styles, abilities and motivations of their colleagues.

Formal learning, accompanied by support and coaching from the employee’s new leader, increases a person’s speed to productivity. Additionally, if the associate’s new leader has the employee’s selection data, the leader can better prioritize which of these skills are most critical to success in the new role.

Encourage purposeful networking
Probably the most critical part of any onboarding process is purposeful networking. More than reaching out to new team members and new internal partners, purposeful networking is about reaching out to those team members and colleagues who can help them in their new role.

These are colleagues who can help them to learn written and unwritten team rules or provide coaching, guidance or information they’ll need in their new role. By adding a networking component into the onboarding process (either through formal learning or on-the-job experience), you are developing people who will be more confident and collaborative, and they will possess a broader understanding of how your team fits into the larger picture in your organization.

These elements, coupled with standard or formal organizational policy reviews, will help set these associates up for a successful transition.

SOURCE: Aviel Selkovits, project manager, leadership & workforce solutions, Development Dimensions International, Pittsburgh, February 19, 2010

LEARN MORE: Some steps on how to reinforce leadership training.

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

Workforce Management Online, March 2010 — Register Now!

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Dear Workforce -What Is the Best Way to Measure the Productivity of Our Managers

Dear Precision Wanted:

The most important measure of an individual manager is found in the collective productivity of employees. The generally accepted definition of productivity—productivity equals production output over production input—is not that meaningful for management jobs.

Because of this, most organizations measure management performance instead of productivity. That way, the leadership behaviors and how they affect the team’s productivity also can be monitored and improved as necessary.

Although it is true that productivity is affected by the manager’s personal output, the much greater impact comes from how well the manager aligns and engages people in the unit to work together to accomplish a defined objective.

Productivity for a management position is defined and measured in different ways. For a sales manager, it is usually defined in volume of sales of the entire team, but those sales must be profitable. For an operations manager, it can be defined as the speed to deliver a product to the customer, or the quality of service, accomplished by the department. For a plant manager, it most often means how much the plant produces and at what cost, provided quality standards are achieved.

Taking all of this into account, the best definition of a manager’s productivity/performance is: the results achieved by the team versus the goal or standard established.

This definition may on occasion allow the manager to experience a “windfall” benefit from an exceptionally strong team. More often, though, the manager has had a hand in building positive energy within the team to accomplish the goals that have been established.

SOURCE: Jay Scherer, BPI group, Chicago, February 24, 2010

LEARN MORE: Please read why it is important for companies to focus on results when assessing the performance of leaders.

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

Workforce Management Online, March 2010 — Register Now!

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New York Governor Defends Use of Temporary Employees

New York Gov. David Paterson defended the state’s use of temporary workers from staffing firms after one union said January 14 that the state spent $62 million on temporary workers from employment agencies who have no benefits.


Use of temporary personnel services are on average 10 percent less expensive than an equivalent state worker, the governor’s office said Tuesday, January 26.


In some cases temporary workers are paid a higher rate than state workers—such as in the medical field and in certain trades such as steamfitters—but that is justified based on the temporary nature of the work or inability to recruit permanent workers, according to the governor’s office. Excluding the medical field and certain trades, the estimated savings by using personnel services is 42 percent.


In addition, the governor said monthly spending on temps is decreasing—falling to $1.4 million in December 2009 from $4.3 million in July 2008.


The governor’s office also said the $62 million represents a 19-month period, while most budget figures are presented for 12-month periods, and only $4 million of that spend was for agencies under the governor’s direct control. It also said executive agencies are projected to spend $19 million on temporary workers during the 2009-10 fiscal year, compared with almost $8 billion on salaries and fringe benefits for permanent workers in executive agencies under the governor’s control.


The Civil Service Employees Association had blasted the use of temporary worker on January 14.


“These workers, who receive no benefits and have no rights, have been used for years to hide the fact that the state workforce has been depleted to such an extent that the agencies are no longer able to deliver promised services to the citizens of this state,” the union said. “What’s more, the Paterson administration is paying a premium for these workers with the bulk of the money going to the temp agencies.”


CSEA said it’s preparing legal action over temporary workers, and it released a telephone number that temporary workers employed by staffing firms could use to contact the union.


Tuesday’s defense of staffing firms was also criticized by the union.


“The excessive use of temporary workers at premium prices through temp agencies is at its heart dishonest,” CSEA president Danny Donohue said in a press release.


The governor’s office is looking at making $250 million in workforce savings in its 2010-2011 executive budget.


In addition to the CSEA criticism, a separate report by the New York State Public Employees Federation said that the state could save more than $656 million in three years by cutting down on the use of private consultants.



Filed by Staffing Industry Analysts, a sister company of Workforce Management. To comment, e-mail editors@workforce.com.


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A Risky New Trend Replacing Employees with Independent Contractors

man holding "we're hiring" sign

In this recession, budget constraints have forced many employers to lay off some of their most valuable employees. Rather than lose key workers, however, many employers are exploring alternative hiring arrangements. One popular alternative is to hire laid-off employees to perform their same jobs as independent contractors. Such a strategy, however, is not without risk. Misclassifying an employee as an independent contractor can result in significant costs to an employer, including back-owed taxes and penalties.

Another economic reality—declining tax revenues and climbing unemployment claims—is prompting the IRS and state taxation agencies to uncover businesses improperly treating their workers as independent contractors.

In September, the IRS announced it will audit 6,000 random employers beginning in February 2010 to determine whether employees are being misclassified as independent contractors. Similarly, many independent contractors are suing their former employers, alleging they were misclassified as independent contractors and denied overtime wages and other benefits.

In recent years, the IRS targeted FedEx Corp. for classifying its ground-service delivery drivers as independent contractors and sought over $300 million in fines and penalties. In the 1990s, the IRS audited Microsoft Corp. and questioned whether certain freelance software programmers and other workers were properly classified as independent contractors.

More recently, cable installers for Comcast Corp. have sued the company, alleging they were improperly classified as independent contractors and denied overtime pay and benefits. Even nightclub owners are not immune from litigation, as evidenced by a class action filed in Massachusetts by exotic dancers alleging misclassification.

In reality, all employers, no matter the industry, should be cautious of replacing their workforce with independent contractors. Employers that simply rehire laid-off employees as independent contractors without fundamentally restructuring the company’s relationship with its workforce will likely be an easy target for such audits and litigation.

The decision to hire any independent contractor, especially an independent contractor who previously worked as an employee of the company, should be made in consultation with an attorney. The following is intended to help facilitate, and not replace, such a discussion.

Who qualifies as an independent contractor?
Determining whether a worker can be properly classified as an independent contractor requires an individualized analysis of the relationship between the company and worker. In addition to adhering to federal tax regulations, complying with the specific requirements in your state is equally critical to avoiding misclassification liability.

But because the federal tax ramifications of misclassifying an employee are typically the most feared and the most severe, this article will focus on the guidelines set forth by the Internal Revenue Service. According to the IRS, an individual qualifies as an independent contractor if the employer has the right to control or direct the result of the work of the individual, but “not the means and methods of accomplishing the result.” Similarly, the IRS explains that an individual is really an employee if the employer controls “what will be done and how it will be done.” In applying these guidelines, the IRS will typically consider the overall relationship between the parties, with specific attention paid to the behavior of the parties and their financial relationship. There are several facets of a working relationship that the IRS will consider in applying these guidelines. For example, when considering the overall relationship of the parties, the IRS may consider:

1. Whether the individual performs work that is distinct from the employer’s business or work that is part of the regular business of the company.

2. Whether the individual performs a service that requires a special skill.

3. The length of time the individual will perform services for the employer.

4. Whether the individual determines his or her own work schedule.

5. Whether the individual is required to devote all of his or her time to the employer.

6. Whether the individual and employer can terminate the relationship at any time.

7. The permanence of the working relationship.

Similarly, when evaluating the behavior of the parties, the IRS will consider how certain responsibilities are divided among the worker and employer. For example, the IRS may consider:

1. Whether the company provides extensive training to the individual prior to commencement of work.

2. Who supplies the instrumentalities, tools and the place needed to perform the work.

3. Whether the individual performs his or her work under the direction and supervision of the employer.

Finally, when evaluating the financial relationship between the parties, the IRS may consider:

1. The individual’s personal financial investment in the equipment or materials required by the work.

2. The individual’s opportunity for profit or loss depending on his or her managerial skill.

3. The method of payment between the parties, in particular whether payments are calculated by time worked or jobs performed.

Why hire independent contractors?
There are many financial benefits to properly hiring independent contractors instead of employees. In an employee-employer relationship, an employer is responsible for withholding federal income taxes, paying Social Security and Medicare taxes (the FICA tax), withholding the employee’s share of FICA taxes and paying federal unemployment taxes.

Depending on the state, employers may also be responsible for withholding state income taxes, paying state unemployment taxes, paying or withholding state disability insurance contributions and providing workers’ compensation insurance. Employees are also protected by federal and state wage-and-hour laws, entitling them to (among other benefits) overtime pay, and typically receive benefits such as health insurance, paid vacation, sick leave and retirement contributions. Finally, employees are protected by federal and state anti-discrimination statutes.

By contrast, an employer can avoid all or most of these obligations and potential liabilities if an individual is properly classified as an independent contractor. Independent contractors are responsible for paying their own taxes, including self-employment taxes, which cover both the employer and employee share of FICA taxes. Typically, independent contractors are responsible for their own insurance and not are not entitled to the protections of federal and state wage-and-hour laws. They also do not receive any of the benefits typically provided by an employer to an employee. Finally, independent contractors are not protected by many federal and state anti-discrimination statutes.

Naturally, there are several reasons the IRS, state taxing authorities and workers prefer the employee classification. First, classifying more individuals as employees maximizes payroll and unemployment tax revenue by ensuring that the employer deducts such taxes on a regular basis before paying the employee. Second, classifying individuals as employees allows tax agencies to collect tax money from a single employer, rather than several individual independent contractors. Third, employees receive more benefits than independent contractors, such as health care and retirement contributions, which decrease government expenditures in the long term. As a result of this preference for employees, the penalties for misclassifying an employee as an independent contractor are quite severe.

Depending on the circumstances, an employer that fails to properly deduct and withhold federal taxes may be liable for penalties equal to 20 to 40 percent of the unpaid tax liability. Moreover, an employer that fails to properly pay overtime to or provide benefits for employees who have been misclassified as independent contractors may be liable for back-owed wages, reimbursement of unpaid benefits and various penalties set forth in federal and state wage-and-hour statutes. Finally, many states have recently passed independent contractor legislation aimed at increasing awareness of worker misclassification and increasing the penalties—in some states to include criminal penalties—on employers that misclassify workers.

How to protect your company
Without a clear test to help employers determine whether a particular worker qualifies as an independent contractor, employers considering hiring new or previously laid-off workers as independent contractors should consult an attorney.

In addition to helping an employer properly classify its workers, consulting an attorney can help protect employers from tax liability in the event the IRS decides that workers should have been classified as employees.

The IRS has enacted a safe harbor provision that shields an employer from liability for back taxes, interest and penalties in the event the IRS reclassifies an independent contractor as an employee. To qualify for this protection, however, an employer must demonstrate:

1. That all similarly situated workers were also classified as independent contractors.

2. That the employer consistently filed all required tax returns for all prior relevant periods.

3. That the employer had a reasonable basis for treating the employee as an independent contractor, such as relying on a court opinion, IRS ruling, a prior employment tax audit, a longstanding, recognized industry practice, or advice from a qualified accountant or lawyer.

Notably, federal lawmakers have recently proposed legislation that would limit the availability of this safe harbor. Additionally, this safe harbor applies only to federal tax liability and does not shield an employer from liability under state tax laws, wage-and-hour statutes, or anti-discrimination statutes. Therefore, it behooves all employers to properly define and classify relationships with workers at the outset of the relationship. When in doubt, workers should be classified as employees, not independent contractors.

Finally, particularly prudent employers can file with the IRS a Form SS-8: “Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.” Based on the information provided, the IRS will officially determine the worker’s status. While it can take at least six months to get a determination from the IRS, an employer that continually hires the same types of workers to perform certain services

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

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EEOC Sues Staffing Firms in Three Separate Cases


The Equal Employment Opportunity Commission sued three staffing firms in September in three separate lawsuits.


In one suit, filed September 15, the EEOC accused Adecco of failing to take appropriate action when female employees complained about sexual harassment at a client site.


The EEOC reported that Adecco assigned Veronica Jalpa and other women to Pittsburgh Plastics Manufacturing Inc. in Butler, Pennsylvania, and that a Pittsburgh Plastics supervisor sexually harassed them through sexual comments and touching. The EEOC said Jalpa asked for a different shift to avoid the supervisor but was fired by Adecco.


The agency also claimed another employee was compelled to quit because of ongoing sexual harassment. Adecco continued to assign women to the plant despite the sexually hostile work environment, according to the EEOC.


Adecco said in a statement it has a zero-tolerance policy toward discrimination by anyone—including its employees, associates and clients—and takes complaints seriously.


Adecco said Jalpa never informed the company of the incidents reported by the EEOC. The company said its records indicate Jalpa’s assignment was ended for frequent tardiness. However, she never informed Adecco of the problems even after the assignment ended, the company said.


The second person mentioned by the EEOC did inform Adecco of inappropriate conduct that may have occurred off site during non-working hours approximately one month after it occurred, the company said. Adecco reported it took action consistent with its policies and as required under law.


“Adecco has fully cooperated with the EEOC and we are disappointed that it has decided to take this course of action given the information that was made available to the agency,” Adecco wrote.


The EEOC said it earlier filed a lawsuit against Pittsburgh Plastics.


“As more companies use staffing agencies to recruit employees, it is vital that both the company and the staffing agency understand that they are each legally required to protect their employees from sexual harassment,” Debra Lawrence, acting regional attorney for the EEOC’s Philadelphia District Office, said in a statement.


In another case filed September 15, the EEOC sued Balance Financial Inc.


The suit claimed the company discriminated against a blind woman in Chicago because of her disability, according to the EEOC. The agency said the company made a job offer to the woman to work at its planned Chicago office and that she began performing services for them from home.


The EEOC said the company rescinded the job offer after finding out she was blind. Balance has since ceased operations in Chicago. A court document identified the woman as Jocelyn Snower.


Melanie Damian, an attorney for Balance, said the woman was never employed by the company. Although offered a position, the woman did not fill out the paperwork to be hired and did not take a drug test, causing the offer to be withdrawn. In addition, the company no longer does business in Chicago and didn’t have the number of employees needed to be covered by the law in this instance.


“We think the case is without any basis,” Damian said. The company will be responding to the EEOC’s complaint, she said.


In a third suit, filed September 30, the EEOC sued Axiom Staffing Group Inc. and Axiom Staffing Group of Virginia Inc. for allegedly refusing to hire a woman because of her back impairment at the companies’ Hagerstown, Maryland, site.


The suit claims the woman, Deborah Reynolds, was told that she would be “too much of a liability because of her back,” according to the EEOC. A person at Axiom also allegedly told Reynolds that the staffing companies would never hire anyone with health problems because it “would be too burdensome to replace them should something happen,” according to the EEOC.


Reynolds said she could perform clerical or customer service duties as she had for years, but the companies’ representative would still not hire her because of her back, according to the EEOC.


—Staffing Industry Analysts


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