Category: Technology

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Plenty of New York Jobs Await Tech Workers

Fluent in geek speak? You’re hired.


While the latest unemployment numbers for New York City still show a gloomy prospect for many would-be workers, recent reports from Dice.com and Pace University show just the opposite for those in the information technology industry—employers can’t seem to fill competitive high-tech positions.


Some companies are even engaging in battles for hard-to-find tech talent, said Tom Silver, a senior vice president at Dice, a career website for technology and engineering professionals.


“Filling talent voids can be painful and expensive,” he said.


According to July’s Dice Report, New York-New Jersey was ranked No. 1 across top metro areas by the number of new job posts on the website, with more than 8,200 tech positions. That’s almost twice the number of postings for tech jobs in Silicon Valley (which came in at No. 3) and more than Chicago (No. 4), Los Angeles (No. 5) and Boston (No. 6) combined. Washington-Baltimore came in second place, with 7,400 posts.


“It’s the fifth straight month of companies posting more jobs on the site,” Silver said.


In Manhattan, the information technology job market showed remarkable strength during the second quarter, according to the Pace/SkillPROOF IT Index Report, also known as PSII. The index, which provides a snapshot of IT job openings at major firms, saw a 47 percent increase, from 74 to 110. It was the largest quarterly gain since the index began tracking data in 2004, according to the report.


Farrokh Hormozi, a professor of economics and public administration at Pace University, said the index behaves much like a leading economic indicator, in that the IT employment market rises and falls before the economy does. He sees the index growth as a sign that companies are feeling optimistic and are looking to “take advantage of the technological advancements.”


Indeed, while the overall unemployment rate for New York City was 9.5 percent in June, experts estimate the rate is half that, or even lower, for the high-tech industry.


The caveat, however, is that although demand for IT professionals is high, computer programming skills are not enough (on their own) to get a job, experts said. Business, sales or administration experience is also essential.


“Schools are preparing them in this capacity” to be able to wear many hats, Hormozi said. For instance, computer science students can take marketing classes, he said.


For IT professionals already in the workforce, Hormozi said that they can increase their value with a business or public administration certificate, rather than learning another programming language.


In fact, job postings for IT managers and network/data communications analysts were the largest contributors to the growth of the Pace index in Manhattan, while the Dice Report shows that the tech skills currently most wired for success are C#, Java/J2EE, and SAP or Oracle know-how.


Moreover, the companies engaging in battles for these coveted skills, Silver said, is likely to make retention the issue this year in technology departments.


“Companies need to think about how to build long-term relationships with technology professionals,” he said. “Understand that you have a lot of competition.”  


Filed by David Montalvo of Crain’s New York Business, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Special Report on HR Technology In SaaS Battle, Customers Win

A holy war is under way among HR product vendors over “software as a service,” or SaaS.


The phrase generally refers to providing software applications over the Internet rather than installing them on a company’s internal computers. But as this approach to software delivery has grown more popular and branched into multiple methodologies over the past decade, vendors have staked out contrasting positions on the subject.


The battle over what’s sometimes called “on demand” software comes with strong rhetoric among combatants. But it’s not clear whether customers need to choose sides—they may benefit from all the competition.


On one side of the fight are the fervent believers. These are vendors, including Workday and SilkRoad, that say a pure form of software as a service—in which all customers run just one or two versions of the software and it is provided only over the Internet—is the way to go.


On the other side is a range of software providers offering some sort of hybrid approach. They may allow for their software to be installed on customers’ machines or accessed via the Web. They may focus on delivering their software over the Internet, but put customers on a dedicated copy of the application.


Hybrid backers say their products offer benefits such as improved data security and more customer control over software settings and the timing of upgrades.


But SilkRoad co-founder Brian Platz says “pure” SaaS is used by the vendors of the best talent management software products. (Talent management software refers to tools for key HR tasks such as recruiting and performance management.) Platz also says the pure SaaS model has the lowest costs. Maintaining many versions of software is expensive, Platz says. And those costs increase further if the vendor also sells software to be run on customers’ internal computers, because extensive testing may be needed in advance of new releases.


“There’s no doubt that pure SaaS is going to win out,” Platz says.


Companies shouldn’t worry too much about the sectarian software strife, says Jason Averbook, chief executive of consulting firm Knowledge Infusion. Instead, they should appreciate their options and choose what’s best for them. “It truly is the Baskin Robbins 31 flavors of software as a service,” he says. “There really isn’t one way that’s better or worse.”

(To enlarge the view, click on the image below. Adobe Acrobat Reader is required.)


 



Appetite for SaaS
Companies like the taste of SaaS. According to a 2009 survey of North American and European companies by Forrester Research, just 14 percent of respondents said they were not interested in adopting software as a service. And in late 2008, Forrester found that 29 percent of companies had tapped HR software through SaaS, making human resources one of the business functions that is using SaaS most heavily.


“SaaS adoption will become the direction of choice for many large and small companies,” Forrester said in a January report on HR software. “Application flexibility, cost predictability and ease-of-use make SaaS very attractive.”


Software as a service is largely a reaction to the way companies bought and ran business software for most of the 1980s and 1990s. Under the “perpetual license,” “on-premises” model, organizations purchased copies of applications and installed them on their own computers. In this scheme, customers typically pay vendors annual maintenance fees that can be 20 percent of the original license fee and entitle clients to tax updates and more substantial upgrades with new features.


The on-premises approach lets companies tailor applications extensively. But software delivered in this way is costly and time-consuming to implement and upgrade.


About a decade ago, vendors pitched the idea of hosting applications remotely and letting companies access the software over the Internet. This approach reduced hardware and maintenance headaches for organizations. But having to manage many customized applications for customers was not cheap.


So the idea of “multi-tenancy” gained ground. Just as the many tenants of an apartment complex share the same roof and infrastructure, applications with a multi-tenant design are run for multiple clients simultaneously—and at a lower cost for vendors. The principle is similar to the way consumer-oriented websites such as Google and Yahoo serve many visitors at once.


As the term “software as a service” emerged over the past several years, it typically meant a multi-tenant application delivered over the Web. It also generally referred to subscription pricing, in which customers paid to use the application for a fixed period of time. SaaS, then, offered the benefits of quicker implementations, lower upfront costs and fewer technology aggravations.


Still, the approach raised fears that a company’s sensitive employee data could be seen by unwanted eyes. Another concern has been that a single shared application would not be able to match companies’ idiosyncratic business processes.


But SaaS products have proved themselves on the privacy front and have become quite flexible by giving customers the ability to configure a variety of settings, says Karen Beaman, chief executive of consulting firm Jeitosa Group International. At the same time, she says, customers have realized that extensive software customizations lead to major hassles when it comes to updating the software later.


“Large companies are now understanding that SaaS has tremendous advantages,” Beaman says.



(To enlarge the view, click on the image below. Adobe Acrobat Reader is required.)


 


Hybrid approaches
Nonetheless, some organizations prefer to stick with on-premises software, says Lisa Rowan, an analyst with research firm IDC. She says security-sensitive government agencies and large, complex businesses in fields such as manufacturing are more likely to shy away from SaaS.


“You’re still going to have a certain segment of clients for whom that just doesn’t work,” Rowan says.


HR software provider Accero gets most of its revenue from clients with applications installed on premises. But the company has joined the SaaS world in its way. Accero, whose human resource management and payroll system used to be called Cyborg, offers to host its software for customers and let them access it over the Internet. For its Accero On-Demand product, Accero does not have a multi-tenant setup. Each on-demand customer has its own dedicated “instance,” or copy, of the application. But Accero uses “virtualization” software to allow multiple clients to be running on the same computer server.


Virtualization software allows a single computer to create multiple virtual computer systems. By slicing up computer resources in this way, Accero’s operating costs are just a fraction more than a pure SaaS vendor, says Accero CEO Tom Malone. And Accero can continue to meet the needs of large customers who want more than a plain-vanilla version of HR software.


“They need a degree of customization,” he says.


Lawson Software has taken a similar approach. For customers that want software delivered over the Internet, Lawson provides dedicated copies of applications and uses virtualization technology to optimize its computer resources.


Lawson customers can choose between a version of SaaS where no customizations are possible or pay a higher price for the ability to make modifications that Lawson will maintain over time, says Larry Dunivan, the vendor’s senior vice president of global human capital management products. Lawson also offers its HR applications for on-premises installation.


As part of its overall SaaS strategy, Lawson is tapping the computing power of Amazon, which provides access to its computer servers via a product called the Amazon Elastic Compute Cloud. Dunivan argues that companies opting for a “single-tenancy” model of SaaS may prove to have the leanest model in the long run.


“As virtualization technologies are leveraged in combination with cloud computing, it’s possible that multi-tenancy won’t offer the lowest long-term cost of ownership,” he says.


Software vendors that insist on the purist approach to software as a service are “multi-tenant SaaS bigots,” Dunivan says.


Others in the hybrid SaaS camp include Softscape and Halogen Software. Softscape sells on-premises HR software, a multi-tenant application typically used by midsize businesses, and what it calls “Secure-SaaS,” in which each customer has a dedicated instance of the application and additional security features.


Steve Bonadio, vice president of product marketing at Softscape, says Secure-SaaS is appealing partly because it means customers aren’t forced to take upgrades, an aspect of pure SaaS that can throw off users and create problems with the way the software integrates with a customer’s other business applications.


Those upgrades, typically zapped out several times a year by SaaS vendors, come with new features but “can break what customers have already launched across their organization,” Bonadio says.


For its SaaS product, Halogen employs virtualization technology and gives each customer its own instance of the application. The company also sells its HR software for on-premises installation. The on-premises product entails testing new versions on a variety of computer operating systems to mimic customers’ computer setups. But the company says testing for those customers is largely done through software tools. “We work very efficiently,” says Donna Ronayne, Halogen’s vice president of marketing.


Vendors of hybrid SaaS products also make the point that the debate over SaaS purity is largely inside baseball: Customers don’t care about it nearly as much as vendors.


But the particular flavor of SaaS did matter to Nebraska. The state signed a deal with Cornerstone OnDemand last year for a suite of talent management software tools to be delivered over the Internet. Cornerstone is among the more pure SaaS players, keeping all customers on the same code.


Carlos Castillo Jr., the state government’s director of administrative services, says state officials appreciate the way pure SaaS prevents extensive customization by clients and thereby “encourages consistency across our organization.” Castillo says custom modifications in the state’s on-premises system for core HR tasks are expensive to maintain when the application is upgraded. “Customization always translates into higher costs for us,” he says.

(To enlarge the view, click on the image below. Adobe Acrobat Reader is required.)


The purist argument
Even so, pure SaaS advocates say their products can accommodate even the largest, most complex companies. Workday points out that its single line of code is working at firms including Chiquita Brands International, Lenovo and Flextronics, which employs 165,000 workers worldwide.


Purists also downplay difficulties from the upgrades that SaaS vendors impose on customers. Roughly 10 percent of the changes sent out quarterly by Cornerstone OnDemand are mandatory, and typically involve the user interface.


“The remaining 90 percent of updates are optional for clients, and they can decide whether they want to activate them for use in their organization,” says Michelle Haworth, Cornerstone’s director of corporate communications.


SaaS flavor matters in terms of software vendors’ long-term viability, pure SaaS vendors say. If there are fewer lines of software code to develop and maintain, that translates to a “leaner model,” says Deepak Rammohan, director of product management for Taleo Enterprise, Taleo’s software product for large organizations.


“A pure SaaS model … leads to a leaner sales model, a leaner consulting services model and a leaner support model,” Rammohan says. “A leaner model for the vendor then also means a better price point for the customer.”


Taleo keeps its largest customers on one of two versions of its Taleo Enterprise application.


It has emerged to be one of the leading talent management firms, and a profitable one. Its revenue grew 18 percent last year to nearly $200 million, and it recorded a profit of $1.3 million.


Another major HR software firm pursuing the pure multi-tenancy SaaS model is SuccessFactors. “We actually turn away companies that will only do on-premise,” says Dominic Paschel, director of global public and investor relations. SuccessFactors, which spent $80 million on sales and marketing last year, posted a net loss of $12.6 million for 2009, but revenue grew 37 percent to $153 million.


Platz of SilkRoad says a typical customer company of a couple thousand employees can expect to pay about $80,000 per year for one of SilkRoad’s six modules.


“Hybrid SaaS vendors are fairly competitive with price. They have to be, or else they wouldn’t sell any,” Platz says. “They tend to, however, have less innovation and functionality. They are tied to that boat anchor of their licensed software.”


SilkRoad’s pure SaaS is selling fast. New sales grew 30 percent last year, Platz says.


But hybrid SaaS vendors also are doing a brisk business. Halogen, for example, enjoyed a 41 percent increase in recurring revenue last year.


Averbook of Knowledge Infusion says it’s generally a good time for SaaS in the HR arena. Companies with tight budgets for information technology projects are willing to let HR proceed with the relatively small investments needed for software delivered over the Web, he says.


Workforce Management, June 2010, p. 29-34 — Subscribe Now!

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United Technologies Moves to Cover Adult Children

United Technologies Corp. says it will extend health care coverage to all adult children up to age 26 of its employees on July 1, six months before the new health care reform law requires it.


The high-tech product and service provider to the aerospace and building industries says the extension includes adult children up to age 26 not currently enrolled in its plans. They will be added with no change in the premium that employees pay for dependent coverage, said a spokesman for the Hartford, Connecticut-based company.


United Technologies, with about 72,500 U.S. employees and $52.9 billion in worldwide revenue in 2009, is the first major self-funded employer to announce accelerated adoption of the young-adult mandate.


“We think this is the right thing to do for our employees and is consistent with our practices of providing our employees with very competitive benefits,” J. Thomas Bowler Jr., United Technologies senior vice president-human resources and organization, said in a statement.


The extension will occur in two steps. Effective immediately, United Technologies will continue coverage of employees’ adult children already enrolled in its plans who would have lost coverage for reasons that include graduation from school.


Then on July 1, coverage will be offered to employees’ adult children up to age 26 regardless of whether they are currently covered, unless they are eligible to enroll in another employer’s health care plan.


Previously, United Technologies stopped coverage of employees’ children at age 19, or 23 if the child was a full-time college student.

Under the health care reform law, the extension is required on the first day of the plan year that begins after September 23. For employers like United Technologies with calendar-year plans, the requirement must be met by January 1, 2011.  


Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.


 


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Companies Making Friends With Social Media

Social networks ranging from employee-only applications such as Deloitte’s D Street to public sites including LinkedIn continue to gain ac- ceptance as the business benefits become clearer.


Three recent surveys suggest how social networks contribute to the bottom line, but the studies also probe why some organizations struggle to tap their potential.


By 2014, social networking will replace e-mail as the primary form of communication for 20 percent of business users, according to Gartner Inc., a research and advisory firm.


Already, McKinsey & Co. has found that 69 percent of executives report that their companies have gained measurable business benefits, including better access to knowledge and higher revenue.


“Quite frankly, the companies that seem to have achieved the most are the ones that have been experimenting most deeply and for the longest amount of time,” says Michael Chui, a senior fellow of the McKinsey Global Institute.


A separate poll by the Human Capital Institute’s human resources membership found that, when counting both public sites such as LinkedIn and in-house applications, 49 percent of organizations use social networks somewhat. But getting employees to incorporate these sites into their routines remains a chief barrier to reaping the networks’ full potential.


“You have to ensure that people understand this is the place to go get answers,” says David Eisert, associate director of emerging technologies at Indiana University’s Kelley School of Business. “When you’ve got people in the network engaged, sharing information and openly communicating, that’s where the meat of knowledge transfer comes from.”


Companies that have invested in internal social networks have taken a variety of approaches to entice employees to create profiles and participate.


Deloitte pre-populated every profile in its D Street network with basic information drawn from its HR system.


“When we launched, we turned on profiles for all 46,000 employees,” says Patricia Romeo, D Street leader. D Street has been integrated into Deloitte’s internal portal, introducing mini-profiles of five colleagues each time an employee logs on. “It’s very much a Facebook-like experience,” Romeo says, “but all from the safety and security of behind the firewall.”


Sabre Holdings Corp., whose technology underpins travel reservations worldwide, created SabreTown, a social network accessed at least once a month by about 70 percent of its workforce. The company, based in Southlake, Texas, has 9,000 employees in 59 countries.


To encourage use, a team sat out in front of cafeterias and visited desks, taking and uploading profile pictures, says Erik Johnson, general manager of Sabre Holdings’ Cubeless, the software behind SabreTown. “It sounds like a silly little thing,” Johnson says. “But once that picture was attached to a profile, it’s amazing how much more likely users were to engage in the system and take ownership of that profile.”


Another challenge: demonstrating return on investment. In fact, not all of the early experiments with social networks have survived the recession. Dow Chemical Co. closed its My Dow Network, launched in 2007 to connect with retirees and former employees, because of “the global economic crisis,” spokesman David Winder says.


Allan Schweyer, principal at the Center for Human Capital Innovation and former executive director of the Human Capital Institute, says a vibrant social network could help with retention. But he concedes, “I don’t think there is going to be any great ROI measurement for corporate social networks anytime soon.”


Workforce Management, April 2010, p. 4 — Subscribe Now!

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What Drives Engagement in the Digital Age?

Daniel Pink’s newest book, Drive: The Surprising Truth About What Motivates Us, disputes the long-held corporate notion that handing out rewards on the job—money, for example—is the best way to manage employees. This carrot-and-stick approach, he says, is not only outdated, but is counterproductive and crippling to company morale. What we really need, according to Pink, is an upgrade in management technique, one in which people are free to explore what really motivates them: the desire to learn, create and improve their surroundings.

Pink talked with Matt Kinsey, a writer for Workforce Management sister publication Advertising Age, about what defines this new sense of drive. It’s what he calls Motivation 3.0: a combination of autonomy, mastery and purpose.

Advertising Age: We last spoke in 2006, following the release of A Whole New Mind. That book made the case for the right-brainers of the world—the creative, empathetic and design-oriented—as the key players of future business. Fast-forward to today: We’ve got an economy recovering from the worst recession in decades, entrepreneurial spirit is high and small-business owners are charged with generating new markets. Do right-brainers still have the edge?

Daniel Pink: I think so. The argument in that book is that left-brain capabilities are necessary but not sufficient. That’s equally if not more true today, for a couple of reasons. One of the things that was tilting the scales was companies trying to save money through automation and outsourcing. That’s intensifying now, as companies are so strapped they’re looking to reduce costs on routine and rhythmic work. That’s making the non-routine and non-algorithmic more valuable.

There’s also this sense that a hardcore carrot-and-stick left-brain approach was one of the factors that drove the economy into a ditch. It wasn’t graphic designers who cratered the economy.

AA: Enter your research findings for Drive. For those who haven’t read the book, explain why our definition of motivation is so different in the 21st century.

Pink: There are 40 years of research that shows these carrot-and-stick motivators—particularly motivators of the “do this, get-that” ilk—work extremely well, but in a surprisingly narrow bank of circumstances. They’re good for relatively simple, straightforward algorithmic tasks. They’re good for getting short-term results. But the science is pretty clear that for more creative and conceptual work, for things that people kind of like doing and for long-term results, those kinds of motivators just don’t work. And they often do harm. There’s essentially a new technology for motivation that the science yields that isn’t built on carrots and sticks, but on autonomy, mastery and purpose.

AA: You embrace several radical management techniques in the book, including Cali Ressler and Jody Thompson’s Results-Only Work Environment, which stipulates employees can work from wherever they want, whenever they want. And many big companies have adopted ROWE, including Best Buy and Gap. Five years from now, can we expect businesses to be run as entirely different beasts?

Pink: It’s not a mainstream movement yet, but those companies employing radical forms of autonomy are harbingers of how we’re going to do things in the future, how companies will be run if you want them to be effective. Of course, these kinds of changes don’t happen with a snap of the fingers. You have some organizations doing things in a different way, and when they start performing well, other folks look to them and say, “What are they doing that I’m not?”

One thing you do see, which is a ticking time bomb in many ways, are these numbers on job satisfaction. If you look at the latest Conference Board numbers, they show morbid levels of job satisfaction. It’s a double whammy: People report being insecure—they’re very worried about losing their jobs—but they’re also bored. So there’s this level of disengagement in the workplace which is actually quite staggering, and what’s interesting about that is you see levels of people seeking engagement elsewhere. Levels of volunteerism and open-source participation are going up. People are seeking engagement who have not been getting it at work. And when the economy picks up a little bit, I think you’re going to have a lot of disgruntled employees who leave to do something else.

AA: Why have corporations been slow to adopt this notion of an autonomous workforce?

Pink: It’s a mix of things. We have this premise in a lot of business that is utterly unexamined, which is that the best way to motivate people is to offer them a contingent reward or threaten them with a contingent punishment. That premise is inaccurate! So in many ways we’re starting with the wrong premise. That’s a big part of it.

Another reason is, this is how we’ve always done things, and you can’t discount the importance of inertia. It’s easy to say, “OK, I’ll give you $1,000 if you come up with a good idea.” It’s harder to ask, “What can I do to create a workplace that’s more autonomous, that allows people to progress and get better at stuff that is infused with a sense of purpose?” That’s hard.

We fake ourselves out a little bit because those conditional incentives work in the short term, they really do. If you say to somebody, “I’ll give you a $1,000 bonus for coming up with a great idea,” they’re going to work very hard to come up with a great idea. But they’re going to be focused pretty much on getting that reward. Chances are, they’re not going to come up with a great idea. As a manager you’re going to think, “Wow, I’ve really motivated them; look how hard they’re working.” So we get faked out by the fact that these kinds of carrots and sticks are actually motivating in the short term. They do get people to work harder, but they don’t always get people to work better or more creatively.

AA: You have a name for those with a natural desire to learn and pursue goals: Type I’s, vs. Type X’s, who sit back and wait for instruction. Are these Type I’s better positioned to weather the post-recession workplace?

Pink: I think they’re better positioned to weather any workplace. There’s a kind of paradox afoot that says one of the best ways to get extrinsic rewards is to not go after them—basically, to do something you love to do and do it well. As hackneyed as that sounds, there’s actually a fair amount of science behind it.

I read a couple of studies of artists attending the School of the Art Institute of Chicago in the 1960s, where one group of artists was very intrinsically motivated and the other was very extrinsically motivated. One said, “I paint because I paint; that’s what I am,” and the other said, “I’m really good at painting and I can make a living off of this and I can get my work in galleries and become really well-known.” Twenty-five years later, about half of these students are pretty successful artists, and almost all of them are the ones who were intrinsically motivated. The ones who weren’t pursuing those external rewards ended up getting them as a consequence of doing something really well. So I just think people with that orientation are gonna do better, period.

AA: Can anyone be motivated?

Pink: Sure. I think human beings want to direct their own lives and don’t want to be controlled. I’m convinced people by nature want to be active and engaged. For a lot of people, something happens to flip the switch the other way, but it’s very possible to switch it back.

AA: How can we better motivate ourselves at work?

Pink: There are small things people can do. It’s not as if they’re going to turn their lives around by saying three magic words or some kind of incantation. It’s more about taking very small steps to sculpt their jobs so they become a little more autonomous. A good starting point might be getting a more flexible work schedule, or taking on assignments outside of your everyday job that you find a little more interesting. Or maybe it’s joining a team or committee you’re not otherwise required to join.

That said, I do think there are many cases where people look deep down and realize they’re unsatisfied at work. It could be something about the nature of that organization that is in some ways irreparable. For some people, it means actually having to leave. But the first step is to try to do something small at your job. Set personal performance reviews for yourself. Take back the performance review from the bosses and work your way toward mastery. There’s all kind of small things people can do to awaken that. It’s difficult if the organization is completely counter to those sorts of ideas.

AA: What sort of advice do you offer executives seeking to motivate their staffs?

Pink: You have to start small. Let’s take the companies that are doing 20 percent time, like Google, where employees can spend one day a week working on a project they’re passionate about. I don’t think companies unfamiliar with 20 percent time should jump headlong into it right now, especially in a recession. Try something modest, something I call “20 percent time with training wheels.” So, 10 percent time. That’s one afternoon a week. And who among us hasn’t squandered one afternoon a week? You don’t do it permanently, you try it for three months or six months. You can completely slash operating costs right there, and you get a modest little experiment in autonomy.

Another way managers can motivate employees is by asking about their autonomy. Ask them, how much control do you have over your time? Over your task, your technique and your team? This is a big motivator, especially for building mastery. People like making progress. So one of the things it’s important for you to do is recognize progress and celebrate progress.

But again, change isn’t going to happen overnight. Everybody wants to say, “Just follow these three steps …” and that’s a false promise. It’s about making slow, steady changes and having that momentum accumulate. This idea you can announce some kind of new policy and everything’s going to be all right with the world is a false promise, and everybody knows that. I mean, everybody who’s not a boss knows that.

Workforce Management Online, March 2010 — Register Now!

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E-Verify at a Glance

 

Federal contractor with the federal acquisition rule (FAR) E-Verify clause in contract

Federal contractor without the FAR E-Verify clause

No federal contracts currently, but competing for one or more

No federal contracts now and none expected anytime soon

Located

in a jurisdiction where

E-Verify is required

Must I enroll in and use E‑Verify?

Yes. Within 30 days, company must register or change its designation to FAR contractor if already registered.

No

No

No

Yes

May I enroll in and use E‑Verify?

 —

Yes, but for new hires only.

Yes, but for new hires only.

Yes, but for new hires only.

 —

Should I check new hires if I’m enrolled in E-Verify?

Yes. Must begin using for all new hires within 90 days of enrollment.

Yes. Must begin using for all new hires immediately upon enrollment.

Yes. Must begin using for all new hires immediately upon enrollment.

Yes. Must begin using for all new hires immediately upon enrollment.

Yes. Must begin using for all new hires immediately upon enrollment.

Should I use E‑Verify for existing employees working on federal contract?

Must E-Verify all employees working directly on the federal contract, but not employees who work indirectly on contract (e.g., admin staff). 

No

 —

 —

 —

Should I use E‑Verify for existing employees?

Employer must choose whether to E-Verify all existing employees or only the ones working directly on federal contract;180 days to comply.

Must not

Must not

Must not

Must not

Workforce Management Online, March 2010 — Register Now!

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Should Your Company Use E-Verify

Secretary of Homeland Security Janet Napolitano recently introduced a new campaign called “I E-Verify” to recognize the approximately 170,000 businesses nationwide currently using the federal E-Verify program. The campaign is designed to highlight employers’ commitment to maintaining a legal workforce and reducing the use of fraudulent work documents.


While the “I E-Verify” campaign certainly marks the growing use of E-Verify by private employers, a large percentage of those companies are using it because they are required to—either because they operate as employers in a jurisdiction where it is legally required or because they are federal contractors or subcontractors. Until very recently, the vast majority of employers in the U.S., for whom E-Verify is optional, had shown little interest in signing up for the program.


After all, for many employers E-Verify has the potential to increase business costs as well as legal liability. However, with more than 1,200 employers per week registering for the new program and approximately 83 percent of them saying they are basically satisfied with its performance, E-Verify is quickly becoming a routine part of the hiring process for many companies.


Ever since Congress passed the Immigration Reform and Control Act of 1986, the federal government has sought to curb illegal immigration by penalizing employers for employing aliens whom they know to be unauthorized to work in the United States. To comply with the law, U.S. employers must verify the employment eligibility and identity of all newly hired employees by completing a Form I-9. Employers that hire or continue to employ individuals knowing that they are ineligible to work in the U.S. may face civil or criminal penalties. Like it or not, since 1986 employers have been de facto federal deputies in the frontline battle against illegal immigration. Accompanying this obligation is a corresponding duty to verify employees’ documents in a manner that is nondiscriminatory.


With millions of people entering the U.S. to work without authorization just in the past decade or so, the effectiveness of the employer-mandated I-9 process is not immediately obvious. Many observers have noticed a dramatic increase in the use of fraudulent work documents since 1986 and no discernible decrease in the number of unauthorized aliens since that time. On the other hand, the Department of Homeland Security rightfully points out that unauthorized employment is a form of unfair competition that must be addressed. Whatever the public policy implications, the main problem with the I-9 program is that employers often lack the expertise to detect fraudulent work documents. Moreover, because of the nondiscrimination provisions in Immigration Reform and Control Act they are understandably deterred from being overly demanding during the I-9 process. In response to this problem, the government created the E-Verify program to operate alongside the I-9 procedure and make the verification process more effective.


For most employers in the U.S., the program remains strictly voluntary. In order to participate, an employer must enroll online and have its human resources staff complete an online tutorial. Voluntary registrants must begin using it for all new hires immediately. However, federal contractors have 30 days from the date of their contracts to enroll in the program and an additional 90-180 days to begin using it. E-Verify supplements the I-9 process; it does not replace it. In fact, an employer is not even permitted to initiate an E-Verify query for a new hire until AFTER the I-9 process is complete—at which time and before the end of the third day of employment, the employer must enter the I-9 data into E-Verify system to confirm the person’s identity and work authorization.


The data entered into E-Verify is checked against databases maintained by DHS and the Social Security Administration. In most cases, work authorization is confirmed in a matter of seconds. However, in about 3 percent of cases, a tentative non-confirmation occurs and the employer is legally obligated to provide certain notices to the employee and to continue the employment until a final determination is made by E-Verify.


The purpose of this article is to discuss which companies are required to use E-Verify and which are not. For those that are not legally required to use it, the article further discusses the potential advantages and disadvantages of voluntary enrollment. Employers generally fall into one of five categories with respect to E-Verify.


Based on your company’s particular circumstances, you can simply skip ahead to the section that best describes your situation. Also, you can consult the quick-reference chart that accompanies this article:


1. Mandatory E-Verify user because of jurisdiction


2. Federal contractor/subcontractor with the E-Verify clause


3. Federal contractor/subcontractor without the E-Verify clause


4. No current federal contracts/subcontracts, but company is competing for them


5. No federal contracts now or in the foreseeable future


1. Mandatory E-Verify user because of jurisdiction


The default position at the federal level is that an employer is generally not required to use E-Verify unless it has a qualifying federal contract or subcontract that contains the E-Verify clause. However, some states have gone beyond the federal government in making E-Verify mandatory within their jurisdictions. At present the most dramatic examples are Arizona, Mississippi and South Carolina. Since 2008, Arizona has had a general E-Verify requirement in effect for all employers, public and private. Noncompliance can lead to the loss of an Arizona business license. In Mississippi, a state law requires E-Verify for all employers, but implementation of the law has been phased in slowly, with large Mississippi employers enrolling in 2008 while smaller companies have until 2011 to sign up. South Carolina has a similar law mandating E-Verify for all large companies starting in July 2009 while smaller companies have until July 2010.


If you are operating as an employer in one of these three states, you must use E-Verify in accordance with state requirements. If your company operates in many locations it might make sense to use E-Verify only in the jurisdictions where it is required. On the other hand, for consistency some employers are deciding to register the entire company.


While these are currently the only three jurisdictions with a general E-Verify requirement for all employers, a handful of other states have E-Verify requirements that are limited to state contractors and public employers. These include Colorado, Georgia, Idaho, Minnesota, Missouri, North Carolina, Oklahoma, Rhode Island and Utah. The specific requirements vary by state. Employers in these jurisdictions are strongly encouraged to consult with their immigration or employment counsel to make sure they are in compliance. The stakes for noncompliance can be surprisingly high, including in some cases the loss of your state contracts. The field is rapidly evolving and employers are advised to watch for continuing changes at the state level. One particularly good source for specific state requirements is the National Conference of State Legislatures Web site.


No discussion of E-Verify at the state level would be complete without mentioning Illinois, the only state that has tried to restrict private employers from using the federal program. A new Illinois law places significant state requirements on employers that use E-Verify. To ensure compliance, the law gives aggrieved employees a private right of action in state court with the possibility of sizable civil damages.


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2. Federal contractor/subcontractor with the E-Verify clause


The remaining categories are for the broad majority of employers who are not under a state obligation to use E-Verify. For most employers, deciding whether to enroll will depend largely on whether you have or soon will have a federal contract or subcontract that contains the E-Verify clause, since this is the only national basis on which E-Verify is compulsory for private employers.


A federal acquisition rule requires federal contractors to agree to use E-Verify through language inserted into the contracts. This is known as the “E-Verify clause.” The rule applies only to contracts awarded after September 8, 2009. The E-Verify clause will come from the contracting agency, not the Department of Homeland Security. Contracts that were awarded prior to September 8, 2009, will not contain the E-Verify clause and therefore will not trigger the E-Verify requirement.


There is an exception for existing indefinite delivery/indefinite quantity contracts. Because of the potentially unending nature of these contracts, federal contracting officers have been authorized to negotiate the insertion of the E-Verify clause on a bilateral basis for future orders if the remaining period of performance extends to at least March 18, 2010, and the amount of work or number of orders expected under the remaining performance period is substantial.


The rule also “flows down” to federal subcontractors if the prime contract includes the E Verify clause and the subcontract is for services or construction in excess of $3,000 for work performed in the United States. Prime contractors must provide notice of the E-Verify requirement to their subcontractors as well as provide general oversight to make sure they meet the E Verify requirement. Subcontractors will not receive notice of the E-Verify clause from the government. Contracting with or continuing to work with a subcontractor whom a prime contractor knows to be out of compliance with the E-Verify requirement can result in fines and penalties to the prime contractor. Prime contractors are not required to verify the work eligibility of their subcontractors’ employees, but they are required to make certain that the E-Verify clause is inserted into every tier of their subcontracts and that all of their subcontractors are using the E-Verify system.


Federal contractors whose contracts contain the E-Verify clause are required to use E-Verify on new hires and on all employees assigned to work directly on the contract. Alternatively, they may elect to verify their entire workforce. As a practical matter, most companies choose to verify their entire workforce rather than spend resources tracking which employees are assigned to work directly on qualifying federal contract projects at any given time. This is particularly true for large companies with multiple contracts and relatively fluid workforces.


A company that chooses to use E-Verify for its whole workforce will first need to make sure that every employee’s Form I-9 is in order. That’s because the data from the I-9 is used during the E Verify process. U.S. Immigration and Customs Enforcement provides two options for carrying out the I-9 re-verification process. One option is to complete a new I-9 for every employee as if he or she were a new hire. The second option, which is even more labor-intensive, involves sifting through every I 9 for your current workforce and re-verifying only those employees whose forms would no longer be in compliance if they were completed today. Whichever option is selected, after the employer has completed the I-9 portion for every employee, it must then run that data through the E-Verify system.


The decision to “cleanse” your entire workforce should not be taken lightly, as it will take considerable time and resources and could lead to the realization that despite your company’s best efforts, some members of your workforce are unauthorized to work. Even if just 1 to 2 percent of your workforce turns out to be unauthorized, that could represent a formidable challenge to your business operations: Their employment would have to be terminated immediately. Also, in certain industries the percentage of unauthorized workers could be significantly higher. One option to mitigate the impact on your business might be to use a controlled rollout of the E-Verify program.


It is crucial to develop a strategy before you register for E-Verify. Employers are strongly encouraged to consult with their immigration and employment counsel before taking any action with respect to enrolling in E-Verify. After they have enrolled in the program, some employers outsource their E-Verify function to third-party vendors, known as designated agents. For many, this is a cost-effective alternative to maintaining a trained HR staff steeped in E-Verify. It might also reduce the risk of privacy and discrimination claims by employees. However, third-party vendors have a strong financial interest in persuading companies to enroll in the E-Verify program. Thus, when deciding whether to enroll, it is better to consult with an independent professional who can help you objectively weigh the costs and benefits.


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3. Federal contractor/subcontractor without the E-Verify clause


It is important to understand that not all federal contractors and subcontractors will have the E-Verify clause in their contracts, and therefore will not be federally required to use E-Verify. There are two ways this could happen (not counting a simple error or oversight by the contracting agency). First, as discussed above, federal contracts awarded before September 8, 2009, do not trigger the E-Verify clause. Thus, if you have an older federal contract, it is grandfathered in without the E-Verify requirement. The E-Verify clause will not be inserted until the next time the contract comes up for renewal. The only exception, again, is with indefinite delivery/indefinite quantity contracts, and even those must be renegotiated bilaterally before the new E-Verify clause can be inserted for future orders. Second, a federal contract awarded after September 8, 2009, could qualify for an exemption from the E-Verify requirement. In that case, the clause would not be inserted and the employer would not be required to enroll.


There are four exemptions under the E-Verify Rule for federal contractors:


• Contract is for fewer than 120 days.


• Contract is valued at less than $100,000 under the simplified acquisition threshold.


• All work is performed outside the United States.


• Contract is for commercially available off-the-shelf items and related services.


The fourth exemption is the most significant one for most federal contractors. A commercially available off-the-shelf item is one that is sold in substantial quantities in the commercial marketplace and is offered to the government in the same form that it is available in the commercial marketplace, or with only minor modifications. For example, a contract to supply NASA with 10,000 “AAA” household batteries per month would qualify for what is called a COTS exemption since household batteries are sold in substantial quantities in the marketplace and the supplier isn’t doing anything to make the make the batteries unique. But a second contract with NASA to design and develop a new battery for use in the next lunar rover would not qualify for the COTS exemption because it isn’t sold in substantial quantities and because it was designed specifically for NASA.


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4. No current qualifying federal contracts/subcontracts, but company is competing for them


What should you do when E-Verify is optional for your company today but will become mandatory in the near future because you are on the verge of getting a qualifying federal contract or subcontract? The basic federal contractor rule is simple enough: Get the contract first. If it contains the federal acquisition rule E-Verify clause, you must sign up within 30 days. If it isn’t in the contract, then signing up is optional.


But many companies are asking what should be done now to prepare for federal contractor status in the future. Let’s say you are currently competing for federal contracts but you don’t have any that qualify for the E-Verify requirement at the moment, perhaps because your current contracts were grandfathered in before September 8, 2009, or because they qualified for one of the exemptions. In that case, the analysis shifts away from the legal requirements and toward a more traditional business analysis. Specifically, you must decide whether and to what extent you will expend resources preparing your company for E-Verify compliance when it is not yet legally required.


There are basically three options available to a company in this scenario:


• Sign up now: The upside is that you will only be required to use it for new hires, since non-federal contractors are not permitted to use it for existing employees. Later, if you get a federal contract with the E-Verify clause, you can simply change the designation in your company profile and then decide whether to verify all your existing employees or just the ones working on the federal contract. Meanwhile, you can market your company to government agencies, prime contractors and customers as being compliant with E-Verify. And if you don’t get the federal contract you’re competing for, you can always withdraw from the E-Verify program with 30 days’ notice. On the other hand, as discussed below, the downside to registering for E-Verify voluntarily is that it adds significant new burdens to your company in terms of time, training and legal liability.


• Prepare now, sign up later: The second option is to fully prepare your company for E Verify but stop short of actually registering for it. Implementing E-Verify in a strategic way that maximizes your specific circumstances while minimizing your obligations and legal risks takes some effort. You will need to decide which hiring sites will participate and how to roll them out for E-Verify purposes. You will also need to develop and implement a written company policy. Finally, you must decide which members of your HR staff will be responsible for the E-Verify function and train them accordingly. If you operate as an employer in Illinois, you will need to take some additional steps. Depending on your company’s situation and the likelihood of future federal contracts, it might make sense to get things in order ahead of time.


• Do nothing and wait: The third option is to do nothing until you receive a decision on your bid for a federal contract/subcontract. If you win the bid, then you can focus on enrolling in E-Verify and getting your internal policies and procedures in place. If you don’t get the bid, you can carry on not using E-Verify for as long as it remains voluntary for non-contractors. The do nothing-and-wait-approach is an attractive option for companies that are not as likely to get a federal contract or for companies that conclude now is simply not a good time to introduce a complicated new hiring system like E-Verify.


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5. No federal contracts now or in the foreseeable future


Let’s assume that your company is not a federal contractor, doesn’t expect any federal contracts anytime soon and doesn’t operate as an employer in one of the mandatory jurisdictions discussed above. In that case, E-Verify is strictly optional. Determining on a voluntary basis whether E-Verify is right for your company will depend on a variety of factors. Here are the basic pros and cons of E-Verify:


E-Verify can help your company avoid the mistake of hiring and training someone only to find out later that he or she is not authorized to work. For this same reason, E-Verify also gives executives and HR managers a measure of confidence and peace of mind about the lawfulness of their workforce. It virtually eliminates Social Security mismatches (although an employer could use the Social Security Administration’s program, called the Social Security Number Verification Service, to check for Social Security mismatches at the time of hire without all the hassle and potential liability of E-Verify). E-Verify also helps to improve the accuracy of wage and tax reporting because it reduces identity mismatches. Furthermore, although using E-Verify does not provide a safe harbor from prosecution for knowing unauthorized employment, it does create a legal presumption in your favor if you end up in court. As a practical matter, this would likely receive a substantial amount of weight in the event of an audit or investigation by Immigration and Customs Enforcement. It could mean the difference between getting a warning versus a fine, or, for more serious cases, a civil fine versus a criminal charge.


Finally, if your company hires many foreign nationals fresh out of college or graduate school, signing up for E-Verify can make the foreign national eligible for an additional 17 months of immigration status if his or her degree is in a field relating to science, technology, engineering or mathematics. As this is a significant new immigration benefit, many of the best foreign national students with highly sought-after advanced degrees are targeting E-Verify-compliant companies as potential employers.


However, E-Verify is not for everyone. There are serious reasons why some employers may decide to wait as long as possible before getting involved with it. The biggest downside of E-Verify is that it increases a company’s legal liability. Because your hiring data is stored electronically in a government database, it makes it much easier for the government to sort through the data for simple hiring errors that previously would have gone undetected. For example, if an HR manager forgets to complete the I-9 process and initiate the E-Verify query until the fourth day of employment—a likely scenario—that would constitute a technical/paperwork violation with the possibility of a civil fine. The odds of detection for such a low-level, innocent mistake under the traditional I-9 process are relatively low compared with the odds of detection under E-Verify. In theory, an accumulation of such small, innocent errors could be sufficient to trigger an audit or investigation.


The second major problem with E-Verify is that it does not replace the I-9 procedure. It merely adds an additional and significant burden to the process. The Department of Homeland Security promotes the E-Verify system as being free of charge, meaning only that the government does not charge for the right to use its databases. But viewed from a wider perspective, E Verify is anything but cost-free for a company. It actually requires significant investments in implementation, training and vigilant internal oversight.


A third problem with E-Verify is its potential for creating unintended privacy and discrimination violations. Employers that use E-Verify are under various federal and state obligations to safeguard the data contained on the Form I-9 and in the E-Verify databases. Once an employer enrolls in E-Verify, it must make certain that employees with access to the company’s E-Verify account are properly trained and supervised so as not to use it at the wrong time, for the wrong purpose or on the wrong person.


A poorly trained or poorly supervised HR worker can create significant liability for a company through misuse of the E-Verify system. Employers are also obligated by anti-discrimination laws to treat all similarly situated employees alike and not to ask employees for more documentation than is legally required. The use of E-Verify may create certain situations that are likely to lead well-meaning employers into trouble because of the problem of false negatives. Namely, employers that are otherwise scrupulous in carrying out their E-Verify obligations may falter when the system returns a false negative for someone they know or strongly believe to be work-authorized. This problem is most likely to occur when the person operating E-Verify knows the employee personally. Ignoring what is called a “final nonconfirmation” can seem like a reasonable thing to do when someone is certain that the system has made a mistake. But if a company overlooks it for one employee and not for others, it may have inadvertently created the basis for a discrimination claim.


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 Final thoughts
E-Verify is a relatively new system that aims to address the needs of hundreds of thousands of employers and millions of employees. It is inevitable that such a large-scale system will encounter many problems along the way. The good news is that the federal government appears to be dedicated to properly funding E-Verify and addressing the most pressing questions. The bad news is that there are still many unanswered questions. Today it is largely optional for most employers, but if present state and federal trends continue it seems likely that E-Verify will become mandatory for all employers in the United States.


Workforce Management Online, March 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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Special Report on Background CheckingBurden of Proof

EmploymentGroup’s December job postings included a “trial hire” for a small assembly job, paying $9 per hour, the equivalent of $17,550 a year. The Michigan staffing firm listed requirements for the position: a high school education or general equivalency diploma, small assembly experience and “no convictions.”


Virtually all of EmploymentGroup’s client companies have a blanket “no felons” policy.


“It’s about keeping the workplace safe, and about those lawsuits we all read about,” CEO Mark Lancaster says. In Michigan, a state that spends more on corrections than on higher education, smoking pot in a park or bouncing a $500 check can produce a felony conviction.


Like most employers, EmploymentGroup doesn’t have any empirical evidence that the “no convictions” policy helps keep the workplace safe. And screening vendors, who routinely claim that criminal checks reduce workplace violence, theft and fraud, don’t have any meaningful empirical evidence either. In addition, the actual probability of a negligent-hiring lawsuit—a perceived risk that often drives criminal screening practices—remains undocumented.


Employers spend billions on criminal checks and often base hiring decisions on the results without evidence of the return on the investment or the efficacy of the decisions. The absence of empirical evidence will soon become more than a question of effective screening and hiring practices.


Within the next 12 to 18 months, employers can expect to see the U.S. Equal Employment Opportunity Commission issue new guidelines that require empirical evidence for the “business necessity” defense in racial discrimination cases that arise from screening and hiring practices, according to Rod Fliegel, a partner at Littler Mendelson in San Francisco. The new guidelines are likely to upend hiring policies based on untested assumptions about criminality and workplace behaviors.


Employers stand to benefit from the new guidelines, which may bring greater clarity to what is now a legal quagmire. In addition to the new guidelines, in September 2009 the EEOC filed the first lawsuit in what experts believe will be a new series of court actions on screening and hiring practices that may help define the empirical evidence federal courts will require.


Perhaps more important, the legal scuffle over empirical evidence will continue to kick up questions about the role of criminal screening in hiring and the extent to which employers find false comfort in a relatively cheap and easy—but unproven—risk management tool while neglecting more effective measures to reduce workplace violence, theft, fraud and employment-related lawsuits. While the screening industry continues to play to employer concerns about criminality and promote criminal checks as an effective countermeasure, broader forces are challenging those assumptions.


Evidence lacking
Sensationalized headlines about workplace homicides and inflated vendor claims paint a dramatic picture of workforce criminality and criminal screening as an effective risk-reduction practice. But when the EEOC demands that employers produce empirical evidence to support hiring practices based on these claims, the screening industry will not be in a position to assist.


“Background screening can create a safer workplace,” says Theresa Preg, director of marketing development for LexisNexis Screening Solutions, also known as ChoicePoint, which runs 12 million employment-related screens a year. But the company has no empirical evidence to back up the statement.


Vendors frequently cite statistics on workplace violence but fail to note that the vast majority of incidents are not perpetrated by employees but by criminals unconnected to the workplace, clients or customers, or outsiders who have a personal relationship with an employee. They also don’t say that there is no research indicating that employees with criminal records are more likely to commit acts of workplace violence. Another common vendor claim is that employee theft causes 30 percent of all business failures. Although the number has been reiterated in marketing materials for two decades, there’s no substantiation for it.


     “I don’t know of any actual studies or evidence of a decrease in fraud or theft tied to criminal checks,” says Jason Morris, president and COO of EmployeeScreenIQ, which runs more than half a million employment screens each year. “There are no hard reports or case studies, and the National Association of Professional Background Screeners hasn’t produced any.”


To construct new guidelines for screening and hiring, the EEOC will draw from testimony given in its November 2008 hearings and from the 3rd U.S. Circuit Court of Appeals’ 2007 decision in the case of El v. SEPTA, according to Fliegel, who represents employers and screening vendors. “The EEOC will look to the hearings and El, which talked about an empirical basis for comparing an applicant with a record with an applicant without a record,” he says. “Some scholarship is now focusing on this.”


Fliegel cites the work of Shawn Bushway, a criminologist at the University at Albany, who testified at the EEOC hearings that employers have elevated criminal-history records as the “trump card” in hiring decisions, instead of using more responsible statistical risk assessments. Increasingly, employers focus less on direct job-related employment and reference checks and skills evaluations and more on criminal records and credit checks.


Bushway’s research and other significant studies also indicate that criminal checks produce numerous false positives and false negatives, which is another issue of concern for the EEOC. In addition, new studies on recidivism challenge blanket policies that impose untested time frames, such as screening records for the previous seven years or barring employment for any conviction within the past five or 10 years.


In HireRight’s 2009 survey of screening practices, employers most frequently cited workplace safety as their motivation for screening. Almost half say they screen to reduce theft and fraud. But no research suggests that criminal checks can predict an employee’s propensity for workplace violence, and there is no evidence that criminal screening reduces theft or fraud.


Most fraud perpetrators, for example, do not have a record because they are first offenders, according to the Association of Certified Fraud Examiners. In addition, U.S. retailers commonly respond to incidents of employee theft by simply firing the employee, so no criminal record is generated.


To avoid hiring unprosecuted thieves, many retailers now pay to access private member-only databases, but these databases do not represent criminal adjudications and dwell in a gray area of the law.


“This is a cutting-edge issue,” says Scott Paler, a labor and employment attorney at Seyfarth Shaw in Chicago. “These databases are a collection of individual opinions about incidents. Legal issues about using these databases in hiring decisions hinge on individual state laws.”


Proxy for discriminatiion
While pressure is mounting at the federal level, the recession has forced state governments to take a closer look at the role employers play in the revolving door of recidivism that keeps prisons full and places already stretched state budgets in even greater peril. A number of states, including New York, Massachusetts and California, are tightening restrictions on screening practices and hiring bars.


At the EEOC hearings, experts reported that recidivism drops to extremely low levels for people who have stable employment during their first year out of prison. Employers that construct hiring barriers for millions of marginal nonviolent ex-offenders will find it increasingly difficult to remain compliant with federal and state regulations.


At both the federal and the state level, the issue centers on criminal checks and hiring bars as a proxy for employment discrimination against black men. Major studies have found that employers treat white job candidates with convictions differently from blacks with convictions. Morris is not surprised. “I’m sure it’s happening,” he says. “We always tell employers to make sure that they do the same screen with the same treatment for every candidate, but it’s happening out there.”


The 10 largest screening companies alone screen more than 40 million job candidates each year. Many invite employers to use grids or preset hiring criteria for processing criminal record results. “There are companies using a criminal check to screen all candidates and eliminate all those with a record,” Morris says.


At Administaff Inc., director of recruiting Mary Massad takes a far more measured approach. Administaff, based in Houston, is a heavyweight in the professional-employer-organization industry, with 110,000 work-site employees at 5,900 client companies. Screening candidates for client companies varies by industry and position, but Administaff counsels clients carefully about the process for making adverse hiring decisions. “We will not support a program that does not consider convictions on a case-by-case basis,” Massad says. “We do a lot of consulting with clients.”


The growing trend at the state level is to require screening and hiring bars for specific jobs, including many caregiver positions, and restrict screening and hiring bars in all others. Greater clarity in state legislation is likely to reduce the small but highly publicized number of negligent-hiring lawsuits that are filed each year, and minimize the even smaller number that center on criminal records.


New EEOC regulations demanding an evidence-based approach to screening may help hone more effective hiring practices and provide a safe harbor from negligent-hiring lawsuits. The criminal screening process now in place at many companies may be an expedient method for culling candidates, but employers with hiring bars may soon have to rely more on proven methods for mitigating risk: job-specific hiring policies, proper supervision and effective performance management.


Workforce Management, February 2010, p. 27-33 — Subscribe Now!

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TOOL Free E-book on Continuing Education in the Health Professions

The book, available free as a PDF, is published by the National Academies Press, which distributes reports issued by the National Academy of Sciences, the National Academy of Engineering, the Institute of Medicine and the National Research Council, all operating under a charter granted by the U.S. Congress.


Here’s the summary for Redesigning Continuing Education in the Health Professions:


“Today in the United States, the professional health workforce is not consistently prepared to provide high quality health care and assure patient safety, even as the nation spends more per capita on health care than any other country. The absence of a comprehensive and well-integrated system of continuing education (CE) in the health professions is an important contributing factor to knowledge and performance deficiencies at the individual and system levels.


“To be most effective, health professionals at every stage of their careers must continue learning about advances in research and treatment in their fields (and related fields) in order to obtain and maintain up-to-date knowledge and skills in caring for their patients. Many health professionals regularly undertake a variety of efforts to stay up to date, but on a larger scale, the nation’s approach to CE for health professionals fails to support the professions in their efforts to achieve and maintain proficiency.


“Redesigning Continuing Education in the Health Professions illustrates a vision for a better system through a comprehensive approach of continuing professional development, and posits a framework upon which to develop a new, more effective system. The book also offers principles to guide the creation of a national continuing education institute.”


Workforce Management Online, February 2010 — Register Now!

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Annual Filing Shows Google Recruiters Took a Hit

Google Inc. may be the epitome of a recession-proof company, having earned sizable profits throughout the recession. But its workforce has not been so immune.


The Mountain View, California-based technology juggernaut reduced the size of its workforce—focusing in part on its recruiters—last year for the first time in its gilded corporate history, according to public filings and statements in 2009 by Google executives. Google also announced on its blog in early 2009 that it cut jobs in sales and marketing.


The company had 19,835 full-time employees at the end of 2009, compared with 20,222 a year earlier, it said in its annual report filed with the Securities and Exchange Commission on February 12.


Google dipped to as few as 19,665 employees at the end of the third quarter.


A leaner Google said it improved the “discipline” of its hiring—a reference to layoffs within the company’s recruiting organization announced early last year.


Google was able to increase its net income compared with the same period to $1.97 billion in the fourth quarter of 2009, compared with $382 million at the end of 2008.


The company said in its annual report that “we expect to continue to invest in our business, including significantly increasing our hiring rate, and this may cause our operating margins to decrease.”


The company did not say whether it laid off employees or that the drop in headcount was the result of attrition. Google announced several small rounds of layoffs beginning at the end of 2008 and again in the spring of 2009, but in each instance the company added that it was going to continue to hire, only at a slower rate.


Among the first let go were contractors providing recruitment services, said Laszlo Bock, the company’s vice president for people operations, in a memo in January 2009.


Executives at Google had expressed concern about a brain drain as other technology firms poached its most talented employees.


According to published reports, Justice Department officials are investigating whether an informal agreement reportedly made among Google, Apple and others in the high-tech industry to not poach one another’s employees violates antitrust laws.


The Wall Street Journal reported last year that the company is developing an algorithm to determine which employees are most likely to quit.


Google made its initial public offering in the summer of 2004 with a workforce that totaled about 2,300 full-time employees. Google beefed up its recruiting efforts and went on a hiring spree over the next four years.


At the end of 2006, the company had 10,674 employees. The company’s headcount peaked at 20,222 full-time employees at the end of 2008.


—Jeremy Smerd


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