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Employers Look To Establish RPO Standards

Shelia Gray is tired of hearing people badmouth recruitment process outsourcing.


She recalls one instance at a recruiting conference a few years ago where someone stood up and denounced employers who engaged in RPO because “you don’t outsource things of value, and recruiting is part of value.”


“The reality is that most of us that are doing RPO are not outsourcing the hiring decisions; we are outsourcing the pieces of hiring that we need help with,” says Gray, who is director of global talent acquisition at International Paper. “Recruitment process outsourcing is not like outsourcing other HR processes.”


That’s why Gray, with the sponsorship of the HRO Association, a group of HRO vendors, buyers and consultants, has spearheaded the creation of the RPO Buyers Group.


The goal of the consortium, which is made up of large employers that have engaged in recruitment process outsourcing, is to be independent and objective and establish some research, benchmarks and metrics in the field of RPO, says Gray, who is chair of the group. It has six members, but 50 more have shown interest, she says, declining to name the members since the group is still in its infancy. All of the companies are Fortune 500 companies with at least 30,000 employees.


“We want people who are involved in the strategic direction of RPO at their companies, not necessarily who manage the day-to-day relationships with RPO providers,” Gray says.


During the past couple of years, the buzz about RPO has been gaining momentum, but it’s unclear whether the hype is being generated by real buyer interest or just by vendor promotion, experts say.


“Most employers would admit that they have a problem attracting and recruiting talent, but they aren’t ready to pull the trigger on RPO,” says Stan Lepeak, managing director of research for EquaTerra, a Houston-based sourcing advisor. “There isn’t huge adoption of RPO.”


Since the RPO market is still so new, the buyers group could help establish standards around pricing and service-level agreement language, says Lisa Rowan, a consultant at IDC.


Rowan estimates the RPO market is still under $1 billion.


The RPO Buyers Group will work in conjunction with the RPO Alliance, a group of vendors, buyers and RPO experts, but it will also have separate meetings that will be exclusive for members.


On December 10 and 11, the two groups came together for the second annual RPO Summit in Washington, says Richard Crespin, president of the HRO Association.


“This is a challenging and new environment for many employers,” Crespin says. “You can’t go to Amazon and buy RPO for Dummies.


—Jessica Marquez


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UAW Seeks Job Guarantees to End Strike at American Axle

The United Auto Workers is demanding job guarantees from American Axle & Manufacturing Holdings Inc. to end a 3-week-old strike.

General Motors has contracted hundreds of millions of dollars of new business annually with American Axle. The union wants those axles and other parts built in UAW-represented U.S. plants, not in Mexico, said a source close to the situation.


The union demanded similar new-work commitments to end strikes at GM and Ford Motor Co. last fall during master contract negotiations.


The job guarantees are needed to salve the pain of concessions the UAW must make at American Axle to bring wages and benefits more in line with the axle maker’s competitors, said Dave Cole, chairman of the Center for Automotive Research think tank in Ann Arbor, Michigan.


“Plant investment is the quid pro quo,” he said.


American Axle CEO Richard E. Dauch is demanding that the 3,600 striking workers agree to cuts that would halve wages to about $14 an hour. That is the average wage paid by rival Dana Holding Corp.


The union is rightfully nervous that American Axle will move future GM work to its Mexican operations if progress isn’t made, Cole said.


Union sources say that is happening with axles that American Axle will supply for the redesigned 2009 Chevrolet Camaro. American Axle plans to ship Camaro axles almost 2,000 miles from its plant in Guanajuato, Mexico, to GM’s assembly plant in Oshawa, Ontario, they say.


“We’re not saying we are moving to Mexico,” American Axle spokeswoman Renee Rogers said. But without a U.S. cost-competitive wage structure, she warned, new programs could go to American Axle plants with a lower wage and benefit structure than the five company factories now on strike.


In addition to its Mexican plant, American Axle has four U.S. plants with a different, lower-compensation UAW contract that are not on strike.


Last year, American Axle idled a Buffalo, New York, plant that had expected to get the Camaro work. That plant is about 130 miles from Oshawa.


American Axle supplies axles for all GM pickups and SUVs built in North America.


The strike has idled seven GM assembly plants and hampered production at 22 other GM parts plants.  It also has halted production of the Chevy Silverado and other light trucks.


Filed by David Barkholz and Robert Sherefkin of Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Shortage Of Veterinarians To Treat Livestock, Oversee Food Supply

Recent veterinary school graduates are likely to work in suburban pet clinics. That may be good for Fido, but it’s bad for livestock destined for the nation’s kitchens and restaurants.

The Department of Labor projects 28,000 veterinary job openings by 2012. Currently,universities produce about 2,500 vets each year. The annual shortfall is projected to be about 5 percent, according to Mark Lutschaunig, director of governmental relations for the American Veterinary Medical Association.

The problem goes beyond sheer numbers. If there aren’t enough veterinarians to vaccinate herds, treat diseases, deliver calves safely and ensure that foreign food sources are safe, tainted meat and other toxic products could be the result.


Veterinarians are “critical if we’re going to maintain a healthy food supply and keep foreign animal diseases out of the country,” Lutschaunig says. “This is probably one of the most important issues the profession has faced in the last 30 years.”

The limited labor pool of large-animal veterinarians is addressed in legislation that renews federal farm programs. A provision in the Senate bill would provide $1.5 billion in grants over 10 years to universities to fund research and increase the number of students who will enter agricultural biosecurity.


The broader farm legislation is in House-Senate negotiations. Meanwhile, the Bush administration is working with Capitol Hill leaders to craft an alternative measure that overcomes objections the president has to the congressional versions. The law expires March 15.

A law that hasn’t yet gone into effect addresses a key aspect of the shortage. In 2003, Congress approved a loan repayment program for veterinarians who agree to work in food supply.

The Department of Agriculture hasn’t yet written regulations that would make the program functional. Many veterinary students graduate with more than $100,000 in debt and receive starting salaries of $50,000 to $60,000.

Loan forgiveness is critical to attracting vets to rural regions, and some states have their own programs in place.

“We need some of our graduates to come back, and that’s the only way we’re going to do it,” says Arlyn Scherbenske, who owns a veterinary practice in Steele, North Dakota.

Scherbenske employs two full-time and four part-time vets as well as two technicians. They tend to about 30,000 head of cattle in a 50-mile radius and do two or three small-animal surgeries each day.

Scherbenske filled recent openings through “very aggressive” recruiting that included traveling to Kansas State University. But he says there is a “huge shortage” of vets in rural areas, where most of the food-supply work occurs.

The dearth is due in part to the retirement of solo practitioners and to the trend among young vets to work in group practices to lower costs and achieve better work/life balance.

If they hang out their own shingle, they have to be on call almost all the time, which can require working outside at night in poor weather.

“You are the emergency clinic,” Scherbenske says.


—Mark Schoeff Jr.


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Chrysler to Go Dark for Two Weeks in July

Chrysler plans to shut down for two weeks this summer, according to a memo sent by CEO Bob Nardelli to employees on Friday, March 14.


The company will take a “two-week mandatory shutdown for the weeks of July 7 and July 14,” Nardelli said in the memo.


“As a private company, we need to think like owners and do our part to accelerate Chrysler’s recovery and transformation,” he said.


Workers will have to take vacation during the period unless they make special arrangements with the company. The move affects the majority of the company’s 15,061 salaried employees and 56,517 hourly workers around the world.


Some operations will need to keep working during the designated period “to support business-critical activities,” the memo said. Such “business-critical” activities would include sales and dealer support functions, a company spokeswoman said.


“Employees who have already used their vacation days, have insufficient earned vacation for the year or are otherwise committed to noncancelable vacation plans during other time periods should work with their local management to make alternative arrangements,” the memo said.


Chrysler has never had a companywide shutdown before, said Mary Beth Halprin, a Chrysler spokeswoman.


“This is the first year Chrysler is implementing a shutdown,” she said.


Some employees who had already taken their allotted vacations might have to take the two weeks without pay, she said.


Nardelli’s message told employees the company was taking the mandatory vacation plan “in order to create better alignment and efficiency across organizational lines and boost productivity.”


Chrysler, General Motors and Ford Motor Co. typically idle U.S. plants in early July for vacations and shut individual manufacturing operations at various times to retool when they have car and truck model changeovers.


Canadian Auto Workers president Buzz Hargrove said the shutdown wouldn’t affect Chrysler employees at two Canadian plants because there’s a normal summer shutdown anyway.


Hargrove called the shutdown a “good business decision.”


The U.S. auto market has slumped by a wider margin than most analysts had anticipated last summer, when Cerberus completed its acquisition of its majority stake in Chrysler. The company has indicated that it is trying to step up its restructuring efforts in response.


Nardelli has repeatedly said that the automaker would focus on bolstering its cash position, and Chrysler has taken a number of cost-cutting steps in recent weeks.


Chrysler announced last week that it was shutting a design studio outside San Diego it has maintained since the early 1980s.


The automaker has also taken a hard line in negotiations since late last year with bankrupt parts supplier Plastech Engineered Products in an effort to steer clear of a more expensive bailout for the privately held company.


Chrysler’s U.S. sales are down almost 13 percent in the first two months of the year.


Filed by Automotive News, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Prep for Paterson Labor Gets Ready

Soon-to-be New York Gov. David Paterson has walked picket lines and championed pro-worker legislation for years, but union leaders are not expecting dramatic change now that their longtime friend will be in charge in Albany.


Labor officials say Paterson is more progressive than Eliot Spitzer, but some worry that an intense pressure on the incoming governor to build consensus could make it difficult for him to move significantly to the left of his predecessor. Union officials say they often had to convince Spitzer that their ideas were both correct and politically feasible; with Paterson, the emphasis will be on political viability.


Unions also have close ties to Paterson’s father, former state Sen. Basil Paterson, an influential labor lawyer who represents 1199/SEIU United Health Care Workers East, the United Federation of Teachers and Transport Workers Union Local 100.


In the short term, union officials say they will have to be sensitive to the fact that Paterson did not win office on a platform that was tested in a campaign. Any talk of what changes he might make in Spitzer’s priorities is premature. Restoring confidence in the executive should be his No. 1 goal, officials say.


In the long run, labor leaders are hoping he will get behind measures that would tie development to livable-wage jobs; maintain health care spending; and raise taxes on wealthy New Yorkers.


Stuart Appelbaum, president of the Retail Wholesale and Department Store Union, insists Paterson will be motivated by one way of thinking.


“David has shown that he’s directed by his own inner compass and he does what he thinks is right,” Appelbaum says. “He’s not afraid to challenge others when he thinks there’s a better direction. And he’s done that consistently.”


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

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Firing Right After Bias Charge Equals Retaliation

Charles Mickey was employed by Zeidler Tool and Die Co. for 33 years. In October 2004, at age 64, he was asked about his retirement plans and then received a pay cut on the grounds that the company was not doing well. A younger manager, however, received a pay raise.


    Mickey’s EEOC charge of age discrimination was received by Zeidler on October 14, 2004. After the company learned of his EEOC charge, Mickey was immediately laid off. However, financial records indicated that Zeidler was profiting and advertising for new positions.


    Mickey brought suit in the U.S. District Court for the Eastern District of Michigan, alleging age discrimination and retaliation.


    The district court granted summary judgment in favor of the employer on the grounds that Mickey failed to establish a prima facie case of unlawful retaliation, reasoning that the time between the filing of the EEOC notice and his layoff was not sufficient to demonstrate a connection between the protected activity of filing the EEOC charge and adverse employment action.


    The U.S. Court of Appeals for the 6th Circuit in Cincinnati reversed, stating, “Where adverse employment action occurs very close in time after an employer learns of a protected activity, such temporal proximity between the events is significant enough to constitute evidence of a causal connection for the purposes of satisfying a prima facie case of retaliation.”


    Since Mickey had been abruptly terminated on the same day that Zeidler had learned about the EEOC charge, the case was remanded to district court for a trial. Mickey v. Zeidler Tool and Die Co., No. 06-1960 (1/31/08).


    Impact: When an employee is fired immediately after the employer learns of a protected activity, it can be inferred that there is a causal connection between the two actions, even if the employee does not present other evidence of retaliation.


p>Workforce Management, March 3, 2008, p. 7 — Subscribe Now!

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Hearing-Impaired Employment and the ADA

United Parcel Service employees could bid for package-car driver jobs, which included a hearing test mandated by the U.S. Department of Transportation for drivers operating vehicles that weighed 10,000 pounds or more. The DOT’s regulations did not apply to UPS’ package vehicles since their weight was less than 10,000 pounds.

In May 1999, five UPS employees filed a lawsuit alleging violations of the Americans With Disabilities Act and related California law, saying UPS discriminated against them when it denied promotional opportunities to the package-car driver positions.

A $9.9 million partial settlement resolved certain of the claims, except those involving the denial of driving jobs to deaf workers. The U.S. District Court for Northern California conducted a trial on those remaining issues, held that UPS violated the ADA and state law, and issued an injunction requiring UPS to assess each hearing-impaired applicant individually for the position of driving vehicles.

On appeal, the U.S. Court of Appeals for the 9th Circuit in San Francisco agreed that UPS violated the ADA by not allowing deaf employees to be considered for jobs in its smaller package vehicles not covered by DOT regulations.

The 9th Circuit granted rehearing of the case, and reversed the trial court’s grant of an injunction. It held that the district court misapplied the ADA in deciding that UPS could not satisfy a business-necessity defense for its driver hearing standards and in deciding that hearing-impaired drivers were qualified individuals with disabilities under the ADA. Bates v. United Parcel Service, Inc., 9th Cir. (en banc), No. 04-17295 (12/28/07).

Impact:The employee alleging that hiring requirements violate the ADA must show that he or she is qualified to perform the essential functions of the job at issue. The bona fide occupational qualification defense does not apply to ADA claims.


Workforce Management, March 3, 2008, p. 7 — Subscribe Now!

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When Is Too Much Pay at Risk

Few industries match telecommunications for cutthroat sales competition, but the industry has traditionally lagged others in designing highly leveraged sales compensation programs to boost revenues. Embarq Corp., a $6 billion telecommunications company formed in 2005 as a spinoff from the Sprint/Nextel merger, broke from the industry pattern two years ago with a sales pay plan that puts 30 percent of total cash compensation at risk.


    The purpose of the program is to drive sales along specific product lines. “If agents are hitting their targets, that should translate directly into revenue goals,” says Kim Povirk, Embarq’s general manager for consumer market sales and service. But when Embarq recently looked at pushing the variable portion even higher, the perpetual question arose: When is too much pay at risk?


    “Sales organizations are grappling with this question,” says Michael Herman, a principal with Deloitte Consulting and national leader, sales force effectiveness. “They want to make sure that they motivate effectively and strike the right balance. Many companies are now taking a step back and looking at who should receive variable pay and how much pay should be at risk.”


    In the most recent Deloitte survey of sales organizations, companies continued to report excessive levels of complexity in sales plan design, cost misalignment and missed quotas. “The critical question is, who are the key people who have influence over the sale?” Herman says. “Who has a direct line of sight and should have pay at risk?”


70/30 split
   Embarq found the answers to these questions in a relatively simple sales pay plan that is now driving revenues. Based in Overland Park, Kansas, and operating in 18 states with 19,000 employees, Embarq began trading as a separate company in May 2006 and has emerged as one of the best-performing organizations in the sector. At Embarq’s 12 call centers, 1,300 sales reps and 120 supervisors now work under the 70/30 pay split along with an additional 400 employees in 51 retail stores.


    Embarq’s 70/30 split evolved from a completely unleveraged plan to a 95/5 split, then an 85/15 split and, finally, the 70/30 plan in 2005. The high level of variable pay requires absolute accuracy in record keeping, so Embarq moved into a software-based compensation administration program with the leveraged plan initiative.


    Monthly base pay for agents averages $1,762. Under the incentive plan, an agent performing at 100 percent receives an additional $755 a month in variable pay. Two-thirds of the agents are currently hitting above 100 percent of target.


    The 30 percent that is at risk is based on two components. The first, representing 40 percent of the variable portion, is based on achieving overall revenue targets; 60 percent is at risk for targets relating to four critical products.


    The targets for the four products are weighted, based on the company’s strategic goals. High-speed Internet service accounts for 25 percent of the 60 percent at-risk component. Packages account for 15 percent, and wireless and satellite television each are set at 10 percent. Every agent receives specific targets for each of the four products.


    A sales agent performing at 100 percent of target receives a monthly incentive payout of $302 for revenue growth, $188.75 for the high-speed Internet payout, $113.25 for packages, $75.50 for satellite TV and $75.50 for wireless activations.


    “Agents routinely hit 200 percent to 300 percent of their target,” Povirk says. “At 300 percent of target, agents are more than doubling their base pay.” Payouts are capped at $10,000 per month. Revenue results reflect the emphasis placed on Internet service sales, which jumped 27 percent for the year ending in the third quarter of 2007.


    The leveraged part is paid out monthly, but sales and the incremental increases in variable pay show up on agents’ statements within 24 hours. “We work very close to real time,” Povirk says. Agents see every sale for every product and the associated payout on their statement by their next shift.


    Embarq did not incorporate a merit increase under the original 70/30 plan. When the company determined that some form of pay increase was necessary, it conducted a study to determine whether it could raise the level of pay at risk. The study and professional consultation determined that higher levels were not desirable. Embarq then instituted merit increases as an alternative to increased incentives.


    Under the merit pay plan, agents are evaluated with a scorecard that includes four to six metrics and determines annual merit increases of 1 percent to 3 percent on the base pay portion of total compensation. Rankings are determined by the scorecard results, with no forced distribution.


    Embarq also launched a noncash rewards program for specific marketing incentives, using items such as iPods for agents who hit targets for special products. In addition, the company added a customer service bonus. With 30 percent of pay focused on sales, Embarq was concerned that agents might lose sight of the service component of their job, so the company now pays a $200 per month bonus for agents who meet specific service goals.


The right level of risk
   Embarq’s concerns about setting appropriate levels of risk for sales agents and maintaining customer service are symptomatic of larger shifts in the nature of sales work. “Sales organizations are changing because of the changing customer environment,” Herman says. “The customer experience is now the differentiating factor.”


    Consequently, many companies have replaced the single sales position with a constellation of sales jobs that includes pre-sales positions, salespeople, account managers and customer advocacy representatives. “This creates very complex organizations and has a very high cost impact,” Herman says. “Companies need this complexity to face off against the market, but they can’t handle it administratively and it often comes at a high cost that customers won’t pay.”


    With complexity and costs moving well beyond what many companies can manage, some organizations are now pushing for greater simplicity in their sales compensation plans. This push begins with re-evaluating which positions should be included in variable pay plans.


    Setting the appropriate level of pay at risk hinges on the extent to which the salesperson can influence the transaction. In some cases, the sale may require substantial skill and effort. In others, the brand name may drive the business to the agents.


    Herman notes that setting the level of pay at risk also depends on company-specific factors. Pay philosophy plays a role. “Some companies want to provide significant upside to high performers; others are reluctant to push variable pay beyond a certain level,” he says.


    In other cases, organizations are trying to not just simplify their plans but also to exert more control and ownership over the client. “The more pay is at risk, the more the sale representatives are going to try to hold on to their clients and protect their clients as their own,” Herman notes. Reducing the risk level can reinforce the company’s direct relationship to the customer.


    Smaller firms may need to reduce their fixed costs by increasing the variable portion of pay. Companies that are trying to build rather than simply hold market share may also need higher levels of pay at risk.


    The level of pay at risk also reflects industry conditions. In industries where margins are not significant, large variable payouts are not viable. In addition, industries with long down cycles may need to limit the variable portion and pay higher straight salaries to employees to help them maintain a more consistent cash flow. In every case, Herman cautions, companies need to be aware of compensation levels at both traditional and nontraditional competitor companies.


    Herman notes that levels of variable pay should also reflect the firm’s ability to measure the relevant factors in evaluating performance. If employees believe that the factors used to determine variable pay are not relevant or measurable, the plan will not be effective.


Altitude markers
   Companies can watch for specific signals that the portion of pay at risk is too high. Herman warns that an uptick in turnover may be a marker. In addition, if there is no natural bell curve in performance ratings, the company may need to re-evaluate the levels of pay at risk.


    If commission costs are too high relative to sales revenues or if there is an adverse reading in this metric, the company may need to take a second look at the levels of variable pay. “At the end of the day, any plan must have strong governance surrounding it that monitors the plan and the data so changes can be made close to real time and before the plan is off kilter with the original intentions,” Herman says.


    Excessive levels of pay at risk often undermine strong customer service. Herman reports that many companies are changing their sales models to incorporate account managers who are responsible for the overall well-being of accounts and product sales managers who focus on closing the sale.


    Adding a bonus plan for sales representatives who maintain high standards for customer satisfaction can be effective if solid performance measures are in place. “Customer service is based on a really subjective set of measures,” Herman says. “If you can capture customer service, a bonus tied to goals is a great way to handle it.”


    The general guidelines apply for setting levels of risk, regardless of the level of base pay. “It takes a higher level of skill to sell yachts than to sell wireless activations,” Herman says. “Finding the right level of risk can drive revenue-generating behaviors across different skill sets.”

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New Emphasis on First Impressions

If you were to look over the shoulder of new employees at Sun Microsystems these days, there’s a good chance that they will be hunched over their computers, playing a game called “Dawn of the Shadow Specters.”

   Plunged into a futuristic world, the player is battling forces of evil that are trying to destroy Sun’s network.


   While the new hires may look like they’re wasting time, they are actually learning about Sun’s core businesses and the company’s mission and vision. The game is one way that Sun is revamping its employee “onboarding,” which is the talent management buzzword for how organizations help new hires transition into their jobs. At a time when Sun is losing talent to companies like Google and MySpace, the organization is making new hires a top priority in order to improve employee retention and productivity, as well as recruit top talent and strengthen its corporate brand.


   Before Sun launched its new onboarding program in October 2007, an employee’s first day was typical for what you would see at many companies today. The new employee spent most of it filling out paperwork. The new hire’s workspace, phone, computer and security badge may or may not have been ready. Some new employees were waiting two weeks before they had access to e-mail. Almost half of Sun’s 34,000 employees work remotely, so many new hires wait weeks or months before meeting their managers.


   “We weren’t making a great first impression,” says Karie Willyerd, chief learning officer at Sun, which is based in Santa Clara, California. “The competition for talent is really tight. People have choices about where they work, and the first few days are particularly vulnerable. They can make them feel good about their choice, or it can put a doubt in their mind. We wanted to make a better first impression.”


   Sun is not alone in wanting to improve its onboarding approach. Some companies are starting to automate the administrative end of their onboarding programs to ensure those first-day mishaps don’t occur. But others are looking at onboarding more broadly, as an opportunity to integrate employees into a company’s culture, improve company image, gather employee feedback and even train employees.


   How employees are treated during the first few weeks on the job affects retention, satisfaction and productivity, says Brian Platz, COO of Winston-Salem, North Carolina-based SilkRoad Technologies. SilkRoad is one of a handful of talent management software vendors that in the last few years have come out with Web-based products that automate onboarding processes. Within six months on the job, 86 percent of new employees have made up their mind about whether they’re going to stay with their company, according to a new survey of almost 800 human resource managers by Aberdeen Group.


   “What does it say when you’re not ready, and the new employee is just sitting there with nothing to do on the first day?” Platz says. “It’s a terrible first impression, and the impact never goes away.”


   At Sun, the onboarding process now starts as soon as new hires accept their job offers. They can log on to the company’s new-hire Web site, where they learn about Sun by playing one of two video games.


   “This started with the need to target college graduates who grew up with computers, and the missing generation we have from not hiring as much during the dot-com bust,” Willyerd says. “We knew we wanted to engage them and capture their imagination.”


   Sun also is using the new site as a recruiting tool, so most of it is open to the public. New hires can watch a welcome video from CEO Jonathan Schwartz and connect with other employees via social networks by posting profiles and having conversations. New hires fill out their W-4s, I-9s and other forms online and check off what they’ve completed on a task list. Their hiring managers can monitor the whole process to make sure everything is set for day one.


   Sun also wanted to make onboarding more “warm and fuzzy,” says Brandon Carson, chief instructional designer for collaborative learning at Sun Learning Services, one of Sun’s core businesses. When Carson started at Sun a year ago, he didn’t meet his manager for three months, and after a short orientation, he felt like he was on his own.


   “We need to make sure our process is welcoming, high-touch and sets the stage for Sun as a place to have a career, not just another job,” he says. New hires now receive notes thanking them for joining Sun with a packet of flower seeds attached, symbolizing growth at the company. All new employees get a backpack with the Sun logo, replacing the old employee gift—a thin Sun T-shirt, which usually faded after a few washings. The onboarding paperwork has been updated with hip, cooler colors.


   “Onboarding is about image too,” Willyerd says. “Before, we weren’t sending a message that we were a high-tech company. Sun is a 25-year-old company. The perception is that it’s not as hip a place to be now. Now it’s Google or MySpace. Part of this is revamping our own image to be appealing to the marketplace.”


   Sun’s attention to onboarding is not the norm, Platz says. “Most companies are doing the minimum. It starts and ends on day one with a quick orientation, filling out forms and watching a video,” he says.


   Onboarding programs need to start the moment an offer is accepted. The weeks between accepting an offer and starting work are critical because some new hires are still interviewing at other companies and may jump ship. Onboarding should continue until the new employee is productive. For an accounts payable clerk that may mean two weeks; for a new salesperson selling a complicated product, it could be six months, Platz says.


   El Paso Corp., a Houston-based provider of natural gas and related energy products with almost 5,000 employees, is working on better follow-up with new hires. New employees attend an orientation the first day and then another session 30 days later. During the first week, they receive an e-mail with helpful links—everything from ordering business cards to joining the local credit union.


   The company also is seeing new hires become productive more quickly by using a Web-based onboarding solution from Taleo, a software vendor based in Dublin, California. Before El Paso’s onboarding program went digital in April 2007, new employees waited up to two weeks to get computers.


   “New employees were here, but they were just sitting around doing nothing because they didn’t have the tools to work,” says LaToya Daily, a systems administrator. Now, most new hires have their workspace, computer and access to the network on the first day. In the past, paperwork took up to two weeks to complete; turnaround is now two to three days.


   More important than checking off items on a to-do list, onboarding is about creating employee loyalty from the outset, Platz says. “Onboarding needs to focus on continuing to sell the employee on the company,” he says. Zimmerman Advertising, a Fort Lauderdale, Florida-based company with 1,000 employees, uses onboarding to immerse new hires into the company’s culture, says Carmen Marston, vice president of human resources. “There’s a bigger picture of what onboarding can do for you,” Marston says. “For us, it’s about new employees understanding the company, getting excited about the company and feeling engaged before their first day.”


   Once new employees accept their offers, they log on to the new-hire Web site and learn about the company’s philosophy, clients and leadership. The company’s themes of “doing what it takes” and “never saying no” are repeated throughout the site. On their first day, new hires meet for an hour with CEO Jordan Zimmerman, who talks about how he built the company. Training also is a part of onboarding. New hires get a 30-, 60- and 90-day training checklist that must be completed and signed by their supervisors. Zimmerman is adding feedback surveys to the Web site as well.


   “I think that a lot of human resource professionals know the term onboarding, but I think where a lot of them fail is that they think of it only as a tactical solution to their issues of filling out forms and getting computers set up for new employees,” Marston says. “They’re not looking at the bigger opportunity … to help new employees understand who you are as a company so they are prepared on the day they start to integrate into the company.”

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Tip Sheet for Executive Background Checking

Legal quandaries can arise when conducting in-depth background checks. Below are some key tips for all companies to consider during the process of hiring any employee, especially employees in executive positions.


  • Complying with federal and state anti-discrimination laws. Avoid asking any questions regarding protected categories or applying background check requirements in a discriminatory manner.

  • Employers and HR managers should refrain from asking applicants about their disabilities or ailments, sex, national origin, pregnancy or plans to have children, religious beliefs and age. These are all federally protected categories.


  • Employers should not apply background check requirements disproportionately to candidates of certain protected classes. A general requirement covering all employees to certain positions will help employers avoid charges of discrimination.


  • ○Employers should also be aware that Equal Employment Opportunity Commission (EEOC) guidelines caution that employers may violate Title VII of the Civil Rights Act of 1964 by not hiring an individual on the basis of an arrest record. The EEOC has noted that, nationally, African-Americans and Hispanics are arrested in disproportionate numbers to whites, and thus barring individuals on the basis of an arrest record alone disproportionately affects members of that protected class. Thus, employers rejecting a candidate are cautioned against basing the decision to not hire an applicant solely on an arrest record. The EEOC suggests employers look to the nature and gravity of the offense the individual was arrested for; the amount of time since a conviction or arrest; and whether the offense relates to the requirements of the position in question.


  • Be cognizant of categories protected by state, city and local statutes. For example, sexual orientation and marital status are categories frequently protected by state, city or local statutes.


  • In the current environment, discrimination on the basis of political beliefs may also be protected by state, local or city ordinances. As tempting as a political discussion may be with an applicant, try to avoid the topic.


  • Avoiding tort liability. Companies can avoid liability for negligently hiring a high-level executive simply by acting in a reasonable manner while carrying out the screening process.

  • The negligent hire cause of action arises where an employer is negligent in hiring or retaining an incompetent or reckless individual the employer knows or should know was unfit or incompetent. Where this unfit individual acts in a manner to injure another individual, the employer that hired the individual opens itself up to liability. These cases have been on the rise in recent years and have typically involved lower-level employees.


  • Equally plausible, however, are suits against companies for failing to thoroughly investigate individuals who will exercise considerable control and discretion over company funds and the direction a business will take. This concern is even greater in the wake of 2002’s Enron and WorldCom scandals. Shareholders of companies suffering from mismanagement at the hands of executives may be more willing to sue for negligently hiring a bad CEO or executive.


  • Employers can avoid liability merely by conducting thorough investigations of the background of a potential executive and acting reasonably when interviewing candidates for a position.


  • Complying with corporate governance laws. In the wake of the Enron and WorldCom scandals, Congress passed the Sarbanes-Oxley Act of 2002, which established standards for corporate accountability and financial reporting.


  • Section 404 of the act imposes upon corporations a duty to institute certain internal controls and to take steps necessary to ensure that high-level employees are behaving ethically and honestly.


  • The Committee of Sponsoring Organizations of the Treadway Commission developed a widely accepted framework to help corporations comply with Section 404. COSO recommends background checks on any individual in a position of trust and anyone with direct access to valuable corporate information and assets. COSO further recommends that these background checks cover educational and employment backgrounds and any criminal history. Thorough documentation of this screening process is also highly recommended.


  • The more rigorous standards applied to those publicly held corporations covered under the Sarbanes-Oxley Act may soon become the standards expected of private companies as well. Those companies not covered under the act are advised to undertake similar rigorous background checks of potential executives.


  • Complying with laws protecting the rights of applicants. The Fair Credit Reporting Act comes into play when investigating a candidate’s financial and credit records.

  • FCRA applies only if an employer obtains information from a third-party reporting agency. The act’s protections extend to credit reports, criminal record reports and driving records.


  • Employers must provide notice to an applicant that protected information will be obtained. They must obtain written consent from the applicant for the background check, which must be separate from any signatures on an application or handbook. They must disclose any negative information obtained and provide the candidate with the report, the name of the consumer reporting agency, and a fair opportunity to contest the report.


  • The FCRA protections do not apply to candidates who will be earning $75,000 or more.


  • Any employer obtaining credit and consumer information on an applicant without complying with the requirements of FCRA faces liability for damages, fines, and possible imprisonment.