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Layoffs Coming, and in Large Numbers

Corporate executives are poised to start making substantial cutbacks in their staffing, according to a new forecast by employment consulting and legal firm Career Protection.


In fact, the firm is predicting a 37 percent increase in layoffs this year compared with last year, based on a survey of more than 1,300 corporate executives and senior-level officials that was conducted earlier this month.


The layoff forecast is the worst in the past five years, according to Career Protection officials. They also indicated that the firm has already been “inundated” with inquiries from employees at a number of companies that announced layoffs earlier this month, including Bear Stearns, Chrysler, Citigroup, Ford, Covidien, General Motors, IndyMac and Sprint Nextel.


If there is a silver lining, it’s that the executives surveyed say that they do intend to provide severance packages to employees whose positions are eliminated. Broadly speaking, however, these severance packages will not be as generous as those that have been paid out in recent years, according to the Career Protection survey.


Filed by Mark Bruno of Financial Week, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.

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Study Reveals Gender Gap in Pension Benefits

Employment-based pensions received by men typically are much higher than pensions received by women, but the gap is likely to narrow somewhat in the future, according to a study released Thursday.


The study by the Employee Benefit Research Institute in Washington found that 44.6 percent of men age 65 and older received an employment-based pension during 2006, with a median benefit of $17,200 annually. By contrast, only 28.4 percent of women received a pension, with a median benefit of $11,142 a year.


The reason for this gender disparity is that older women tend to spend less time in the workforce than their male counterparts, as well as have lower-paying jobs, according to the EBRI study. Those circumstances directly affect the size of their pension, since the benefit is largely based on income and years of service. Additionally, defined-benefit plans typically require employees to work five years before they are fully vested in a benefit.


While younger women still, on average, spend less time in the labor force than younger men and tend to earn less, today’s younger women on average will work longer than women who were 50 or older in 2006, according to the study.


As a result, younger women will be more likely to earn a pension and the amount they earn will increase over time as younger generations of women retire, the study found.


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

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Signing Bonuses for College Grads Likely to Climb in ’08

It appears more employers are willing to dig deeper to lure skilled young talent, according to the National Association of Colleges and Employers’ Job Outlook 2008 survey.


Fifty-five percent of the 276 employers participating in the annual poll plan to offer signing bonuses to new college grads—almost a double-digit increase from 2007, when 47 percent of respondents said they would offer bonuses.


“More companies believe that offering signing bonuses gives them an edge in this competitive field,” says Andrea Koncz, employment information manager at NACE. The Bethlehem, Pennsylvania-based association published the report January 25.


Not only is the number of employers offering signing bonuses on the rise, the dollar amount also is climbing. Signing bonuses will average $4,450, according to survey respondents, up from last year’s average of $3,568.


The trend doesn’t mean employers are indiscriminately offering signing bonuses, Koncz says. Two-thirds of survey participants expect to be selective when assigning bonuses. Factors such as college major and a candidate’s degree level will play a role.


Koncz says employers in IT and computers are most likely to provide signing bonuses. “There is a shortage of graduates in math, engineering and sciences,” she says. “They’re going to have to make themselves as attractive as possible to this audience.”


Signing bonuses may be particularly important for companies that are not in the business of technology and innovation but still need IT talent.


“Science and engineering majors are going to naturally gravitate to the employers they consider cool and hip, like Google and Apple,” says Carol Barber, executive vice president at Bernard Hodes in Inverness, Florida. “Financial incentives could help the less cutting-edge employers make a compelling case for themselves.”


Increased signing bonuses don’t surprise Heidi Hanisko, director of client services at CollgeGrad.com, an online job search service for college students and recent grads in State College, Pennsylvania.


“Companies are constantly telling us how difficult it is to attract and retain young talent,” she says. “Candidates are responsive to financial rewards.”


Koncz says there’s a likelihood that the number of employers offering signing bonuses this year is greater than what the Job Outlook 2008 survey is projecting.


In 2007, 47 percent of respondents planned to offer signing bonuses; ultimately, 54 percent used them. The year before, 44 percent of survey participants predicted they would offer bonuses, and 47 percent wound up doing so, she recalls.


The spate of signing bonuses looks strong now, but that could change if a recession hits, says Steven Rothberg, CEO of CollegeRecruiter.com, a Minneapolis-based job board.


Employers could pull back, particularly because college graduates tend to be recruited for entry-level positions.


“Entry-level employees are the first to get hit during a recession and the last to rebound,” Rothberg says. “We’ll see what happens in the coming months.”


—Gina Ruiz

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Congress Approves Bill to Expand FMLA for Military Families

Legislation given final congressional approval Tuesday, January 22, would expand the federal Family and Medical Leave Act to allow employees to take up to 12 weeks of unpaid, job-protected leave when a spouse, son, daughter or parent is on active duty in the military or is called up for active duty.

Under a provision tucked into a broader Defense Department authorization measure, H.R. 4986, leave for close relatives of employees on active duty or called up for military service in support of a contingency operation could be taken for any “exigency,” as defined by regulations.

That expansion would be the first since Congress passed the FMLA 15 years ago this month. The act requires employers to offer employees up to 12 weeks of annual leave after the birth or adoption of a child, to care for a child, parent or spouse who has a serious health condition, or when an employee has a serious illness.

Additionally, the legislation, which the Senate passed Tuesday on a 91-3 vote after the House cleared the measure in December, would allow employees to take up to 26 weeks of leave under the FMLA—up from the current 12-week annual maximum—to take care of a child, parent or spouse who incurred an injury during military service when that injury results in the service member being unable to perform his or her duties.

The FMLA expansion would go into effect as soon as President Bush signs the legislation, which is expected. That will mean affected employers will have to change their FMLA policies immediately and communicate the changes to employees.

“This is a rather big deal. You have to be ready to deal with this,” says Fran Bruno, an attorney with Mercer LLC in Washington.

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

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Ready for a Crash

Is the economic sky really falling? It’s hard to say with certainty, but you would have to have been living on a desert island to miss the very real signs of economic turmoil occurring in the world today. If you are a business-savvy HR leader, then, today might be a good day to begin shifting your HR strategy to better fit these unsettled times.


    Unfortunately, most HR departments find it difficult to be agile. There are many excuses that can be offered for that rigidity, and nearly all of them relate back to the fact that corporate HR strategies are overly focused on transactional HR and compliance. Business strategies are purposely designed to flex whenever the economic environment shifts from expansion to contraction. Most HR departments, on the other hand, don’t flex. They simply find a way to do everything they were doing before the contraction—just with less money (something that leads many executives to wonder whether the original budget wasn’t inflated to start with).


    Unfortunately, there are signs everywhere of an upcoming downturn, including fluctuating oil prices of about $95 a barrel, layoffs in the auto, banking and pharmaceutical industries, and lingering fallout from the bursting of the credit bubble. The collapse of the subprime lending industry is rapidly triggering a broader credit crisis, as illustrated by the massive financial problems and CEO resignations at Merrill Lynch, Citigroup and Bear Stearns. (If the CEO must be changed, shouldn’t the HR approach be changing also?) Regardless of your personal prediction of exactly when a downturn will come, it’s important that you have a plan.


    There are many elements of your HR strategy that should shift during a downturn. When economic conditions threaten growth plans, employees begin to shift their interest toward increased job security, resulting in less pressure on you to provide cost-of-living adjustments or to build outrageous compensation packages to attract and retain talent.


    Now that the economy is cooling, with unemployment in December increasing to 5 percent, the relative supply of labor available to firms is increasing. This provides smart HR managers with an opportunity to cherry-pick from this expanded candidate pool, while simultaneously beginning a process for identifying and then releasing their own poor-performing employees. It’s time to trade up, in other words.


    Another shift that should occur when preparing for a downturn is an increased emphasis on maintaining a contingent workforce. This provides you with the opportunity to more rapidly shrink or expand your workforce to meet your firm’s changing business needs. By expanding the amount of work that you outsource, as well as increasing the percentage of part-time and contract workers that you employ, HR gives managers the flexibility they need to quickly reduce their workforce by releasing contingent employees.


    Although HR professionals are almost universally resistant to even discussing the need for layoffs, an effective overall strategy needs a component that allows labor costs to be reduced quickly. This often begins with HR conducting an assessment of how much “fat” there is in the headcount. If appropriate, HR can conduct a mock layoff to identify the positions that have the highest probability of being cut. In addition to cutting costs, the HR strategy must also have a component designed to increase worker productivity and output.


    The best approach here is for HR to work with the CFO to identify a target “revenue per employee” number. This figure indicates the approximate value of the output produced by the average worker. HR can then work with individual managers to increase employee productivity through a number of approaches, including improved training, better metrics, programs for increasing innovation and an improved best-practice sharing process among departments.


    It’s almost impossible to successfully make the case that it’s perfectly acceptable for HR to drone along without a contingency plan for an economic downturn. If you want to be a business partner, then you have to act like a businessperson. That means rewriting your current HR strategy and including in it plans that cover each of the most likely “What if?” scenarios. Adding this agility component will clearly demonstrate to senior managers that HR, just like marketing, finance, product development and supply chain, has an effective plan of action for any upturn or downturn—whenever one might occur.


Workforce Management, January 14, 2007, p. 34 — Subscribe Now!

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Weeding Out the Passive-Aggressive, the Liar and the Blamer

B race yourself. It’s a new year. The holidays are behind us, with not many festivities to look forward to for a few months. The bills are coming in. Everyone has a cold and people are cranky. Here’s one more piece of news that will make your head hurt: Chances are pretty good your company is going to get sued in 2008.

    There are hundreds of ways an employer can get sued, and sooner or later, your ticket is going to be punched. In 2006 alone, the EEOC received more than 27,000 charges of race discrimination. Gender discrimination claims (including sexual harassment claims) represent nearly one-third of all filings with the EEOC over the past 10 years.


    Experts report that claims of family responsibility discrimination, in which workers allege they are treated worse at work because of their responsibilities in caring for children, elderly parents or sick relatives, have increased nearly 400 percent in the past decade. And legislation is pending that, if passed, would expand the statute of limitations on wage claims, prevent discrimination based on sexual orientation and gender, and prohibit employers from using genetic information in employment discrimination.


    But to me, the skyrocketing EEOC charges and employment litigation seem somehow out of whack with reality. It is hard for me to believe all this discrimination is taking place. As always, there are some exceptions to the rule. The recent case in which supervisors allowed an electrical wire in the form of a noose to hang outside a workshop and let graffiti espousing racial hatred remain in workshop bathrooms is one example of a company that deserved everything it got (substantial punitive damages were awarded to the plaintiffs). Likewise, the woman with severe allergies who had a life-threatening reaction each time air freshener was sprayed in her vicinity deserved to win against her employer, who insisted on keeping the timed air-freshener units blasting several times a day.


    Here’s my point: I’ve been defending employment discrimination cases for more than 30 years. I spend an enormous amount of time sitting in depositions and in courtrooms listening to employees complain about their jobs. And after 30 years, there seem to be three behaviors common to plaintiffs: They demonstrate passive-aggressive behavior; they exaggerate or lie; or they refuse to accept personal responsibility for their own poor performance. Sometimes plaintiffs have all three behaviors. Other plaintiffs may exhibit only one. But the fact is these three behaviors cause trouble in the workplace:


    The Passive-Aggressive. The American Psychiatric Association has dropped this behavior pattern from the most recent Diagnostic and Statistical Manual of Mental Disorders, but anyone who has supervised someone in the workplace knows the pattern when they see it. The employee does not respond to the supervisor’s e-mail request for information without several e-mail reminders. The employee who says perkily, “Can do!” to a task request, but then performs the task poorly in an angry fashion. The employee who accepts an assignment, but then stands in the coffee room and complains bitterly to co-workers about his heavy load. You know it. You’ve seen it.


    The Exaggerator/Liar. Employees who exaggerate or outright lie are a huge problem. Oftentimes, those folks create more uproar because of their lies than the actual problem ever caused. Just ask Richard Nixon or Bill Clinton or Marion Jones. Lying and exaggerating are common traits among plaintiffs. A talented fudger can turn a single inept comment into a raging lawsuit. Here’s an example:


    A few years ago, I defended an employer against 16 plaintiffs who were alleging race discrimination. Plaintiffs’ Exhibit 1 was a poster titled “Five Rules for Raising Monkeys.” Included among the rules were “monkeys should be fed or shot” and “the monkey population should be kept below the maximum number the manager has time to feed.”


    The significance of the “monkey poster” grew larger with each plaintiff who testified. Every one of them had seen it. Every one knew without doubt that the poster was clearly a racial slur against the African-American employees in that facility, and their emotional damages were enormous.


    On cross-examination, however, the jury learned the truth: the “monkey rules” were an excerpt from an article written by Kenneth Blanchard (of One Minute Manager fame) and published in the Harvard Business Review describing management tips for dealing with employees who dumped problems and work on other employees’ desks. Race had nothing to do with it. Plaintiffs’ Exhibit 1 disappeared from the courtroom and was not seen again.


    Another example of an employee/plaintiff putting a spin on an innocuous action is the ex-employee who, in order to show that her boss was arrogant and self-centered, claimed that he had given a picture of himself to each member of the office staff at Christmas. Not quite. The supervisor had given each employee an expensive sterling silver picture frame and, to be cute, included in the frame a Xerox of one of his baby pictures. Now, that may have been a silly thing to do, but it didn’t show the arrogance and animus the employee hoped it would.


    The Blamer: I’m no statistician, but based on my experience in litigation, there is a direct correlation between someone becoming a plaintiff and his or her failure to accept personal responsibility for poor performance. Workers who blame co-workers, their supervisor, their job assignment or their lack of training for their own poor performance often take the next step of blaming a supervisor and claiming discrimination or retaliation instead of admitting poor performance.


    So what’s an employer to do? Screening to weed out these behaviors is difficult. Job and personal references are not always helpful. If the candidate was a problem at her previous job, chances are good that the former employer only wants to put the sorry experience in the past and may be afraid to be candid in her assessment of the applicant’s abilities. A discrete inquiry as to the applicant’s education and previous jobs may, however, yield substantial information to determine if an applicant has exaggerated his past. Anyone who claims to have a degree they don’t or fabricates previous job history will no doubt exhibit these negative behaviors in the new workplace.


    A supervisor’s first assessment of a candidate is at the initial interview. Remember that interviews are inherently stressful and it may be hard to read a nervous applicant, so schedule plenty of time for each interview. Use standard questions, remembering to avoid direct or indirect questions regarding age, sex, religion or other protected categories. But don’t settle for stock answers. Probe applicants with follow-up questions on how they would handle a specific situation, what they would have said and what they would expect the next step to be.


    Identifying the “it’s not my fault” behaviors often takes some time and sometimes cannot be accomplished in the initial interview. Watch for telltale signs in speech and behavior. My experience in interviewing job candidates is almost identical to those frequent occasions when I am picking a jury. A potential juror who refuses to accept responsibility for his own actions will more likely than not side with a plaintiff who complains of discrimination when counseled for performance problems. Likewise, a candidate who complains about a previous employer may be telling you something about his inability to accept responsibility.


    When interviewing, ask the prospective employee to identify some problems in his previous workplace and the cause of the problems. His answer will go a long way in identifying the candidate’s score on the personal responsibility scale. In jury selection, I find that people with a high sense of personal responsibility make good jurors, and quizzing prospective jurors about their accomplishments (whether keeping their checkbook error-free or rebuilding a family room) all help identify individuals with a high sense of personal responsibility. The same holds true for employees: the higher the employee’s score on the personal responsibility scale, the less likely that litigation will occur.


    Identifying the passive-aggressive types, sorting out the liars and exaggerators, and avoiding the blamers will help employers reduce their litigation risk in 2008 and beyond.

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Kennedy Wants to Move Pay Discrimination Bill Forward

Capitol Hill attention is focused on cobbling together an economic stimulus package that Congress hopes will help stave off a recession.

Following that bill, Sen. Edward Kennedy, D-Massachusetts, wants to move to the top of the Senate agenda a pay discrimination measure designed to overturn a recent Supreme Court ruling.

Kennedy’s bill, the Fair Pay Restoration Act, would allow workers to file pay discrimination cases within 180 days of any paycheck they receive that has allegedly been reduced because of bias.

Last spring, a 5-4 Supreme Court majority ruled that the federal statute of limitations requires workers to take action within 180 days of the original discriminatory decision.

Kennedy chaired a Senate Health, Education, Labor and Pensions Committee hearing about the bill on Thursday, January 24. The next step will be either a committee or Senate floor vote after the Presidents Day recess. The bill is on the Senate calendar, according to Kennedy.

“We’re going to get action on it, one way or another,” Kennedy said after the hearing.

It’s too early to tell whether Senate Republicans will filibuster the bill, as they did last year with a measure that would make it easier for workers to organize a union.

Republicans “wouldn’t be opposed to alternatives” to Kennedy’s bill, according to a GOP committee staffer who requested anonymity because he’s not authorized to speak on the record.
Kennedy’s measure is a response to the controversial Supreme Court ruling in a case involving Lilly Ledbetter, a former floor manager at a Goodyear Tire & Rubber Co. plant in Gadsden, Alabama.

Ledbetter, who started with Goodyear in 1979, claims the company paid her less than male co-workers for the same job over the course of her nearly 20-year tenure. When she retired, Ledbetter was paid $3,727 per month, while the lowest-paid male manager received $4,286.

Ledbetter filed a claim with the Equal Employment Opportunity Commission in March 1998—after she got an anonymous tip about the pay disparity. A jury ruled in favor of Ledbetter, awarding her back pay and $3 million in compensatory and punitive damages.


But the Supreme Court held that Goodyear was not liable because Ledbetter did not take action within 180 days of the first instance of discrimination.


In a scorching dissenting opinion, Justice Ruth Bader Ginsburg said that the court majority failed to understand the realities of today’s workplace—where pay information is secret and evidence of discrimination builds up over long periods of time. She challenged Congress to clarify the federal statute of limitations.


On July 31, the House passed a bill similar to Kennedy’s in a 225-199 vote. President Bush has vowed to veto the bill.


“Ledbetter was a textbook case of pay discrimination,” Kennedy said at the January 24 hearing. “The court’s decision gives employers free rein to continue such discrimination, and it leaves workers powerless to stop it. The result defies both justice and common sense.”


Corporate advocates warned that the bill would make companies liable for stale cases that stretch back decades, making it difficult to gather evidence and mount a defense. In Ledbetter’s case, one of the potential witnesses, her supervisor, died before the trial.


Eric Dreiband, a lawyer with Akin Gump, testified that the bill would force companies to implement “incredibly costly record keeping,” foster “unanticipated and potentially limitless monetary penalties,” and create pension liability.


“Everybody here is opposed to discrimination in any form,” Sen. Johnny Isakson, R-Georgia, said after the hearing. “I’m also opposed to opening the door in perpetuity to frivolous lawsuits.”


Opponents of the bill assert that Ledbetter dallied after her first inkling about pay discrepancies in the early 1990s.


In her Senate testimony, Ledbetter said she had suspected that she was making less than her male counterparts but couldn’t make a case until she received the anonymous note about company pay scales in 1998.


“There is no way I would have waited,” if she had known sooner, she said. “I would have wanted that time-and-a-half and overtime pay.”


As Ledbetter visits Washington to promote the bill inspired by her Supreme Court case, she knows that it won’t directly benefit her.


“Goodyear may never have to pay me what it cheated me out of,” she said. “But if this bill passes, I’ll have an even richer reward because I’ll know that my daughters and granddaughters, and all workers, will get a better deal.”


—Mark Schoeff Jr.

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Court Rules Workplace Safety Laws Independent of ERISA

The 5th U.S. Circuit Court of Appeals has ruled that the Employee Retirement Income Security Act does not pre-empt state law claims regarding unsafe workplaces.


Le Ann McAteer, a former employee for Silverleaf Resorts Inc., worked as a landscaper at the Holly Lake Ranch in Texas, about 100 miles east of Dallas. Silverleaf, which is based in Dallas, does not subscribe to Texas workers’ compensation insurance, but does provide benefits to its employees through the Silverleaf Club Employee Injury Benefit Plan, which is governed by ERISA.


The plan provides no-fault benefits to employees in the event of a job-related injury and requires arbitration of any disputes regarding its benefits.


According to court documents, McAteer claimed she suffered a job-related injury when she tripped over a cement parking block while using a string weed trimmer in July 2005. She fell on her back and was later diagnosed with a herniated disc that required surgery.


McAteer did not report the injury to Silverleaf and left the company in August 2005. She notified Silverleaf of the injury in September 2005.


McAteer’s claim was denied by Silverleaf because she did not report it in a timely manner, did not she seek advance approval for her medical treatment and did not use a plan-approved physician, according to court documents.


In January 2006, she filed a lawsuit against Silverleaf in the U.S. District Court for the Eastern District of Texas, alleging that Silverleaf was negligent by failing to provide her with a safe place to work when it assigned her to work in a parking lot when the company knew parking stops were hazardous; failing to warn her of the potential hazards; and failing to inform her of employee safety measures to help prevent the accident.


The district court ruled that ERISA barred her injury claims and dismissed her case.


U.S. Circuit Judge Edward C. Prado’s ruled on January 15 that in similar cases previously, state law negligence claims for failing to maintain a safe workplace are independent of ERISA.


In his opinion, Judge Prado said that McAteer’s claim under state law was preserved even though she added an ERISA claim to her action after it was dismissed by the district court. Prado ruled that McAteer’s “state law negligence claims in this case are not pre-empted by ERISA and must be remanded,” and that “she did not make her argument moot by adding an ERISA claim,” thus reversing and remanding the district court decision.


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

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Despite the Pain, They Train

Persuading employees to embrace new training is challenging even during times of prosperity. Imagine their reluctance when your company makes deep, painful job cuts.


    Such is the dilemma facing LandAmerica Financial Group Inc., one of the nation’s largest title insurers. The company, based in Richmond, Virginia, provides title insurance and related transaction services to mortgage lenders, real estate developers and brokers, attorneys and homebuyers. Fueled by a sustained homebuilding boom, LandAmerica during the past decade evolved from a regional niche player in the southeastern U.S. to a Fortune 500 company. Revenue has doubled since 2000, from $1.8 billion to more than $4 billion in 2006 (full-year financial results for 2007 were not available at press time).


    At one point, its workforce swelled to 13,500 people. Like many of its financial brethren, however, LandAmerica is feeling the effects of the nation’s ongoing mortgage fiasco. Real estate has gone from robust to bust. Although always cyclical, market conditions seldom have been as devastating as they are now. Languishing home sales are triggering a spate of mortgage-related job cuts across the United States. LandAmerica has slashed about 2,400 jobs during the past year, including 1,100 layoffs announced in August.


    Even as the housing market continues its plunge, LandAmerica hopes to withstand the onslaught by steering employees into well-defined career paths. Heading into 2008, employees will be required to begin mapping out individual career plans, guided by clearly established performance objectives for each job and job family.


    For the first time, LandAmerica is gathering comprehensive data on competencies and skills gaps. It will use the data to design training that lifts employee performance. Training resources delivered through LandAmerica University, the company’s online learning and development center, will connect the dots between learning, career growth and the company’s financial results, according to the company.


    “It is an effort to ensure that our employees know what is expected of them, and how they can progress and develop,” says Susan Sinkiewicz, the company’s vice president of talent and learning resources.


    The approach marks a huge step forward for the company and it is prompted by two factors, both related to the need to better assess the talents and skills of the organization. First, LandAmerica realized about four years ago that a large percentage of employees soon would be eligible to retire. Finding replacements is no easy matter. Second, the company’s workforce is spread across three continents. In addition to the U.S., LandAmerica operates branches in Canada, Mexico, Central America and South America.


    The company’s origins date to October 1991, when Universal Corp. spun off its Lawyers Title Insurance Corp. subsidiary. The new company, named Lawyers Title Corp., went on to acquire two other title insurers: Commonwealth Land Title Insurance Co. and Transnation Title Insurance Co. The combined entities later were renamed LandAmerica Financial Group, which serves as a holding company for a host of subsidiaries.


    Until recently, the different companies retained a fair amount of autonomy, but LandAmerica wants to digest its separate holdings into a unified operating company. The business objective is to get its 900 offices to follow a set of uniform business procedures. LandAmerica needs to provide “superior customer service all the way from Arizona to New York” and beyond to remain competitive, Sinkiewicz says.


    “Four years ago, we made learning and talent development a priority. But we didn’t want to just create a training department; we wanted to embed active learning into our training,” Sinkiewicz says. “To do that, we needed know where our employees stood. That’s data we didn’t have.”


    Part of the problem stems from the highly fragmented nature of the escrow and title business. Much of the work traditionally has been processed by smaller mom-and-pop businesses. As LandAmerica began acquiring other companies, it also inherited their problems. For one thing, performance reviews often were lacking or inconsistent, making it impossible to pinpoint areas of deficiency when planning for succession.


    Even worse, LandAmerica lacked a systematic way to gather and assess data about employee performance. In particular, the company could not determine whether employees were capable of executing the complex tasks associated with real estate transactions.


    “It quickly became apparent that we didn’t have a handle on our talent profile in transaction services,” which are the customer service positions that generate revenue, Sinkiewicz says.


    Rather than customizing a solution on its own, LandAmerica solicited bids from talent management software vendors to analyze jobs by job families, identify critical functions, build a skills inventory and design appropriate training.


    The company eventually settled on human capital management vendor Softscape, based in Wayland, Massachusetts. Softscape is creating a “knowledge warehouse” that would enable LandAmerica’s decision-makers to make a quick inventory of skills and competencies of individual employees.


    “LandAmerica has a lot of cross-fertilization between different lines of business. They’re looking for successors from within—people who can move vertically or horizontally across the organization,” says Christopher Faust, executive vice president of global strategy for Softscape.


    Softscape’s platform analyzes other questions too, such as the implications for succession and workforce planning when key contributors are moved from one business unit to another.


    LandAmerica is introducing the performance- and objectives-driven training in small doses. Eventually, Sinkiewicz says all employee groups will be assessed to spot gaps. The initial pilot is geared to 300 top performers, including 75 executive managers and 225 managers who work at its operating facilities.


    Using 360-degree feedback and targeted performance assessments, they are expected to create a development plan that includes a methodical approach to acquiring the knowledge that LandAmerica deems critical to its corporate strategies. LandAmerica has identified 14 competencies that are essential for employees to develop, including behaviors that describe concepts such as integrity and respect for others. Another important behavioral characteristic centers on continuous improvement, which involves encouraging employees to come up with innovative ways of improving business processes and serving clients.


    Sinkiewicz says the greatest benefit will emerge as the company begins to mine its performance data. Someone trained as an escrow assistant, for example, will be able to see the learning requirements for advancing to the position of escrow branch manager. Likewise, employees who work in the residential side of LandAmerica’s business will be able to see what training they would need if they wanted to pursue jobs in commercial divisions.


    “We don’t push training for training’s sake. What we are pushing is the importance of completing a performance review and an individual development plan that identifies gaps,” Sinkiewicz says.


    Companies facing adverse financial conditions frequently resort to cutting back their spending on employee training—a mistake LandAmerica intends to avoid.


    “We’re not necessarily stepping up our training budget, but we’re not pulling back. We are looking for more efficient ways to do things,” Sinkiewicz says.


    Kerry Patterson, a training and management consultant with Vital Smarts in Provo, Utah, says it’s critical for companies like LandAmerica to have ongoing “crucial conversations” with employees, especially when trying to weather a stormy business climate.


    “Be frank, be honest. Tell them: ‘Look, we don’t have control over the entire market. What we do have control over is an ability to make you a better employee by providing you with training,’” Patterson says.


    LandAmerica should be able to trade on a reservoir of good will among its employees. In 2007, even amid news of layoffs, LandAmerica earned a spot on Fortune magazine’s list of the most admired companies in America.


    The company says more than 75 percent of its employees have used the training resources made available through LandAmerica University. All told, about 20,000 online learning sessions and more than 200 classroom sessions have taken place.


    Early returns on skills assessments also are promising. Faust of Softscape says LandAmerica has been able to reduce turnover by about 10 percent. Most important, the company is holding on to more of its promising young managers.


    Along with emphasizing career paths, the company’s Leadership Academy provides in-depth management training to a select group of leaders. The 20 people who attend each year must be nominated for the program, which is run by the University of Richmond’s Robins School of Business. To be considered, managers must score exceptionally well on annual performance and talent assessments.


    Participants spend one week a year, over a two-year period, at an off-site location, where they tackle strategic issues considered essential to LandAmerica’s growth. The training includes material on relationship-centered leadership, communication, negotiation, evaluating joint ventures, honing financial skills and learning the basics of SWOT analysis—how to size up an organization’s “strengths, weaknesses, opportunities and threats.”


    A comprehensive range of activities deepens people’s exposure to critical issues facing the title and mortgage industry, and the learning doesn’t end after the week is up. The group conducts regular monthly meetings, aided by a facilitator, to gauge its progress toward assigned goals during the year.


    Morton Manassaram exemplifies the push to groom new leaders. A 12-year company veteran, Manassaram joined LandAmerica 12 years ago as an accounting manager in its South Florida branch. Later, he advanced to the position of regional controller.


    Last year, shortly after completing training through the Leadership Academy, Manassaram assumed a new role: corporate performance business partner. The fancy-sounding title entails evaluations of business practices that affect financial performance, including helping managers make fact-based decisions.


    “Retaining employees who are considered high performers, and letting them know that they will have opportunity to grow, is something that’s very important. That’s really the success of the Leadership Academy,” Manassaram says, who estimates about half of the 20 people in his group occupy positions of increased responsibilities.


    Manassaram also is sharing his knowledge with others, having recently taught a one-day Leadership Academy course that illustrates how an employee’s individual performance affects business and financial results.


    Sinkiewicz says the leadership initiative is paying off in new ideas and innovative thinking. “They’re taking the learning and immediately applying it, increasing revenue and reducing expenses.”

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Health Plans Did Not Violate ERISA, New Jersey Court Rules

Six health insurers that allegedly conspired with brokers to steer customers their way in return for hidden commissions did not violate the Employee Retirement Income Security Act, a New Jersey district court judge ruled January 14.


Judge Garrett E. Brown Jr.’s dismissal of the ERISA claims against American International Group Inc., Cigna Corp., Hartford Financial Services Group, MetLife Inc., Prudential Insurance Co. of America and Unum Corp. is the latest ruling in the ongoing consolidated litigation in New Jersey that stems from industrywide investigations into bid-rigging and client-steering allegations.


Brought on behalf of commercial property/casualty insurance policyholders and employee benefit plan sponsors, the litigation centers on allegations that several dozen insurers and brokers engaged in a conspiracy in which they stifled competition by steering clients and fixing prices in violation of the Racketeer Influenced and Corrupt Organizations Act, the Sherman Antitrust Act and ERISA.


In two separate rulings last year, Judge Brown threw out the RICO and antitrust claims against the insurers and brokers, citing lack of factual evidence.


Those rulings are now on appeal in the 3rd U.S. Circuit Court of Appeals in Philadelphia.


In his latest ruling, Judge Brown said the plaintiffs were unable to support their claim that the insurers were fiduciaries under ERISA with respect to the employee benefit plans involved in the alleged conspiracy.


Among other charges, plaintiffs alleged that the insurers breached their fiduciary duty by failing to disclose contingent commissions and other types of compensation on Schedule A of Form 5500, which is provided to ERISA plan participants.


While Judge Brown has dismissed all the claims pending in the class actions, there are still a number of individual plaintiffs’ cases centering on the same issues against the insurers and brokers that were filed in federal courts around the country and subsequently transferred to Judge Brown, noted Mitchell J. Auslander, an attorney with Willkie, Farr & Gallagher in New York, who represents Marsh & McLennan Cos. Inc. in the multidistrict litigation.


Judge Brown noted in his ruling that he will hold a conference call on January 24 to discuss remaining motions and other open issues in the case before the court.


While Judge Brown did not elaborate, Auslander said the court may address remaining individual policyholder cases.


He noted that most of the defendants and plaintiffs-class counsel have taken the position that the individual cases should be stayed pending the appeal in the 3rd Circuit.


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