Category: Archive

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OPM Writes the Book on Government HR Practices

As the Office of Personnel Management developed a modern, strategic human resources function that transcends dozens of federal agencies, it got nearly the entire government on the same page—literally.

    OPM was tapped by the Bush administration in 2004 to overhaul the business of government—actually, to make government think of itself as one business when it comes to human capital management.


    It set about that task by bringing together 24 federal agencies to hash out visions and goals for a standardized, interoperable, government-wide HR function. The talks produced “seminal” reports, says Norm Enger, director of the OPM’s HR Line of Business.


    The foundational document is the Business Reference Model, which describes how the government is being organized around common business areas and the people management processes that support them. Other documents include the Data Model, Performance Model, Service Component Model and Technical Model. Each can be accessed by clicking here.


    “The HR community in the federal sector is very proud that for the first time they have been able to publish the documents,” Enger says.

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Training That Transforms a Job

The partnership between General Motors and Raytheon Professional Services that resulted in the GM Service Technical College and revamped training for dealership mechanics at GM has worked so well that some mechanics have been poached by competitors like the Ford Motor Co.


    Mark Hardman, a service technician with a Cadillac dealership 25 miles north of Detroit, says mechanics have used the automotive training skills they have developed with the help of Raytheon and GM’s training to leave their dealership for jobs with other companies in the auto industry, including as trainers for Raytheon and mechanics and engineers for Roush Fenway Racing and Ford.


    “The training is too good,” Hardman says. “Other guys are getting jobs elsewhere.”


    “Ford wants to take us and put us in their technical departments,” he adds, referring to engineering positions at Ford.


    Mechanics leave in part because the work is grueling, greasy and paid by commission, not by the hour.


    “You have to be trained and experienced to handle anything that comes in,” Hardman says. “Cars get towed in. They’re dead; they don’t run. There’s three feet of snow in the parking lot and you have to push the car in to get paid.”


    Hardman, 30, has worked on Cadillacs for the past 10 years, but he also does his share of oil changes. By the end of the week his knees hurt.


    Colleagues have used their training to get less physically demanding, though lower-paying, jobs as instructors, engineers and technical writers, he says.


    “You can see how it’s tempting to get a tech job or get an office job,” he says.


    Ten years ago, the career path of a shop mechanic—like the training program for service technicians and the line of cars Cadillac was producing—was narrow and limited.


    At that time, Cadillac built three car models: the Seville, DeVille and Eldorado. All were similar front-wheel-drive cars.


    Hardman, meanwhile, was a 20-year-old yard mechanic at a heavy truck repair facility in Roseville, Michigan, just outside Detroit. He worked on tractor-trailer steel haulers, doing light electrical work, oil changes and other grease jobs.


    Wanting to work as a diesel mechanic for Caterpillar, Hardman inquired about degree programs at nearby Macomb Community College. The college didn’t offer diesel mechanic training, but it did offer dealership apprentice programs for service technicians.


    Hardman began working at Crestview Cadillac in Rochester, Michigan, just north of Detroit, around the same time GM was expanding its Cadillac line. The new models combine elements from a variety of GM’s existing lines: a sports car based on a Corvette engine, and an SUV, the Escalade, built on the chassis of a GM truck.


    The new training for service technicians, provided by Raytheon at GM Service Technical College, is also something of a crossover, combining the know-how of all of GM’s product lines into one curriculum that’s as easy to access as typing a question into a search engine, Hardman says.


    “You can be continuously trained and fed information about all their products,” Hardman says. “It’s just amazing.”


    The key to making a good living as a mechanic is to “fix it right the first time” Hardman says, repeating what has become the mantra of the GM Service Technical College.


    “There is a direct relationship between my training and fixing it right the first time,” he says. “With Raytheon’s training I was able to understand the things I needed to test for.”


    That means following repair procedures outlined in online training manuals in order to diagnose a problem. It can also be as simple as typing the problem into a computer to get a list of possible causes. It has taken Hardman a couple years to master the computers, but the more he is able to navigate the training system, the easier it is for him to produce high-quality repairs, in turn putting money into his pocket and giving him a reason to stay where he is—as long as his knees remain strong.


    “The whole program has given me a life I never thought I could have had,” Hardman says. “It got me trained, and now I feel very valuable in the industry.”


    One of the most important lessons that Reindl has drawn from this experience is that workforce management initiatives never get off the ground unless there is significant support and commitment from executives at the top.


    He has also learned the value of looking beyond the technical capabilities and leadership potential that a job candidate has to offer. Reindl is a big believer in looking for intangible qualities in an individual—the things they either have or they don’t. Passion is one such trait.


    “You simply can’t teach somebody about passion,” Reindl says. “Our work involves putting a foreign object in somebody’s body, therefore we only hire those who are seriously passionate.”


    Reindl also values an individual who is self-confident, but not arrogant. “There is a big difference between being sure of one’s capabilities and being arrogant,” he says. “Thinking you know it all or trashing your former employers won’t get you in these doors.”

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A Bonding Byproduct

The Luxottica Retail HR team was trying to build relationships with new colleagues from Cole National. But they ended up cementing bonds among themselves as well.

    After eyewear firm Luxottica acquired Cole in October 2004, about a dozen members of the Luxottica HR department based in Mason, Ohio, began making four-hour van trips to Cole’s former headquarters in Twinsburg, Ohio. The Mason crew typically would stay in Twinsburg for a week at a time, living at a hotel. And they made multiple trips over a period of several months.


    The visits were part of an effort to avoid a culture clash between the two major eyewear retailers, says Robin Wilson, senior director of human resources technology and analytics at Luxottica.


    But even as they helped bring Cole into the Luxottica family, Luxottica’s HR pros tightened their own relationships. So much time away from family members can be hard. But driving and eating together encouraged camaraderie, Wilson says.


    “You found out about people’s kids, people’s weddings, everything from life to death,” Wilson says.


    In the wake of the intense integration project, Luxottica’s HR team took its performance up a notch, Wilson says.


    “The productivity probably increased at a sustainable [level] as a result of the relationships that were formed.”

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Employee Autonomy in Aisle 5

Can Best Buy’s radical reorganization of work actually adapt to a retail workplace?

    The answer may become apparent soon. The principles of the Results-Only Work Environment, or ROWE, may be applied to a Best Buy retail store this year, say Jody Thompson and Cali Ressler, the architects of the program and co-founders of consulting firm CultureRx.


    Thompson and Ressler are not yet sure how ultra-high levels of worker autonomy will mesh with a retail setting, where accommodating foot traffic is key. But they are eager to explore how giving employees at all levels of the company more control over their jobs can better serve customers and the electronics retailer.


“A lot of young people are techno-savvy and highly collaborative. They can pull information together quickly and respond to concerns,” Thompson says. “They have a lot of great ideas.”

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Paid Sick Leave Bill’s Impact Depends on Legislative Details

A recently introduced bill that would mandate paid sick days is generating concern among HR practitioners about how it would affect companies that already offer paid time off.


Under the Healthy Families Act, which was authored by Sen. Edward Kennedy, D-Massachusetts, and unveiled on the Senate floor March 15, companies with at least 15 employees would have to provide seven days of paid sick leave annually for each person who works 30 or more hours each week.


A prorated number of days would have to be offered to those who work less than 30 hours. Unused days could roll over from year to year. A similar bill has been introduced in the House by Rep. Rosa DeLauro, D-Connecticut.


Kennedy promotes the bill as a vehicle for economic fairness, arguing that almost half of private-sector workers—and an even greater percentage of low-wage earners—don’t receive paid sick days to care for themselves or their children.


He also says the measure would improve public health because so many workers in the food service industry don’t have access to sick days.


Most people in the HR community don’t oppose giving workers time off if they’re sick. In fact, many companies already offer paid leave as an incentive to attract talent. But that’s also the reason that the bill is raising red flags.


It’s unclear whether paid-time-off days would count toward the required seven paid sick days or whether the mandated days would be layered on top of PTO.


An aide to Kennedy, who is chairman of the Senate Health Education and Pensions Committee, says that the bill would not tack extra sick days on to voluntary leave a company already has in place.


“It wouldn’t add to their total,” says Laura Capps, a Kennedy spokeswoman. Her boss’ bill “gives a floor of guaranteed sick days. It [ensures] that people have at least seven paid sick days.”


But the chief lobbyist for a major HR organization isn’t as certain about how the bill will affect PTO days and how it relates to the Family and Medical Leave Act.


“The equivalency test is vague and it would need to be fleshed out further to see how it interacts with voluntary paid leave programs … and other federal and state-mandated requirements,” says Michael Aitken, director of governmental affairs for the Society for Human Resource Management.


Working out those details was the main concern expressed by HR professionals assembled by SHRM on March 14 to lobby Capitol Hill on a range of legislation, including Kennedy’s bill.


“It’s not a bad thing,” Angela Hamilton, director of HR services for Benefit Resources, says of the measure’s theme—providing paid sick days. “It depends on how it plays out. There are just too many unknowns.”


There is plenty of initial skepticism. “They need to be more specific and they need to spell it out,” says Miriam Feibel, HR business partner at Firmenich, a Princeton, New Jersey, manufacturer.


In addition to concerns about PTO days, there is disquiet over the bill’s definition of a full-time employee as someone who works 30 hours or more per week.


At the Dollar and Thrifty auto rental chains, the definition of a full-timer is someone who works 35 hours a week. The company is incorporating more part-time employees in part to save money from a reduction in benefits.


“We’ve solicited a lot of part-timers,” says Henrietta Berroteran, director of field employee relations for Dollar Thrifty Automotive Group Inc. About 1,500 of the company’s 8,500 employees work part time, or less than 35 hours a week.


But if the Kennedy bill becomes law, it may undermine the savings generated by a part-time workforce. “It’s eliminated,” Berroteran says.


As Kennedy’s bill winds its way through the legislative process, HR officials, spurred by SHRM, intend to register their concerns with their states’ lawmakers.


Debbie Jorgens, an organizational development consultant for Thrivent Financial for Lutherans in Minneapolis, will outline qualms about the Kennedy measure’s potential impact on PTO days to a newly elected Minnesota Democratic senator.


“I’m counting on Amy Klobuchar,” Jorgens says. “She’s always impressed me as someone who will listen. It’s one of the reasons I voted for her. We’ll find out.”


—Mark Schoeff Jr.

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Survey Points to Growing Dissatisfaction Among HRO Buyers

There seems to be growing dissatisfaction among HR outsourcing buyers, according to a recent survey conducted by EquaTerra.


Thirty-one percent of buyers surveyed said they are uncertain of whether they will renew their current HRO contracts. Ten percent say they plan to terminate their contracts and bring the work back in-house.


Seventeen percent plan to send out a request for proposals to find a different HRO provider to handle the current processes they are outsourcing, while only 10 percent plan to send out an RFP for an expanded HRO contract that includes processes beyond what they currently outsource.


The latest research marks the highest percentage of buyers saying they are planning terminations and the lowest percentage of buyers planning to expand the scope of their HRO contracts that EquaTerra has found in its studies, says Stan Lepeak, managing director of research.


“Usually the number of firms planning to eliminate HRO has been less than 10 percent and the number of firms expanding is usually around 40 percent,” he says.


While the sampling of the survey is small, ranging from 40 to 60 HRO buyers, depending on the question, Lepeak believes the findings are somewhat telling.


“There is some dissatisfaction among HRO buyers, but it’s not so much dissatisfaction with the concept as it is dissatisfaction with the execution of their arrangements,” he says.


In their comments, a number of survey respondents said they wanted more flexibility in their HRO arrangements. “Flexibility could apply to a number of issues,” Lepeak says. “They may want more flexibility in the pricing, or in the business model.” EquaTerra plans to do more research to figure out what buyers want and will publish a white paper in late April on the topic.


Providers need to get in front of these issues and talk to buyers proactively, Lepeak says.


Buyers are out talking to one another about these issues, and HRO providers need to address that, he says.


“They are all comparing notes about what they are experiencing,” Lepeak says. “And while that kind of cocktail hour benchmarking might have pitfalls, it’s happening, and service providers need to address it.”


Jessica Marquez

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Drug Study Taps Counseling To Cut Harmful Interactions

Employers who have succeeded in getting their employees to manage a chronic illness by taking necessary prescription medicine now face a new dilemma: harmful drug cocktails consumed by patients who are treating several chronic conditions simultaneously.


The University of Michigan is set to announce today that it will study whether counseling with pharmacists reduces the incidence of adverse reactions that occur when its employees take multiple drugs for unrelated con­ditions. Such harmful effects can occur between prescription drugs, over-the-counter medicines and dietary and herbal supplements. The university is among a handful of employers trying to learn how best to manage the use of multiple medications.


“We ought to have someone looking at the overall picture here to make sure things work well,” says Leslie Shimp, the professor at the university’s College of Pharmacy who is leading the project.


Researchers at the pharmacy school will begin a pilot program next month to provide counseling to 3,000 employees, dependents and retirees who regularly take at least nine medications. The goal will be to see what kinds of counseling best help individuals safely adhere to their drug regimens. Another goal is to encourage people to use cheaper generic drugs.


Every day, 85 percent of adults take one or more prescription drugs, over-the-counter medicines, herbal medications or supplements, while nearly one-third of adults take five or more every day, according to the Institute of Medicine in Washington.


Despite the prominent role medicine plays in people’s everyday lives, patients are not necessarily using drugs correctly or with awareness of how they interact with other medicines. The inappropriate use of medications leads to more than 1.5 million serious medical events each year, all of which are considered preventable, according to the Institute of Medicine.


“We know that adverse reactions go up almost exponentially depending on the number of drugs you take,” says Dale Christensen, a professor emeritus at the University of North Carolina’s School of Pharmacy.


Some disease management programs have focused on managing chronic illness, like the program begun 10 years ago in the city of Asheville, North Carolina, to manage diabetes.


But programs that look at the entirety of a person’s medical therapies are more recent and less studied. Federal law governing Medicare Part D, the prescription drug benefit that was introduced last year, mandates that individuals with several chronic conditions who take multiple medicines receive what is called “medical therapy management.” Since then, employer groups have taken a closer look at better managing the regimens of employees who have high health care costs associated with chronic illnesses.


“The way you get value for your dollar is to make sure that medical therapies are used properly,” Christensen says. “If not, it’s waste of money at the very least.”


The issue is one that affects more than just retired people. At the University of Michigan, the patients in the pilot program, more than half of whom are 18 to 65 years old, take an average of 12 medications daily, not including non-prescription medications. The goal of the program is to improve the management of chronic diseases, reduce side effects and harmful drug interactions, and simplify the pill-taking process, Shimp says.


The university also expects to save money by moving people to generics, eliminating redundant medications and avoiding medical errors that result in expensive hospitalizations and lost productivity. Exact savings, however, have not been adequately measured, according to the Institute of Medicine.


In order for other employers to reproduce the program, they must contract with local pharmacists who can provide a clinical setting where one-on-one counseling can take place and persuade their population to use the counseling. Other employers, like Pitney Bowes, are using on-site clinics or on-site pharmacies managed by pharmacy benefit managers to provide similar counseling.


“I think that patients are often interested in talking to somebody about their medicine,” Shimp says, “especially if they are taking a lot of them.”


—Jeremy Smerd

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Vurv CEO Looks for a Big Year

If CEO Derek Mercer gets his way, this could be a big year for Vurv Technology. His goals for the Jacksonville, Florida-based talent management software provider: increase revenue from $40 million to $50 million; make two more acquisitions of $20 million or more apiece; and take the company public. He recently spoke to Workforce Management staff writer Gina Ruiz at the Vurv Revolution 2007 conference in Las Vegas.


Workforce Management: Some say it’s only a matter of time before Vurv goes public. What pieces of the puzzle still need to fall into place before an IPO happens?


Derek Mercer: From an organizational point, we are already there—we have undergone some recent restructuring, we have a strong base of clients, and our balance sheet is solid. What we’re doing now is working with the board of directors to identify potential acquisition targets to build more mass.


WM: There are rumors that Peopleclick is for sale. Would you ever vie for that company?


Mercer: If they were serious about selling themselves, we would take a look at them. We are not shy about going after companies, much like the way we went after Unicru, where we put in a bid. This year we just made an acquisition and we hope to close two more by the fall.


WM: Do you have a time frame for the IPO? Is it contingent upon anything?


Mercer: We are shooting for the end of this calendar year. But we are not fixated on a specific date. What we are fixated on is making strategic acquisitions, and if that means pushing the date back, then so be it.


WM: You have entrenched Vurv into many workforce management arenas—onboarding, performance management, compensation, etc.—except for training and development. Is this a strategic area that you would get into through an acquisition?


Mercer: I’m not sure about training and development. It is a critical area in workforce management, but it is also very cyclical. It is one of the first initiatives that is eliminated when companies hit tough times. Also, that industry uses a licensing model, while we focus on subscription-based models.


WM: Would you ever forgo an IPO to sell Vurv?


Mercer: For the right price, anything is possible. But it would have to be an exceptional offer that far exceeds a multiple of three. I have already been approached and declined several offers.

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A Focus on Long-Term Careers in the Contingent World

Bernadette Kenny’s flight landed in Charlotte, North Carolina, one morning in March and she shuttled to the local office of staffing company Adecco Inc. Once there, she offered advice and coaching on attracting and keeping talented temporary workers, then huddled with managers to plan annual bonus reviews and awards.


    Next it was off to a luncheon for one of Adecco’s clients, a local bank, where she spoke to 60 of the bank’s hiring and human resources executives as well as a few of the bank’s contingent workers about the challenges of catering to a multi-generational workforce. She ended the day back on an airplane.


    Such is the daily grind of the staffing industry’s first “chief career officer,” a newly created position at industry giant Adecco’s North American operations designed to provide leadership and guidance on workforce retention, development and recruitment. The new role became official March 19 and Kenny continues to hold her previous job title: senior vice president of human resources for Adecco North America.


    Taking a few minutes to chat via cell phone while waiting to catch her flight out of Charlotte, Kenny reflected on how her new role may affect the operation of a company that provides contingent workers around the globe.


    “It is my role to bring career planning and career development and awareness to the hundreds of thousands of associates who work for us every year,” Kenny says. “It is also a way of demonstrating to corporate customers that we are committed to the careers of the people we place with them.”


    Kenny, a staffing industry veteran with 25 years at Adecco, including management stints in sales and marketing, sees her new role as a way for the company to improve its ability to locate, develop and encourage retention of qualified workers. The high-level title sends a message to corporate clients that Adecco is serious about the task.


    Industry insiders and competitors are watching to see whether the introduction of a chief career officer has any effect on Adecco’s operations and bottom line, or turns out to be more of a public relations move designed to impress corporate clients.


    The first order of business for Kenny is dealing with a looming contingent labor shortage that has staffing companies and corporate clients worried.


    “The test will be whether they are able to bring in the talent their clients need,” says Steve Berchem, vice president of the American Staffing Association.


    Kenny says she recognizes that her success in the new role depends ultimately on how her work affects the bottom line at Adecco, a global powerhouse in staffing with 6,600 offices in 70 countries and a network of 700,000 contingent workers.


    If she can persuade temporary workers to stick with Adecco for multiple assignments, she should be able to reduce turnover and cut Adecco’s recruitment costs. And if she is able through training and development programs to raise the skill level of Adecco’s employees and its temporary workers, that should help Adecco sell its services to corporate clients and generate revenue.


    “This goes to the heart of the business,” Kenny says of her new position. “There is money to be made in it.”


    If the position proves beneficial to Adecco’s North American operations, it could be expanded to other parts of the company and might be adopted by rivals in the staffing industry.


    Adecco has been on a mission to improve its bottom line after seeing its profits slip in 2005 behind such rivals as Manpower. Worried that Adecco was losing its edge, co-founder Klaus Jacobs, who had taken a lower-profile role in the corporation, increased his stake, using the added clout to oust then-CEO Jerome Caille and assume the job himself.


    Jacobs then engineered the takeover of German staffing company DIS in 2006, where he found someone to take over the top job at Adecco. As part of the deal, DIS CEO Dieter Scheiff became Adecco’s new CEO in August 2006.


    Since then, Scheiff has been reshuffling leadership at Adecco, including the North America unit. On March 1, Tig Gilliam, 42, took over as country manager for the U.S. and Canada, moving from IBM Global Business Services, where he was global head of supply chain management services. The move mirrors what’s happening at many large corporations, where procurement officers have taken larger roles in contingent staffing to better control costs and contracts.


    Kenny’s appointment offers some balance to the trend toward greater reliance on procurement methods. She will continue to oversee human resources functions in North America. But as chief career officer, Kenny will also provide leadership on learning, training and talent development; direct U.S. strategy for the Adecco Institute, a new research center created in October that focuses on such issues as employee satisfaction and productivity; direct Adecco University, the company’s learning center and its development of a Web-based leadership program; and act as senior advisor on Adecco’s diversity initiatives.


    Kenny says part of her goal is to help Adecco bond with its employees as well as its contingent workers by catering to career needs. Staffing organizations that ignore the career aspirations of contingent workers are missing a key component of worker relations, she says.


    “People are very much focused on what their own personal career means to them,” Kenny says. “People change jobs frequently today. The worker today is extremely individualistic. My job title speaks to that, to the personal nature of each individual worker.”


    Kenny says she hopes to measure her success by her impact on job satisfaction among Adecco employees and on the usage patterns of the contingent workers those employees oversee. She will be looking for trends in contracts for contingent workers and whether Adecco is able to reduce turnover and keep contract workers attached to Adecco longer.


    “As you can imagine, the very nature of the term ‘variable workforce’ leads workers to think short term,” Kenny says. “We want the worker to think long term with Adecco.”

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ACS Wants to Go Private Again

Affiliated Computer Services founder and chairman Darwin Deason is trying to take the company private again, a move observers say will make the company’s business, including its HR outsourcing business, easier to manage.

Deason and investment partner Cerberus Capital Management are offering $5.93 billion in cash to take the Dallas-based IT company private, according to a March 20 letter to ACS’ board of directors. The price represents a premium of 15.5 percent over the closing price Monday, March 19, of $51.29 on the New York Stock Exchange.


“We believe that our proposal is fair and in the best interests of the Company and its public shareholders and that the shareholders will find the proposal attractive,” states the March 20 letter from Deason and Cerberus to ACS’ board.


“The board will evaluate the offer in due course,” says Mike Buckley, a spokesman for ACS. He declined to elaborate.


Under the proposal, Deason will remain chairman and ACS management will remain in place.


Last year a number of private equity firms, such as Blackstone Group, Bain Capital and Texas Pacific Group, were in talks to take ACS private, but the discussions fell through.


Now, however, observers say it looks like it might happen given the fact that Deason is one of the buyers.


And given the public scrutiny around ACS, it makes sense for the company to want to go private, observers say. Last year, ACS got caught in the options backdating scandals when regulators uncovered that executives intentionally backdated the effective dates of their stock options to a date when the stock hit a low point to make the options more valuable when exercised.


CEO Mark King and CFO Warren Edwards resigned over the scandals and the firm had to restate earnings for the past 11 years.


Going private will enable ACS to focus on growing without the burden or public scrutiny, experts say.


“The big question is, who is next?” says Stan Lepeak, managing director of research at EquaTerra, a Houston-based advisory firm.


But Lepeak says that while private equity investors are interested in scooping up smaller HRO players, particularly those in the recruitment process outsourcing space, there isn’t a lot of interest in larger HRO providers.


“Hewitt is a possibility,” he says, noting rumors that bankers had been eyeing the Lincolnshire, Illinois-based company.


While the market might not see a wave of public HRO providers go private, privately owned HRO providers will probably put off their initial public offerings until the market gets better, says HRO specialist Phil Fersht.


“There are some select Indian providers who are pushing to [do an] IPO as soon as they can, but I anticipate this to slow down as valuations go through a correction later this year,” he says.


If the board approves the proposal by Deason and Cerberus, the investors hope to finish the transaction in early May, according to their letter to the board.


click here to view ACS’ 8k filing  with Securities and Exchange Commission.


Jessica Marquez