Category: Archive

Event: HRO World Europe Annual Conference
Date: November 6-8, the Conrad Hotel, Brussels, Belgium

What: HRO World Europe brings together more than 350 executives from more than 20 countries to exchange their views and discuss the challenges they see facing their organizations’ HR outsourcing strategies. The conference is less of a trade show than its U.S. sister event, HRO World. With just a small exhibit hall, this show gives buyers and prospective buyers more opportunity to network and learn from each other.

Show info: For more information, go to www.hroaeurope.com/file/3439/hro-world-europe-2006—future-proof-hr-transformation.html.

Day 3: Wednesday, November 8

Data-driven: Like many European organizations, RBS (formerly Royal Bank of Scotland) decided to do a shared services center instead of an HRO deal. One of the main advantages of this approach is that the bank can keep all of its data in-house–a real concern for the financial services organization, Brian McLaren, director, HR shared services, said during his presentation.

However, what good is having the data in-house if HR managers don’t know how to read it? “HR people in general are not good with data,” McLaren says.

To address this issue, RBS is creating a People Metrics Advisory Group, whose job will be to present the data to HR in a readable format. Being a bank, RBS has many credit and data analysts in-house, and McLaren says he hopes to use some of this talent to staff the new group, which he hopes to make fully operational next year.

Biggest fear: Albert Martens, director of HR services at Ikea, was very upfront about his biggest fear regarding entering an HRO agreement: becoming too dependent on the vendor. That’s why the Swedish retailer decided to only outsource payroll and HR administration to ADP, while keeping things like performance management and recruiting in-house, he told attendees.

Recruiting is just too important a function for Ikea to outsource it. The company gets a million applications a year and expects to grow 33 percent in the next five years.

“Our people are our company,” he says.

Election time: The midterm elections in the U.S. were a hot topic Wednesday morning as the results continued to trickle in. In five states, there were huge debates between candidates who were self-proclaimed protectionists versus those supporting globalization, and four of the five protectionists seemed to have won their elections by early Wednesday morning.

Speaking at a panel discussion featuring analysts, Helen Neale, a business process outsourcing analyst in the London office of NelsonHall, said that while there might be a slight downturn in HRO contracts like there was during the U.S presidential elections, she didn’t anticipate a long-term effect.

After all, most companies realize that if you offshore jobs now, the organization will become more competitive and will hopefully be able to create jobs later, said Mike Friend, an analyst at IDC.

Only time will tell, however.
–Jessica Marquez

---

Conference Notes: Day 2, Tuesday, November 7, 2006–And the Conference Begins

Word of the day: Transformation was the catchphrase of the day as the conference kicked off. As Jay Whitehead, publisher of HRO Europe and HRO Today, put it “The O-word has become a bad word.” By the “O-word,” Whitehead means outsourcing, and speakers throughout the day instead referred to the “HR transformation.”

For example, in the keynote session, “How Cultural Resources Support Business Transformation,” Geert Hofstede, a professor or organizational anthropology and international management at Maastricht University in the Netherlands, spoke about how country culture and corporate culture can affect a company’s “HR transformation.”

In the next session, “How Unilever is Transforming HR,” Reg Bull, senior vice president, global HR transformation, talked about how his company’s HRO deal with Accenture is helping it to transform into a more efficient operation. For Bull, outsourcing is one means that Unilever is applying to transform its business.

But whatever companies are calling it, Bull says not to underestimate the pain that organizations may feel from the process.

“There will never be a safe time to do outsourcing,” he says.

Time for sales pitches: If Tuesday morning’s panel discussion of vendors, “How to Best Evaluate the Different Transformation Options,” was meant to be informative to buyers, it failed. In fact, a number of attendees were disappointed that many of the panelists decided to use the time to pitch their products.

In his introduction, Whitehead, who moderated the panel of ADP, SAP, Oracle, Hewitt, IBM and Accenture, made it seem that it was going to be an interesting back and forth between competitors.

But for the most part, the panelists did not step up to the plate, choosing instead to discuss the uniqueness of their products yet shying away from bashing one another. In fact, when Whitehead asked each of the panelists which competitor they liked going face to face with, none would provide a name.

The most brazen self-promotion on the panel came from Stephen Randall, an HRO executive in the London office of Hewitt Associates. Despite the company’s troubles, he said: “For Hewitt, HR is all we do, so why would you do anything else?”

The one breath of fresh air on the panel was Mary Sue Rogers, human capital management global leader at IBM. She talked about how companies need to not just think about cost savings when doing HRO, but also think about increasing revenue per employee. As the labor market tightens up because of the aging workforce and it becomes harder to get good employees, she said, companies need to make sure they are getting the most that they can from their current workforce.

“Being able to get rid of payroll processes is easy,” she said. ‘Getting more revenue from employees is hard.”

Hitting your numbers: In a few of the presentations Tuesday, HRO buyers spoke about the challenges of figuring out and attaining the right ratio of HR managers to employees.

For Unilever, which signed a seven-year HRO contract with Accenture in April, its goal is to get from 3,200 HR managers down to 900, meaning there would be one HR manager for every 213 employees. “Today we estimate that is competitive, but when we implement it the market might have moved and we may have to re-evaluate it,” Bull said in his presentation.

Claus Fey, senior HR executive at Bayer AG, which implemented a partial outsourcing model, is shooting for a ratio of 120-150 employees for each HR manager. But like Bull, Fey said he isn’t sure this number will change.

“We will keep reviewing it,” he said.

Fey and Bull also agreed on the challenges associated with getting line managers within the business to accept the change.

“Line managers felt that what we were doing was taking their local HR people away from them,” Fey said. “It shows the importance of having change management processes in place.”

At Unilever, Bull and his team made sure to interview line managers about what they wanted to see happen, but at the end of the day the decision to outsource was made by management and the board.

“You should not confuse asking people’s opinions with being democratic,” he said.
–Jessica Marquez

---

Day 1—November 6, pre-conference workshops

Where do I begin: Not surprisingly, most of the organizations attending Monday morning’s pre-conference workshop, “Assessing and Evaluating Transformation Options,” by David Parry, a Deloitte consultant, were still in early discussions about whether to outsource their HR processes.

In introducing themselves to the group, many executives talked about their desire to understand all of the variables that need to be considered when making decisions to outsource or not.

For example, HR executives at Electrolux Home Products, a Belgian manufacturer of appliances with 57,000 employees globally, say they want to get a better understanding of how to avoid risk when engaging in an HRO agreement.

Similarly, an executive from Deutsche Bank says he wants to understand how implementing an HR transformation is different from implementing a transformation in other business areas.

But Nadia Lambrechts, an HR systems manager at UCB, a Brussels-based bio- pharmaceuticals company with more than 8,300 employees worldwide, says she is just trying to figure out where to begin. Right now the company runs most of its processes in-house, and Lambechts says she is just trying to figure out which metrics she and her team need to analyze when coming up with a business case.

“Everyone here says they are new to the process, but we are even in an earlier stage than all of them,” she says.

Cost questions: At first, Parry’s presentation may have caused prospective buyers to ask why there were even thinking about outsourcing their HR processes. If cost reduction was the sole reason, then that’s not good enough, Parry told attendees.

“Unfortunately, HRO has become synonymous with cost cutting,” he says.

But HR costs generally only make up 1 percent to 1.5 percent of an organization’s entire cost structure, Parry says. For example, one of Deloitte’s clients, a company with more than 100,000 employees, had HR costs of 140 million euros ($178 million). That might seem like a lot, he said, but it was nothing compared to the company’s total IT outsourcing costs of 500 million euros ($636 million) and its real estate restructuring, which cost 1 billion euros ($1.27 billion).

“So when you look at those numbers, HR is not a big savings component,” he says.

When you consider the time and work that go into these deals, the cost savings argument may not be enough for a convincing business case for HRO, Parry says.

Claire Daly, HR project manager at Intel Europe, agreed with Parry, and asked him how should she go about convincing upper management that HRO may make sense even if the return on investment is going to be negative for a few years.

Parry advised attendees to be prepared to provide their executive teams with other quantitative data to support the business case for HRO. These include:

• Cost avoidance. For example, companies are avoiding the costs that they would have incurred on technology upgrades and implementations.
• Service-level improvement—how much can service improve through HRO?
• Increased sales of organization by freeing up employees’ time that they may have spent dealing with HR issues.
• Increased availability of employees.
• Reduction in recruiting costs.

Parry also suggested a number of measurable non-quantitative metrics that HR executives can reference when creating a business case. These include:

• Employee morale.
• Improved service quality.
• More stabile workforce.

Parry’s overall advice to prospective buyers of HRO is to understand that this is a never-ending process.

“There is no point three to four years from now where you can say we are done,” he says. “In reality, HR transformation starts after we [the consultants] have left.”

Buyers’ lament: Chatting between sessions, a few HR executives lamented the fact that the HRO market today is completely dominated by the sellers. Since so many of the large HRO providers are busy absorbing the deals they already have, they are becoming more selective about whom they bring on as clients, says Intel Europe’s Daly.

“It’s completely a sellers’ market,” agreed Sunita Malhotra, HR director for Europe at Electrolux Home Products.

Today, prospective HRO buyers actually have to woo the provider of their choice, Deloitte’s Parry says.

“A lot of organizations tend to procure in an adversarial fashion,” he says. “Instead, they need to be open to vendors and see it as a partnership.”

When it comes down to it, there are only three or four providers that can do global HRO deals, and those companies are either about to or already have signed large contracts. And it’s a huge amount of work for vendors to take on one of these deals, Parry says.

“So buyers need to demonstrate to vendors that theirs is a business that they want,” he says.
–Jessica Marquez

 

Under fire for not saying enough about future product plans, HR software giant Oracle said plenty at its recent conference in San Francisco.

During its OpenWorld show late last month, Oracle provided details about the next versions of its Oracle E-Business Suite and PeopleSoft Enterprise products. The company also emphasized its Applications Unlimited program, a pledge made earlier this year to keep advancing various product lines.

But it said little about what to expect in Fusion, Oracle’s project to blend the best of various applications in a new product line.

Albert Pang, an analyst at research firm IDC, gives Oracle credit for clarifying its vision at the show. “It’s a major improvement over what it did last year,” Pang says.

But, Pang adds, Oracle has downplayed what features will go into the Fusion application.

“There’s still anxiety among the Oracle customers about what the Fusion strategy is going to look like,” he says.

In a statement, Oracle said it “communicates product road maps to its customers through a variety of channels.” Among those steps, the company said, is a set of 1,000 events around the world this year focused on applications.

Oracle and archrival SAP, both of which make software for a range of business tasks including human resources, are each seeking to dominate the growing HR software world. Meanwhile, a host of smaller players focused on “talent management” applications, such as recruiting and performance management, are growing quickly.

Oracle has expanded in recent years, in part through its acquisition of PeopleSoft in 2005. Its San Francisco show was its biggest ever, with more than 41,000 attendees and 1,400 sessions.

Among the improvements to E-Business Suite Release 12, Oracle said in a statement, are new capabilities planned in the Oracle Compensation Workbench tool that “show all forms of compensation for employees in a single place regardless of the employee’s geographic location.”

Among the changes in PeopleSoft Enterprise 9 is the ability to print electronic pay slips using the common PDF format. Currently, employees using PeopleSoft print those slips from Web pages that might not match up well to printers. Applause broke out in a session when an Oracle official described the check-printing change.

A document on Oracle’s Web site says Oracle will release Oracle E-Business Suite 12 and PeopleSoft Enterprise 9 this year. But during the conference, Oracle said E-Business Suite 12 is scheduled to be available within 12 months and declined to give details about the timing of the human capital management component of PeopleSoft Enterprise 9.

Attendees also didn’t hear many specifics about Fusion.

During one session, Oracle officials were asked about the road map to Fusion. Gretchen Alarcon, Oracle’s vice president of human capital management product strategy, responded that it was “too early” to spell out what will be included in Fusion HR applications. She said Oracle had concluded its “gap analysis” of the differences between its product lines and was in the midst of defining what the product should be able to do.

Oracle has said it plans to release initial Fusion HR applications next year and a full suite of products in 2008.

—Ed Frauenheim

If the polls and pundits got it right, Democrats will wake up Wednesday with control of the House. And, perhaps, the Senate.

A shift in leadership would usher in a new agenda for workplace issues and shift the policy debate toward low-income workers, Americans who lack health insurance and legislation backed by unions. The impact on employers would depend on how big a margin Democrats have secured.

The party has put four issues that involve the workforce at the top of its priority list for the “first 100 hours” of its projected House leadership—raising the minimum wage, restoring Republican cuts to higher education, providing incentives for retirement savings and negotiating with drug companies to lower Medicare prescription costs.

Sometimes, of course, the electorate fools the pundits. If the Republicans do stay in power, they likely will continue to pursue policies that flesh out President Bush’s “ownership society” theme by promoting individual control of benefits. An instance of that was evident in September, just before the congressional recess, when the House Ways and Means Committee approved a proposal to increase annual contributions to HSAs. Also, Republicans advocate job-training programs that give the unemployed flexibility to choose their courses through one-stop career centers.

Assuming that the Democrats win, they are likely to move immediately to raise the federal minimum wage from $5.15 to $7.25. Over the summer, Republicans folded that proposal into a bill that included the permanent elimination of the estate tax. Democrats balked, saying the hike shouldn’t be tied to what they called a tax cut for the rich.

Boosting hourly pay is one step Democrats hope to take toward raising household income to match productivity gains.

“If we win a majority of seats in the House this November, we will work to ensure that all families benefit from a growing economy,” says Rep. George Miller, D-California, the ranking member of the House Education and the Workforce Committee. Miller likely would become chairman of the panel in a Democratic House.

Democrats also will pursue their Innovation Agenda, which calls for graduating 100,000 new scientists, mathematicians and engineers over the next four years, investing in scientific and medical research like stem cells, establishing universal broadband access and achieving energy independence.

On health care, Democrats will resist President Bush’s push to expand health savings accounts.

“HSAs are not health policy, they’re tax policy, and we’re shifting more of the health burden onto workers,” Rep. Pete Stark, D-California, said at a House Ways and Means Committee hearing in September.

Stark, who asserted that tax breaks for HSAs would be better spent on expanding health coverage for children and seniors, would likely become chairman of the Ways and Means health subcommittee. He also is advocating a proposal aimed at achieving universal health coverage by establishing a program to provide insurance to people not covered by employers.

One analyst says Democrats would be loath to advocate a government-based health care proposal like the one that foundered during the Clinton administration. But they may try to facilitate state efforts to force employers to provide coverage.

A Maryland judge shot down that state’s so-called Wal-Mart bill because he said it violated the Employee Retirement Income Security Act, which ensures that multi-state employers can offer the same benefits package to all of their employees. More than 30 similar measures are percolating in state legislatures nationwide.

Democrats “would weaken ERISA to the point that it would enable these state-by-state health care reform initiatives to move forward,” says Bruce Davis, a principal at Findley Davies, a consulting firm in Toledo, Ohio.

Setting the agenda
The political equation may not add up to a decisive change on Capitol Hill. For one thing, many of the Democratic candidates who are trying to unseat Republicans are running to the right of their party’s Washington leadership. So, it’s a good bet that they won’t roar into the Capitol raring to implement a liberal agenda.

Besides, if Democrats win, they’re not likely to achieve a House majority that’s even as big as the Republicans’ current 15-seat advantage. That means they’ll have to scramble—and compromise—for votes.

Democrats are less likely to gain control of the Senate. But the political atmosphere has grown so bad for the GOP that many political observers believe that the Senate is within reach.

Even if Democrats control both chambers, Bush will remain at the other end of Pennsylvania Avenue—with his veto pen in hand.

“In order to get anything done, we’re going to have to have tight majorities, which means that legislation that emerges from either party is likely to be more moderate,” says Mike Aitken, director of governmental affairs for the Society for Human Resource Management.

On the other hand, the fierce partisanship that has defined the midterm elections may carry over into the Congress and bog down the legislative process.

“The desire to sharpen party differences for the 2008 presidential race militates against compromise,” says Geoff Manville, a principal in the Washington office of Mercer Human Resource Consulting. “We’re in for a session of stalemate.”

The difference for Democrats, if they take over the House, is that they will be the protagonists in the drama. They’ll set the agenda while the Republicans push back. The GOP has warned that Democratic control of the workforce committee would result in higher taxes, new employer mandates and more government influence on business.

Although a small difference in the number of Democrats and Republicans in the House would make for close votes, the ability to move legislation to the floor is solely under the purview of the majority party. If Democrats win, they will wield a parliamentary mechanism that they have not enjoyed since 1994. The party will control the Rules Committee, which determines the House agenda and sets limits on how a bill can be amended.

That means legislation under which a union could be authorized if a majority of workers sign cards would almost certainly come to a vote before the full House. The bill already has 216 co-sponsors, some of whom are Republicans.

Unions have made the so-called card-check bill, titled the Employee Free Choice Act, a legislative priority. The Republican majority has blocked that bill while promoting its own legislation that would require that every union vote occur by secret ballot.

Another bill that may get a boost from a Democratic majority is a measure that would make it illegal for a corporation to eliminate retiree health benefits. Right now, the legislation has about 60 co-sponsors, all of whom are Democrats.

It’s not clear whether the measure would be a priority for a Democratic majority, but its journey to the floor would be smoother in a Democrat-led workforce committee.

Committee control
By gaining committee power, Democrats would be able to frame the policy discourse in a way that eludes them in the minority.

Elisabeth Gehl, director of public policy for Business and Professional Women/ USA, says that Democrats would be more inclined to expand the Family and Medical Leave Act and consider the Healthy Families Act, a piece of legislation that would provide paid sick leave for those who don’t have it.

If Sen. Edward Kennedy, D-Massachusetts, were to become chairman of the Senate Health, Education, Labor and Pensions Committee, workplace flexibility likely would become more prominent.

“One of the big differences is that some of these bills would get committee hearings,” Gehl says. “Hearings get the issue out there and talked about.”

Advocates of comprehensive immigration reform are hopeful that under a Democratic majority, the House might produce legislation that is closer to the Senate’s package, which includes increasing legal immigration and providing a path to legalization for many undocumented people. The House version focuses solely on border security and workplace enforcement.

“If the Democrats control the House, it will have the positive effect of putting us in a better position to move the issue forward through committee,” says Angela Kelley, deputy director of the National Immigration Forum, a pro-immigration nonprofit.

Yet even if they’re empowered on House panels, Democrats won’t be able to accomplish much alone. That’s why Paul Miller, executive director of ProtectSeniors.org, is reaching out to Republicans on the retiree health benefit bill.

“We’re looking for a bipartisan approach,” he says. To appeal to the GOP, he’s highlighting provisions that would help companies that face financial hardship in maintaining their retiree programs.

On one issue that is increasingly important to corporate executives—education—Republicans and Democrats already seem to be moving toward harmony. Company leaders see education reform as the key to improving the U.S. labor market. Next year, the No Child Left Behind law, which is designed to improve school standards, will be up for reauthorization.

Reps. Miller and McKeon, appearing together at a recent Washington event sponsored by the Business Roundtable, were on the same page. “This should not be a partisan issue,” McKeon says.

Those words no doubt were reassuring to Arthur Ryan, chairman and CEO of Prudential Financial and chairman of the Business Roundtable’s Education and the Workforce Task Force.

“We need a skilled workforce,” he said. Manual labor is no longer enough to keep a family going, he said. “You have to use your brain.”

If solutions to challenges facing employers are going to emanate from Washington, the more Miller and McKeon cooperate, the better—no matter who’s in charge.

—Mark Schoeff, Jr.

People moving into key executive positions
	Kevin Kelly has joined of Heidrick & Struggles as CEO. Kelly most recently was president of the firm’s Europe, Middle East, Africa and Asia-Pacific regions. He has also been named regional managing partner. Bonnie W. Gwin, who previously held the position, is stepping down. From 2002 to 2005, he was regional managing partner, Asia-Pacific region. Kelly joined Heidrick & Struggles in 1997. Outgoing CEO Thomas Friel will continue as non-executive chairman of the board.
	Sybll Romley has joined the board of directors at the International Association of Human Resource Information Management. Romley is president and CEO of Spectrum Human Resource Systems.
	Richard A. Goldman has been appointed COO of Birkman International. Before joining Birkman, Goldman held positions including president and co-CEO of GevityHR and CEO of CentriconHRA. He also was a practicing corporate attorney for 15 years
	Meridee J. Maynard has joined the board of directors at the Todd Organization. She is senior vice president, life product at Northwestern Mutual Life Insurance. She joined Northwestern Mutual in 1988.
	Pamela Cardoza has been promoted to director of business development at the Castleton Group. She had been business development manager.
	William Carmell has joined the New York office of Ford & Harrison as partner. Carmlee was a partner at Winston & Strawn.
	Christine Stimpel has been appointed managing partner at Heidrick & Struggles Germany. Stimpel has extensive experience within the executive search realm. She previously led the German business at executive search firm Spencer Stuart. She also worked as director of Ogilvy & Mather Healthcare International and before that was director of the clinical research department and marketing manager at Johnson & Johnson
	Mike Gelster has been appointed vice president at the Jacobson Group. He has worked with large organizations such as Baxter Healthcare, 3Com, Lucent Technologies and, most recently, Qwest Communications.
	Wanda Granier has been named senior sales executive at the Dallas offices of Veritude. Before coming to Veritude, Granier was a senior site manager at Fidelity Investments.
	David Peters has been named regional managing partner for the Europe/Middle East/Africa division at Heidrick & Struggles. He joined Heidrick & Struggles in 2000.
	Gerry Davis has become regional managing partner for the Asia-Pacific division at Heidrick & Struggles. He joined Heidrick & Struggles in 1998.
	Michael W. Jalbert has been named president of CDI’s Management Recruiters International Inc. Jalbert has extensive experience in leading business service franchises, having held senior positions at Cendant and ERA Europe.
	Peter McAteer has been named vice president and managing director of corporate learning at Harvard Business School Publishing. Prior to joining UNDP, McAteer was vice president of Giga Information Group. He has also been vice president of leadership, learning and organizational development at Fidelity Investments in Boston and director of consulting services at Development Systems Inc.
	Uwe Herold has been appointed chief information officer for SAP. He will be based out of Waldorf, Germany. Herold comes to SAP from Brose Fahrzeugteile GmbH & Co., where he was CIO and was responsible for the Brose Group Information systems in Germany. Before joining Brose in 1999, he worked for Hydac Filtertechnik GmbH, where he headed up the company’s process engineering and organizational development.
	Deleise Lindsay has joined F&H Solutions Group as vice president. Lindsay was district managing consultant for DBM. She has also worked as an international recruitment specialist for CMS Therapies and is a member of the corporate human resources team for First Union Bank.
	Kurus Elavia has been promoted from COO of Gateway Security to CEO of the firm. Elavia joined Gateway in 1988 as a security officer and worked his way up the ranks to CEO.
James E. Bataillon has been named human resource director at Fluor Corp. He most recently was manager of human resources at ABB Lummus Global Inc. and has more than 25 years of human resources experience.
Mark W. Allen has joined Administaff as vice president of strategic planning. Prior to joining Administaff, Allen held various roles with SunTrust Robinson Humphrey, last serving as managing director, investment banking.
Jan Hanley has been named senior vice president of SAP Services Organization. Hanley joined SAP after 11 years at Oracle, where he was responsible for Oracle services, support and on-demand business development in a global capacity. Prior to Oracle, he spent seven years at Accenture U.K.
Greg Lignelli has been named executive vice president for Hudson’s energy, scientific and managed staffing practice.
Mark Fenske has been named senior vice president for Hudson’s energy, scientific and managed staffing practice.
James C. Tudor has been appointed president of State Compensation Insurance Fund’s board of directors. Tudor, who has 35 years of industry experience, has been acting president of the California nonprofit workers’ comp insurance provider for the past 18 months.
Stanley Jeremiah has been appointed as vice president of benefits for Convergys’ employee care business in the Asia-Pacific region. Before joining Convergys, Jeremiah was with NTUC Income as general manager for its life insurance division.
Jeffrey Saltzman has joined Kenexa as practice leader. Saltzman was CEO of Sirota before joining Kenexa.
Michael Lavington has joined the board of directors at Gevity. Lavington has worked in various executive HR roles, such as managing director of Mecca Leisure Group, president and CEO of Resorts USA and senior vice president of HR at Global Telesystems.
Ben Zenick has been appointed vice president of consulting services at Zencos Consulting. Meanwhile, Joseph J. Costanzo has been appointed chief technology officer at Zencos. They both held the title of principal consultant, and co-founded the company five years ago.
Barbara A. Garrett has joined the Conference Board as executive director of marketing and strategy. Previously, Garrett was senior consultant of financial service growth strategy practice of Computer Sciences Corp.
Bennett Williams has joined PeopleFilter Technology as director of strategic alliances. Prior to joining PeopleFilter, Williams was director of client services at Shaker Recruitment Advertising and Communications.
M. Michele Burns has been promoted to chairman and CEO of Mercer Human Resource Consulting. Burns had been CFO of Marsh & McLennan Cos., which owns Mercer. She joined Marsh & McClennan in March as executive vice president and CFO.
Tim Doherty will serve as president of the National Association of Professional Employer Organizations in 2007. He is CEO of Doherty Employer Services.
Michael W. Jalbert has been named president of Management Recruiters International, a subsidiary of CDI Corp. Jalbert has extensive experience in business service franchises, including senior positions at Cendant and ERA Europe. He most recently was of MRI Worldwide Network.
Christine Espy has been named human resources director at Instrument Sales & Services. was HR director at Advanced Navigation Position Corp. Espy has more than a decade of human resources experience.
Submit your move

Elaine Sarsynski
Executive vice president,
MassMutual Life Insurance

Elaine Sarsynski, executive VP at MassMutual Life Insurance in Springfield, Massachusetts, is one of the highest-ranking women at a Fortune 100 company. She has spent the past 30 years managing large organizations in the financial services industry and the public sector, and says that despite the finance industry’s image of being a male-dominated profession that would like to stay that way, it has become much more supportive of women. She recently spoke with Workforce Management staff writer Jessica Marquez.

Workforce Management: How has the industry become more supportive of women?

Elaine Sarsynski: I have seen the industry work hard to attract, promote and retain women in a meaningful way. At MassMutual, we do a variety of things, like offer true work/life balance to help support women at different stages of their careers. We have a day care center on site as well as a fitness center, a pharmacy and a dry cleaner.

WM: Companies often talk about work/life balance to show how they support women. But what beyond that is MassMutual doing to support women and make sure they are on a career path within the firm?

Sarsynski: Many of our women executives are involved in mentoring younger women and recruiting. For example, through our executive development program, which is an executive recruiting program to bring in MBA candidates, we hired six people, two of whom are women. We also hold women’s luncheons where 40 to 50 of us get together. We might talk about our strategy regarding our women’s advisory boards, which are comprised of women employees in local communities to help their offices find and attract female candidates.

WM: Is MassMutual doing anything to bring back women who have left the workforce?

Sarsynski: We absolutely want women, like me, who have that background. We do a lot to network with women and look for opportunities to reach out to them. For example, we reach out to the YMCA because some of our women executives are on the board. MassMutual also sponsors Women in Insurance and Financial Services, a networking organization to support women in the industry. Just over the past year, my group alone has hired 10 women who either left the workforce or were in a career change.

WM: Why is this important?

Sarsynski: Research shows that at some point in their lives, women will be the manager of the household’s financial decisions. We recently had a conference that addressed this fact: Women are the market to market to, and if you are not, you are going to miss not only 50 percent of your market pool, but the majority of the decision makers. Women make up more than half of the U.S. labor force, and 83 percent are responsible for financial decisions.

WM: Is there a danger of employers creating resentment among male employees by focusing so much on women?

Sarsynski: No, this isn’t 30 years ago. Today, I really believe that male and female colleagues care about each other and working as a team.

Workforce Management, October 23, 2006, p. 11 — Subscribe Now!

Events you’ll want to put on your schedule December, 2007 December December 5-6 Chicago Employee Benefits Conference The Conference Board will focus on the new strategies and tools that companies are using to communicate with employees and engage them in determining their own health and financial planning. www.conference-board.org December 10-12 Nashville, Tennessee Gartner Enterprise Networking Summit 2007 This Gartner summit brings together IT professionals and executives interested in learning about upcoming networking opportunities and system implementation. www.gartner.com

Send announcements of upcoming events for listing consideration to calendar@workforce.com

Ford Motor Co. will end health benefits for its salaried retirees beginning in 2008, following the lead of DaimlerChrysler AG’s Chrysler Group, which announced this year that its white-collar workers would be given a stipend to put toward their health care.

Beginning January 1, Ford will put $1,800 into health retirement accounts for its Medicare-eligible retirees. The company disclosed the news in an e-mail to employees November 1 and in information packets sent to its retirees. Retirees’ spouses or domestic partners will receive an additional $1,800, according to Ford spokeswoman Marcey Evans.

“We want to be able to continue providing quality health care benefits,” Evans says. “But we also have to offset increasing health care costs we’re experiencing each year.”

To cut down health care costs, Ford will ask salaried employees to pay a greater share of health care premiums in 2007, though an exact amount has not been determined, Evans says. Ford introduced a high-deductible health plan among its five health care plans this past year.

Like other U.S. car manufacturers, Ford has been beset by huge losses and sharply rising health care costs. The company posted a $5.8 billion loss in the third quarter of this year and spent $3.5 billion last year on health benefits that covered 590,000 employees, retirees and dependents.

The money will be put into a health retirement account and can be used, tax-free, on health care spending, including co-pays, premiums and deductibles not covered by Medicare.

In another sign of the effects of high health care costs, in addition to the other financial woes afflicting Ford, the company told its salaried employees that it would be freezing wage increases for the year. Ford says it will reinstate a company match for employee 401(k) accounts. Beginning July 1, 2007, Ford will contribute 60 cents for every dollar that employees contribute toward their pension, totaling no more than 5 percent of an employee’s salary.

Chrysler announced in March that it would provide a flat annual sum of $1,750 to retirees over age 65 beginning in January 2007.

—Jeremy Smerd

As hundreds of companies move ahead of the political debate regarding gay marriage by offering benefits that cover their employees’ same-sex partners, it is apparent that diversity continues to make strides in American offices.

But momentum for an inclusive work­place screeches to a halt in many organizations when it comes to disabled workers, according to advocates.

“It’s absolutely not part of the conversation,” says Jeff Klare, CEO of Hire Disability Solutions, a company that consults with major corporations on the recruitment and retention of disabled people.

Klare says he will try to expand the dialogue by highlighting companies that recruit disabled workers and provide an accessible workplace on his firm’s Web site, www.hireDS.com.

Later this fall, featured employers will have their logos posted on the site. When users click on them, they will be shown a list of company job openings. The site also posts job seekers’ résumés.

The employment rate for people with a work-limiting health problem or disability is 20.8 percent, compared with 78 percent for non-disabled workers, according to the 2002 Current Population Survey.

Putting disability on the diversity agenda has to occur “one employer at a time,” says Nancy Starnes, vice president of the National Organization on Disability.

One obstacle is the lack of awareness. “Disability rights is one of the newest of the civil rights efforts and one of the least recognized,” Starnes says.

In making their case, advocates emphasize the positive contributions disabled workers can make that transcend their condition. If someone can type 70 words per minute, Klare says, it should not matter whether that person has only one hand.

“This is not about charity, this is about skills,” says Klare, who has worked in human resources for 20 years and established his firm when his late sister suffered workplace discrimination because she had HIV/AIDS.

One of the biggest obstacles to employment is the proliferation of misperceptions about disabled people. “It’s a lack of knowledge,” Starnes says. “It’s myths that persist.”

One mistaken assumption is that disabled workers are more inclined than others to sue an employer. In fact, the biggest reason for legal action is being denied an interview, Starnes says.

Companies also fail to create an atmosphere that lets disabled people be productive.

“It’s about bringing the environment into balance with the abilities of the person,” says JoAngela Morin, partner service delivery manager at Monster, which partners with Hiring Disability Solutions for job postings and job searching. For example, a company could assign a blind person to a job that revolves around talking on the phone, Morin said.

Overcoming a disability was illustrated earlier this month when Erik Ma­daus, an 8-year-old with spina bifida, cycled from the U.S. Capitol to the Franklin Delano Roosevelt Memorial in pouring rain with Klare, who was completing a New York-to-Washington, D.C., bike ride to raise awareness about hiring people with disabilities. Madaus’ bicycle was designed so that he can recline and pedal rather than having to sit up.

It may take many more miles—and more education—before Klare gets his message across to most employers. “We fear what we don’t understand,” he says.

—Mark Schoeff Jr.

Diverse workforces do not have higher turnover rates than more homogeneous employee groups, according to a new study from the University of California, Berkeley.

The study, conducted by the university’s Haas School of Business, found that contrary to previous findings in analyzing race and gender in the workplace, “diversity does not consistently predict high turnover.”

Published by Berkeley professors Jonathan Leonard and David Levine in the July issue of the journal Industrial and Labor Relations Review, the study was intended in part to gauge whether there was evidence supporting claims by industry consultants that diverse workplaces require special training to mitigate the risk of high turnover.

“We think a reasonable interpretation of [the findings] is employees don’t care too much about the race and gender of their co-employees,” Leonard says.

The professors analyzed turnover rates during three years among 70,000 employees at 800 workplaces of an American retailer to see if workers left at a higher rate at stores that were more diverse. The retailer asked not to be identified, Leonard says.

Diversity training has become standard at many companies, according to the Society for Human Resource Management. Seventy-eight percent of employers who implement diversity practices say they do so to lower the cost

of turnover, absenteeism and low productivity.

Diversity consultant Terry Simmons, managing partner of Simmons Associates in New Hope, Pennsylvania, disagreed with the study’s hypothesis: Turnover is lower in workplaces with little diversity.

“They’re saying diversity is a negative condition you have to overcome,” Simmons says. “I’m saying people are different and that’s great; how do we use that to increase productivity? It’s a different starting point.”

The study noted some exceptions when turnover increased. The authors write that “isolation”—when an individual is a numerical minority within the work group—is a useful predictor of retention. Among most racial groups, turnover is lower when they are the numerical majority. Blacks, followed by Hispanics, were most sensitive to being a numerical minority within the group.

Among seven categories—age, men, women, whites, blacks, Asians and Hispanics—women had higher turnover rates when working in a mixed group than in a highly male or highly female setting. By a small margin, women in the study had lower turnover rates when the majority of their co-workers were male.

As a matter of policy, the authors called the results “encouraging,” since they hinted that workers were indifferent to issues of race and gender when choosing to leave a job. The study’s conclusions, however, may not hold in sectors such as insurance and banking, where people are more invested in their jobs and stay longer, and where teamwork is more important, Leonard says.

—Jeremy Smerd