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Unions Warm To Environmental Issues, Alliances

The United Steelworkers of America, the country’s largest manufacturing union, and the Sierra Club, the nation’s largest environmental group, may seem unlikely bedfellows.


But in June, the organizations announced the formation of the Blue/Green Alliance, the first formal partnership ever between a labor union and an environmental group.


The groups established an official relationship because they see a need to address how environmental issues are relevant to the U.S. economy, says David Foster, the alliance’s executive director.


Specifically, the alliance will focus on showing how good environmental practices can create jobs and result in safer workplaces. The groups will also launch campaigns highlighting the loss of manufacturing jobs to countries with poor environmental and labor standards.


“We recognize that we need to have a joint voice to be more effective in managing how workers’ rights are protected and in advocating that environmental protections are maintained,” Foster says.


The partnership may be the first of a larger movement by labor unions to raise awareness around environmental issues, says Gary Chaison, a professor of industrial relations at Clark University in Worcester, Massachusetts.


“This is a great platform for the union because it’s difficult to argue against protecting the environment,” he says. “This is a way for unions to prove that they are relevant again.”


Just as unions rallied around the civil rights movement of the 1960s, this represents another social issue that puts them on the moral high ground, says Tom Walsh, a partner in the White Plains, New York, office of Jackson Lewis.


During the next few months, the alliance will launch its “New Vision for America Tour,” in which it will hold events at cities across the country whose mayors have embraced the Climate Protection Agreement, a movement of mayors who have vowed to take action to support the Kyoto Treaty on global warming.


The alliance expects to reach out to other unions in the manufacturing space to join its cause, Foster says. “We expect this to be a catalyst for more unions and environmental groups getting involved,” he says.


Esmeralda Aguilar, a spokeswoman for the AFL-CIO, says environmental issues are a focus of some of the labor union’s campaigns, but it doesn’t have immediate plans to launch a formal alliance with an environmental group.


The Change to Win Coalition, a group of several unions that broke from the AFL-CIO earlier this year, plans to launch a campaign in the next several months focusing on the environmental hazards facing truck drivers at ports nationwide, says Carole Florman, a coalition spokeswoman.


Many of these drivers, particularly in the Los Angeles area, are working in dangerous environmental conditions, she says.


Increased labor activity around environmental issues will likely take the shape of corporate campaigns focused on specific employers, labor lawyers say.


To address this, companies need to not only make sure that they are abiding by best practices so they are as clean as possible, but they also need to be proactive, Walsh says.


“If employers feel that this is an issue for them, they can get out in front of it and team up with environmental organizations themselves,” he says.


—Jessica Marquez

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Activist Groups, Union Denounce EEOC Overhaul

Organizations representing women and minorities contend that the federal agency responsible for fighting discrimination in the workplace is being gutted by the Bush administration.


The government counters that its redesign of the Equal Employment Opportunity Commission is adding more people to the battlefield.


The opposing views are coming into stark relief as the federal budget wends its way through Congress. The American Federation of Government Employees and 10 other groups are protesting a proposal to cut $4 million from the EEOC budget.


Coming on top of reductions in the organization’s workforce since 2001, the union says the latest round of cuts demonstrates the administration’s intention to starve the EEOC to death.


Activists say the agency lacks staff and resources as the caseload piles up.


“This plan would send a loud and clear message to employers—go ahead, do whatever you want,” says Edward Coyle, executive director of the Alliance for Retired Americans. “Rather than the EEOC playing the role of policeman, it would instead be acting like the lookout man at a bank robbery.”


A Latino group says it is underserved by the EEOC. “We are no longer confident that our members or their cases are getting the attention they deserve,” says Cesar Moreno Perez, executive director of the Labor Council for Latin American Advancement.


The agency asserts that the reorganization plan it implemented in January is designed to better help people who walk through its door with complaints.


“We are increasing the number of frontline staff doing investigations, mediations and litigation, delivering a more streamlined and efficient structure with greater customer service and more public accessibility,” says Charles Robbins, EEOC director of communications. The EEOC is moving 100 positions from its headquarters in Washington, D.C., to field offices.


The number of cases on the EEOC agenda draws different interpretations. The government union calls it a “backlog” and says that the number will grow to 48,000 in fiscal year 2007.


Robbins says that the EEOC’s “pending inventory of cases remains at a manageable level, below projections.” It totaled 39,000 at the end of March.


A couple months ago, the EEOC announced an effort to target systemic discrimination, taking on class-action cases that affect entire companies, industries and economic sectors. The commission hopes to widen and deepen its impact through investigations and litigation involving thousands of workers.


But interest groups charge that EEOC budget cuts undermine the nascent systemic effort, which requires more investigators, lawyers, economists, statisticians and other experts.


“To the extent we don’t have resources, we won’t be in a position to take on these broad, sweeping cases of a systemic nature,” says Gabrielle Martin, president of the National Council of EEOC Locals.


One leader of a major women’s group questions the EEOC’s commitment to pursuing class actions, asserting that the agency tries to make its numbers look better by taking on many individual complaints.


“The reality is that they’re filing fewer pattern-and-practice cases,” says Kim Gandy, president of the National Organization for Women.


—Mark Schoeff Jr.

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Epileptic Truck Driver Entitled to ADA Accommodation

Robert Dark began working for the Road Department of Curry County, Oregon, in 1985, operating heavy equipment and vehicles. Diagnosed with epilepsy at age 16, Dark controlled his condition with medication, but still experienced occasional seizures.


    On January 15, 2002, before reporting to work, Dark experienced an “aura,” which typically preceded an epileptic seizure by an hour or more approximately half of the time. Dark failed to tell anyone at work about the possibility of his suffering from a seizure, and he fell unconscious because of a seizure later that day while driving a truck at work. Although nobody was injured, a doctor retained by the county to examine Dark concluded that his condition imposed limitations on Dark’s ability to do his job.


    The county fired Dark, stating that he could not perform the essential functions and duties of his position, and that his continued employment posed a threat to the safety of others. Dark sued the county under the Americans With Disabilities Act.


    Reversing the federal district court’s dismissal of his claim, the U.S. Court of Appeals for the 9th Circuit in Portland found that factual issues existed as to whether the county could have reasonably accommodated his condition, such as by a temporary reassignment or medical leave. Thus, Dark was entitled to a trial on his claim. Dark v. Curry County Road Dep’t, 9th Cir., No. 04-36087 (7/6/06).


    Impact: Employers are advised to always consider reasonable accommodations that may permit the continued employment of protected disabled employees.


Workforce Management, July 31, 2006, p. 11 — Subscribe Now!

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Calif. Harassment Act May Affect Out-of-State Managers

In 2004, California passed legislation mandating that supervisors of public-and private-sector employers or contractors with 50 or more employees receive sexual harassment training every two years. The California Fair Employment and Housing Commission’s latest proposed interpretative regulations of the law were released June 30, 2006.


    The proposed regulations cover part-time and temporary as well as full-time employees. “There is no requirement that the 50 employees or contractors work at the same location or all work or reside in California,” nor must the supervisors be located in California “so long as they directly supervise California employees.” Thus, employers and contractors who engage even one employee in California would be required to give direct supervisors of that employee two hours of sexual harassment training every two years.


    In the case of Web-based training or e-learning, the proposed regulations also require that the program be interactive and provide the trainees with the opportunity to have their questions answered with a direct link or directions on how to directly contact their trainers. Details of the proposed regulations for California Government Code Section 12950.1 can be reviewed online at http://www.fehc.ca.gov/pub/harassment _training.asp.


    Impact: Employers with any operations within California are advised to review this law and its regulations, and harassment training of supervisors and all other employees everywhere is always recommended.


Workforce Management, July 31, 2006, p. 11 — Subscribe Now!

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Manpower Poised to Further Extend Its Broad Global Reach

Lew Freyholtz, creative partner at Minneapolis-based Web consultancy Factor_UE, was looking for developers with expertise in an open-source Flash application called Open­Lazlo. He turned to Manpower, the Milwaukee-based staffing firm, knowing the company would probably have to find people from outside Minnesota. That was fine with Freyholtz.

    “It had to be built a certain way, and we didn’t have the time to train people,” he says.


    Manpower delivered a team of developers with exactly the right experience. They happened to be based in Buenos Aires.


    Freyholtz couldn’t be happier. He’s pleased not only with the talent, but also about the time difference: Argentina is a mere two hours ahead of Minnesota.


    “We can actually talk to them in real time,” says Freyholtz, as opposed to having to communicate with developers in Asia who are 10 to 12 hours ahead of Minneapolis time.


    Today, it’s not remarkable that a major U.S. staffing company is involved in offshoring. But what is surprising is the depth and breadth of Manpower’s global reach. Just 13 percent of Manpower’s worldwide business in 2005 came from the United States, excluding revenue from acquisitions Right Management Consultants and Jefferson Wells. France is the company’s largest market and represents more than a third of its revenue.


    At the same time, Manpower is the third-largest personnel supply services company in the U.S., with $3.5 billion in annual revenue, including sales from the Manpower franchise operations, according to Staffing Industry Analysts Inc. This gives the firm 3.2 percent of the U.S. market, which Staffing Industry Analysts estimates to be $133 billion for 2006.


    The U.S. represents about half the worldwide staffing market, which, according to Staffing Industry Analysts, totaled $250 billion in 2005. Manpower’s 6.4 percent global market share ranks second after Adecco. Manpower’s total sales worldwide were $16 billion in 2005, up from $14.9 billion in 2004.


    It’s a world away from the company’s post-World War II Midwestern roots.


    Manpower was founded in Milwaukee by two lawyers, Elmer Winter and Aaron Scheinfeld. In 1948, according to company lore, the two were rushing to finish a legal brief and needed additional administrative help. Upon discovering that no one could provide such supplemental help, they established Manpower Inc. Over the next half-century, Manpower was bought, sold and bought back again. But throughout, it has maintained its position as a market leader in the staffing industry.


    Now, 58 years later, the company is on a tear. It is launching its first-ever branding campaign, complete with a highly stylized “MP” logo. The company has 4,400 offices in 72 countries, with 27,000 staff employees. It places about 4 million permanent, temporary and contract workers with clients around the world each year. The company’s stock nearly doubled between mid-2003 and mid-2006. Its bonds were upgraded a notch, and its outlook is rated “positive” by Moody’s Investors Service, based, in part, on the long-term view.


    “Manpower will benefit from a talent gap emerging in the U.S. and abroad, exacerbated by aging populations and the increasing skill levels required to manage technological advances,” Moody’s analyst Lenny J. Ajzenman says. He expects businesses to continue to replace fixed-cost permanent labor with less costly temporary staff.


Global flexibility
    Manpower has caught several waves, including the ongoing trends of globalization and flexible labor and a more recent trend toward consolidation and global contracts in the staffing industry, where companies are looking for fewer suppliers worldwide.


    “Global contracts are becoming more significant,” says Neil Coe, a professor at England’s University of Manchester. Coe is completing a two-year study on the globalization of the staffing industry. He says that staffing companies are driven to be international players so they can follow “key transnational clients overseas and … offer a service in all the markets in which the client operates.” Which is, in part, what Manpower did.


    When the company launched its international operations in the 1950s, decades ahead of most other staffing firms, it simply exported its U.S. business model to other countries. Jonas Prising, president of Manpower North America, explains that in the early stages of internationalization, the goal was simply to have geographic coverage worldwide.


    But about 15 years ago, that changed.


    “Some clients started organizing their businesses according to global product lines versus traditional geographic boundaries. Rather than isolated, country-by-country operations, businesses began to operate more fluidly across borders,” Prising says. “We accompanied our clients when they made this shift in thinking and supported them with flexible staffing solutions.”


    Prising posits that companies are now more global and fast-changing, and as a result they have a competitive need to use their workforces more strategically. This means using flexible and contingent labor and coordinating between different regions, if not different countries.


    At first, the statistics underestimate these changes. According to the Department of Labor, about 2 percent of U.S. workers are employed on a temporary basis. But larger companies might hire 10 percent to 25 percent flexible employees.


    “Temporary help in companies with over 1,000 employees is not just due to vacations and illnesses of administrative staff,” says Barry Asin, executive vice president and chief analyst at Staffing Industry Analysts. “Companies are looking carefully at work that needs to be done throughout the organization. Strategic use of temporary staff is core to the business.”


Organic growth
    Manpower differs from other global staffing firms in how it has integrated itself into key employment markets. While other major staffing firms have grown through consolidation, such as the merger of Swiss firms Adia and Ecco to form Adecco in 1996, Manpower has extended its global reach through organic growth and startups. The company also tends to get involved with a country’s labor policy regulators early on.


“Our global infrastructure is all about our ability to serve locally.”
 –Jonas Prising, Manpower

    Temporary staffing was illegal in Italy until 1997. “We played a major role in advising the government when temporary staffing was introduced in that country,” Prising says. Before his ascendancy to president of Manpower North America, Prising had a successful run as president of the Italian business, which went from zero to nearly $900 million during his tenure.


    Organic growth notwithstanding, the company also has embarked on some very visible acquisitions, with nearly all focused on its core businesses. According to a recent report by Credit Suisse analyst Greg Cappelli, staffing represents 95 percent of Manpower’s revenue and 85 percent of its profit.


    Since 2000, Manpower has acquired London-based Elan Group, a specialty IT staffing company; Jefferson Wells International, a financial and accounting staffing company; and Right Management Consultants, an outplacement firm.


    “Services offered by these acquisitions were considered to be an important part of Manpower’s strategy, but the expertise was not available in-house,” suggests Coe, the University of Manchester professor.


    It has been management competence and a focus on pricing discipline, though, that have driven Manpower’s stock to historic highs. “The turning point for this company was about 1999, when CEO Jeff Joerres and his management team took over. They are young, driven and understand how to motivate managers,” says James Janesky, an analyst with the investment banking firm Ryan Beck & Co.


    Janesky is also impressed with how Manpower has restructured its profitability model. “On a global basis, Manpower has evolved from a company that historically pursued a high-volume, low-margin business. … Now they are actually walking away from unprofitable revenues,” he says. This has been especially noticeable recently in the U.K., where the company lost a number of low-margin clients and took a $7.8 million reorganization charge in the first quarter.


    National and multinational contracts represented 45 percent of the company’s 2005 revenue, according to Manpower’s annual report. That means that to be profitable, Manpower has to be able to stand up to its big clients. “When there is a lot of money on the table, it’s tempting to try to work a deal,” Prising says.


    Manpower is equally keen to serve companies of any size, Prising says, adding that serving major clients is not that different from serving smaller businesses. That’s because labor markets are ultimately local.


    “Our global infrastructure is all about our ability to serve locally,” he says. “We leverage our knowledge. We know what it would take to start an assembly line in Tianjin, [China,] and we can find the right people for a tough-to-fill order for a small company in Minnesota.”


    Ryan Beck analyst Janesky likes the way the company handles itself in locales like the French market, estimated at 18.3 billion euros in 2004, the most recent data available. According to Janesky, Manpower has spent time improving its relationship with the French government and those who set local labor laws. These efforts have “had a dramatic effect,” and Manpower’s profit margin in that country is better than ever at this point in an employment recovery.


    These gradual changes are separate from the proposed youth labor law, which would have made it easier to fire workers under age 26, but were not expected to give a boost to major staffing companies.


    “The fact that it hasn’t gone through is very slightly positive,” Manpower CEO Jeffrey Joerres said in the company’s first-quarter 2006 conference call, “but we didn’t see it as having a major effect.”


    What is more important to Manpower is the global economy and its health. With 95 percent of its market so dependent on the employment cycle worldwide, Manpower is sensitive to economic downturns and slowdowns in global employment. Moody’s calls earnings and margin cyclicality a “key rating concern.”


    The company’s diversification efforts, growing efforts in higher-profit permanent placement and strong position at the crossroads of long-term trends all help.


    “A slowdown in the global economy and rising interest rates are traditional risks in this industry,” Janesky says. “What’s different now is that there are fewer company-specific risks than there were before.”


Workforce Management, July 31, 2006, pp. 1, 31-32 — Subscribe Now!

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House Passes Pension Bill; Legislation Entangled in Tax and Wage Policy

Late Friday night, the House passed a bill that would require companies to fund 100 percent of their pension promises within seven years beginning in 2008. But the Senate may fail to take similar action this week, which could halt the first major overhaul of pension rules since the mid-1970s.


House and Senate negotiators late last week reached an agreement on the legislation, but its fate may be bound to an unrelated measure extending a number of tax cuts, reducing the estate tax and increasing the minimum wage.


The House-Senate conference committee did not produce a final report because a bipartisan group of senators wanted to include the tax-cut extenders. Instead, House Republicans split off the tax cuts off from the pension agreement and put them in the separate tax bill.


They took advantage of the opportunity to force Democrats to vote on an estate tax cut by linking it to raising the minimum wage. For the most part, Democrats decry the estate tax measure as a break for the rich, but see minimum wage as a winning issue in this fall’s elections.


The House approved the pension bill 279-131 and the tax bill 230-180. In the Senate, a motion to end debate on the tax package was set to be filed Wednesday, August 2, according to an aide to Senate Majority Leader Bill Frist, R-Tennessee. That would set up a Senate vote on Friday–first on the tax package, then on the pension bill.


“The pensions bill is must-pass,” Frist said in an Aug. 1 speech on the Senate floor. “If we fail to act, billions of dollars of new debt will be thrown on the federal treasury. That’s just irresponsible. The Senate must clear the pensions bill, clean, so the president can sign it this month. We will act, and pensions will get done, without amendment.”


But Senate Democrats, who have already stopped estate tax reform this year, are gearing up to defeat the tax bill. If they do, the Senate might then re-attach tax extenders to the pension measure, which represents perhaps the last vehicle for tax reform this year.


Such a move would require the pension bill to return to conference negotiations for reconciliation with the bill the House passed on Friday.


“I can’t imagine the Senate taking up the pension bill as a stand-alone bill,” says Robert Davis, senior manager of Deloitte Consulting in Washington. “Even if it were to come out of the Senate, it would be lit up like a Christmas tree (with tax provisions).”


Among the highlights of the House-passed pension bill:


Requires companies to fund 100 percent of their pension promises within seven years.


Prohibits the use of credit balances in pension plans that are less than 80 percent funded and, for the most part, subtracts them from assets when calculating “at-risk” status.”.


Requires increased pension payments that are deemed “at risk.” They fall into that category if their plans are less than 80 percent funded and fall to less than 70 percent after subtracting credit balances and assuming that workers eligible to retire within the next 10 years retire as early as possible.


Reduces the smoothing of interest rates to a 24-month average of the yield on the top three grades of corporate bonds.


Prohibits increasing benefits if a plan is less than 80 percent funded.


Gives airlines 17 years to meet 100 percent funding of their pensions.


Protects companies from age discrimination suits if they establish cash-balance pension plans, but does not provide safe harbor for existing plans.


Permits financial advisors for company-sponsored 401(k) plans to provide advice to employees based on a computer model certified by an independent party.


Provides incentives for automatic enrollment of employees in 401(k) plans.


Makes permanent the federal income tax credit for the first $2,000 of annual contributions to an IRA or qualified pension plan.


Allows companies to use excess pension funds to finance retiree health benefits.


The business lobby, which has warned Congress not to make pension funding more volatile and onerous, is lukewarm toward the bill emerging on Capitol Hill. The Pension Coalition, a group of about 200 companies, remains neutral on the bill.


“The success or failure of the legislation will be judged over time,” says Martin Reiser, manager of government policy for Xerox and spokesman for the coalition. “There are individual companies within the coalition that have endorsed it, including Xerox. But there are others who have concerns.”


—Mark Schoeff Jr.


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Studies Examine the Online Job Hunting Experience

Keeping an eye on the job seeker’s online application experience is not an easy job, but somebody’s got to do it. CareerXroads recently conducted two quality control exercises to shed light the state of the online application experience.

    CareerXroads’ list of the top 25 corporate sites suggests that financial service providers lead the pack when in comes to catering to the needs of online job applicants. The Kendall Park, New Jersey-based recruiting consultancy combed through Fortune’s list of “America’s 500 Largest Public Corporations” to find which Web sites create the best online application experience for job candidates.


    “We looked for sites that treat job applicants like valued consumers, not like yesterday’s garbage,” says Mark Mehler, co-founder of CareerXroads.


    CareerXroads evaluated the sites based on their ability to target, engage, inform and respect job candidates. Financial service providers—which include Bank of America, Goldman Sachs, Morgan Stanley and Capital One—have the strongest presence on the list, followed closely by tech companies like Intel, Microsoft and Texas Instruments.


    “We did not make our decisions lightly,” Mehler says. “It took a lot of research and much deliberation.”


    Those Web sites that made it to the list tend to offer special features, like allowing job applicants to check remotely the stage of the hiring process they are in. In addition, these Web sites do a good job giving candidates glimpses into an organization’s corporate culture.


    “Features like ‘a day in the life of an employee’ are important,” Mehler says. “They give applicants useful information to determine whether they are a good fit with the company.”


    Mehler says that a wide cross section of companies are pushing to improve their online recruiting efforts. The financial service providers and tech companies’ edge is attributed–at least in part–to necessity, because the hiring needs in these two industries are highly demanding, Mehler notes.


    In its efforts to better understand the experience that online job applicants go through, CareerXroads also conducted a mystery job seeker study. In this exercise, the consultancy targeted Fortune’s list of “America’s Best Companies to Work For.” CareerXroads created a résumé for a fictitious job seeker, Mr. Ted E. Baer, and enlisted 20 volunteers to apply electronically. One of the objectives for embarking on this study was to determine the level of attention that is paid to résumés that are received from job applicants.


    The results reveal that rendering personalized care to job candidates could be falling by the wayside at some of the country’s top employers. There were 96 companies that sent generic responses to Ted E. Baer, either electronically or by mail, to let him know that his résumé had been received, was being considered or was being forwarded to a hiring manager. There were two companies, including a casino, that actually called Baer for interview.


    Usually, contacting an applicant who has submitted a résumé is standard protocol, but in this case it would be a bit odd. Ted E. Baer’s résumé indicates that he worked as an administrative assistant to “the man in the yellow hat,” and that some of his responsibilities have included tucking in his bosses’ three children each night.


    Only two companies, FedEx and Alston & Bird, were proactive enough to look into the matter further and contacted CareerXroads directly.


    “The results tell me that many companies that are simply not paying enough close attention to the résumés they are receiving,” Mehler says. “It is lazy recruiting 101.”


    According to CareerXroads, the 25 members of the Fortune 500 that seem to best understand how to treat today’s job seekers are:


1. Agilent
2. Bank of America
3. Bell South
4. C.H. Robinson
5. Capital One
6. Federated
7. Ford
8. General Electric
9. General Mills
10. Goldman Sachs
11. HCA
12. Intel
13. Kodak
14. Eli Lilly and Co.
15. Merck
16. Microsoft
17. Morgan Stanley
18. Proctor & Gamble
19. Sherwin Williams
20. Southwest Airlines
21. Starbucks
22. Target
23. Texas Instruments
24. Whirlpool
25. Xerox


As part of this study CareerXroads also enlisted 20 volunteers to apply to each company on Fortune’s “America’s Best Companies to Work For” list.

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D.C. Program Promotes Careers in Pharmacy

Not many kids growing up in low-income neighborhoods of Washington daydream about becoming pharmacists. CVS and the District of Columbia are attempting to change that mind-set.

    This summer, the drugstore chain and the local government are sponsoring a program called Pathways to Pharmacy. The first workshop was held in June during the rededication of the CVS Regional Learning Center in Washington. The facility, opened in 2000, is a joint venture between the company and the District that focuses on hiring and training unemployed residents for CVS jobs.


    The drugstore chain needs as much talent as it can find for its pharmacies. CVS estimates that the retail industry will more than double by 2012 and that several high-growth regions in the United States lack pharmacy coverage.


    CVS wants to draw young people to the profession by sponsoring summer jobs for high school students. It is also trying to attract adults.


    The company established a pharmacy technician apprenticeship program in the District in 1998. CVS and the government developed standards that were approved by the U.S. Department of Labor.


    The goal for local leaders was to put people on a lifelong-learning track that would start with the pharmacy tech position and lead to more schooling and eventually a degree and career as a pharmacist.


    Ebony Harris, 22, may be headed in that direction. She joined CVS as a pharmacy technician after going through training at the Washington learning center. A single mother who had worked at a bookstore, she applied for the CVS program after hearing about it through a program for out-of-school adults.


    Harris, who has always wanted to be a pharmacist, is getting an intimate view of the profession’s challenges. She has helped track down drugs when her store lacks supplies. She also has had to sort out insurance problems.


    “Some of the demands are unexpected, but you can deal with them if you take a deep breath,” says Harris, who intends to start taking pharmacy courses. “That’s what CVS is about—keeping the customer satisfied.”


    Increasing the number of people like Harris who pursue pharmacy will require raising awareness and enthusiasm about the field among youngsters. “It’s not a jazzy profession at all, according to them,” says Gregory Irish, director of the District’s Department of Employment Services.


    One way to pique interest is to highlight the field’s salary potential. The Rev. Lionel Edmonds, pastor at Mount Lebanon Baptist Church in the District, has used that tack when talking to kids.


    “When I ask, ‘Who wants to make $100,000 a year?’ everyone’s hands go up,” says Edmonds, whose church is working with CVS and the government on the pharmacy program. “Then I tell them, you need to study math and science to be a pharmacist.”


    Irish acknowledges that the District hasn’t reached its goals. But some kids have stepped onto the pharmacy path. “It works for highly motivated young people,” Irish says.


Workforce Management, July 31, 2006, p. 26 — Subscribe Now!

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CVS’ Magic Pill Partnerships

While the Rev. Lionel Edmonds leads people to God, he also might help them get and keep a job with CVS. The minister is part of a unique partnership that helps the giant pharmacy chain build its workforce in the increasingly competitive retail industry.

    As pastor of Mount Lebanon Baptist Church in Washington, D.C., Edmonds presides over a 1,500-member congregation. In 2001, he agreed to sponsor a job fair for CVS that attracted 120 parishioners, 50 of whom were eventually hired.


    “He gives us a competitive edge,” Steve Wing, CVS’ director of government programs, says of Edmonds.


    The event helped CVS find workers as it expanded in the metropolitan Washington area. It also gave unemployed people a chance to jump into the labor pool.


    “You’re not just caring about their souls; you’re caring about their welfare,” Edmonds says. “You give folks hope. They get a career track.”


    The relationship CVS built with Edmonds is one facet of its work with government, nonprofit and faith-based organizations. These groups not only help the drugstore find workers, they also help retain them by providing social services. CVS augments retention by linking low-income employees to inexpensive home loans. Beyond these initiatives, CVS is trying to hold on to its older workers through a program that allows pharmacists to work in different regions of the country at different times of the year, thus keeping “snowbirds” out of full-time retirement. In 1990, only 7 percent of CVS’ employees were older than 50. Now that figure is 18 percent.


    Each of these efforts shows how CVS is looking in new places to staff its rapidly expanding network of stores.


    “I would give CVS very high marks for imagination and for tying the (faith-based) initiative to bottom-line business results,” says James Post, professor of management at Boston University and an author of a case study of the company. “CVS is running well ahead of Walgreens and Rite Aid in terms of this critical aspect of their business strategy. It’s about running the business better for investors, employers and customers.”


Powerful allies
    About a year before the job fair at Mount Lebanon, the company established a CVS Regional Learning Center in southwest Washington. The facility is a joint undertaking between CVS and the District of Columbia’s Department of Employment Services. In the front is a District one-stop job center for the unemployed. In the back is a mock CVS store, complete with a photo lab, electronic checkout registers, aisles of merchandise and a pharmacy counter. The center celebrated its sixth anniversary on June 1.


    Post praises CVS for partnering with the government to lower training expenditures. CVS spends about $1,500 to $2,000 to train a new employee in a learning center, but that’s after the government picks up the tab for expenses like rent, utilities, maintenance and security, and also offers tax credits. The final result is about a 50-50 split on costs.


    New CVS hires go to the regional center to train for their first jobs. Continuing workers visit to prepare for new jobs as they move up the company ladder. Among the occupations taught there: pharmacy tech, photo lab technician, shift supervisor and assistant manager. CVS has established similar centers in Baltimore, Atlanta, Detroit, New York City and Southern New Jersey. It is opening its newest one in Cleveland in September.


    Since 2000, CVS has hired 3,782 people who have gone through training at the Washington center. The retention rate in 2005 was 82 percent—a strong number for retail, an industry in which turnover can average 200 percent. People who have been trained include welfare recipients, ex-offenders, those with no previous work experience and high school dropouts.


    Altruism is not pushing CVS to offer jobs to people whom other employers often leave behind. The company needs to recruit and keep workers in a tightening job market. “They had substantially better retention results than competitors and other employers in the D.C. area,” Post says.


    The D.C. government has helped fill in the gaps that may cause workers to leave their jobs. Many of the new CVS employees don’t have prior work experience and often are in need of other services like transportation and child care that the local government can provide.


    “CVS has been smart,” says Gregory Irish, director of the D.C. Department of Employment Services. “It’s formulated partnerships with nonprofits, faith-based organizations and government in terms of delivering these holistic and wrap-around services to people.”


    Since 1996, CVS has hired more than 45,000 people who had been on public assistance through its welfare-to-work program. More than 60 percent are still actively employed, and the majority have been promoted at least twice.


    That record is made possible in part because of help from CVS’ agency partners. If a new hire starts to arrive late or miss work altogether, the government or an outside group can step in.


    “We have good managers, but they’re not social workers,” Wing says. As workers stumble, they can get help from other sources. And instead of being terminated, “the problem becomes a blip on the screen and they continue to work.”


    That outcome also benefits the D.C. government. It is working with CVS to break what has been a long-term cycle of poverty for many people.


    “What we’re looking at is not only the job placement of an individual. We’re also looking at how long they stay on the job,” Irish says. “Our whole goal is to make sure they become productive citizens and taxpayers.”


    The services the government offers “may mean the difference between their success and becoming unemployed again,” Wing says.


    Retention begins with the right hiring decisions. CVS works with the D.C. employment office to set standards. The government then evaluates potential applicants through a series of tests that measure their skills, aptitudes and personality. For instance, someone who wants to work outdoors or tends to be anti-social wouldn’t prosper in a CVS store, where customer service determines whether the business thrives or dies.


    The D.C. government is not looking for charity from CVS, Irish says. It does benefit when CVS takes people off the unemployment rolls, but in the process the government wants to bolster the CVS workforce, not enervate it.


    “We don’t expect CVS to hire people who are not qualified for jobs,” Irish says. “We’re selecting the people we think will fit the corporate culture of CVS.”


    That culture has produced strong results lately. Second-quarter sales for the drugstore chain rose 15.8 percent to $10.6 billion compared with the second quarter of last year. Same-store sales, an important retail measure, increased 8.8 percent during the same period. CVS operates 6,205 retail and specialty pharmacy stores in 44 states and the District of Columbia, and it employs 170,000. (A breakdown of part-time versus full-time workers was not available.)


A hand with homeownership
    As it does business with CVS, the D.C. government sees the company as the customer and job seekers as the product. In the process, the lines of demarcation between the public and private sectors blur. That starts with the look of the job center.


    What was once a dilapidated building now has a sleek design. It features CVS signs, gray and black interior colors, flat-screen computer terminals, indirect lighting, comfortable cubicles for job searching and steel pipes exposed with a postmodern flair.


    “You can’t tell it’s a government facility,” Irish says. “It has a private-sector feel. That was intentional. It inspires confidence from those who use the services.”


    Rebuilding the job center was a centerpiece of the District’s effort to revitalize the area that surrounds it. Once a rough area, it now features new businesses, renovated buildings, a new elementary school and several new housing complexes.


    Like a proud father, Wing highlights the improvements during a tour. He hopes that CVS employees move to the neighborhood. “They’re our employees. They’re our customers,” he says. “We want them to live in the neighborhood where they work.”


    To help employees buy new homes, CVS has launched a program that gives staff who have worked for two years a $500 forgivable grant and access to loans that are 1.5 percent below the prime rate. Managers and pharmacists are eligible when they’re hired.


Since 2000, CVS has hired 3,782 people who have gone through training at the Washington center. The retention rate in 2005 was 82 percent–a strong number for retail, an industry in which turnover can average 200 percent.

    Prescriptions for Homeownership is an initiative involving CVS, Freddie Mac, Bank of America and Mount Lebanon church. It targets the company’s 1,000 employees in the D.C. area.


    The company again turned to Edmonds to introduce the program. The minister conducts financial literacy and homebuyer education sessions at the CVS center. Since its inception, 80 people have participated in information meetings, eight have secured loans and two have closed on houses in the Washington area. The company wants to start similar programs throughout the country.


    Although CVS works with federal lenders and commercial banks, the church connection is key. Many of the people applying for the program live in the inner city and have not had much access to loans. A local minister like Edmonds is someone they can trust to help them work through bad credit issues.


    Those who receive loans must stay with the company for three years. But once they buy a home, employees may feel connected to the company in a relationship that is deeper than a financial agreement. They may find that CVS is a foothold on the economic ladder.


    “It’s a motivational factor,” Wing says. “They see the company as a partner. If they’re bettering themselves, they want the company to do well too. They become an even stronger and better employee because they feel we’re trying to help them.”


Courting older workers
    CVS goes beyond the country’s inner cities to keep its workforce in shape. It has also tapped a growing pool of mature workers. One innovation is the snowbird program, which adjusts work to older workers’ schedule rather than let them slip off into retirement.


    In this initiative, the company offers employees the chance to spend the winter in warm climates, such as Florida, and to work the warmer months of the year in the East or Midwest.


    In the past year and a half, the company has signed up 350 to 500 employees for the snowbird program.


    “They want to work,” Wing says. “If we want the best people, we’re going to have to be flexible.”


    Sometimes CVS must lure a worker out of retirement. That was the case with Dave Johnson, a pharmacist who spends Memorial Day through October 1 in Tecumseh, Michigan. He and his wife, Linda, live in Naples, Florida, the rest of the year.


    While Johnson’s wife is on the golf course, he is working at a CVS store. He rotates among four locations in Michigan and nine in Florida. After selling the two pharmacies he owned and retiring at age 49, Johnson and his wife spent two years traveling. But then he became bored.


    CVS was happy to welcome him behind the counter and set up a schedule that fit his needs. Johnson, now 57, works two 14-hour shifts during the week and every other weekend.


    “I’ve always loved what I do, and I get personal fulfillment from going to work,” he says. “I enjoy the connection with the people. Everybody has a problem; everybody has a story to tell.”


    Bouncing from store to store and between regions also keeps things interesting. “We have things to share from other stores and other ideas,” he says.


    Working for the same company in two different places makes the life of a part-time employee much easier. For instance, Johnson only has to deal with one computer system and one corporate culture. In addition, he has seamless employment, something that doesn’t exist in seasonal hiring.


    “You can’t hire someone for three or four months and then cut them loose,” he says. “You’re not going to find many people who are going to work that way.”


    But CVS, along with some other U.S. companies, has realized that if it structures jobs to suit people who, like Johnson, want to maintain 401(k) and health care benefits, it can tap into a steady and reliable workforce.


    CVS also knows that it’s not just older workers who come to work because of benefits. It’s also what low-income workers are seeking. That’s why the company has developed a benefits package that is available to part-time workers. Making the transition from never having held a job to working 40 hours a week can be tough.


    “They may not be ready to work full time,” Wing says. “But they do need the health benefits, and this way they can get them.”


    Continuing to attract employees from low-income populations is likely to become more urgent for CVS. The company estimates that the retail pharmacy industry will more than double by 2012 and that several high-growth areas of the country lack adequate pharmacy coverage.


    The company’s efforts in the community will help it establish connections that can lead to new hires.


    “They’ve been good corporate citizens in the District of Columbia,” Irish says. “It’s a matter of enlightened self-interest for CVS.”


    For Edmonds, it’s a matter of ministering to his congregation.


    “Every one of them has someone in their family or a friend who is looking for a job,” he says.


    Sometimes, the CVS relationship helps Edmonds put more people in the pews. Once he found himself trying to persuade a young man to come to worship. The conversation focused on the difficulties of finding a job.


    Edmonds says he told the teenager: ” ‘You want a job? Come to church. We’ll get you a job at CVS.’ He was in church the next Sunday.”


Workforce Management, July 31, 2006, pp. 1, 22-28 — Subscribe Now!

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Employers May Want to Get off Sidelines in Dialogue on Worker Economic Insecurity

A debate is brewing about the economic insecurity faced by American workers in today’s global economy, a discussion that so far includes economists, activists and some politicians. But one group with a big stake in the matter has been largely silent: business leaders. During the past few years, corporations have remained relatively quiet as others have begun to discuss the erosion of the traditional compact between workers and employers and grapple with ideas about how to repair or replace it.


    Few if any observers call for a return to the days when workers gave loyal service to firms in exchange for a promise of lifetime employment and comprehensive health and retirement benefits. That era may be over, but employers risk a great deal if they fail to engage in the public conversation of what should replace that earlier promise or at least address financial anxiety among their own workers, analysts say.


    On the one hand, companies’ reputations could take a hit just as the labor market threatens to tighten and places a premium on attracting talent. More broadly, anger about economic inequality may trigger new regulations on firms. And fears of offshoring could translate into protectionist laws that hurt the economy overall and sharply limit companies’ growth, says Brad Jensen, an economist with the Institute for International Economics.


    Jensen, one of a number of economists calling for a stronger safety net for people displaced from their jobs, suggests business leaders have “fallen down a little” when it comes to figuring out what to do about those who lose big in the global economy.


    “There’s a lot of good from having an open trade system, but people are anxious and scared,” he says. “The protectionist sentiment is palpable here in Washington. Businesses should be concerned by that.”


    John Castellani, president of the industry group the Business Roundtable, rejects the idea that U.S. companies have remained aloof regarding Americans’ economic fears. He says corporate leaders haven’t spoken out about “economic insecurity” per se, instead focusing on the need for American workers to become lifelong learners and for the country as a whole to remain competitive. Those steps will be critical for Americans to enjoy any sort of financial security in a fast-paced global economy, he says.


    “You can wish to slow it down all you want,” says Castellani, whose association is made up of executives at major U.S. companies. “But the rest of the world isn’t slowing down.”


    Perhaps not, but the global economy is exposing large numbers of Americans to painful economic dislocations. In a study published by the Institute for International Economics last fall, Jensen and co-author Lori Kletzer found that many U.S. workers are in services industries that can be traded internationally, such as data processing and insurance. They also discovered that these workers lose their jobs at a higher rate than workers overall do, and that job loss for them is costly.


    On average, the authors report, full-time workers in tradable services fields who are displaced and then return to full-time work suffer a 21 percent drop in earnings.


    That finding comes amid other data suggesting those at the top of the corporate heap are winning big while most employees tread water. Meanwhile, workers face the decline of employee-sponsored health and retirement benefits. Even outplacement services, which emerged in the 1980s to help cushion corporate layoffs, have shrunk. Ten years ago, companies often hired outplacement firms for as long as it took for every laid-off worker to find a new position, says John Challenger, CEO of outplacement provider Challenger, Gray & Christmas. Today, firms typically cut off outplacement services after three months.


    Most workers can find new jobs within that window, Challenger says. “But it means the people who have the most difficult time—the bottom 20 percent—are abandoned,” he says.


Concern widespread
    Amid a growing economy, layoff fears seem to have eased in recent months. Still, the overall trends have left Americans anxious and unhappy with businesses. According to a March report by retirement services firm the Principal Financial Group, 73 percent of Americans surveyed agreed completely or somewhat with the statement “I am very concerned about my long-term financial future.” And in a study published last fall by the AFL-CIO, 64 percent of adults surveyed said companies fall very short or somewhat short on being loyal to long-term employees, up from 57 percent in 2002.


    There’s strong interest in laws to bolster economic security, according to the AFL-CIO study. Eighty-five percent of those surveyed rated providing incentives for companies to keep jobs in America as a priority, and 73 percent said establishing a national health care system should be the top or a high priority.


    Politicians have begun debating these issues in the past few years. In recent months, economists from different parts of the political spectrum have highlighted one possible reform: a stronger social safety net.


    Princeton University’s Alan Blinder, who served on President Clinton’s Council of Economic Advisers, argued in the March-April edition of Foreign Affairs magazine that the United States “may have to repair and thicken the tattered safety net that supports workers who fall off the labor-market trapeze—improving programs ranging from unemployment insurance to job retraining, health insur­ance, pensions, and right down to public assistance.”


    Jensen, whose institute is known for its staunch defense of free trade, also argues for a “less-porous” safety net, which could mean extending existing Trade Adjustment Assistance programs to more workers.


    Louis Uchitelle, author of a new book, The Disposable American: Layoffs and Their Consequences, argues the true number of American full-time workers forced out of their jobs each year is about 7 percent, rather than the official annual layoff statistic of about 4 percent.


    Despite the scale of layoffs and a lack of quality jobs for people to move into, Americans largely blame themselves when they get pink slips, Uchitelle says. He’s not surprised that corporate management has remained quiet in the discussion about economic security.


    “Until we start talking about this as a social issue, companies don’t have to enter the debate,” Uchitelle says.


    Sanford Jacoby, a professor at UCLA’s Anderson School of Management, sees other factors behind the business community’s relative silence. Compared with the past, that community is more fractured along fault lines such as an international vs. domestic focus, Jacoby says. What’s more, he says, today’s crop of business leaders is missing the sort of public spokesman on social issues embodied by Marion Folsom, the Eastman Kodak treasurer who helped draft the Social Security Act during the Great Depression.


Too much investor focus?
    Jacoby traces much of the current climate back to a corporate focus on pleasing shareholders rather than other stakeholders, such as customers and employees.


    “It’s not only shifted to shareholders,” he says, “everyone else has fallen off the map.”


    Not all companies are taking a shareholder-only route. Oil refiner Valero Energy, for instance, says it has never had a layoff despite a downturn in the refining business in the late 1990s and multiple acquisitions. The 22,000-person company has fired some employees for poor performance. “But at Valero, as long as you do a good job, you know you will have a job,” says company spokeswoman Mary Rose Brown.


    Valero offers both a 401(k) and a traditional pension plan. And the company, which saw net income jump 59 percent in the first quarter of this year to $849 million, makes stock options available to all exempt employees and bonuses available to all workers.” “If executives get a bonus, everyone gets a bonus,” Brown says.


    Outrage about huge CEO pay packages is generating shareholder calls for reform, says Amy Lyman, co-founder of the Great Place to Work Institute, which compiles the annual list of Fortune’s 100 Best Companies to Work For in America. The concern, she says, is CEOs are being paid more than they are worth when their contributions are considered relative to those of everyone else.


    “Smart boards are going to see investor anger and start paying attention,” she says.


    Among the firms under fire for hefty CEO compensation is retailer Home Depot. Its chief, Robert Nardelli, took in $37.9 million in compensation in the last fiscal year, including the value of stock options granted to him. A recent shareholder proposal calling for an advisory vote by stockholders on the firm’s executive compensation practices failed to pass, but garnered 40 percent of the votes cast.


    As for the broader public debate about Americans’ economic worries, some of the loudest business voices have decried possible trade barriers. Business leaders such as Microsoft’s Bill Gates have called for better education and looser immigration policies to improve America’s ability to compete. In addition, the Business Roundtable’s Castellani cites executives’ efforts to make the U.S. health care system more efficient and to provide portable retirement benefits—like 401(k) plans—that reflect a working world in which people tend to have multiple employers during the course of their careers.


    Business leaders have good reason to address the financial anxiety of average Americans, argues economist Jared Bernstein, author of the new book All Together Now: Common Sense for a Fair Economy. Americans would be better, more reliable consumers if they felt less vulnerable economically, he says. In Bernstein’s view, this could be done without closing off free trade, but instead by creating policies that pool risks rather than shift them to individuals.


    Today’s businesses could then help their own bottom lines by helping to rewrite, and not erase, the social contract.


    “In other eras, corporate titans recognized that a more equitable distribution of growth, more opportunity and greater economic stability was very much in their interest,” Bernstein says.


Workforce Management, July 31, 2006, p. 38-39 — Subscribe Now!