| THE MOST EXPENSIVE HOUSING MARKETS | |||
| RANK | METRO AREA | STATE | MEDIAN PRICE |
| 1 | San Francisco Bay Area | CA | $689,200 |
| 2 | Orange County | CA | $656,900 |
| 3 | San Diego | CA | $584,100 |
| 4 | Honolulu | HI | $529,100 |
| 5 | Los Angeles Area | CA | $474,700 |
| 6 | New York: Bergen/Passaic | NJ | $448,100 |
| 7 | New York: Nassau/Suffolk | NY | $446,700 |
| 8 | New York/N. New Jersey/Long Island | NY/NJ/CT | $435,200 |
| 9 | Boston | MA | $398,300 |
| 10 | New York: Middlesex/Somerset/Hunterdon | NJ | $381,400 |
| 11 | New York: Newark | NJ | $379,700 |
| 12 | Washington | DC/MD/VA | $369,000 |
| 13 | W. Balm Beach/Boca Raton/Delray Beach | FL | $362,800 |
| 14 | New York: Monmouth/Ocean | NJ | $358,500 |
| 15 | Sacramento | CA | $352,900 |
| 16 | Riverside/San Bernardino | CA | $343,400 |
| 17 | Sarasota | FL | $326,300 |
| 18 | Seattle | WA | $321,100 |
| 19 | Ft. Lauderdale/ Hollywood/Pompano Beach | FL | $320,700 |
| 20 | Miami/Hialeah | FL | $315,700 |
| Source: National Association of Realtors, first quarter 2005 | |||
Training by the Numbers
| TRAINING COSTS (U.S. DOLLARS) |
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| Source: ASTD 2004 State of the Industry Report |
| AVERAGE PERCENTAGE OF LEARNING HOURS PROVIDED VIA DIFFERENT DELIVERY METHODS |
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| Source: ASTD 2004 State of the Industry Report |
| average percentage of vice presidents and c-level executives who support learning in different ways |
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| Source: ASTD 2004 State of the Industry Report |
| AVERAGE PERCENTAGE OF LEARNING HOURS VIA TECHNOLOGY-BASED DELIVERY METHODS |
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| Source: ASTD 2004 State of the Industry Report |
IBM Builds a New Business on Its Training Program
When it comes to training and development, IBM likes to have it both ways. The company maintains one of the world’s largest internal training and development programs, last year spending a whopping $700 million. Big Blue estimates that its workers will log 15 million hours of training in 2005.
But IBM takes training and development a step further. It resells some of its successful learning programs to outside clients—with a markup in price, of course.
“Part of our strategy is harvesting what’s going on internally,” says Steve Rae, a vice president at IBM Learning Solutions. Programs “are provided to IBM at cost and to clients at retail.”
At IBM, training and development represents a key element in an overall corporate strategy aimed at repositioning the company. After decades as a computer hardware supplier, IBM has been aggressively moving into the service and consulting industry. In December, it sold its personal computer division to the Chinese company Lenovo.
“It used to be that we sold products with services attached,” says Ted Hoff, IBM’s vice president of learning. “Now the people of IBM have become what we deliver to clients.”
IBM expresses its new focus through its marketing slogan, On Demand, which refers to the company’s goal of meeting clients’ needs exactly when they want it, a particularly daunting task in the rapidly evolving world of information technology. For IBM to match its slogan with results, its personnel must stay abreast of all the latest changes.
For IBM to back up its On Demand promise, its people must be able to anticipate what clients need and be ready with answers. That has required the company to devise ways of rapidly training and developing in-house talent.
| “Part of our strategy is harvesting what’s going on internally.” |
To figure out what skills and knowledge its employees need, IBM surveys targeted workers. It has cataloged the skills of about 100,000 employees. That database, in turn, is used to connect employees who have questions to others with the answers, using the Internet and instant messaging. The company estimates that 80 percent of what it considers “learning” falls outside of traditional classroom instruction.
Rae offers as an example a recent case in which an IBM consultant in Atlanta who was developing an instructional course for a client encountered a problem at 11:30 on the night before the final product was to be presented. The worker sent out a frantic message for help. On the other side of the world, an IBM worker in Sydney, Australia, saw the message, had the answer and immediately sent a reply.
Problem solved, and the Atlanta worker gained knowledge that could be used in the future.
Does that interaction count as training and development? IBM says it not only counts, it’s the essence of modern learning: real-time workplace interactions that deliver key pieces of knowledge when and where needed.
“We are going to enable people to learn through their work, not just with statistics and data,” Hoff says. “I think this is the future of learning.”
If Hoff is right, IBM may be creating not just a powerhouse internal training and development program but also a learning system that it can sell to other companies around the world.
Workforce Management, July 2005, p. 59 —Subscribe Now!
Typical Measures of Return on Investment
Here are some ways to measure the payoff of some workforce management programs.
The measures are quite broad for some programs. For example, a reward systems project can pay off in a variety of measures such as improved productivity, enhanced sales and revenues, improved quality, cycle-time reduction or even direct cost savings.
In other programs, the influenced measures are quite narrow. For example, in labor management cooperation programs, the payoff typically comes in reduced grievances, fewer work stoppages and improved employee satisfaction. Orientation programs typically pay off in measures of early turnover (turnover in the first 90 days of employment), initial job performance and productivity.
Absenteeism control/reduction
Absenteeism, customer satisfaction, job satisfaction
Business coaching
Productivity/output, quality, time savings, efficiency, costs, employee satisfaction, customer satisfaction
Career development/career management
Turnover, promotions, recruiting expense, employee satisfaction
Communications
Errors, stress, conflicts, productivity, employee satisfaction
Compensation plans
Costs, productivity, quality, employee satisfaction
Compliance programs
Penalties/fines, charges, settlements, losses
Diversity
Turnover, absenteeism, complaints, charges, settlements, losses
E-learning
Cost savings, productivity improvement, quality improvement, cycle times, error reductions, employee satisfaction
Employee benefits plans
Costs, time savings, employee satisfaction
Employee relations program
Turnover, absenteeism, employee satisfaction, engagement
Gainsharing plans
Production costs, productivity, turnover
Labor-management cooperation programs
Work stoppage, grievances, absenteeism, employee satisfaction
Leadership development
Productivity/output, quality, efficiency, cost/time savings, employee satisfaction, engagement
Marketing and advertising
Sales, market share, customer loyalty, cost of sales, wallet share, customer satisfaction
Meeting planning
Sales, productivity/output, quality, time savings, employee satisfaction, customer satisfaction
Orientation
Early turnover, training time, productivity
Personal productivity/time management
Time savings, productivity, stress reduction, employee satisfaction
Project management
Time savings, quality improvement, budgets
Recruiting source (new)
Costs, yield, early turnover
Retention management
Turnover, engagement, employee satisfaction
Safety incentive plan
Accident frequency rates, accident severity rates, first-aid treatments
Selection tool (new)
Early turnover, training time, productivity
Self-directed teams
Productivity/output, quality, customer satisfaction, turnover, absenteeism, employee satisfaction
Sexual harassment prevention
Complaints, turnover, employee satisfaction
Six Sigma
Defects, rework, response time, cycle time, costs
Skill-based pay
Labor costs, turnover, absenteeism
Strategy/policy
Productivity/output, sales, market share, customer service, quality/service levels, cycle times, cost savings, employee satisfaction
Stress management
Medical costs, turnover, absenteeism, job satisfaction
Technical training (job-related)
Productivity, sales, quality, time, costs, customer service, turnover, absenteeism, employee satisfaction
Technology implementation
Cycle times, error rates, productivity, efficiency, customer satisfaction
Wellness/fitness
Turnover, medical costs, accidents, absenteeism
Source: Excerpted from Investing in Your Company’s Human Capital, by Jack J. Phillips. Copyright 2005 by AMACOM Books.
One-stop Shopping Versus Best of Breed
Like many companies, United Parcel Service slowly has expanded its human resources outsourcing since the 1980s. Today, multiple vendors administer human resources tasks for the world’s largest package carrier.
CitiStreet, a joint venture between Citigroup and State Street, manages UPS’ 401(k) program. Hewitt Associates administers health care. Talx, a business software and services provider, handles employment verifications. ChoicePoint provides background checks. PricewaterhouseCoopers manages UPS’expatriates program. And Mellon Securities manages a bonus stock program for UPS managers.
But some industry experts see signs that the multiple-vendor approach of UPS may become less common as more companies look for suppliers able to handle all of their human resources processes. As more companies explore outsourcing, they’re weighing the pros and cons of one-stop shopping versus piecemeal outsourcing to so-called best-in-breed vendors.
“While working with best-of-breed vendors, in theory, is very attractive, in practice, it is very difficult to master,” says Robert Brown, a principal analyst with Gartner.
Even organizations outsourcing just payroll or benefits administration, for example, often select vendors capable of doing much more. That’s because companies increasingly look for vendors that could take on more processes if they decide to expand their human resources outsourcing, Brown says.
Single-vendor approach
Twenty-three percent of companies already have consolidated their human resources services with one outsourcing provider or plan to do so within the next three years, according to a survey of 122 companies conducted by the Conference Board.
In fact, 60 comprehensive human resources outsourcing deals have been formed since 2000, according to outsourcing advisory firm EquaTerra.
Some companies want “a single face” for their vendor or hope to use one human resources information system. “It’s usually easier to manage (one) vendor,” says Larry Kurzner, senior vice president with Aon Human Capital Services, which provides end-to-end human resources outsourcing to clients such as AT&T.
If Aon hires another firm to handle some aspect of the outsourcing agreement, Aon manages that tertiary relationship, Kurzner says. The client still has only one vendor to oversee: Aon.
Organizations that use only a few vendors believe that their approach leads to less employee confusion, better integration and easier coordination of services, less time dedicated to vendor management and more buying power, according to a recent survey by Hewitt Associates.
But going with a single vendor comes with potential downsides. “If you go with one provider, sometimes you have to compromise one area for the sake of another area,” says Robin Rasmussen, managing director of human resources research at EquaTerra.
Best-of-breed
Research by EquaTerra suggests that companies that outsource to more than one provider are more satisfied than those with just one provider are. The reason why, though, is unknown. It could be that buyers who choose multiple vendors have a preconceived belief that they are receiving best-in-class service, Rasmussen says.
Despite hoopla about large companies such as Bank of America, Prudential Financial and Motorola signing comprehensive human resources outsourcing deals, most companies outsource incrementally, according to a study released in May by Watson Wyatt Worldwide.
Only 7 percent of the 135 respondents say their HR departments are mostly outsourced, according to the Watson Wyatt study, compared with 65 percent who say they are mostly insourced. Twenty-nine percent say their human resources administration is split equally between insourcing and outsourcing.
“The value of the unbundled approach is that you’re getting the best services from those companies that specialize in those services,” says Bob Crow, a senior consultant for Watson Wyatt’s strategic sourcing practice. “I’m pretty much a fan of the unbundled model because a lot of companies don’t like to have all of their eggs in one basket, and it gives them leverage to negotiate if they keep it broken up.”
Market consolidation
The competitive market of human resources business process outsourcing has fueled consolidation as suppliers buy niche expertise that they lack.
Last year, Hewitt Associates bought rival Exult. In January, Electronic Data Systems agreed to pay $420 million for the human resources outsourcing division of Towers Perrin. And in May, Affiliated Computer Services completed its $405 million acquisition of Mellon Financial Corp.’s human resources consulting and outsourcing businesses.
“Yesterday the industry was made up of tons of suppliers,” says Michel Janssen, president of the supplier solutions division at Everest Group. “Today the trend is to consolidate those into one main contractor.”
IBM Moves East to Get Timely Industry Data
The scenario usually goes like this. A manager comes bursting into human resources with a hot-off-the-Internet article about what their industry is paying. The manager then grills the human resources executive about why the company isn’t offering similar compensation.
“Sometimes the person is right, sometimes they are wrong,” says Patrice Daprino, senior program manager, compensation, at IBM. “We don’t know what to say or do.”
The frenzy is not confined to IBM, of course. Human resources executives from coast to coast are beset by instant compensation experts at their companies.
“It becomes a fire drill and drives HR folks and compensation managers nuts because they need to find something right away to address this,” says Rick Beal, division practice leader for compensation at Watson Wyatt Worldwide.
The problem is that it is next to impossible to get up-to-date compensation data. Surveys on pay take so long to conduct that by the time they are ready, the information is often too old to be valuable.
Matters have gotten worse in recent years because the Internet has made anecdotal compensation data more readily available to everyone. But beyond being a mere headache for human resources managers, old information on compensation can mean lost credibility for the organization, Daprino says. For the companies, the consequences can be unwanted turnover as valuable employees go to competitors that offer better compensation. Old compensation data also hampers a company’s ability to compete for the best job candidates.
To address the issue, IBM turned to Clark Consulting to see if there was some way to collect data and shorten the time lag. After months of discussions and development, IBM and Clark came up with a quarterly survey of 143 companies representing 1.6 million employees.
The survey, which is open for 20 days and produced in 10, has only a one-month cycle time, which resolves many of the issues involved in the traditional process, says Ken Cardinal, managing director at Clark. The results are free to all participating companies.
The surveys also take into account participants’ opinions about what’s going on in their markets, which can offer important insights, he says. “We think it’s valuable to know what companies think about whether their market is heating up or not,” he says.
After five quarters of participating in the survey, Daprino believes there is enough data for IBM to make any necessary changes to its compensation. For now, though, the data seems to indicate that hiring in the technology sector is flat, if not a little down. And so salaries don’t need to be raised.
This data already has helped human resources managers counter claims about pay and hiring trends. Cardinal’s recent favorite was an article that said technology hiring was ramping up. The article was published a week before the release of Clark’s survey, in which 14 major technology companies said that hiring was either flat or down.
A few weeks later the Department of Labor’s report confirmed the survey’s findings. “It was a good feeling,” Cardinal says.
0507 Pearson Reid
Mercy Iowa City, located in Iowa City, Iowa, has served its community for more than 130 years. The hospital is accredited by the Joint Commission on Accreditation of Healthcare Organizations, and has enjoyed a longstanding reputation for the high quality of its primary and specialized care. Mercy also benefits the community by promoting programs to foster optimal health, by educating individuals on the effective use of healthcare services, and by facilitating services for the poor and underprivileged.
Identifying, recruiting and retaining the strongest healthcare professional available is critical to maintaining Mercy’s high performance standards and its mission. In support of these performance standards and mission, Pearson Performance Solutions has provided a leading healthcare assessment tool to Mercy Iowa City since 2002.
Mercy’s Need
Mercy is a rarity in its hiring practices – it is an organization that seeks to have personal contact with all applicants. The hospital also seeks to offer applicants many convenient ways to apply for positions, including through its Web site and an on-site kiosk. As an employer of choice in the area and with its speedy applicant-friendly hiring process, Mercy sought to be able to identify quickly the strongest candidates in its pool for interviewing and to ease the heavy workload on its recruiters. In order to supplement the process of employment application and resume submission, Mercy elected to administer a standardized assessment solution that could help evaluate all non-physician candidates across key performance measures in a uniform, reliable way. The assessment solution also needed to be integrated into its existing hiring process and to facilitate the candidate funnel for the hospital’s recruiters by helping determine which candidates would continue in the process.
Our Solution
To help Mercy better select superior employees, Pearson Performance Solutions has supplied its Healthcare Employee Productivity Report assessment. The instrument was developed specifically for the healthcare industry to help select applicants who exhibit the traits necessary for quality patient care, including conscientiousness, reliability, punctuality, responsibility, consistency and service relations. It can be inserted quickly into an organization’s hiring process at the juncture that works best within that organization’s hiring process. The instrument is used by many leading health systems nationwide to help improve selection procedures. In line with Mercy Hospital’s applicant-friendly approach, the assessment takes many applicants as little as 15 minutes to complete. Candidates have reported to Mercy that the flexibility to apply for positions via the Web site or on-site kiosk has introduced valuable convenience to the process.
How We Did It
Pearson Performance Solutions assessments are easily configured onto our automated application platforms and offer flexibility to clients with existing hiring processes. Mercy Iowa City requests that all applicants complete an initial application; a resume is also requested for certain positions. An assessment is required as part of the application process for all positions.
Using the application, resume and assessment tool, qualified candidates are then forwarded electronically to departmental managers for further review, and the managers can then determine if they would like to conduct an interview. Individual candidate assessment results, including scale-by-scale evaluation, as well as overall organizational reporting are available via the Pearson Performance Solutions system, so Mercy can quickly determine which candidates are recommended to continue in its process.
Net Business Result
Mercy quickly became convinced of the value of the Healthcare Employee Productivity Report assessment. Uniform evaluation of candidates after the application and resume review stage added consistency to the hospital’s hiring process, both within job families and organization-wide. Perhaps most important, the hospital’s recruiters found that the assessment aided the applicant process as one of the tools determining which candidates were appropriate for further consideration and which were not, while keeping the hospital’s personal touch with candidates intact. Mercy believes that the assessment has, in conjunction with other human resource initiatives, contributed to reduced turnover and strong patient care. Another benefit is that the assessment helps interviewers focus on key areas with individual candidates that might not have been otherwise brought to their attention. The ability to use the information to quickly identify the strongest candidates, and to hire and retain those candidates, is a critical advantage for Mercy in its efforts to be as selective as possible.
The Healthcare Employee Productivity Report instrument can be an important part of a successful hiring program for healthcare organizations. Pearson Performance Solutions recommends that organizations follow a few basic principles as part of the hiring process:
- Hire for attitude; train for skill
- Interviewers have bad days; assessments don’t
- Process efficiencies can help to identify the right people with the right attitudes
- The best practices lead to the best people
- Quality RNs and healthcare professionals want to work with quality RNs and healthcare professionals
To learn more about how Pearson Performance Solutions can facilitate HR cost savings and help improve employee retention for your organization, please call, click or write:
Pearson Performance Solutions
1 North Dearborn Street Suite 1600
Chicago , IL 60602 (800) 922-7343
www.pearsonps.com
Dear Workforce How Do I Get Younger Associates to Enroll into Retirement Plans
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The earlier you start, the less you have to put in each month to get to where you want to be. The example I always use (and I’m sure you’ve heard it) is the one about two 21-year-olds. The first one puts in $2,000 per year from age 21 to 30, and then puts nothing more into the account until he retires at 65. The second person starts at age 30 and puts $2,000 into his account each year until he retires. Who has more? The first person, because of the compounding of interest.
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Have your young employees start at the lowest possible contribution percentage they can—perhaps 1 percent. Then encourage them to increase that percentage by 1 percent each year, or to take a set amount of a bonus check and set it aside for the plan. If you can even get them to put $25 into the plan, it’s still better than nothing. If your plan allows set dollar amounts, this is even more attractive than percentages because they can set the amount that’s comfortable for them—without the initial shock of “Whoa! 2 percent of my pay?”
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It always helps to match their contributions with an employer contribution.
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Workforce Management July 2005
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International business machine
By Fay Hansen |
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| Going global isn’t just for Western institutions anymore. With its acquisition of IBM’s PC division, Chinese tech giant Lenovo has become a company that operates without borders, buying up top talent in both advanced and developing nations. | ||
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Leading indicators
By Jessica Marquez |
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| Don’t tell researcher and consultant Roslyn Courtney that nice guys–and gals–finish last. She has found that the most successful leaders are accessible and encourage candid dialog. | |||
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State of the Sector: Training
By Irwin Speizer |
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Between the Lines
Dr. Cosby’s lesson People down in the trenches of a company know the business a lot better than executives give them credit for. |
Reactions From Readers Debunking the “myth” “Turnover numbers are meaningless without knowledge of the environment, both work-related and management-related.” |
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In This Corner
Unfair play against bias “Testers” are individuals who–armed with résumés, letters of references and training in deception–apply for a job. |
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Legal Briefings |
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GM makes health costs an issue
In announcing a plan to cut 25,000 jobs, GM puts a large part of the blame on the company’s liberal and costly health care benefits package. Also: Activists see positive signs at Wal-Mart meeting. A relaxed deadline for FSAs. Leaping the language gap. The fee-disclosure debate. Housing puts a hurt on hiring. Fast-forwarding comp data. |
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| Recruiting Taleo’s next version With a new CEO and CFO now in place, Taleo is poised for an initial public offering and expansion. It seems to be a trend in the recruiting software sector: Kenexa was scheduled to hold its IPO in late June. |
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Recruiting
The new crop of job seekers The millions of American college students who finished school last month have very different expectations from graduates of 10 years ago and even from last year’s grads. For them, salary and location take a back seat to a good fit of skills and the chance for professional development. |
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Employee Benefits
The oral argument As they market dental coverage to employers, insurance companies are stressing the link between oral health and general health. New research supports the notion. |
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Recognition
A rewarding business Bad blood spans generations at Maritz Inc., but the firm has remained a major player with its programs aimed at helping clients reach their business goals. |
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Outsourcing
Measuring up HR outsourcing experts say it’s not all about upfront cost savings. Smart companies will also consider such factors as organizational performance and worker satisfaction. |
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May 2005
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March 2005
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Dr. Cosby’s Lesson
Most people don’t think of Bill Cosby as a management expert. But last month, The Cos seemed to strike a nerve and impart a little management wisdom when he told one of his famous stories to some 12,000 HR professionals attending the Society for Human Resource Management conference in San Diego.
Cosby told the story of two geniuses and two human resources professionals at the gates of heaven, all trying to get in. The gatekeeper said there was a simple way to gain entry: just give God a question that he couldn’t answer. If you could stump him, you got in.
The geniuses huddled and talked back and forth for a while, but no matter how hard they tried, God always had the answer to their questions.
The two human resources people, on the other hand, huddled for just a moment, scribbled down a question on paper and handed it to the gatekeeper. He reappeared a few minutes later and said they had done well. God was stumped, so they could enter. The geniuses were puzzled. What, they asked the gatekeeper, could the HR people have possibly been able to ask God that he couldn’t answer?
It was simple, the gatekeeper said: “They asked God when the company they were working for was going to get their shit together.”
Cosby’s story got a huge laugh, as you would expect, because it exposed an underlying but very basic truth: Businesses everywhere can’t seem to get their act together. The workforce knows it. The HR staff knows it. Probably even the customers know it. Who doesn’t know it, sadly, is usually the CEO or other well-paid top executives who seem oblivious to the problem.
Jim Collins knows all about this. He has studied businesses for years and written about what separates the great ones from the not-so-great in books like Good to Great and Built to Last. He recently told Fortune magazine that a very typical problem in business is that “the CEO has already made a decision, and his definition of leadership is to get people to participate so that they feel good about the decision he’s already made.” That’s a bad way to manage, Collins says, because “you’re ignoring people who might know a lot that would be useful in making the decision.”
“You’re accepting the idea that because you’re in the CEO seat, you somehow know more or you’re really smarter than everyone else,” he says. “But what you’re really doing is cutting yourself off from hearing options or ideas that might be better.”
Collins’ research and Cosby’s story make the same basic point: People down in the trenches of a company understand the business a lot better than the folks in the executive suite give them credit for. They also have a lot of good ideas about how to make the business operate better. Problem is, they frequently aren’t asked what they think. Or worse, they are handed down decisions without being given an opportunity to have any meaningful input.
I heard this a lot from some of the conference attendees in San Diego. They have strong opinions on how to make the business they work for a lot better—if they only had more of an opportunity to voice them sometime before they reach the pearly gates.
Workforce Management, July 2005, p. 6 —Subscribe Now!