With a labor shortage hitting the trucking industry, companies are “raising driver pay like never before,” according to Crain’s Chicago Business.
A spokesman for Wisconsin trucking company Schneider National says that this is the toughest driver recruitment market in the history of trucking. The top 195 trucking companies in the United States raised their per-mile pay an average of 8.9 percent last year, according to the National Transportation Institute. They’re passing along those costs to customers.
Even with the pay raises, driver turnover is high. Last year, it hit 121 percent, according to the American Trucking Association. Many drivers find themselves working very long days-as much as 14 hours-and are away from their families for long periods.
Jason D. Shaw is a management professor at the University of Kentucky’s Gatton College of Business and Economics. He says that as the transportation industry has become less regulated and less unionized, pay over the years hasn’t kept up with inflation. It’s finally catching up with companies; Shaw believes there’s been a severe labor shortage for at least 10 years.
“It’s hard to recruit people in the trucking industry,” Shaw says. “Living in a sleeper cab for a long period of time, three weeks at a time, is not that attractive. When you combine that with the expansion in the economy, the amount being shipped, the number of drivers needed-that’s kind of a bad combination.”
Transportation giant J.B. Hunt has been working to reduce turnover, according to Shaw, by improving pay and benefits and generally being much more flexible with employees. Other companies are following suit.
Shaw’s research shows that the most consistent predictor of turnover is driver pay. Flexibility is important, but not as much as pay per mile. “It’s very easy to change jobs,” he says. “You can pretty much go to the another company if you decide to quit. The drivers are just looking around for a (better) deal. If they find one, they move on.”
Among the additional resources available online: a list of fatigue management programs implemented in the transportation industry; an article about turnover in trucking; as well as a report called “Critical Success Factors in Truck Driver Retention.”
AARP Lawsuit Delays Final EEOC Ruling on Retiree Health Plans
Employers are going to have to wait a while longer—perhaps a very long while—for the resolution of a longstanding legal threat to the way they administer retiree health care plans.
Earlier this month, the Equal Employment Opportunity Commission agreed not to publish for 60 days a final rule that would exempt retiree health care plans from the Age Discrimination in Employment Act. The move was in response to a lawsuit brought by AARP.
U.S. District Judge Anita Brody will hear oral arguments next month on the legality of the rule, which the EEOC had been expected to send to the Federal Register this month. The rule would have gone into effect upon publication.
The AARP litigation means that the resolution of a pivotal legal question will remain unanswered for quite some time: Can employers with retiree health care plans be sued for age discrimination if they don’t offer the same level of coverage or spend the same amount on health care benefits for Medicare-eligible retirees as they do for other retirees? “It means continued uncertainty,” says John Piro, an attorney with Hewitt Associates in
“This issue has been around a long time, and it now looks like it will continue to be around even longer,” adds Henry Saveth, an attorney with Mercer Human Resource Consulting in
The issue emerged 4-1/2 years ago, when the 3rd U.S. Circuit Court of Appeals ruled that retiree health care plans are subject to the Age Discrimination in Employment Act. To prevent a charge of age discrimination under ADEA rules, employers either would have to spend the same amount of money on health care for Medicare-eligible retirees as they do for younger retirees or offer the same coverage to the two groups.
The practical effect of that ruling in the so-called
While the ruling was a bombshell, its impact was short-lived. Within a year of the ruling, the EEOC, which enforces age discrimination law, said it would no longer enforce the ruling.
Last year, the EEOC proposed a final rule that would exempt retiree health care plans from the ADEA, an action that would allow employers with retiree health care plans to continue to offer different levels of benefits to the two groups.
Publication of the final rule had been expected to put an end to the controversy. But AARP, fearful that employers would cut coverage to Medicare-eligible retirees, filed suit to block the proposed EEOC rule.
In its complaint, AARP says the EEOC lacks the legal authority to grant an exemption to the ADEA.
“Congress has not delegated to the EEOC any rule-making authority in the substantive field of health care policy, nor does the EEOC possess any expertise to weigh factors relevant to the challenged exemption, or to accurately predict the consequences of the exemption itself,” the complaint says.
If the final EEOC rule is published, AARP members “will suffer irreparable harm” because employers throughout the country will reduce or eliminate health care to older retirees, the AARP complaint adds.
But others say that if AARP prevails, it is retirees who will be hurt. At a time of rising costs, employers will reduce the coverage provided to younger retirees or eliminate coverage for the two groups rather than upgrade coverage for Medicare-eligible retirees, benefit consultants say.
“If anything, you will see cutbacks for younger retirees or the elimination of coverage. Employers aren’t going to do anything” that would increase their retiree health care obligations, says Cara Jareb, director of retiree medical consulting for Watson Wyatt Worldwide in
—Jerry Geisel, Business Insurance
Dear Workforce How Do Organizational Development and Training Relate to Each Other
The Longer Employees Work at a Company, the Less Happy They Are, Study Finds
Employees’ job satisfaction declines the longer they work for their employers, according to one new study.
The finding is in a new book, The Enthusiastic Employee: How Companies Profit by Giving Workers What They Want by David Sirota, Louis A. Mischkind and Michael Irwin Meltzer of Sirota Consulting. The book is based on research by Sirota Consulting, including a survey of about 1.2 million employees, mainly in large companies, between 2001 and 2004.
According to Sirota’s research, there is some improvement in the satisfaction of employees with more than 10 years’ experience with their employers, but it’s not as high as when they started on the job.
The company finds that employee job satisfaction (on a 100-point scale) averages out as follows:
- Employees with an average of six months with employer: 80
- Employees with one to five years working for employer: 69
- Employees with six to 10 years working for employer: 68
David Sirota says that the declines in satisfaction are even greater than the numbers show. That’s because the unhappy employees often leave and are no longer included in the data.
In many cases, Sirota believes, the low morale is a result of a gap between what a company says its goals are and the message it really sends to its workforce. A firm might say “quality is job one,” according to Sirota, but managers may leave employees just enough time to get the product out the door, regardless of its quality.
About 10 percent of companies, he says, buck the trend. These “super-high-morale organizations,” he says, include the Barron’s division of Dow Jones (Barron’s is “incredibly engaged,” he says), as well as Intuit, the Mayo Clinic, Southwest Airlines, Crescent Real Estate Equities, Continental Airlines and FedEx. “Their honeymoon lasts through employees’ careers.” These organizations, Sirota says, generally have a minimal amount of bureaucracy and fairly flat structures. Lower-level employees sense that they are treated pretty much the same way senior managers are.
This sense, he says, is passed down by the CEO. Southwest Airlines, for example, has a highly unionized workforce, but customers can’t help but notice the employees’ high morale. Employees’ feelings about the company stem from a sense that the company is a positive influence in the community and is concerned about its customers.
Dear Workforce How Can We Retain Our Best and Brightest
Dear Looking:
I applaud your support of higher education. However, not every position justifiably requires a college degree. For various reasons, you’ve placed people without degrees in positions requiring a degree. How have they performed? Can you still justify the degree requirement? A realistic review of job specifications will help you open the field of candidates, justify positions that need a degreed incumbent, and help you avoid lawsuits for discrimination. You may also get a more diverse workforce.
You might consider a higher compensation level for people who have degrees. Or, hire people without degrees with the provision that they will actively pursue a degree, probably on the company’s dime. Supporting higher education is a sensible move, but sometimes training, experience and ability to do a job can be substantially more valuable than a piece of paper and a theoretical education.
An educational degree does not predict performance, nor does it validate competence. I’m reminded of the old question about what you call someone who graduates at the bottom of the medical-school class: doctor.
SOURCE: Roger Herman, CMC, The Herman Group, Greensboro, North Carolina, March 25, 2004.
LEARN MORE:Greg: The New Breed of Supervisor
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.
Dear Workforce What Are Some Precise Adjectives for Describing the Attributes of Job Applicants
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Child Care Reaps Benefits for Employers
Making the case that providing benefits pays off for employers isn’t easy, and measuring the payoff of an onsite day-care center is particularly tough. A new study offers a way to value day-care benefits, and finds that employers who offer the benefit are well rewarded.
Bowdoin College professors Rachel Connelly and Deborah DeGraff co-authored the study with University of North Carolina professor Rachel Willis. They surveyed 925 employees at three light manufacturing firms—two that offer on-site child care and one that does not. The report was partially funded by a grant from the W.E. Upjohn Institute for Employment Research, and was written up in Industrial Relations.
The researchers studied the cost-benefit of the on-site day-care centers mainly by measuring how much it’s worth to employees; in other words, how much employers would have to pay employees in wages had the centers not existed. They arrived at this number by asking employees how much they’d be willing to have deducted from their paychecks in order to keep their child care center open. In the case of the company that didn’t have child care, employees were asked what they’d pay to have it.
The upshot: firms offering the benefit save between approximately one-half and twice the cost of what the companies are paying to have their child-care centers open, including subsidies to employees and other costs. This does not include the expected cost savings arising from reduced turnover, higher productivity, goodwill in the community, a reputation as a place where potential employees want to work or lower absenteeism.
The report does say, however, that “we know from other studies that the breakdown of child-care arrangements is a source of stress for many parents and leads to a number of lost work days per year.”
Connelly adds that a key finding of the survey was that newly hired employees were willing to pay more than long-time employees for child care. “You want to convince certain new workers to work for you,” she says. “If they ascribe more value to the child-care, then your strategy is working. And that’s what we found.”
Interestingly, Connelly and her team found that while some employees without children view a child-care center as worthless to them, others would be willing to pay to keep it running. One 17-year-old male employee surveyed, for example, says he supports the benefit because, he says, “I don’t want my coworkers to lose day care.”
The professors hope the report offers employers some help in valuing child-care and possibly other benefits programs. According to the authors’ description of their findings in Industrial Relations, “measuring the benefits of employer-sponsored child care programs for employers is challenging given the complex interaction among working conditions, productivity, compensation and the makeup of one’s labor force. As a result, even companies with employer-sponsored child-care programs have found it difficult to quantify the value of the child care benefit they are offering. Many other firms may be contemplating offering an employer-sponsored child care programs but do not follow through because of the same difficulty in calculating the benefit versus the cost.”
One of the companies surveyed, Action Industries, opened a child care center in 1979, partially to retain his human resources officer. It was a decision he admits was based more on impulse than on detailed study.
For more information, also see “A Case for Child Care.”
Uncle Sam’s Recruiters Have Their Hands Full Competing Against the Private Sector
The federal government will face a “daunting” challenge in the coming years as it competes with the private sector for scientists, engineers, nurses and other employees, according to a groundbreaking new report.
The New York Times Job Market provided a grant to the Partnership for Public Service and the National Academy of Public Administration to conduct the study. It’s a rare look at the hiring needs of every major U.S. government agency.
“The federal government is in triple jeopardy,” says Max Stier, president and CEO of the Partnership for Public Service. “It’s struggling to respond to the talent demands of the 21st century, baby boomers are retiring in record numbers, and the pipeline of available talent to replace them has run dry.”
To address the challenge, the report’s authors recommend that “workforce planning [should not be] just a process owned and performed by human resource professionals but one that evolves to be an essential component of day-to-day management.”
Among the other suggestions from the report: federal agencies should develop recruiting plans and update them annually; the way the federal government classifies jobs must be improved to be made more consistent with the job categories used by the Bureau of Labor Statistics; and the government should develop state-of-the-art recruitment materials to improve the image of professional government service.
Homeland security
In other government news: the U.S. Department of Homeland Security and the Office of Personnel Management have published in the Federal Register a description of how pay, performance management, labor relations and other human resources systems will work in the Homeland Security Department.
Reaction Positive to Health Coalition’s Plan
There has been favorable reaction so far to a groundbreaking plan that’s aimed at offering affordable health care insurance to 3 million uninsured workers and their families. The program involves a coalition of 60 Fortune 500 companies, and is sponsored by the HR Policy Association.
The program is “a noble effort” to tackle a formidable problem, says Pat Schoeni, executive director of the National Coalition on Health Care. The problem is coming up with an affordable package of benefits on the one hand, and convincing uninsured workers to buy into it on the other.
“We don’t think it’s the answer to the uninsured, but we certainly think it’s a positive step,” Schoeni says. Some 44 million Americans are living without health insurance.
The plan offers six tiers of service and six levels of price, ranging from a $5 a month discount card to a $400 a month major medical policy offered by a health maintenance organization.
Eligibility will be limited to part-time employees, contract workers, pre-65 retirees and some franchise employees with ties to one of the participating companies. Regulatory hurdles in some states must be overcome. Open enrollment is scheduled to begin Sept. 1.
Companies in the coalition will not help workers pay health plan premiums, but will use their existing provider networks and bargaining power to generate deep physician and hospital discounts. With 3 million eligible workers and their families in a single pool, employees are promised better price breaks than they’d get on their own. Sears Roebuck and Co., IBM and General Electric Co. are helping lead the coalition.
“Even a low-paid part-time worker will have something that fits their budget,” says Tom Beauregard, a health care consultant at Hewitt Associates, which will administer the program.
UnitedHealth Group will be the primary health care provider. Humana and Cigna Healthcare will also participate on a regional basis.
Alan Slavitt, managing director of UnitedHealth’s Center for Affordable Consumer Health, says it’s hard to predict what kind of acceptance the program will receive. “Nothing like this has ever been done,” he says. “We are trying to reach a population that we’ve never sold to before.”
Karen Davis, president of the Commonwealth Fund, a private health care research foundation, says offerings like a “wellness benefit” priced at $50 a month will help sell the program. The benefit pays $20 toward each prescription up to five a year, covers two dental visits and one vision visit annually, and covers 80 percent of in-network office visits costs and 100 percent of preventative care.
“For $50 a month they get a reasonable set of services,” she says. “Its not comprehensive health insurance, but it is certainly a set of primary and preventive care services.”
Even though the plan is not perfect, Paul Fronstin, a research associate with the Employee Benefits Research Institute, says just getting a plan off the ground can be considered a success. “You’ve created something where nothing existed before,” he says.
Best case, Fronstin says, the plan could take off and have a snowball effect.
Worst case, it’s back to square one.
—Douglas P. Shuit, staff writer
Long Stints Abroad May Put Foreign Workers’ Status at Risk
Foreign nationals who are in the United States on permanent resident status are eligible to apply for citizenship once certain conditions are met. However, those who end up on assignment abroad, whether back in their home country or elsewhere, before becoming an American citizen could be putting their chances for U.S. citizenship in jeopardy.
A person with a green card has permanent resident status in the United States, and as long as they continue to intend to reside here permanently, they keep their status, says Diane Butler, an immigration attorney at Lane Powell PC in Seattle. “The problem with sending them abroad for extended periods of time is it looks like they have given up their status in the United States,” Butler says.
If the foreign national wants to return to the United States to live and work at some point, they have to maintain the image that they are intending to come back. “And in my experience,” Butler says, “100 percent of the foreign-born who are being transferred would rather stay [in the United States] unless they are certain they will be able to come back [to the United States]. Even if they never do (return), they prefer to know they have that option.”
Human resources professionals need to educate their nonresident employees on understanding the implications of an overseas assignment, says Stéphane Brahy, the Chicago-based director of intercultural management training for Cendant Mobility.
There are several pieces of advice human resources professionals can give their foreign-national employees who wish one day to return to the United States without having to repeat paperwork filled out years earlier. Here are a few tips from immigration attorneys that human resources can give employees.
Employees should continue paying U.S. taxes. “If they claim to be a nonresident to reduce tax liability, they will jeopardize their green-card eligibility,” says Angelo Paparelli of Paparelli & Partners LLP in Irvine, California. Also, they should keep club dues current. “Do not resign from club memberships–and maybe buy a burial plot. They have to maintain an image that they will be coming back within a certain period of time.”
Butler says human resources departments should advise the employee who has permanent resident status to obtain a re-entry permit before they go abroad for an extended stay. “The permit shows that at the time they left they were planning on returning,” she says.
These employees should maintain ties to the States and also make a couple of trips back per year. “Although it is not enough to just come back every six months,” Paparelli says. When the employee does come, Butler adds, he or she should stay a couple of weeks and look after their interests in America.
Harry Shum, co-managing director of MSR Asia, who has been working in Hong Kong for Microsoft for about five years after spending a couple of years at the Redmond, Washington, campus, makes a couple trips a year back to the United States. He and his wife also made a special return visit so that his second child could be born in America.
Although it’s tough for many families to do, Butler suggests that when possible, an employee should even leave his or her spouse and children back in the United States. “That definitely shows your intent to return,” she says.
A 2004 Cendant Mobility survey of 548 global employees from 43 different countries reports that 75 percent of companies are doling out sufficient information about visa status and tax compliance. But, Paparelli says, human resources departments shouldn’t handle the issue alone. The legal department should be consulted as well.