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Bad Writing is a Costly Problem
Employers are having to spend more than $3 billion annually to improve the writing skills of their employees, according to the College Board’s National Commission on Writing. More than 40 percent of firms offer or require writing training for salaried employees.
The commission surveyed 120 human resource directors in companies affiliated with the Business Roundtable.
Half of the respondents said that they take writing ability into consideration when hiring and promoting professional employees. Eighty percent of employers in the “FIRE” industries–finance, insurance, services and real estate–give writing tests to job candidates or otherwise try to determine the quality of a candidate’s writing.
The commission estimates that the annual cost of training new salaried employees in writing at $104.8 million and the cost of training new hourly employees at about $98.7 million. On top of that, it says that training current salaried employees costs $1.36 billion and current hourly employees costs $1.52 billion. All told, it estimates the total cost of filling what could be called the “writing skills gap” at about $3.09 billion.
Top Talent Wants Flexibility, Recognition
The most talented employees at large companies are increasingly demanding a better work/life balance, according to one new report.
The study by the Service and Support Professionals Association involved extensive surveys of employees–many in tech-support and related roles–in the United States in Canada. The study compared all employees to “top talent”–the people that executives defined as the top 10 percent of the employees in their companies.
The association found that “top talent places high value on flexible schedules,” particularly when working for large corporations. These top 10 percent also want a pat on the back; recognition and appreciation is far more important to them than money.
Also from the study:
- Top-talent females are much happier at their jobs than other female employees.
- Autonomy is very important to highly successful employees. Fifty-one percent of highly talented employees say that it’s “extremely important” that they operate with a degree of autonomy. Only 14 percent of other employees feel that it is extremely important.
- Fifty-three percent of top talent were referred to their companies by a friend, and only 6 percent were hooked up by a recruiter. In contrast, only 31 percent of the other employees were referred to their companies by friends. Thirty-six percent were referred by recruiters.
- Generally, it’s more important to older employees than to younger employees that they contribute to their company’s success.
Winners and Losers in the Oracle Case
There could be more consolidation of software companies and a boost in business for workforce management consolidation firms as the result of a federal court decision that favored Oracle Corp. in a closely watched antitrust case that grew out of its attempted takeover of PeopleSoft Inc.
The recent ruling went against the U.S. Department of Justice. But the big loser could be PeopleSoft, which is now back in play as a takeover target. Even if it ultimately fends off Oracle, the case could be costly to PeopleSoft in legal fees and the potential for lost business.
Paul Hammerman, a vice president at Forrester Research, says that third-party support vendors already have begun to emerge to compete for a share of PeopleSoft’s software-maintenance market. And the German software firm SAP “will continue to benefit from the takeover battle,” he says in an e-mail. The ruling could also figure in future software cases. “The case sets a precedent that anti-competitive effects are hard to prove for differentiated software product lines,” Hammerman says.
The government argued that the market for complex enterprise resource planning software would be whittled down to two chief players–Oracle and SAP–if PeopleSoft were swallowed up.
But U.S. District Court Judge Vaughn Walker said the government had not proven that the merger of Oracle and PeopleSoft “is likely substantially to lessen competition.” Walker noted that the field is rich with competitors. He cited Lawson, Microsoft and American Management Systems, which is now part of the Canadian firm CGI. The judge also noted the existence of such best-of-breed vendors as Siebel, and pointed to the large number of outsourcing firms, including Accenture, Fidelity, Exult, Hewitt and Aon that are ready to handle such company functions as payroll, benefits and pension management.
PeopleSoft and Oracle both vow to fight on. The Department of Justice might appeal. PeopleSoft still has a “poison pill” provision that would make its takeover prohibitively expensive. The company also is pressing a business-disruption suit against Oracle, asking for $1 billion in compensatory damages, plus punitive damages.
As the software giants slug it out, their marketplace is changing, says Henry Morris, a group vice president with the research firm IDC. He agrees there will be more consolidation. He predicts companies will also find “outsourcing is appealing,” and that competition for niche markets will intensify.
Steve Hitzeman, a senior consultant with Watson Wyatt, says it may be too early to tell how it will all shake out. “It’s like a hurricane just sitting out there but not moving in any direction,” he says. “Until you see which way the wind is blowing, you don’t know.”
–Douglas P. Shuit
Dear Workforce How Do We Use Knowledge Management to Build an Effective Workforce
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Dear Workforce I Need Help Convincing Management to Invest in Training
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Employers Are Skeptical that their Health-Care Strategies Will Really Pay Off
Companies are implementing a potpourri of strategies to reduce health-care costs, but their effectiveness is questionable, according to a study by the Kaiser Family Foundation.
Only 15 percent of employers rate disease management as “very effective” at controlling health insurance costs. Similarly, only 11 percent say that consumer-driven health plans are very effective at cost control. Most companies think that these strategies are only “somewhat effective.” In the near future, Kaiser says that about half of all firms with 200 or more employees are “very likely” to increase employee health-care contributions.
The annual survey by the Kaiser Family Foundation and the Health Research and Educational Trust shows that between the spring of 2003 and the spring of 2004, health-insurance premiums rose by 11.2 percent. In 2003, premiums rose 13.9 percent.
Among the survey’s other findings:
- More than half of all employees with health coverage are enrolled in PPOs. About 25 percent of all covered employees are in HMOs.
- Of firms offering health benefits, 17 percent offer incentives to people who decline coverage. (The topic has generated discussion online).
Co-payments for doctor’s-office visits rose in 2004. Twenty-seven percent of employees paid $20 for visits, compared to 19 percent last year.
The Creative Class May Be Moving–Out of the United States
Two years ago, Carnegie Mellon professor Richard Florida wrote in his book The Rise of the Creative Class that the key to a city’s success is whether it is attracting the right talent to handle information-age jobs that require creativity and problem-solving skills. Now, Florida says that some of those top American cities are losing out to overseas locales.
Florida, writing for The Conference Board’s magazine Across the Board, says that Brussels is competing with Boston, Seattle and Austin as a center of creativity. Sydney and Melbourne are ranking up there with Washington, D.C. and New York.
One thing causing top talent to give up on the United States is the frustration of immigrants who have previously attended school or worked in America. Visiting graduate students, Florida says, “now complain of being hounded by the immigration agencies as potential threats to security, and they worry that America is abandoning its standing as an open society.”
Florida says that some Americans choose to relocate–whether within the country or to a different country–partly for the job opportunities, but also based on whether they fit in culturally. Gays may leave cities they find intolerant, and scientists may leave places where there are heavy regulations on research. One leading stem-cell researcher left California three years ago for England, according to Wired magazine.
New York, according to Across the Board, could someday lose its place as the sort of de-facto capital of the world. Among the cities that urban planners, economists and futurists predict could be the next “capital of the world” are Shanghai, Bejing, Hong Kong, Bangalore, Jerusalem, Berlin, Budapest, Vancouver, Miami, Singapore and Toronto.
When it Comes to Absenteeism, the British are Getting Religion
U.K. employers are increasingly aware of the costs of absenteeism, and several companies are trying to reduce the time it takes employees to return to work from injuries.
The Confederation of British Industries estimates that absenteeism costs employers about $19 billion (U.S. dollars) in 2003. British Airways, for example, canceled 30 flights in August because the company was “unable to cope with unexpected absences,” according to Business Insurance.
Royal Mail Group, which is owned by the government, is giving employees who don’t take any time off for illnesses over a six-month period a chance to win a new car. Kevin Fairbotham, Royal Mail’s head of risk management, tells Business Insurance that his company’s employees miss 12 days off for illnesses annually—double the national average.
For some companies, the first step is simply getting their hands around the scope of the problem. Janice Kaye, managing director of MMS National, says that “ninety-nine percent of companies have no idea how much absenteeism costs them. They have not done the analysis, and when they do, they are shocked.”
When Women Rise
Until three years ago, Diana McGinnis was an ordinary program analyst for Cigna Inc. whose job was more about following orders than initiating projects or managing people. But when she was thrust into the world of management in 2001, the 32-year-old technician suddenly became a decision-maker. Her steep learning curve included figuring out how to deal with the nuances of the worker-boss relationship from the boss’s perspective, how to network to push projects forward and how to interact with high-level executives who handed down daunting deadlines.
For McGinnis, experiencing Cigna’s leadership testing ground, which is offered in a variety of business specialties, has proved valuable. And for the company, increasing its ranks of women in top jobs has been invaluable, especially in recruiting, grooming and retaining female leaders. The “Information Technology Emerging Leader Development Program,” a project open to Cigna employees in IT, begins with a week of “boot camp” where women like McGinnis are immersed in leadership seminars and discussions and introduced to books such as Seven Habits of Highly Effective People. Over a three-year period, McGinnis’s preparation included quarterly two-day management training meetings run by senior executives and a rotation through a host of supervisory jobs in different business segments for 6- to 18-month stints. She was also assigned a mentor–a vice president who met with her every month and was at her beck and call whenever McGinnis needed to discuss managerial issues. “Without the program, I don’t know if I would have had the confidence to know that management was a possibility I could aspire to,” says McGinnis, who has been with Cigna since 1994 and was chosen for the program not because of her IT prowess but for her leadership and management potential.
The program, which was launched in 2001 and has cost $200,000 thus far, is one part of Cigna’s larger mission to promote more women to top positions. The company estimates that it now spends $2 million annually on the recruitment and development of executive women. The motivation: women make most of the health-care buying decisions in households. Having them in key positions offers more insight into that consumer base.
“The fact is, an employee community consisting of talented men and women representing many backgrounds, cultures and social perspectives clearly is best equipped to anticipate and meet the needs and expectations of an increasingly diverse customer base,” Cigna CEO Edward Hanway says. “It’s also the best way to operate strategically and to gain a competitive edge in a tough marketplace. The significant number of women in our employee ranks–especially in high-impact positions at the executive and managerial levels and in the Cigna boardroom–reflects this thinking.”
And since about 75 percent of Cigna’s overall employee population is female, notes Curtis Mathews, Cigna’s diversity chief, upper management must mirror those numbers so that women have peers to look up to and emulate.
In 1998, Cigna boosted its efforts to recruit and retain female executives at a time when turnover among women managers was about 15 percent and the representation of women in the upper echelon seemed thin when compared to other industries, Mathews says. Cigna has since seen turnover rates among this group plummet 50 percent. He attributes the firm’s success to the IT program and others like it in finance and health care, and to the company’s decision to push to get women candidates into the pool of executive prospects whenever a job opening arose. That meant managers, internal human resources staff and headhunters had to bring the résumés of qualified women to the table as well as those of men, he says.
Mathews won’t say how much the firm has saved since 1998, but he maintains that its efforts have paid off. Cigna now has a higher percentage of women at the top than most other Fortune 500 firms, with 24 percent of the company’s executive-level or senior management positions held by women. Thirty percent of its board members are women. (A 2003 study by the nonprofit research firm Catalyst Inc. found that 7.9 percent of senior-level executive titles and 13.6 percent of board-member spots in the Fortune 500 were held by women.) Women now fill about 40 percent of vice-presidential and higher positions, up from 34 percent in 1999. Thirty-eight percent of individuals hired as a senior vice president or higher are women, a jump from 11 percent in 1999. And 44 percent of promotions to senior management positions go to women, up from 12 percent in 1999.
McGinnis, now a director and applications project manager with 25 direct reports, appears to be heading in that direction. She hopes to be managing several projects in the next year, has a five-year goal of becoming a senior vice president and doesn’t rule out becoming CIO someday.
For businesses, having women leaders isn’t about being politically correct. It’s about survival, says Joyce Gioia, co-author of How to Become an Employer of Choice and president of The Herman Group Inc., a management-consulting firm in Greensboro, North Carolina. “Women will lead the corporations of the future, and if you don’t have women leaders you might not be in business in the future,” she declares.
Women also are a boon to business because they “understand aspects of consumerism from a more personal point of view,” Gioia notes. Many management experts agree that women have a different perspective from men, and often bring creativity and innovation to staid corporations. There is also growing evidence that diversity in the executive suite, not just among the rank and file, boosts profits. A recent study by Catalyst shows that companies with the highest representation of women on their top-tier management teams had better financial performance as a group than those with the lowest number of women: 35.1 percent higher return on equity and 34 percent higher total return to shareholders.
Still, business and society in general have yet to foster an environment where women, who make up more than half the population, are able to take on even close to 50 percent of top jobs. Finding enough qualified women, Mathews says, is getting easier, but it’s still a challenge. “When you look at the population out there, the number of women who have the education, skills and talent to fill the executive-level positions we have is still not 50 percent,” he says.
In fact, some studies show that women are losing ground when it comes to holding positions at the vice-presidential level and above. Over a decade, women’s share of executive positions, including everything from vice president to CEO, dropped 13.1 percentage points, from 31.9 percent in 1990 to 18.8 percent in 2000, according to the Peopleclick Research Institute, a unit of Peopleclick Inc. in Raleigh, North Carolina, that helps firms comply with federal antidiscrimination regulations. The study, released earlier this year, based its findings on 2000 U.S. Census figures.
| the delicate balance: |
As companies ramp up their efforts to attract and keep women, they are finding that executive women say they have benefited from flexible schedules, supportive husbands, business opportunities and mentors. Judith Soltz, chief general counsel and executive vice president of Cigna, she has received professional support and recognition for her talent throughout her career. In 1998, she was given responsibility for all corporate legal functions such as mergers/acquisitions and employment law. The appointment was part of a succession-planning process at Cigna that identifies and develops managers to move up the chain of command. She says the plan was designed “to prepare me and test me and to give me exposure to board members.”
In 2001, general counsel Thomas Wagner began a succession-planning process for his job. Soltz was a candidate. “Tom was very supportive of women. Why? Because we’re good.”
While women as nurturers may sound like a cliché, management experts say that personality trait often means leaders who are better communicators and more adept at managing teams. The two top women at Cigna, Soltz and Andrea Anania, the firm’s CIO, both talk about their proficiency at rallying teams as a reason for their ascent up the corporate ladder. And both point to their ability to clearly state business concepts–legal matters for Soltz, technological issues for Anania–as a plus when communicating with bosses and staff. “I guess we learned these things from taking care of our dolls,” Anania quips.
It appears that a significant number of companies are focusing on the female set, but few firms shout their ambitions from the rafters. First, it’s illegal to consider gender when making hiring or promotion decisions. While human resources can ask for a diverse pool of candidates from headhunters, for example, they can’t use testosterone as a reason to toss aside résumés. And many companies are mindful of not alienating men, still the predominant sex in most boardrooms.
Atlanta-based AGL Resources, a publicly traded natural-gas company with a significant number of women executives, including its CEO and chairman, Paula Rosput, declined to be profiled in this story because of the message it might send. “AGL Resources is unique on a number of fronts. It’s not a sleepy southern utility anymore. It’s been run by a woman since 2000, and other women hold very senior executive positions in the company,” the company reports. ” Yet we certainly don’t want to give the impression to the readers of your magazine that only women are welcome at AGL. We are looking for balance so that when prospective employees look at AGL, they can see the rich diversity of our team.”
The bottom line is finding the best person for the job, and most women aren’t looking for handouts. “Cigna created the opportunity, but you still have to achieve on a personal level, and there’s an element of luck,” says Soltz, who now earns more than $1 million a year, not including stock options and other compensation, and reports directly to the CEO.
No discussion about women executives would be complete without a nod to the proverbial glass ceiling. Discrimination and stereotypes do limit opportunities and keep women off the executive track, says Paulette Gerkovich, senior director of research at Catalyst. “There are still pervasive stereotypes that women don’t want the top job, that women don’t want to relocate, that they don’t want to travel.” (Witness the $54 million settlement by Morgan Stanley in July with female employees who claimed they were paid less than their male counterparts and passed over for promotions, and the massive lawsuit against Wal-Mart by 1.5 million current and former women employees.)
Getting–and keeping–top women
But even if all the weeds of prejudice were rooted out of American companies today, there wouldn’t be a sudden flood of women into the corner offices. Many women who hold top-tier posts today say that episodes of discrimination were merely pebbles on the career path and don’t buy the thinking that such bumps can bar women from the executive suite. “I never perceived there to be a glass ceiling,” says Kathy Hopinkah Hannan, 43, Midwest area managing partner for KPMG tax services and the first woman at the firm to hold the managing partner title. “At KPMG you don’t have to be a gray-haired male to be given opportunity and, more important, to be listened to.”
Recruiting experts and executive women say that discrimination is often the first thing many people point to as an explanation for a lack of female leaders, but women face other challenges, including their own lack of understanding of business politics, a dearth of female leaders as role models and the never-ending struggle to balance work and family obligations, most notably child-rearing. Of the three highest-ranked women at Cigna, all of whom report directly to the CEO–Soltz, Anania and Karen Rohan, president of Cigna Dental and Vision Care–none has children.
That doesn’t mean executive women aren’t balancing family and work. Noel Obourn was named senior vice president for Cigna’s national accounts in March. She has a 7-year-old son and a 5-year-old daughter. But her husband is a stay-at-home dad. “I do not understand how anyone at my level can have this type of career and not have a spouse who stays at home,” Obourn says. “It becomes too complicated to juggle both and do it adequately.”
Kim Bonner Massey, assistant vice president of underwriting and business processes for Cigna, has set her sights on the CFO job. She has two young kids, and she and her husband both work full-time. It works because of one important factor, she says: “I have an excellent husband.” Both Obourn and Massey say their bosses at Cigna have been understanding when they needed to take time off for the family, and that the company provides schedule flexibility and telecommuting opportunities.
Marty Nemko, a career and education consultant in Oakland, California, says that women are psychologically and verbally more sophisticated and more process-oriented. Despite that, he says, “the benefits of female leadership are insufficient to compensate for the disadvantages of hiring someone who insists on a shorter workweek and refuses to devote serious effort during personal time for professional development.”
Peter Skalak, senior director of Peopleclick Research, says it’s hard to point to any one reason for the decline in the number of women at the top because the study did not look at causality. He speculates that it could be the glass ceiling, women choosing not to stay in certain jobs, or an issue of not enough work/life options for executives. Katherine Simmons, president and COO of Netshare in Novato, California, has a subscription-based networking service and job site for senior executives making $100,000 and up. She says she’s seeing more women MBAs start their own businesses, opting out of large corporations for entrepreneurial dreams. “They want flexibility and autonomy, and think they can move up faster on their own,” Simmons says.
While recent figures by Catalyst show a slight rise in the percentage of women corporate officers at Fortune 500 firms, up to 15.7 percent in 2002 from 12.5 percent in 2000, researchers say there’s a long way to go. Despite the anemic numbers, many companies across the country want to recruit and retain women in high-level posts, especially in light of what many say is an impending shortage of talent for executive ranks in the years ahead.
Day care and mentors
At Cigna, the unique needs of women with very young children are addressed. The company offers a host of programs such as on-site lactation rooms and lactation consultants to help mothers return to work while continuing to nurse. There are also perks such as on-site emergency day care and a cafeteria that offers take-home dinners. In addition to having companies help them address domestic concerns, women executives in a variety of industries say, networking and mentoring opportunities are very effective ways of helping them with the daily grind and assisting them in rising through the ranks.
In 1998, New York-based Ernst & Young started a program called Women’s Plan, or Partnership, Leadership, Alliance and Networking. It enables the firm to identify the women with the most potential, create opportunities for those women to be mentored by an executive, and offer outside professional coaches. The plan has paid off, says Wendy Hirschberg, Americas Gender Strategy Leader, Center for the New Workforce at Ernst & Young. Today, 4 out of 20 board members at the firm are women, compared to one female director in 1996, and the number of women partners has more than doubled to 12 percent in the same period. In addition, the presence of women at the executive level has increased from zero to 14.5 percent.
Retention of executives–men and women–continues to be an issue for almost every company in the United States, as both sexes increasingly want to devote time to work and family, says Bert Hensley, chairman and chief executive officer of Morgan Samuels Company, an executive-search firm that focuses on C-level managers. With the reality that women still do the lion’s share of child-rearing, many firms give women the opportunity to take time off. KPMG, which now offers employees a year’s leave of absence, is currently studying the possibility of a five-year leave as a way to retain women executives, says Joe Maiorano, executive director of KPMG human resources.
Flexibility doesn’t have to mean offering women a chance to run companies or divisions on 20-hour workweeks. While the rank and file may be able to cut back hours, executives have to be there to get the big promotions and run day-to-day operations. Work/life balance at the senior level is not about cutting hours, it’s about flexibility, says Carter Franke, 47, chief marketing officer for Chase Card Services in Wilmington, Delaware, a division of JP Morgan Chase & Co. Franke’s mission is to be home every night at 6:40 to cook dinner for her husband and three teenage stepdaughters. That means she gets to the office by 8 a.m., works after hours and puts in the extra time whenever needed. She says that her boss, Bill Campbell, understands her schedule. “When he has me in a meeting or on the phone he will say, ‘Hang up. I know you need to catch that train.’”
But even if the corporate environment is perfect, women may have to leave a bit of themselves outside the office door. Rohan, 41, Cigna’s dental and vision care president, recalls an informal mentor she had early in her career. On one occasion, she was in a meeting offering a group of executives a financial review, talking about risks and opportunities. After the meeting, her mentor told her: “You have to be much more deliberate in your delivery. You have to be more straight up and not sugarcoat the bad news.”
That was her first experience with “direct toughness,” she says. “It’s like a football game. We women can be petty. We hold grudges. But in football, after the game where players are fighting each other, they pat each other on the butt and have beers. My mentor taught me it’s about business. It’s not about me.”
Workforce Management, September 2004, pp. 26-32 — Subscribe Now!