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Putting Job Candidates to the Test

In a slow economy, no one can afford to make bad hiring decisions. Every failed hire causes companies to throw precious dollars down the drain retraining recruits for the same position. That’s why pre-employment assessment tests are more valuable than ever. While many areas of human resources are feeling the pain of belt-tightening, these staffing tools are growing in popularity because they have such a significant impact on the cost of hiring and turnover.

    An accurate assessment dramatically reduces the time that hiring managers spend interviewing because it automatically eliminates a percentage of the applicant pool. For a human resources team trying to do more with less, that saves valuable time and ensures that bad candidates don’t slip through the hiring process, says Mel Kleiman, managing partner of the Hire Tough Group, a division of Humetrics, an employee retention services company in Houston, and author of Hire Tough, Manage Easy. It also helps you to identify the best candidates by adding another level of evaluation to the process, he adds, and that is critical for success in today’s economy. “It’s no longer enough to hire good people. You have to hire the right people–and now is the time to do it.”


    When the economy is good, the candidate pool is smaller and you can’t be as selective as you might like to be, he says. But in a poor economy, there are extremely talented people looking for work. “A bad economy is an opportunity to change the future of your company because you have access to the best possible people for the job.”


    In order to hire them, however, you have to know how to identify them, especially when you are being inundated with applications. “You can’t use the same hiring standards today that you used two years ago,” Kleiman says. You have to re-evaluate everything in your recruiting process, from how you interview candidates to how you define job performance and expectations. For example, downsizing can have a huge impact on job responsibilities. Employees have fewer people to support them and are expected to do more with less training. If you are using the same job descriptions and the same evaluation standards in a downsized environment, you’re not going to identify the right people for the job.


    Assessment tests enable you to judge candidates on more than just work experience because they also evaluate cognitive ability, says Karen Timmins, assistant vice president of human resources and development for American First Credit Union in La Habra, California. Timmins uses a test from Wonderlic, Inc., a recruiting and retention services company in Libertyville, Illinois, to assess candidates going into her hiring process. At a time when good people from all industries are looking for work, this helps to identify those who best fit your culture and needs, she says. “I’m not limited to choosing people with bank experience. If I identify someone who’s bright and emotionally intelligent, I know they have greater potential for success and job satisfaction, regardless of their background.”


    And the impact of that goes beyond individual potential; it has a bearing on the entire staff, Timmins adds. “If you hire a person who conflicts with your core values, it’s amazing how much they stand out. Their disruptive behavior affects everyone.”


    To get the best results from assessment tests, many vendors use industrial psychologists to build custom profiles of ideal applicants by defining the high and low performers in that job. Then, using those profiles, they create a set of assessment questions that identify the most suitable candidates for the position.


    Identifying specific performance criteria is critical to the success of the hiring process, says Pat Rowe, vice president of assessment services at Spherion Corporation, in Fort Lauderdale. He recently worked with a telecommunications company that wanted to increase revenues in its customer-service call centers. After the requirements for the position were evaluated, it became clear that, even though the title was “customer service representative,” the most successful people were those with good sales skills. Within a year of targeting candidates with sales skills, turnover decreased by 50 percent and revenue per seat increased by 15 percent, he says.


    Getting the right people for the job is how you become a great company, says Charlie Wonderlic, president of Wonderlic, Inc. “The single greatest return on investment comes from the people you hire, yet most companies spend more time evaluating a $10,000 copy machine than they spend evaluating potential employees,” he says. “The cost of not hiring the right people is the cost of mediocrity and failure. How much is that worth to you?”


Workforce, April 2003, p. 64-68 — Subscribe Now!

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Table of Contents April 2003

Features

Diversity’s Business Case Doesn’t Add Up
Employers spend billions on diversity programs, but there’s little evidence of improved business performance, financial results, or accountability. Meanwhile, discrimination cases are on the rise.
By Fay Hansen
Corporate America’s Scariest Opponent
Plaintiffs’ attorney Cyrus Mehri has wrested megabuck settlements from companies including Texaco and Coca-Cola, and put a shiver in the spine of the NFL. Here’s his advice on how to keep him out of your office.
By Janet Wiscombe
Technology Brings Employees the Hartford Experience
Human resources and company success are inextricably linked, says Shelly Bancroft. And the glue that binds them is technology. As the human resources information systems honcho at the Hartford, Bancroft is responsible for a massive tech overhaul at the insurance giant.
By Maryann Hammers
Getting Happy with the Rewards King
Bob Nelson has sold 1.5 million books by telling companies how to make small rewards yield big loyalty and productivity bonuses. Critics scoff at a “baubles and trinkets” approach, but Nelson has plenty of believers.
By Leslie Gross Klaff
Optimas Award Competitive Advantage Babies Deliver a Loyal Workforce
When it couldn’t compete by offering bigger salaries, the National Association of Insurance Commissioners came up with a set of low-cost initiatives designed to retain its employees. The centerpiece: parents can bring babies under 6 months to work. Turnover plummeted.
By Maryann Hammers

Departments
Between the Lines
When You Feel Like Screaming
Mailbox
Smoke Gets in Their Eyes • Playing by the “Rules” 
The Buzz
The War at Work • At last, the Navy Has a Shipshape HR System • A Subtle Reference Trap
On the Contrary
A Black Hole in Corporate Communication: Shari Caudron contemplates the cosmic connections between physics, cryptic messages from management, and the black hole of fear that opens up in the absence of real information.
What Works
A Burning Sense of Mission: In a very literal sense, Tom Terez suggests you light a fire under your organization’s ill-conceived mission statement. From its ashes, you can begin again.
Dear Workforce:
The downside of “secret” profit sharing • Standardized compensation and benefits • Should managers receive fewer rewards that the people they supervise? • 
Case Studies
Putting Job Candidates to the Test: Accurate assessments can reduce interviewing time and ensure that bad candidates don’t slip through. Here’s how three companies made pre-employment tests work.
Legal Insight
Same Race, Same Sex, Same Harassment: Many companies aren’t aware that there is such a thing as same gender or same race harassment. But there is, and the liability issues are the same. Legal Posts: Curious about your temporary workers’ past workers’ comp claims? Don’t even ask.
Think Twice
Waging a Campaign for Political Talent: Sen. John Kerry might not become president, but Todd Raphael finds he’s one heck of a workforce strategist.

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Technology Brings Employees the Hartford Experience

The way Shelly Bancroft sees it, human resources and company success areinextricably linked–and technology is the glue binding the two. As assistantvice president of human resources information systems at the Hartford, Bancroftis responsible for the human resources department’s automation strategy. Sheis now heading up a massive three-year technology initiative to consolidate andbring online the company’s various HR systems.

Known internally as “e-HR,” the initiative, which is based on humancapital management applications made by PeopleSoft, is expected to boostproductivity and efficiency, and, over the long term, reduce costs. But Bancroft’soverriding goal is to align the Hartford’s human capital with the company’skey business objectives, while shifting the human resources department from anadministrative to a strategic role.


The original impetus for the initiative was a branding strategy called TheHartford Experience, which refers to the $15.1 billion financial service andinsurance company’s promise to provide solutions to problems, make it easy forcustomers to conduct business, and deliver superior service. It makes sense thatemployees will be more likely to deliver that kind of positive experience tocustomers if their own encounters with the company are equally glowing. Withthat in mind, the human resources department sought ways to extend the HartfordExperience to its 27,000 workers.


Bancroft saw technology as key to achieving that goal. “Our employees’experiences with HR transactions should reinforce the message that we want todeliver to our external customers,” she says. “Through technology, we canmaximize each employee’s contribution and strengthen their Hartfordexperience, so they’ll be in a better position to serve customers.”


A veteran of both human resources and technology, Bancroft has been with theHartford for 20 years and in her current position for six. She started out ininformation technology and business analysis, and over the course of her careerhas developed computer applications and managed IT departments and informationcenters. She moved to human resources in 1989, during a time when HR technologytended to revolve around ad hoc reporting, program development, and technicalwork.


And as the human resources department becomes astrategic player, Bancroft faces the challenge of developing systems thatsupport the Hartford’s mission and brand.

Today the field of HRMS–and Bancroft’s role in it–is far morecomprehensive and vital. And as the human resources department becomes astrategic player, Bancroft faces the challenge of developing systems thatsupport the Hartford’s mission and brand.


The e-HR initiative, which has been under way for about 18 months and ishalfway complete, includes upgrading HR information systems from a manual to aWeb-based operation; developing a new hardware infrastructure to support theupgraded systems; implementing customized functions aimed at managers;constructing a data warehouse; and using analytic tools to measure HR functionssuch as staffing, compensation, talent management, and training.


Rolling out a comprehensive array of employee and manager self-servicecapabilities was the first step, which is mostly complete. Now workers havequick, easy access to their employment, personnel, and benefit information. Theycan update their personal data, view their compensation history, refer friendsto jobs, apply for open positions within the company, complete a profile oftheir skills, and automatically receive e-mail alerts of job openings that matchtheir profile.


Managers also can maintain correct listings of employees who report to them;change reporting relationships; view their employees’ compensation history;manage and plan employees’ total compensation, including salary, bonuses, andincentives; create requisitions for new positions; and submit compensationchanges–all from the desktop.


“Just look at what it takes to process an address change in the old worldversus the Web world,” Bancroft says. “In the past, it was time-consumingfor employees to make an address-change request. Now they have it at theirfingertips. They just click on a link and make the change.”


Such applications can save not only time and frustration but money as well,according to a PeopleSoft return-on-investment calculator that compares costs of business processes before andafter deployment of self-service applications. “Most organizations see a 50 to75 percent reduction in transaction costs,” says Jason Averbook, director ofglobal product marketing for HCM at PeopleSoft. “For example, each call on atypical help desk costs around $30. But using a Web-based self-service system,each transaction costs around 10 cents.”


Self-service applications lead to fewer errors, more accurate data, andquicker access to information. “Instead of having just HR responsible, now thewhole workforce is interacting with business processes in real time,” Averbooksays. “Employees have access to the information they need when they need it.”


But despite the convenience, transitioning from a manual to an online way ofdoing business is a “tremendous culture shift,” Bancroft says. “Changemanagement was our biggest challenge.” To introduce the new capabilities toemployees, the Hartford offered training programs, including “employee expos,”during which the HR staff demonstrated the new applications. “We wanted tomake people comfortable with the change and get them excited about it, so weshowed how it will directly benefit them,” Bancroft says. “That went a longway in ensuring our success.”


Bancroft’s current challenge is building an integrated data warehouse to store and manage HRMS data and link it withthe company’s financial, customer, and contractor systems. Such a consolidatedsystem will eliminate the need for ongoing IT maintenance and training formultiple systems. More important, once the data warehouse is complete, HR staffand managers will have desktop access to powerful analytic tools and will beable to slice, dice, drill down, and delve into data for in-depth analysis, aswell as measure effectiveness of HR programs and obtain better insight intoworkforce performance.


“Once this foundation is in place, we will be positioned to look at dataanalytically and focus on results, measurements, and metrics,” Bancroft says.”For example, we’ll be able to tie competencies to job openings,compensation, and performance management. We can create scorecards with jobobjectives, which can drive total compensation. Learning events, such astraining, classes, online resources, and reading materials, can be linked tocompetencies, helping employees strengthen the skills they need to advance. Froma management perspective, it makes sense to tie everything together.”


Such a system will help executives quickly see if key performance indicators–suchas head count, compensation, or ethnicity ratios–are on track or out of whack,Averbook says. “Instead of flat reporting, it can deliver instant, real-timealerts if data is not consistent with the company’s goals, and it showsmetrics in the user-friendly form of red, yellow, or green lights. For HR to bestrategic, it needs to see more than static data. It needs to see how peopleaffect customers and the company’s finances. It needs to see how competencies,skills, and education interact.”


Linking the systems will also help managers and HR staff get new workers onboard as quickly as possible, Bancroft says. “As soon as a new hire accepts ajob offer, a ‘hire record’ will be automatically created, which will triggeridentifications, equipment procurement, and all the other steps necessary tohelp the new employee be productive from day one.”


The Hartford would not divulge the cost figures involved in its e-HRinitiative, saying the information was “proprietary.” But according toPeopleSoft, such a massive undertaking could cost several million dollars,depending on how many applications are being licensed, the organization’srevenue, and its number of employees.


However, the resulting gains in productivity and efficiency, along with fewerexpenses for printing and distributing pay stubs and various employment forms,decreased time and costs for recruiting and hiring, and savings on anticipatedredeployment of HR staffers, will more than make up for the e-HR costs, Bancroftsays.


“At the beginning of the e-HR process, we conducted a detailed analysis ofeach human resource transaction to measure the productivity we would realize. Welooked at how many people were involved with a transaction–for example,employee, manager, administrative assistant, HR specialist–and how much timewas devoted to each step,” she says. “We could prove there would be hugeproductivity gains by shifting from a manual world to a Web-based one, and thatwas the biggest seller [to the company’s leaders].”


Workforce, April 2003, pp. 42-45 — Subscribe Now!

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Busch’s Performance Evaluations

Busch’s, Inc., a Saline, Michigan-based retail grocer, believes the mantrathat people leave bosses, not companies. With that in mind, it implemented amanager training program for managers to learn soft skills, computer andtechnical skills, and performance management.

    The program has led to lower turnover, better customer service, andultimately the highest profits the company has seen in 27 years of doingbusiness.


    The attached Excel file includes four different spreadsheets the company usesas part of its performance management program.


Workforce Online, April 2003 — Register Now!

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The Case Against Sick Days

Your coworker calls to say she’s at home sick. Maybe she’s just thinkingtwice about inhabiting her cubicle while you’re sitting next to her hacking upa lung.

Going into work sick rather than staying home has reached epidemicproportions (pun intended). More often than not, employees who are sick wouldrather risk annoying their coworkers (and even contaminating them) than havetheir boss question their motives for staying home. Even bosses are succumbingto this anxiety-based “attendance disorder,” thus creating a “culture of germs” in the office. If you’re truly unfortunate, you could be on an airplanewith a pilot who, coughing into recirculated air, gets to infect hundreds in oneflight!


Many workers feel that they can’t afford to call in sick. No matter how sickwe may actually be, we are made to feel guilty, as if we intentionally becameill. This can lead to denying how sick we really are and convincing ourselvesthat going to the office is probably better.


Interestingly enough, we may not even be conscious that we are doing this.It’s so bad that you see employees with mounds of used tissues on their desks,sweating profusely and responding “I’m fine” when people inquire about theirhealth. What are we afraid of?


Quite a lot, as it turns out. We may worry that our boss will think we’refaking sickness to take a personal day. If you work in a high-stress,competitive environment, you may worry that you’ll miss an important event ormeeting and get left out in the cold while someone else saves the day (and grabsthat promotion you’ve been eyeing). In particularly toxic work environments,you may fear that someone will stab you in the back while you’re flat out onyours.


This appears to be a particularly American phenomenon. The American workculture is based on competition. An eight-hour day is rarely good enoughanymore. Europeans, by comparison, have seemingly mastered the concept ofwork-life balance. In France, if you wake up sick, you stay home.


The concept of “sick days” is obsolete and demotivating, and it should beeliminated. If you’re really sick, you should be trusted to make the decision to stay home rather than feeling guilty and then infecting your coworkers. We have sick days to keep employees from abusing what some might view as “free”days off. The result is a plethora of sick-day policies that exist to police the 2 percent of employees who would actually take advantage of them.


The concept of “sick days” is obsolete and demotivating.

There’s a difference between rewarding attendance and punishing people whoare sick and need to stay home. Of course, excessive absence is an indicatorthat something else is wrong. Attendance is still an important employeeresponsibility, so excessive absences should still be discussed and explored asa symptom–not a cause–of workplace problems.


Companies should reorient their attendance policies to reward rather thanpunish. One technique is to give employees a half-day off for every quarter inwhich they have perfect attendance, and to let it accumulate. Reward perfectattendance, but don’t punish for necessary absences. When you place theemphasis on rewarding attendance, people will be absent only when coming to workis not an option (in other words, they’ll stay home when they are truly sickrather than call in sick when they need some personal time off).


Psychologically, it’s much easier to abuse sick leave if you feel you’renot an important part of the organization, or if you feel alienated bymanagement. Managers must regularly communicate to employees how important theyare to the enterprise.


Yearly reviews don’t do enough to communicate to employees their worth to theorganization; they should have an ongoing sense of the importance of their role.When you know you are a needed and valued member of your team at work, yoursense of commitment and responsibility is strong enough that when you call insick, it’s because you are actually sick.


Workforce Online, April 2003 — Register Now!

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Q and A About Consumer-Driven Health Care

Alexander Domaszewicz answered questions posted by Workforce members relating to consumer-driven health care. Here are his answers:

Q: I have a liability question. Employers will be “empowering” employees but it will still be an employer sponsored plan. What safeguards does an employer have to help avoid the lawsuit that comes from arguably incomplete information or an alleged abandonment of employer responsibility?


    A: This is a concern for many employers as they move toward an information-rich health care environment. This is also a question with legal implications that can only be fully addressed by legal counsel (inside and/or outside).


    One of the best analogies is the move from passive defined benefit retirement plans to the “empowered” defined contribution retirement plans we’re seeing more of today. Plan sponsors continue to expand the resources they make available for their employees in the financial area, despite the potential liability issue.


    By keeping health care information resources distinctly separate from company resources and with proper disclaimers, many employers feel they are able to effectively address the liability issue. To my knowledge, no plan sponsor has been held liable for detrimental outcomes after providing health care information to an employee. However, since the potential exists, it is important to address this area when moving towards greater health care consumerism.


Q: What is the FASB liability for HRAs? Example: Employer establishes a $500 HRA for each of 100 employees with a carry forward provision. During the plan year $20,000 is used and paid. Does the employer have to accrue an expense of $30,000 to reflect “rolled over” amount?


    A: As a consulting firm we’re not in a position to give tax or legal advice, but we’re seeing a number of approaches in the marketplace.


    The majority of plan sponsors are viewing the first or second year of CDHP account accumulations as insignificant or diminimus in terms of the overall plan costs, and are not accruing liability yet. They will revisit this as the accounts and balances mature.


    One plan sponsor, using a major accounting house, has deemed it necessary to accrue and report the liability on an ongoing monthly basis. As of now, this approach seems to be the exception.


    With corporate debacles such as Enron and WorldCom, this is one of the areas that we may soon see further health reimbursement account IRS guidance.


Q: One company describes an account that an employee can take with them after termination. These funds are actually in custodial asset accounts.


In what circumstances will this type of account still sanctioned by the IRS?


    A: You may be talking about CareGain’s (www.caregain.com) HealthcareIRA. In reviewing the IRS’s Revenue Ruling 2002-41 and Notice 2002-45 on Health Reimbursement Arrangements (HRAs), there do not seem to be any barriers to an employer setting up an HRA that is portable and personal to an employee. An employee could still access funds after employment has ended, as long as they incur a qualified medical expense and aren’t allowed access to the funds for any other purpose. For now, the issue of how the account is funded is at the discretion of the sponsoring employer who allocated the funds in the first place. The guidance is fairly broad and allows the employer quite a bit of freedom in structuring the HRA, but securing qualified tax and legal guidance would be an important step if structuring an HRA with a funded custodial asset account.


Q: Most of us have been hearing the success stories of some Consumer Driven Health Plans, which is great, but might not actually paint a true picture. Are you aware of any companies that took the CDH initiative and failed miserably with it? If so, what were the faults with the program? I know these plans are new, so there might not be enough information out there to answer this question.


On a different note, aren’t the majority of employees signing up for these types of plans young and have few health problems? What I’d be interested in reviewing is the medical increases on the plans that are still being run with a managed care philosophy for some of the companies that are seeing very low increases on the CDH renewals. For example, if half the group is on a CDHP and that plan only experienced a 5 percent increase, but the HMO and PPO plans that cover the other half of the group saw a 25 percent to 30 percent increase are there really any savings on these plans?


    A: Your question has two parts, so I’ll address them one at a time.


    There have been a few failures in the CDHP market, but it is early in the process and programs for the most part haven’t had a chance to prove themselves (or not). Besides, it’s a lot more fun to tout successes. On the plan sponsor side, I heard about one 5,000-employee wholesaler (non-Mercer client, I might add) that offered a CDHP in 2002 and only attracted eight enrollees. Of course the program was only piloted as a “slice” option in three locations and it’s likely that communications, design, and alignment with the traditional plans was less than optimal. The employer dropped the CDHP and reenrolled the eight employees in other plans. Moving toward a consumer-directed health strategy can take quite a bit of time, effort, energy, and money. Making the new program worthwhile for the employer and the members is critical and any less could be viewed as a failure.


    Another anecdote that is in some respects similar to the example above but is really a success comes from a large employer who offered a CDHP in 2002 and only attracted 30 employees to enroll. The difference here is that the employer actually targeted and was perfectly fine with very low enrollment (less than 100) as it allowed them to gain experience with CDHP for the following year. The employer has now expanded the option and has thousands of enrollees in CDHP.


    The final piece of this equation is around vendors in the CDHP marketplace that have not made it. HealthSync was a great idea–create a health plan marketplace where firms give employees a fixed amount of money to go ‘shopping’ on a Web-based platform allowing them to choose (based on cost and quality) between all the health plans in a given market. Then the health plans would have premiums paid to them out of the entire pool of money adjusted for demographics and disease burden. Unfortunately, this consumer-directed model took too much coordination between health plans and employers, while initially being a solution in a very limited number of markets. HealthSync didn’t make it. Planlinx was another vendor in the consumer directed benefits and education space that didn’t gather enough business to stay afloat. The lesson here is to choose who provides services to your employees carefully.


    The second part of your question has an easy answer: it’s too soon to tell. Of course that is a little cowardly, so I’ll expand just a bit for now. There have been very few full replacement CDHP cases with enough available experience to measure, but what little uncorroborated evidence is available suggests the plans help dampen the cost increase trend. In slice offerings, a lot of what we do with plan sponsors is help create an offering that will not cause excessive selection based on demographics or health status between the plans. In early CDHPs there seems to be little selection based on demographics and low to moderate selection towards the healthy. This is not surprising for the first year or two of any new offering, considering that people with health concerns or undergoing a course of treatment are often not anxious to change plans.


    Also consider that there is still selection between traditional plans with different benefit and cost-sharing structures. Generally, we have not seen the huge increases on the traditional plans that are offered along side CDHPs as in your fictional example. Every CDHP scenario is different and it is hard to generalize the results at one company to others–we see different employer goals, different offering environments, different eligibles and enrollees, different geographies and different administrators. Well-designed CDHPs that are properly aligned to the other benefit offerings with a thoughtful contribution strategy and a strong educational effort are the best defense against the undesirable selection scenario you’ve created.


Alexander Domaszewicz works for Mercer Human Resource Consulting and is an expert on consumer-driven health care.


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.


Workforce Online, April 2003 — Register Now!

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How to Figure Out if You’re an Employer of Choice

It’s easy to say that you have become an employer of choice. In reality,though, being an employer of choice is a difficult–albeit measurable–status toobtain. Here are some ways to assess how far you have come in theemployer-of-choice sweepstakes. The employer-of-choice factors are listed herein descending order of importance.

1. “Best” list appearances. The firm currently appears on Fortune’s or Working Mother’s best places list and on more than one industry or regionalbest places list.


2. Positive name recognition in target population. When asked in a survey orfocus group, people in your target professional fields know the name of yourfirm 75 percent of the time, and over half of those know at least one keypositive selling point of your firm.


3. In the top three choices of top performers. When highly qualifiedprofessionals are asked the names of places they “would like to work someday,”over 50 percent list your firm in the top five most-often mentioned.


4. Where your applications come from. At least 10 percent of your applicantscome from the top five most profitable firms in your industry or region.


5. Often cited in MVPs. Your firm’s HR and people practices are cited atleast five times a year by name in the top three (most valuable publications)that are read by top professionals in their field or industry.


6. Often cited. Your firm’s HR and people practices are cited by name inmajor industry, business, and HR publications over 50 times a year.


7. Referral rate. Employee referrals make up over 50 percent of all hires.


8. “Other offers.” Applicants with multiple offers also get a concurrentoffer from one of the top ten-rated firms in your industry at least 50 percentof the time.


9. Give away/take away ratio. Your firm hires away more people from your topfive competitors than the competitor hires away from you (you win four out offive of these head-to-head battles).


10. Talent competitors talk positively about you. When managers at directtalent competitors are asked in surveys or focus groups about your firm’speople practices, they give a positive response 25 percent of the time.


11. In top three choices of average performers. When professionals in yourindustry are asked the names of places they “would like to work someday,”over 25 percent list your firm.


12. Recruiters list you in top employers. When professional recruiters areasked in surveys or focus groups about your firm’s people practices, they givea positive response 50 percent of the time. When asked to list the top tenemployers of choice in your region or industry, they cite you 50 percent of thetime.


13. On “admired” list. You appear on Fortune’s “most admired firms”list.


14. On diversity list. You appear on Fortune’s diversity list.


15. Former employees do/would return. Over 10 percent of employees whovoluntarily quit in the past three years have returned. Over 50 percent expressan interest in returning when surveyed.


16. Employees send the “same” message. When your employees are asked whatthey tell strangers about “why the firm is a great place to work,” over 50percent of their answers include your top selling point.


17. Low turnover rate of top performers. The turnover rate of your top 25percent-rated employees is below 5 percent.


18. CEO mentions people practices. Your current CEO mentions specific HR orpeople practices by name in 25 percent of external and 50 percent of internalspeeches.


19. Sign-up lists. Your “sign-ups” at college information events exceedthe average by 50 percent. Your lines at job fairs are 25 percent longer thanyour top direct talent competitor.


20. Web hits. You get 50 percent more Web hits on your jobs page than theindustry average.


21. Benchmarked. Fortune 500 firms from outside your industry benchmark you(call to learn about your best practices) at least once a year.


22. Listed first in conference brochures. When presenting firms are listed incommercial seminar brochures, your firm’s name appears in the first 25percent.


23. Book. There has been a book written about your firm or CEO within thelast five years.


24. CEO has wide name recognition. Your current CEO has a positive namerecognition 75 percent of the time when professionals in your industry are askedto comment in surveys or focus groups.


25. You have an EOC manager. Your HR department has a designated manager whohandles employer of choice, best-places-to-work list, and employment-branding.


Excerpted from “HR Metrics, the World-Class Way” by Dr. John Sullivan,with permission from Kennedy Information, (800) 531-0007.  The phrase ‘Employer of Choice,’ is a registered trademark of Employer of Choice, Inc., a division of The Herman Group. Use of the phrase in this article is done with specific permission to www.workforce.com from the trademark holder. For further information, see www.employerofchoice.com.”


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Dear Workforce What Are Good Recruiting Metrics

Dear Talent-Hunter:



Recruiting metrics are the building blocks upon which recruiting decisions,strategies, and plans are built. Without these items, it is impossible todevelop a meaningful recruiting strategy or determine the effectiveness of thatstrategy.

Companies commonly rely on the following standard measurements of recruitingeffectiveness:

Source distribution: Number of job applicants and new hires per recruitmentsource.

Time-to-fill: Number of days between when a new job requisition is opened andwhen a candidate accepts an offer.

New-hire quality: A performance assessment conducted during an employee’sfirst 90 to 180 days on the job.

Customer Satisfaction: refers to the average hiring manager rating.

Recruiting Cost Ratio: requires figuring out the total recruiting costs, andthen dividing by the total compensation recruited. Total recruiting costs aredetermined by adding up four cost areas:

  • Fixed-overhead recruiting expenses
  • Sourcing-advertising, recruiting fees, Internet-posting expenses
  • Signing bonuses
  • Travel, relocation, visa expenses

The sum of these four areas equals total recruiting costs. Total compensationrecruited is the sum of the annual base starting compensation of all externalpositions filled by recruiting. Once you’ve come up with these two figures, therecruiting cost ratio can be calculated by using the following equation:

Recruiting Cost Ratio=Total RecruitingCosts/

Total Compensation Recruited

Recruiting cost ratio replaces the more traditional and commonly usedcost-per-hire metric. It takes into account more factors that affect cost, suchas geographic differences, industry differences, functional differences, anddifferences in job level.

SOURCE: Mike Sweeny, T. Williams ConsultingInc., Collegeville, Pennsylvania,Aug. 14, 2002. Staffing.org developed therecruiting cost ratio.

LEARN MORE: Read How Can We Measure Our RecruitingCosts?

The information contained in this article is intended to provide usefulinformation on the topic covered, but should not be construed as legal advice ora legal opinion. Also remember that state laws may differ from the federal law.

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Sailors Get a Streamlined System

Clunky is probably the best way to describe the human resourcessystem as it now stands in the U.S. Navy. The 20-year-old technology consists ofabout 78 legacy systems, along with hundreds of smaller applications. None arelinked, so each piece of information on every one of the active-duty 380,000sailors has to be manually entered again and again. And with more than 45,000new sailors and up to 4,000 officers enlisting each year, plus another 60,000sailors and 17,000 officers moving or changing jobs on shore, ships, squadrons,and submarines, it’s no wonder that inaccuracies, errors, inconsistencies, andall manner of human resources headaches occasionally surface.


    “The training database isn’t linked with the personnel database,”says Vice Admiral Gerald L. Hoewing, who assumed the duties of chief of navalpersonnel/deputy chief of naval operations (manpower & personnel) lastOctober. “The open job database isn’t linked to sailors’ competencies. Thefinancial system isn’t linked to personnel records. And it goes on and on.”


    But that awkward and inefficient situation is about to change under Hoewing’sleadership. In December, the Navy began implementing a human capital managementand data warehouse application made by PeopleSoft. The streamlined system, whichis expected to be fully functional by 2004, includes analytic, self-service,recruiting, and other applications to consolidate the various systems, link andintegrate the disparate databases, and allow sailors online access to theirpersonnel records.


    “This HR system upgrade will have a direct, positive impact on ourmission effectiveness, combat readiness, and organizational efficiency,”Hoewing says. “For example, by linking job databases with sailorattributes, we’ll improve our ability to get the right sailor to the right placeat the right time.”


    When it comes to HR technology, the Navy is the Defense Department leader,Hoewing says. “This application suite enables us to gain efficiency; gettimely, accurate data; be more effective; and reduce the costs of maintainingand operating multiple legacy systems–all with a common, off-the-shelf product.Over the next several years, the entire Department of Defense will be moving tocommercial solutions in order to reduce administrative and maintenance costs.The Navy is ahead of the game.”


    The new system, which cost just over $7.5 million, will consolidate andcentralize benefits, training, assignments, qualifications, and compensationinformation. It will enable immediate updates and provide access toup-to-the-minute data on personnel skill sets and competencies required to buildfuture force structures. And it will allow the Navy to measure, manage, andmaximize service members’ performance.


    Sailors will be able to match their qualifications to job opportunities andupdate their preferences for geographic location and type of duty. They’ll beable to access their personal information, instantly update their records, tracktheir training, and manage their careers from home, on a ship, or at a base–allthrough a simple Web browser.


    “Our stakes are high,” Hoewing says. “So every system weimplement and every policy we make must contribute to our ability tosuccessfully operate in the four corners of the world in support of our nation’sdefense.”


Workforce Online, March 2003 — Register Now!

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Dear Workforce What’s The Best Way To Downsize Yet Still Hand Out Raises To Remaining Staff

 Dear Caught in a Vise:



Depending on how much downsizing is involved, this may be problematic foryou. I would strongly advise against providing raises to “surviving” staffmembers, particularly in situations where the downsizing is significant — morethan 10 percent of the workforce.

Many of the remaining employees will react unfavorably to the increases, nomatter how you position things. It will serve to increase the level of confusionand frustration that they feel, and many may think that their colleagues were”sacrificed” to pay for the raises. The best approach would be to separatethe events by at least four to six months. You can provide increases on theregularly scheduled annual review date, assuming you have one. If you use ananniversary system, then freeze all increases (not performance reviews) for thenext four to six months. You can then begin them again when you feel that theshock of the downsizing is past. For those whose increases were delayed due tothis process, provide them with prorated increase amounts. For example, a personwhose increase was delayed four months would get 16/12ths of their increase.

If you absolutely cannot wait to provide salary increases, then the way tohandle things is to be as up front and honest with employees as prudentlypossible. You need to explain the business situation. Be clear as to the reasonsfor the downsizing, and why you feel it is necessary to provide raises to theremaining staff members.

Let’s assume for a moment that you are giving the raises to keep pay atcompetitive levels, even during a business downturn. Your message should focusfirst on the company’s inability, due to business conditions, to allow stafflevels to remain at current levels. The next message should explain that eventhough you must downsize, the company remains committed to keeping talentedpeople, and paying market-competitive compensation.

Employees need to believe that all of this makes sense from a businessperspective, so you will need to craft these messages carefully. Whether youprovide increases right away, or wait as explained above, communicate via groupmeetings with senior management, as well as personal meetings between managersand employees. Follow these up with e-mails or personal letters. Useface-to-face communication as your primary vehicle for getting the message out.Your goal is to gain understanding, if not acceptance. Make sure you get there.

SOURCE: Robert Fulton, managing director, The Pathfinder’sGroup, Chicago,Illinois, Aug. 13, 2002.

LEARN MORE: Read Thirteen Alternatives toDownsizing.

The information contained in this article is intended to provide usefulinformation on the topic covered, but should not be construed as legal advice ora legal opinion. Also remember that state laws may differ from the federal law.

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