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Posted on December 15, 2000June 29, 2023

Hiring an Employee How Much Does It Cost

You are absolutely correct if you say that the quality of the hire is moreimportant than the cost.


However, when you’re doing a cost-benefit analysis to determine whether tobuy an applicant-tracking product, one of the first steps is to figure out whatyou’re spending now.


When large companies hire thousands of employees per year, these costs cantake a significant portion of the HR budget and the total operating expenses.Successful start-ups and dot-coms are also feeling the squeeze. Agency fees of20-30% of the new hire’s base salary have a heavy financial impact when you’readding over 100 new hires per year.


Whether you are using the new electronic methods or the traditional hiringtactics, having a standard and effective way of measuring your cost per hire isessential to evaluating your recruiting effectiveness and efficiency. TheSaratoga Institute includes six basic elements to calculate Cost per Hire:

    1. Advertising
    2. Agency and search firm fees
    3. Referral bonuses paid to employees
    4. Travel costs incurred by both recruiters and applicants
    5. Relocation costs
    6. Company recruiter costs (including salary and benefits prorated if therecruiter performs duties other than staffing)

These six factors account for 90% of the costs to hire. Saratoga Instituteadds an additional 10% to cover miscellaneous expense items such as testing,reference checking, bonding, hiring unit staff time, administrative support andother minor expenses.


The internal cost per hire calculation is very similar. It includes four dataelements: Any internal advertising costs, travel and interview costs, relocationcosts, and internal recruiter costs. The combination of both external andinternal hiring costs provides a total cost analysis of your recruiting efforts.


Total cost per hire


In the Saratoga Institute Human Capital Report for 2000 (compiled fromcalendar 1999 data), the total cost per hire (external and internal hires) forall 991 participants surveyed averaged $4,588. The exempt cost per hireaveraged $12,032 and nonexempt $989.



External vs. internal for exempt employees


Exempt external cost per hire averaged $8,676 while exempt internalcost per hire hit an average of $15,008. Exempt internal costs are greatlyinfluenced by relocation expenses while the exempt external costs are highlyswayed by both relocation costs and agency fees.




Regional differences


A closer look at the total costs to hire exempt employees shows that highercosts are seen in companies located in the West and for organizations in theComputer, Pharmaceuticals/Medical Devices, and Manufacturing industries. Highnonexempt costs are also seen in companies located in the West. The regionalvariances can be attributed to several factors: The higher costs of doingbusiness, higher cost of living and therefore higher salary demands, plus thedemands of a tight labor market — there are simply more jobs than people.


Costs by source


The total costs to hire are only one element in an effective and efficientrecruiting function. Many companies don’t measure and therefore don’tunderstand what works for their organization since they’re not looking attheir costs and hires by source. A breakdown of the 1999 total hiring costs showsthat on average 18.4% of the total hiring cost was allocated to advertising and19.9% was paid to agencies and search firms; only 1.8% was for referralbonuses, 2.7% for travel costs, 32.9% was paid out for relocation expenses, and24.3% was for recruiter pay and benefits.



The breakdown for external exempt hires shows that close to 50% of the costis allocated to agencies’ fees and relocation expenses.



When evaluating cost per hire, and considering any changes, the key is tolook further. Ask yourself these questions:

  • Are you getting what you pay for right now?
  • What is the retention rate for those employees hired from employeereferrals vs. agencies?
  • What is the average tenure for employees who relocate?
  • What level employees are best hired from newspaper advertising?
  • What source has provided you with the highest performers?

The cost to hire exempt external employees has risen 25% in the last twoyears. Effective staffing functions use this data to plan successful recruitingstrategies that supply them with the quality hires they seek and hopefully slowdown that rate of cost increase.


Posted on December 14, 2000June 29, 2023

2001 Optimas Award Winners

The Workforce Optimas Awards are a celebration of the power of human resources management. Annually, Workforce recognizes HR programs that have made their businesses better. The winners are selected in 10 categories: General Excellence, Competitive Advantage, Financial Impact, Global Outlook, Innovation, Managing Change, Partnership, Quality of Life, Service, and Vision. The winning programs are profiled in the March issue of Workforce magazine with additional information provided at Workforce online.


It is with great pleasure that Workforce celebrates the winners of Optimas Awards 2001:

General Excellence:
Sysco Corporation
Competitive Advantage:
WellPoint Health Networks
Financial Impact:
NCCI Holdings
Global Outlook:
Deloitte Touche Tohmatsu
Innovation:
Province of New Brunswick
Managing Change:
National Imagery and Mapping Agency (NIMA)
Partnership:
Blue Valley School District
Quality of Life:
Camping World, Inc.
Service:
IXOS Software
Vision:
Acxiom Corporation
Posted on December 10, 2000July 10, 2018

A Manager’s Guide to the EAP

Here are some common questions managers have about emmployee assistance programs.


Q:When is it appropriate to referemployees to the EAP?


A:There are really two different kinds of referral situations, one where theemployee does not have a job performance problem, and the second, where theemployee’s job performance has deteriorated.


In the first instance, the supervisortypically learns directly from the employee that he or she has a personalproblem, such as a marital or other relationship conflict, a problem with an outof control adolescent, illness or a death in the family, a childcare oreldercare issue or some other significant personal concern. The supervisorexplains that the EAP is a free, confidential, professional counseling serviceto address a wide range of individual and family problems. This is known as an”informal” referral. The supervisor’s involvement with the processends here.


In the second instance, the supervisortakes the initiative to recommend the EAP to the employee, based on declining orerratic job performance. This is known as a “formal” referral. Not alljob performance problems call for an EAP referral. Supervisors should consider aformal referral when the employee fails to respond to the standard coaching anddisciplinary process.


There may also be a more extremesituation, such as an employee showing up with the odor of alcohol or makingbizarre statements in the workplace that suggest a substance abuse problem or aserious mental health issue. Here, timely referral to the EAP is crucial.


 


Q:Should the supervisor contact the EAP before making a referral?


A:When there are job performance problems, the supervisor should consult with theEAP prior to meeting with the employee. There are several reasons for apre-referral consultation:


  • The supervisor may be concernedabout how to deal with an employee who typically gets angry when confrontedor tearful or defensive. The EAP can provide useful guidance on how to stayon track and manage a difficult or manipulative person.
  • The EAP can help the supervisordecide if this is the right time to make a referral. Sometimes, a betterstrategy is clarifying job performance expectations and potentialdisciplinary consequences and waiting to see how the employee responds.
  • If it looks like an EAP referral isappropriate, then it is imperative that the EAP know why the referral isbeing made. Employees often minimize or deny job performance issues whenthey meet with the EAP. The EAP needs to know the details of the jobperformance problem in order to help the employee recognize what changes areneeded.
  • If the employee has a substanceabuse problem, he or she will be extremely reluctant to acknowledge this toanyone, including the EAP. A qualified EAP professional has the training toidentify the signs and symptoms of alcoholism or drug abuse and to help theemployee recognize the need for professional treatment. It is critical thatthe supervisor convey information about absenteeism, changes in appearanceor grooming, emotional instability, memory lapses, agitation or lethargy andother for the EAP to make an accurate problem assessment.
  • Contacting the EAP prior to thereferral opens the door for the EAP to subsequently confirm that theemployee followed through. While most EAPs require the employee’s consentto speak with the supervisor, employees who accept an EAP referral recognizethat it is their best interest that the supervisor knows that contact wasmade.

 


Q:How should the supervisor make a formal referral?


A:The supervisor should follow this sequence:


  • First, document the employee’sabsenteeism, errors, late assignments and arguments with co-workers or otherwork discrepancies and problematic workplace behaviors. Remember, if youdidn’t document it, it didn’t happen!
  • Meet with the employee in privatewith the documentation in front of you and explain that the purpose for themeeting is to discuss the employee’s job performance.
  • Ask for an explanation of the jobperformance or behavioral issues. Sometimes, there are quite legitimateexplanations for changes in behavior and job performance having to do withmedical problems or other circumstances that the supervisor was not awareof.
  • Clearly state the employee’sstatus regarding the company’s disciplinary process and what theconsequences will be if there is no improvement in job performance.
  • Tell the employee, “I’mreferring you to the EAP. Your use of the EAP is confidential. You will needto authorize the EAP to confirm with me that you made contact. That is allthey will tell me, unless you give them permission to share moreinformation. Your use of the EAP is voluntary, but your improving your jobperformance is mandatory for you to avoid discipline and possibly losingyour job. I strongly recommend that you follow-through.”
  • Never diagnose the employee’sproblem. You can tell the employee, “You have come back from lunchthree times this month with the odor of alcohol on your breath, slurringyour words and unable to finish your work on time.” Under nocircumstances should you say to the employee, “I think you’re analcoholic.”

 


Q:What else should supervisors and managers know about EAP referrals?


A:While specifics vary from company to company, additional information isavailable from the following sources:


  • Most companies have developedspecific policies around job-performance related EAP referrals that are partof corporate and human resources policy manuals. If your company does nothave a written EAP policy, samples are available from the EmployeeAssistance Professionals Association, and you can get assistance indeveloping policies from your EAP vendor or from a consultant whospecializes in EAPs.
  • Most EAPs provide a specified numberof hours of training for supervisors and managers as part of the EAPcontract. In today’s fiercely competitive marketplace, employers oftenfind it difficult to take supervisors off their jobs for EAP training.Supervisory referrals provide the best means to identify and help the 15% ofthe workforce whose job performance problems may be tied to alcoholism, drugabuse, depression or other serious personal problems. Three decades of EAPresearch has shown that EAP utilization is strongly correlated with EAPvisibility in the workplace.
  • All EAPs do not handle formalsupervisory referrals in the same way. Contact your vendor account managerand ask for procedural guidelines around job performance referrals. If youfeel that your EAP vendor has too many procedural roadblocks for supervisoryreferrals, compare your experience with other HR professionals or speak withan EAP consultant about alternative ways to structure the EAP process.

Posted on December 3, 2000July 10, 2018

Dear Workforce How Do I Choose the Right Consultant

Q

Dear Workforce:


I need to choose an organizational consultant for a managers’ developmentprogram in my company (50 employee start-up). This might be a long-termrelationship, and I need tips for making the right choice — what can I ask theconsultants whom I meet, who is considered a “good” consultant, andwhat are the hazards which I must avoid.


— Human resources manager, Israel


A Dear Start-up:


Here are some steps to take:

  1. Make your selection competitive and get proposals from a variety ofconsultants — and select the one who best understands your culture, needsand is flexible in customizing (customizing means more than changing thename on an off-the-shelf product).
  2. Ensure that he or she is getting senior resources from the consultingorganization. It helps when a consultant working with managers has been amanager before.
  3. Look at other manager development curriculums they’ve done before to seethat they are in line with what their expectations would be. Find out aboutthe consultants history — if you want a long-term relationship it isimportant that the person have a track record and is likely to be around fora while. Ask to see sample materials. Ask to observe a course.
  4. Ask about class size — good management development programs almost neverhave more than 12-14 individuals in them.
  5. Check references.
  6. Conduct a preliminary working session with the consultants prior to thedecision. This will allow you to see their working style.

SOURCE: Lance Brilliantine and David Rudini ofDeloitte and Touche.


E-mail your Dear Workforce questions to Online Editor Todd Raphael at raphaelt@workforceonline.com,along with your name, title, organization and location. Unless you stateotherwise, your identifying information may be used on Workforce.com andin Workforce magazine. We can’t guarantee we’ll be able to answerevery question.

Posted on December 3, 2000July 10, 2018

Cut the Fat Without Losing an Arm

Don’t sacrifice everything to the bottom line; cutting costs by letting go valuable employees can be a drastic measure. Use these questions to inspire new thoughts about efficient budgeting.


Revenue


  1. In what different ways can we use our facilities to generate additionalrevenue?
  2. Are there add-on sales opportunities, where we can sell ancillary productsto our existing customer base at no additional cost to us?
  3. Is there value in our customer database?
  4. Are there significant heavy users of our products that could be isolatedinto a separate group for special product offers and additional sales?
  5. How often do we lose customers?
  6. Can we develop a retention strategy for those customers?
  7. What additional actions can we take to augment our business products orservices?
  8. Are there opportunities to license or franchise our business?

Salaries


  1. How many hours a week do our managers work?
  2. Should they be working 45 to 55 hours instead of 40?
  3. How many of our employees take advantage of direct deposits for paychecks?
  4. How well do we manage our salary administration program?
  5. Have we established target compensation ratios based on the personality ofour business?
  6. Have we established a desired community position, knowing where we want tobe with regard to our competition?
  7. Do we have a salary administration program?
  8. Do we have a salary range philosophy?
  9. Do high-performing employees get higher increases than those who have notperformed as well?
  10. Do we establish a salary increase guideline budget and stick with it?
  11. Are salary increase guidelines pre-approved?
  12. Do we have a salary administration program that offers employees a salaryreview on an anruversary of the hire date?
  13. Do we know whether our company would qualify for targeted tax job credits?
  14. Do we have a training rate for all appropriate positions, where employeesreceive a lower rate until they are trained?
  15. Do we have a 90-day probationary rate for certain positions?
  16. Do we have a labor management system that helps us schedule labor in15-minute increments?
  17. Do we have a software program that reconciles cash and allows employees tocash out quickly at the end of shifts?
  18. Do we constantly look for labor reductions by modifying our software?
  19. Do we have industrial engineers do time-and-motion studies to determinewhether additional efficiencies can be gained?
  20. Do we have an incentive program to help reduce absenteeism?
  21. Is our business a high-turnover business? what can be done to reduce ourturnover rate?
  22. Does our business utilize a vacancy factor?
  23. Do we measure all of our costs by various units (such as cost per test,cost per guest check, and cost per widget) in order to determine areas ofcontrol?

Payroll Burden


  1. Have we ascertained the difference between full-time and part-timeemployees and the benefits they should be receiving?
  2. Have we evaluated the cost of our 401(k) administration program to see howcompetitive our costs are and to determine whether additional savings arepossible?
  3. Have we evaluated the cost employees are paying for participating in ourbenefits?
  4. Have we established a vacation policy whereby vacation time must be takenthe year in which it is earned?
  5. Do we have a sick time buyback program whereby employees can sell backsick time at reduced rates?
  6. Have we instituted a vacation buyback program allowing employees to sellback unused vacation hours at a reduced rate?
  7. Have we evaluated a cafeteria-style benefits program?
  8. Have we aggressively tried to reduce worker’s compensation insurance byeliminating accidents?
  9. Do we understand how our true burden percent is budgeted?

Communications


  1. Have we authorized a telecommunications consultant to analyze ourcommunication costs in terms of rates charged, equipment used, or programsoffered? Perhaps the consultant could be compensated in accordance with afee structure based on a percentage of the savings. If there is no savings,there is no fee.
  2. How often do we renegotiate rates and terms with vendors who provide uswith communication services?

Utilities


  1. Have we authorized a utility consultant to analyze our utility costs?
  2. Do we have in place a mandatory energy conservation program wherebythermostats are set at a standard temperature?
  3. Do we have a policy that lights are turned off in conference rooms andrest rooms when these rooms are not in use?
  4. Do we have a procedure for turning off all other than security lights atthe close of business?

Professional Fees

  1. Do we challenge fees charged by outside attorneys?
  2. Have we reached an understanding about how much we will be charged, or do wejust pay whatever outside professionals bill?
  3. Have we sought to get the most favorable fee arrangement in each case?
  4. Do we try to settle our legal cases?
  5. Have outside attorneys designed a format to use for routine scenarios?
  6. Have we attempted to negotiate contracts giving us a guarantee as to aminimum number of hours?
  7. Do we use less expensive attorneys for small collection transactions?
  8. Do we try to share costs when appropriate and make sure there are noconflicts of interest?
  9. Do we give lawyers all appropriate records at the first meeting in order toeliminate the need for phone calls regarding missing items?
  10. Do we insist on an itemized statement each month?
  11. Do we suggest PBF approaches to the attorney? Maybe we can save the lawyer’sexpense, which would offset or reduce the cost of our service.

Marketing


  1. Do we ensure that our advertising agency does a postbuy analysis on alladvertising buys to determine whether the target rates were achieved?
  2. Do we seek syndication scenarios whereby a partner would agree to fund thedevelopment of commercials and campaigns for a percentage of revenues?
  3. Do we seek to have the advertising agency have some “skin in thegame?”
  4. Do we look for those who would partner on a percentage of the revenue?
  5. Would it be possible to publish a magazine via a custom publisher anddistribute it to our customer base as a way of marketing our organizationand generating some additional revenue?

Public Relations


  1. Should we consolidate our brochures into a few rather than have a largenumber of brochures?
  2. Do we write our own press releases?
  3. Do we seek free PR opportunities for promoting our business?
  4. Do we stretch the impact of our public relations by being a good corporatecitizen, sponsoring teams or working with local schools?
  5. How do we rate our public relations agency? Is it getting results?
  6. Is there a way to create PR events out of everyday occurrences?

Insurance


  1. Are we familiar enough with our insurance policies to determine whichitems are covered and which are not?
  2. How often do we challenge third-party providers to reduce our insuranceadministration costs?

Travel and Entertainment


  1. Does our business need an individual who is certified as an independenttravel agent so that we may receive discounts on hotel rooms, car rentals,and other travel expenses?
  2. Should the company buy or lease an apartment for traveling employeesrather than paying for hotel rooms?
  3. Do we have a need for video conferencing? Would that solution help usreduce costs?
  4. Is there a policy stating that all travel must be approved in advance andthat travel authorization forms must accompany expense reports?

Facility Costs


  1. Have we performed a property tax assessment comparing the cost to build afacility with the current fair market value, and have we sought adjustmentswhen appropriate?
  2. Have we ever had an accountant challenge a tax assessment?
  3. How often do we evaluate our excess property? Could this property be soldor leased to reduce carrying cost?
  4. Have we evaluated the sell/leaseback program?

Vehicle Costs


  1. Do we have a program in place for monitoring our gasoline purchases?
  2. Are our maintenance costs monitored and controlled?
  3. Have we evaluated our company policy to determine whether a car allowanceis better than a company-car program?

Other Supplies and Services


  1. Do we need to have armored-car service, or can our managers make thosedeposits?
  2. Have we evaluated our armored-car service to determine whether we canreduce the number of pickups?
  3. Do we constantly negotiate and renegotiate prices with vendors?
  4. Do we constantly renegotiate our prices with vendors to avoid the typical3% annual inflation rate that most vendors demand?
  5. Does our business recycle paper?
  6. Does our business manage our trash bins to determine whether the bin sizesare appropriate? Can we get by with smaller ones or fewer pickups?
  7. Have we evaluated our uniform program?
  8. Are uniforms needed?

 


SOURCE: Excerpted from ProfitBuilding: Cutting Costs Without Cutting People, by Perry J. Judy,published by Berrett-Koehler Publishers. Order by phone at 800/929-2929.

Posted on December 2, 2000July 10, 2018

Attitude, Attitude, Attitude

One of the biggest barriers toemploying disabled job candidates is the negative attitude of supervisors andcoworkers, according to a July 2000 study by Cornell University, “Americanswith Disabilities Act Implementation in the Federal and Private Workplaces.” 


    In that study of human resourcesmanagers at 400 federal employers and 800 private-sector employers, 43 percentof the federal employers and 22 percent of the private employers cited negativeattitudes of supervisors and coworkers toward persons with disabilities as acontinuing barrier to employment and advancement. 


    “Anecdotally, negative attitudesmanifest themselves in overt and subtle ways,” says Susanne Bruyère, directorof the program on employment and disabilities at Cornell and author of thestudy. “When employees are interviewed, they may be passed over because ofconcern they may not be as capable as other candidates. Often it’s notintentional.” 


    “Managers need to see a person who isboth productive and well-educated,” says Beth Hatch-Alleyne, a blind seniordesktop specialist for general markets at Xerox, in Webster, New York. Youcan’t expect people to know what you’re capable of if you don’t tell them,she says. “They don’t always understand that I need to do additional work inthe beginning. If a database doesn’t speak, I need to learn to program it tospeak.” Additionally, if a program is causing problems that decrease herproductivity, they need to know that also. 


    Basically, overcoming bias is a matterof educating managers and coworkers about the possibilities, and that’s a jobfor companies as well as individuals. The Norfolk Southern Corporation, arailroad headquartered in Norfolk, Virginia, addresses the issue of negativeperceptions by providing training classes for all supervisors, says R. DavidCobbs Jr., director, EEO and employment. “But,” he adds, “it isn’t asextensive as sexual harassment training.” Nonetheless, he says, “Some of theperceptions have changed. Our managers look toward reasonable accommodationsnow.” 


Workforce, December2000, Vol. 79, No. 12, p. 42  Subscribenow!

Posted on December 2, 2000July 10, 2018

Being Accommodating

Supervisors’ lack of knowledge aboutaccommodations was cited as an obstacle to hiring disabled job candidates,according to the July 2000 Cornell University study “Americans withDisabilities Act Implementation in the Federal and Private Workplaces.” 


    But that lack ofknowledge extends to disabled individuals, too, says Sheridan Walker, vicepresident of recruiting and development, and co-founder of Hire Potential, aDenver-based workforce training organization. “Some don’t understand thatit’s their responsibility to understand how to use their adaptive equipment tobe productive.” 


    GoodwillIndustry’s Santa Ana, California, location, for example, has a comprehensiveprogram that includes more than 1,000 assistive devices, including page readers,specialized devices for typing and mousing, voice-output devices, and ergonomicequipment. These are available for training and for loan. 


    But not allaccommodations are extensive. Xerox Corp. in Rochester, New York, developsretrofit kits for its multifunction machines that make them usable for the blindor for those in wheelchairs. Dick Schieck, manager of customized applications,says the modifications include Braille kits for multifunctional devices,including maps of the keypads and menus, and modules that angle the keypads,which usually are on top of the machines,  so they are accessible to those in wheelchairs. 


    Wynd Communicationshas designed a wireless communication system specifically for the deaf. Using apalm-sized pager called WyndTell, the company provides a complete set ofcommunication options that include e-mail, TTY, fax, voice, and paging. Many ofits users can’t operate a regular phone and so can’t phone the office orcall home while they are in transit unless they can find a phone with a TTYdevice or access to e-mail. The WyndTell service remedies that. 


    Technology can’tsolve every problem, however. Only 10 to 20 percent of the pages on the WorldWide Web can be read by page readers for the blind, Walker says, but Beth Hatch-Alleyne,a blind senior desktop specialist at Xerox in Webster, New York, begs to differ.“I’m on the Internet all the time. If screens use alt-tags codes insertedinto the copy — similar to the meta tags used by Web search engines to findkeywords in searches — to describe the images, most readers will work withthat.” The World Wide Web Consortium posts access standards on its Web site,and the beleaguered wireless application protocol (WAP) promises it will broadenaccess for everybody by streamlining page content. 


    Sometimesaccommodating a disabled employee is simply a matter of being creative. It canmean changing a desk layout from right to left, altering a work schedule toensure that an employee doesn’t work a shift that interferes with medication,providing written instructions, or reassigning tasks. “Most accommodationsdon’t cost a lot of money,” points out Robin Hoornstra, human resourcesconsulting and EEO officer for Wisconsin Electric. Identifying accommodationsand making them work “boils down to having a good supervisor.” 


Workforce, December2000, Vol. 79, No. 12, p. 44  Subscribenow!

Posted on December 2, 2000July 10, 2018

The ADA at 10

A lot has changed since the Americanswith Disabilities Act (ADA) passed into law 10 years ago. Most sidewalks nowhave wheelchair ramps, stairs usually have either ramps or wheelchair lifts, anddoors and aisles generally are wide enough for a wheelchair to pass throughunimpeded. Just as important, technologies now are available to help individualswith vision, speech, or hearing disabilities hold meaningful jobs. 


    Access andtechnology are only part of the solution for fully integrating the disabled intosociety, however. “The ADA is the United States’ most ambitious attempt atsocial engineering,” according to Christopher Bell, a blind attorney whohelped craft the law and who is also a managing partner at Jackson Lewis inMinneapolis. Ten years after it was enacted and eight years after it tookeffect, “it’s too early to tell the outcome.” 


    Corporate humanresources directors say the ADA hasn’t significantly affected theiroperations. “A lot of our accommodations for people who are disabled had beenin place for a long time,” says Robin Hoornstra, HR consulting and equal opportunity officer for Wisconsin Electric in Milwaukee. Butthe ADA did provide a framework for working through the process, “and in thatway, it’s been helpful. It also caused us to be more precise in defining therequirements of a position,” he says. 


    The strengths andweaknesses of the ADA can be demonstrated in two ways. There has been a dramaticincrease in accessibility to public facilities since its passage. But theunemployment rate for disabled persons remains virtually unchanged since the ADAwas passed in 1990. 


As Fred Grandy, president and CEO ofGoodwill Industries International, says, “The Americans with Disabilities Act,on balance, has created a more favorable environment” for people withdisabilities, but  it has notactually improved their employment fortunes. For that segment of the U.S.population, unemployment typically is about 70 percent. And in that figure liesthe debate. 


ADA Is Misunderstood
    “There is a hugemisperception of the ADA,” says John C. Fox, chairman, employment law, at thePalo Alto law firm of Fenwick & West. Bell agrees: “The ADA protects thosewho are able to do the job.” It doesn’t guarantee the right to a job. 


    “If someone isdangerous or acts out in the workplace, employers can discharge that person.Mental illness is not a defense. It’s just like drinking on the job,” addsRobert Dinerstein, professor of law and associate dean for academic affairs,Washington College of Law at American University in Washington, D.C. 


    The ability to dothe job is foremost in the minds of employers, and “a lot [of disabled people]don’t have the skills necessary or are unable to work,” says Bell. Butskills can be learned. Goodwill Industries International has the proof. In 1999,“we trained 370,000 people and placed 66,000,” says Grandy. “Weconcentrate on people deemed ‘lost causes.’ We don’t give up on you untilyou give up on yourself.” 


    Goodwill Industriesis one of several organizations that helps disabled people enter the workforce.Its emphasis, like that of the ADA itself, is on putting capable people to workdespite their disabilities. As Fox says, “The ADA was considered a modesteffort by Congress. It is only a few words different from the Rehabilitation Actof 1973, which applies to federal workers and government contractors — about 80percent of the large and medium-sized companies — yet it received many timesthe attention given to the Rehabilitation Act. The reality hasn’t matched itsperception.” 


What Constitutes a Disability?
    The reason for thedisparity between reality and perception may be the catch-22 that’s writteninto the law. “You have to have a disability using a narrow definition of theterm, but you have to be qualified to work,” Bell says. “Disability” isdefined in the ADA as loss of a “major life activity.” After nearly 30 yearswith the Rehabilitation Act of 1973, the courts have compiled a growing catalogof conditions that constitute a disability, but debate continues. 


    In 1999, forexample, two nearsighted sisters brought a case against United Air Linesclaiming disability. In that case, Sutton v. United Air Lines, Inc., the Suttontwins applied as global airline pilots for, but were not hired because theycould not meet United’s visual acuity requirement of 20/100 or betteruncorrected vision. The U.S. Supreme Court determined that the use of mitigatingmeasures, including eyeglasses and medications, must be considered indetermining an individual’s disability status. But although they wereprevented from being global airline pilots, they were not prevented fromperforming other pilot jobs. As such, they were not considered disabled. 


    “The court notedthat simply having a physical or mental qualification standard does not create aperception of disability. That decision circumscribes the number of those whoare deemed disabled,” says Nan Alessandra, an attorney with the New Orleanslaw firm of Phelps Dunbar. “That doesn’t defeat the ADA.” 


    The Equal EmploymentOpportunity Commission (EEOC) accepted the Supreme Court’s decision. But inits March 1, 1999, “Enforcement Guidance: Reasonable Accommodation and UndueHardship Under the Americans with Disabilities Act,” the EEOC announced thatit intended to continue to interpret the definition of disability as broadly asit can, by reading court decisions narrowly, Alessandra says. 


    In July 26, 1999,instructions to its field offices, the EEOC noted that the Supreme Court’srecent decisions emphasized that the definition of disability must be determinedon a case-by-case basis, and directed its personnel to use the definition ofdisability that provides ADA coverage for persons with a “record of”disability from which they have recovered in whole or in part, Alessandra says. 


Uncertainty for Small Businesses
    That further muddiesthe waters for all employers affected by the ADA — those with 15 or moreemployees — and is particularly troubling for small businesses. “The ADA iswritten in a vague way, and small businesses may not know whether they are incompliance,” says Mary Leon, spokesperson for the National Federation ofIndependent Businesses. 


    “It isn’t thecost of accommodations, it’s the cost of litigation that hurts small firms,”she says. For example, “remodeling a bathroom for wheelchair access can costbetween $300 and $3,000, and adding a concrete ramp in lieu of stairs costsabout $1,000 per step,” Leon says, citing the book The Americans withDisabilities Act: Private and Public Costs (National Legal Center for the PublicInterest, 1996). Most accommodations are inexpensive. In fact, the JobAccommodation Network reports that 80 percent of the accommodations it suggestscost less than $500. 


    In contrast, if anADA discrimination suit is filed, legal fees can be astronomical, she says. A small business typically doesn’t have an attorney on staff andtherefore needs time to find and thoroughly brief the attorney, which takes timeaway from the business. Additionally, suits currently are often filed withoutgiving the firm an opportunity to correct the situation. 


The issue of disability goes beyond simply hiring and retaining workers.


    For example, Bellfound 112 such suits filed in Florida during the first six months of 2000. Heterms them “drive-by lawsuits,” with attorneys going door-to-door in malls,slapping lawsuits on small businesses. This might change if H.R. 3590, the ADANotification Act, is passed. It would require that businesses be given 90 daysto correct non-compliant situations before a civil action can begin. The factthat employers win 94 percent of the ADA cases brought against them is smallconsolation. 


Conditions That Fall Through theCracks
    The key to thesewins is that individuals’ abilities to perform major life activities must besignificantly impaired, but employers are not required to accept substandardperformance, says Dinerstein. “So, you could have a serious impairment ordisease, but if it doesn’t affect you now, you’re not covered under theADA.” For example, he says, cancer patients in remission are not coveredbecause there are times when they are not limited. 


    Likewise, acondition such as paruresis — shy bladder syndrome — is not covered. Paruresis,explains Steven Soifer, president of the International Paruresis Association, isa condition that prevents people from urinating on demand and in places wherethey fear they might be seen or heard. But it isn’t considered a disability.The consequence is that firms requiring urine samples for drug testing oftencan’t get samples from people with this condition. Unless a firm is willing toprovide a blood test (which is more expensive than a urinalysis), the employeetypically is fired. Why? Because companies tend to follow U.S. Department ofTransportation guidelines, which as yet don’t allow alternative testingmethods. 


Supreme Court Weighs In
    The issue ofdisability, however, goes beyond simply hiring and retaining workers. It alsoinvolves disability insurance claims. If a worker becomes unable to perform anyjob in the company, short- and long-term disability claims eventually will befiled, and insurance companies have different payment schemes for physical andmental disabilities. 


    The 1999 suit Lewisvs. Kmart Corp. is a case in point. At 41, Harold Lewis became disabled byorganic brain syndrome, commonly called depression. He collected short-termdisability for the maximum allowable period of six months. At that point, unableto return to work in his supervisory position or to successfully perform any jobat Kmart, he filed for long-term disability. 


    In the UnitedStates, long-term disability insurance pays about 60 percent of the employee’ssalary until age 65 for physical disabilities. Mental disabilities, however, arepaid for only two years. When that period expired, Lewis sued Kmart for offeringan unlawful insurance policy to its employees. “The courts said thatdifferential benefits were not unlawful,” says Fox, who was the attorney forKmart. In refusing to hear the case, the U.S. Supreme Court upheld thatpractice. 


   Despite its clouded language, the ADA is doing what it was designed todo: extend the anti-discrimination protection provided by the Rehabilitation Actof 1973 to employees and job applicants at firms with no government contracts.If Americans want more (or less) than that, Congress would have to amend thelaw. 


Workforce, December2000, Vol. 79, No. 12, pp. 40-46 Subscribenow!

Posted on December 1, 2000July 10, 2018

The High Cost of Cyberslacking

If there’s one thing that’s clearin today’s emerging digital economy, it’s that many of the competitive gainsof the last few years can be directly attributed to Internet connectivity. Forthe vast majority of companies, the Internet has established itself with thetelephone and the photocopy machine as an item of essential technology. 


    Yet, the gain comeswith some pain. Despite the enormous payoff from e-business and online access toinformation, the Internet has quietly emerged as a playground for workers, whoincreasingly trade stocks, download music, gamble, play games, buy books, readsports news, send e-cards, and frequent online red-light districts — all duringworking hours. Others tap out jokes or send chain letters across the enterpriseand beyond, devouring bandwidth and brainwidth. 


    A  January 2000study by the Saratoga Institute found that nearly two-thirds of U.S. firms havedisciplined employees for Internet abuse, and slightly less than a third haveactually terminated workers. Fifty-six percent admit they know of employees whouse the Internet to gamble, look at pornography, and engage in other activitiesthat are not work-related. Meanwhile, a 1999 study by the American ManagementAssociation found that more than 50 percent of all Internet activity takingplace within companies is not business-related. The total cost? Billions ofdollars a year in lost productivity. 


According to market research…80 percent of companies will monitor employees’ online behavior by July 2001.


    While most workerskeep their extracurricular activities to a minimum — and some organizationsprefer to leave the wild frontier of the Internet unregulated — cyberloafersand cyberslackers are becoming a big enough problem in the corporate world thatmany companies are beginning to crack down. In some cases, they’re puttingsophisticated monitoring systems in place. In other instances, they’resuspending and firing workers for Internet abuse. Not surprisingly, almosteveryone is grappling with developing a policy to deal with the problem. 


    Complicating thingsfurther is the fact that personal use of the Internet might actually provide apositive benefit. An August study conducted by Xylo, Inc., a work/life programsprovider based in Bellevue, Washington, found that 56 percent of employees whouse the Internet for personal reasons report that it helps them do their jobsbetter or simply makes them happier or less stressed-out employees. About 43percent claim that the Internet has no real impact — positive or negative — ontheir performance. 


    Of course, sortingthrough all the issues is no simple matter. It’s quickly becoming clear thatthe primary issue isn’t whether or not to provide Internet access and letemployees conduct personal business online, it’s how to manage the environmenteffectively. Developing a focused strategy and a clear policy that backs it upcan go a long way toward keeping workers and management happy and productive.Ultimately, HR must establish a policy that’s based on the needs, culture, andvalues of the organization. 


    Some companies arebeginning to get serious. Although Xerox Corp. allows employees a good deal oflatitude when it comes to surfing the Net, the company is intent on crackingdown on blatant violators. In October 1999, Xerox made headlines when itannounced that it had fired at least 40 employees for accessing Web sites deemedinappropriate in the workplace. Some workers had engaged in online gambling,others had day-traded stocks and viewed pornography. In some instances, theworkers had spent as much as eight hours a day engaged in non-businessactivities on company time. 


    Since then, Xeroxhas fired additional employees, while companies such as the New York Times,Edward Jones Investments, First Union Bank, and Dow Chemical have joined theparade. At Dow, inappropriate use of computer resources resulted in 50terminations last summer, and another 200 employees found themselves facingdisciplinary measures, including suspensions. 


    Managementdiscovered that it had a very real problem when an employee approached aworkgroup supervisor and complained that colleagues were exchanginginappropriate materials. The company began closely monitoring its e-mail serversand learned that a group of workers were in fact passing the materials back andforth, in direct violation of the company’s e-mail policy and anti-harassmentcode. All the individuals that Dow Chemical disciplined were encouraged to usethe company’s Employee Assistance Program (EAP) and seek counseling. Today,the company conducts regular audits and has stepped up education andcommunication efforts. 


    Some organizationshave found that, left unchecked, the issue can explode in their faces. Forexample, two industry giants, Chevron and Microsoft, found themselves settlingsexual-harassment lawsuits for $2.2 million apiece as a result of internallycirculated e-mails that, according to the law, might have created hostile workenvironments. In fact, many companies, as a direct response to these kinds ofproblems, have turned to sophisticated Web-monitoring software from firms suchas Websense, Elron Software, eSniff.com, and JSB SurfControl. 


    These programs canrecord every keystroke an employee types, even capturing words that theindividual later erases. The same software tracks which Web sites a workervisits, and issues an alert when an employee begins surfing an X-rated corner ofcyberspace. According to market research firm IDC, 80 percent of companies willmonitor employees’ online behavior by July 2001, up from 40 percent lastspring. In the past, some companies used filtering software programs, whichcould block certain sites or keywords, but those have proved somewhatineffective. In many cases, employees find ways to circumvent the programs. 


    If all themonitoring sounds like an invasion of privacy, you’re not alone in thinkingthat. Civil libertarians and privacy advocates bristle at the thought ofever-expanding corporate monitoring, even if it is perfectly legal. They arguethat the answer doesn’t lie in draconian rules and limitations on what anindividual can view, but in establishing ways to measure each employee’soverall performance. In fact, some workers say that since their work livesconstantly invade their homes, and they put in hours in the evening and onweekends, the workplace should also accommodate their personal or home lives. 


An enterprise can establish and document official e-mail and Internet usage policies, educate workers on why they’re important and what they mean, and enforce and reinforce policies.


    It’s no time foran HR department to idly stand by. Dr. Kimberly Young, executive director of theCenter for Online Addiction in Bradford, Pennsylvania, says that employersshould “be willing to acknowledge the legitimacy of Internet addiction” and“be prepared to implement fair and appropriate strategies” to deal with theissue. Instead of imposing a zero-tolerance policy, which can alienate employeesand leave a company susceptible to litigation, an organization should fashion areasonable policy, and then train and educate its employees, she says. 


    Young believes thatall employers and HR professionals should follow some basic guidelines whendeveloping a company-wide policy to deal with Internet usage. First, it’sessential to evaluate current IT and HR policies. “Does the company have anyexisting policies for employees? Does the company update the policies to keep upwith the rapid pace of change occurring on the Internet?” Once an enterprisehas an understanding of where it is and where it needs to be, it can establishand document official e-mail and Internet usage policies, educate workers on whythey’re important and what they mean, and enforce and reinforce policies. 


    The key, says Young,is to offer ongoing and continual communication. Providing regular electronic“pop up” reminders that appear on each employee’s computer, and requiringeach individual to read and agree to the terms, can ensure that the word getsout. In addition, “An effective education process should also includeinformation about Internet addiction and its warning signs,” she notes.Finally, the program should provide rehabilitation as well as “fair andequitable penalties for non-compliance.” In most cases, the goal should be toget valued employees back on track rather than casting them off. 


    The end result?Improved employee productivity, better morale, lower turnover costs, and greaterprotection from legal liability. “The Internet is an amazing communicationtool that has changed the way business is conducted,” Young observes. “Byrecognizing the potential problems and issues that may arise with an increase inthe use of the Internet, employers and HR professionals can…increase theproductivity and resourcefulness of the business.” 


    The growing use ofthe Internet, combined with new technologies such as wireless Web browsing onphones and personal digital assistants, ensures that new and more elusive typesof mind candy will soon appear. The key is to strike the right balance betweenmorale and productivity. 


Workforce,December 2000, Vol. 79, No. 12, pp. 22-24 Subscribenow!

Posted on December 1, 2000July 10, 2018

How Cinram Hired a Heap of Help – in a Hurry

Cinram has always been good at adaptingto new situations. A leading manufacturer of prerecorded VHS video cassettes,audio cassettes, audio CDs, CD-ROMs, and digital versatile discs (DVDs) formajor movie studios, music labels, software companies, and publishers worldwide,the company has learned to be flexible in a rapidly changing market. It wasn’ttoo long ago that eight-track tapes went out of fashion, after all. 


    That flexibilitycame in handy when the company won an exclusive contract to manufacture video,CD, and DVD products for 20th Century Fox Home Entertainment. The challenge tofulfilling that contract? Cinram had to hire an extra 500 employees in sevenweeks. 


    “We used severalstrategies,” says Peter Hassler, HR manager for the company’s plant inHuntsville, Alabama, which would be the site of all the new production. “Thefirst goal was getting a good staff that was capable of working extraordinaryhours in a round-the-clock situation. We sourced local candidates for productionpositions and used referrals and search firms like (Florida-based) MillenniumSearch, Inc., to identify specific talent required to put together adistribution center. With that, we were able to identify a significant candidatepool, and from that to hire as much of the management team as possible.” 


    In order to fillsupervisory positions, Cinram decided that it would promote between 30 and 50percent from within, then hire the rest externally, as the Huntsville plant hadbeen previously dedicated solely to distribution, not manufacturing. The newrole demanded new talent. 


    To make matters morecomplicated, the plant didn’t have the luxury of hiring a new staff, trainingthem, and then getting down to brass tacks. Instead, work was getting under waywhile the hiring process was happening. 


    Faced with adaunting task, Hassler and his team set out to recruit a brand-new workforce.“We had a groundbreaking ceremony that got a lot of press coverage,” hesays. “That helped us as much as any advertising campaign. We used classifiedads, and the Alabama Employment Office helped us screen candidates. We were ableto get more than 100 applications a day processed. From those 100 applications aday, we were able to select enough candidates to hire a hundred people a weekfrom the Fourth of July to Labor Day.” 


    No mean feat,considering the current labor shortage and low unemployment. Huntsville’sunemployment rate has recently hovered between 2 and 4 percent. Hassler chalksup the success to competitive wages, good benefits, and clean work conditions.


    “It’s a goodwork environment,” he says. “That all contributed to source enoughapplicants to fill the bill. Though unemployment is low, we were able to getenough quality candidates. Some positions were tough, though, like some of themore technical areas. We had to search a little bit further, with professionalsocieties and such.” 


    Mike Collaizzi,president of Millennium Search, Inc., was one of the people who had to findsomeone for one of those hard-to-fill positions. “The biggest challenge,” hesays, “was finding someone who had technical experience in distribution, andwho had experience with multiple products in a high-volume setting. I identifiedabout 30, and spoke to 20 of them. I sent four candidates to Huntsville tointerview for the position. The candidate that got hired was from Baltimore. Allof this took place in about 10 days.” 


    It’s notsurprising that local workers found the idea of a job with Cinram attractive:the company has been honored for its benefits before. For instance, the Torontoplant was listed in the recent book Canada’s Top 100 Employers. 


    “Cinram,” saysthe book, “provides a comprehensive employee benefits package that includesdental, eye care, prescription drugs, extended health (including semi-privatehospitalization and supplemental medical insurance), personal leave, and grouplife disability insurance. The company also provides a series of financialbenefits, including a share-purchase program, a group registered retirementsavings plan, discounts on company products and a year-end bonus.” Otherbenefits include ongoing employee development through in-house traininginitiatives and tuition subsidies for courses at outside institutions. 


    One of the problemsthat Hassler expected to face was high turnover. From the outset, he expected tosee 20 percent turnover — which is exactly what he got. “People find out thatthe type of work isn’t suited to them,” he says, “or that the 12-hourshift doesn’t suit them.” 


    In order to fulfillthe contract with Fox, Cinram needed the Huntsville plant to work around theclock, a serious problem for a company that tries to be sympathetic toemployees’ work/life needs. It took some inventive scheduling to accommodateeveryone. 


    “We work a shiftthat’s composed of four teams,” says Hassler, “alternating weekends andfour days off at a time. Some people can’t do that, but for those who can,it’s a great structure. You get a couple days off in the middle of the weekevery week. What it required of the managers and the HR employee staff was threemonths of Mondays, no weekends, and 16-hour days. Because the paper flow and the number of people you have to talk to is enormous, just gettingthem signed up on the payroll was an immense job. 


    “For many of theweeks, we were conducting orientation on the sidewalk, because our conferencerooms were too full. Whatever came our way, we were just determined to deal withit and do whatever we had to do to make it work. It takes dedicated staff with ahigh tolerance for long hours and perseverance. It’s more like a marathon thana sprint.” 


    The plant’sproduct-sorting lines began operating in July, and every week from then on,Cinram started another part of the operation. “We started with one majorwarehouse facility,” says Hassler, “and added four more with a combined500,000 square feet and an additional warehouse to help place product.Ultimately, we’ll have have 10 warehouses, and the home plant will have800,000 square feet. We’ll be the largest facility in the Huntsville area.” 


Workforce, December2000, Vol. 79, No. 12, pp. 118-119  Subscribenow!


 

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