Are Frontline Employees Fully Expendable? Isn't the "Same" really "Lame"?

If you've ever worked in a retail or consumer call center situation, odds are you've seen some employee turnover.  Depending on pay levels, the specific industry, and local economic conditions, it's not unusual to see annualized turnover at 100% in those sectors.

As HR Pros, we're conditioned that high turnover is never acceptable.  Most of us take it personally.

Is it possible, depending on the conditions you face (pay levels, industry and the local ecomomy), that you shouldn't take high turnover as a personal challenge as a HR Pro?  Additionally, if you don't invest much in the upfront training of those associates, have you made a business decision that high turnover is OK?

More on the value of high entry-level turnover from the Workforce Institute:

"Unless your Unique Selling Proposition (USP) or point of difference is Exceptional Customer Service (like Nordstrom, BMW, Ritz Carlton, and the Container Store), there’s no reason to sweat it when you lose frontline employees. Most likely, they were not that good anyway because, truth be told, you haven’t invested a lot of money in your hourly hires and even the training you provided, if any, didn’t cost much. In fact, their replacements will probably be just as good and may be even better than those you lose. New employees are excited about their new jobs and will probably have a better attitude and try harder - at least for the first three-to-six months. On top of this, employee turnover will probably reduce your labor costs because you won’t have to fund any benefit programs for a while. And there’s no need to worry if the new hire doesn’t know very much because the customers don’t expect them to know much when customer service is not your USP. You may even want to have new people wear a button that says: “I’m new. Please help me help you.”

It's an interesting take, and hard to deny the investment piece.  If you don't invest much in service-oriented new hires, have you already made your choice from business perspective.  Should you be pointing that out as an HR Pro?

Still, it's hard as a consumer, who is also an HR Pro, to let go of the fact that exceptional service is important.  Thoughts?  Should business be giving up on entry-level turnover, or should they be fighting to be memorable?

I guess it depends on the business plan - and how you plan to make money...

Smoke 'Em If You Got 'Em - German Company Fires Non-Smokers....

Has there ever been a harder transformation in societal expectations than the one that has occurred in the last 30 years regarding smoking?  I was raised in a family of smokers, and in the 70's and 80's, as a kid, it really never occurred to me that the whole habit was dangerous.  In a weird twist, it also never occurred to me that I should smoke. 

I hear I beat the odds...

Then, society got cracking and made all who smoke a little uncomfortable.  Don't smoke here, here or here, and just so you got the message, here's a fishbowl to smoke in at the airport with your friends.

Of course, the whole thing has been good for our health care plans.  Fewer people smoking is good for what ails your PPO.  I'm channeling John Lennon when I say "imagine" if the U.S. made the same shift with Crisco.  Now that would really help the PPO trendline.

Of course, smoking is now seemingly uncool in the U.S.  Other countries however, like Germany, would like to thank you for smoking:

"The owner of a small company in Germany fired three workers because they were not smokers. It seems that their boss (evidently a smoker himself) felt that they were “disturbing the peace” in the workplace by being vocal about their smoking colleagues.

“I can’t be bothered with trouble-makers,” said the boss. “We’re on the phone all the time and it’s just easier to work while smoking. Everyone picks on smokers these days. It’s time for revenge. I’m only going to hire smokers from now on.”

Of course, being anti-smoking doesn't fall in a protected class.   Here's my ridiculous list of other things that are easier while smoking:

1.  Filling out a health history at your local doctor's office.
2.  Helping your son bat during a father/son baseball game.
3.  Engaging a fire extinguisher.
4.  Typing a Blackberry message while driving, and smoking...

Hat Tip to Andrew Scott-Holman, keeper of the best blog in Kiwi-land....

HR Capitalist Goes to D.C. - World Health Care Congress...

As a part of my ongoing role to figure out the whole health care cost thing for our company, I'll be taking a trip to the 5th Annual World Health Care Congress ,in Washington, D.C. 

While there, I'm serving as a featured blogger for the proceedings, a part of the cast that includes:

-Lola Butcher
-George Van Antwerp - PatientCentric Health Care BLog
-Jennifer McCabe Gorman - Health Management RX
-Joe Paduda - Managed Care Matters
-Vijay Goel - HealthShopper

Wish me luck!  I'll post my top couple of observations daily here, and you can check out all the think-tank observations at the live blog for the conference here...

Can You Improve Service by Firing HR People? Home Depot Slashes Field HR Staff...

The economy's bad, you can't find anybody to mix your paint at Home Depot, and the housing market stinks.  What should you do if you're in charge at Home Depot?

Apparently get rid of a bunch of HR folks.  From the Wall Street Journal:

"Home Depot Inc. is restructuring its human-resources department in an effort to cut costs and put more workers on the sales floor.

After the changes, there no longer will be a human-resources manager in each of the company's 1,970 U.S. stores. Human-resources-supervisor positions at U.S. stores also will be eliminated.

The Atlanta-based company said it notified this week about 2,200 employees who will be affected by the changes, which will result in about 1,000 job cuts. The switchover will be completed by May 1.

"We have an 'Aprons on the Floor' program, and this is part of it," said company spokesman Ron DeFeo, referring to the people on the sales floor, who wear bright-orange work aprons. "The goal of the program essentially is to add three full-time associates to the sales floor in each store."

Home Depot will create 230 district teams that will each have a district human-resources manager and three people reporting to that person. "We go from a structure with 2,200 employees to 1,000," Mr. DeFeo said."

OK - I don't mean to go off on a rant here, but I offer up the following observations to the slashing of field HR people at Home Depot:

1.  When it comes to service in the stores, the start of the slide is widely held to be the arrival of past CEO Robert Nardelli from GE, not the HR folks who tried to hold it all together when the productivity metrics starting raining from the skies (not that there's anything wrong with that).

2.  The former head of HR, Dennis Donovan, got a golden parachute worth 19 million in 2006 to go away.  Nice.  Guess what?  He wasn't at the store level.

3.  I've been asked to refer people for the store positions before, and was told the HRM slot pays around 50-60K a year.  With that in mind, the reductions are worth about 1.5 FTE in staffing.  Hardly enough to save the day, from a customer service standpoint, in your standard big box, Home Depot.

So, if centralization is the new thing, call it that.  Don't tell me that cutting the HR presence is key to putting aprons on the floor. 

If only Donovan was around to help with the outplacement of those affected... Surely Tony Stewart will weigh in with his thoughts...

Is Your Strategy Entry Level Talent or Superstar?

Baseball season's here, and it reminds me of the talent/economics lesson that occurs each season in Major League Baseball.  This year's compensation lesson?  A-Rod is making more in 2008 than the entire roster for the Florida Marlins. 

From Yahoo Sports:

"Alex Rodriguez makes more this year than his hometown Florida Marlins. Boosted by his new deal with the New York Yankees, A-Rod tops the major league baseball salary list at $28 million, according to a study of contract terms by The Associated Press. The 33 players on the Marlins' opening-day roster and disabled list total $21.8 million.

For the first time in baseball history, the average salary topped the $3 million mark. The 855 players on opening-day rosters and the DL averaged $3.15 million, up 7.1 percent from last year's starting average of $2.94 million.

Florida's highest earner doesn't even make the average. Pitcher Kevin Gregg tops the Marlins at $2.5 million."

Always interesting to see the battle of haves and have nots in MLB. 

Meanwhile, teams with low payrolls always pop up (more randomly, of course) as huge successes in a given season.  Last year's examples?  The two teams playing in the National League Championship - the Rockies and the Diamondbacks.  With payrolls of $54 and $52 Million respectively, these franchises took the Moneyball approach, seeking to use less proven talent to deliver wins via on-base percentage, base hits and defense.   The result for those teams?  A greater degree of success than the Yankees last year, which drives an owner like Steinbrenner crazy.  Thus the Joe Torre firing...

Who will be this year's Rockies, doing more with less?  As a Missouri guy, I can only hope the Kansas City Royals...

(Hat Tip to Capitalist reader, Heather, for the link)

A Cynic's View - Scenes From the 2009 Job Market...

The video says it all....Economic naysayers, unite!

Notice that no calls went out for HR people....

Lose 2.7 Billion, Get a Bonus?

I'm just sayin.... You lose 2.7 Billion and give out bonuses?  From Workforce:

"Ford Motor Co. is paying every U.S.and Canadian employee a $1,000 bonus even though the automaker lost $2.7 billion last year.

In a company wide e-mail to all employees on Wednesday, March 5, CEO Alan Mulally said that although Ford fell short of its sales goals for 2007, the automaker “met or exceeded” its objectives in every other category.

The bonus also will be paid to managers outside the U.S. and Canada. Mulally said the “performance awards” are based on improvements in cost performance, quality, automotive cash flow and financial results."

I know the cash isn't a lot on the individual level but it's a nice gesture.  Still - bonuses when the loss is 2.7 Billion?   From where I come from, we'd be rallying around the barrel for heat, so we could save on the energy bill.

For my Austin Powers peeps out there - that's Billion, not Million.  Perhaps a recap is in order.....  Feedburner or Reader subscribers click through for the video tutorial...

Crazy #%! Job Statistic of the Week - Wal-Mart Replaces GM as Largest Employer in Ohio...

A while back I noted that the war on talent is zip-code specific.  If you are in a hot zip code, you are probably set to work for the foreseeable future.  If you're not, you may see your real wages actually going down.

I saw the stat of the week to illustrate this, in the most recent issue of BusinessWeek, which had an article on the decline of manufacturing in Ohio, and how that reality was driving presidential politics.

More on the decline in job quality in Ohio from Business Week:

"Ohio's plight is a vivid reminder that manufacturing still provides a livelihood to millions of Americans— and that the agony of U.S. manufacturing's decline is far from over.   

Since 2000 the state has lost 236,000 manufacturing jobs, a 23.3% drop. One sign of the times: In 1995, General Motors (GM) was Ohio's largest private employer, with some 63,200 employees, while Wal-Mart Stores (WMT) was ranked No.6, with 15,100. Today the discount retailer is the state's top source of jobs with 52,000 workers. GM employs just 12,300."

That's an ugly stat.  Automakers are among the best jobs that blue-collar, middle class workers (especially those without degrees) can hope to land.  To hear that GM has dropped 75% of its workforce in Ohio is a sobering stat.  Especially when you're confronted with the picture that the engine replacing those jobs is Wal-Mart.  Nothing against Wal-Mart, but last time I checked, it was hard to get health care as an employee there.

So what happened?  Globalization, poor quality, etc. all contributed. 

It's a sobering situation.   When I posted that the war for talent is zip-code specific, one of the conclusions I reached is that, as necessary, workers had to be mobile to relocate where the jobs are. 

The unfortunate part about that is that the workers least likely to relocate are the ones most impacted by the closings of major manufacturers like GM - less probable to have college degrees, grew up in the area in which they live, etc.

That stinks.  I'm a capitalist, but there's no other conclusion when you look at it from the eyes of the impacted family and as an individual with a family who loves where they live.

What's that? Indian Outsourcers Account For 80% of Approved Visas in the U.S. in 2007??

I'm a big fan of bringing the best and the brightest to the U.S. to work - especially if part of their dream is to become an American citizen.  After all, isn't that part of almost everyone's heritage here?  I'm channeling Neil Diamond today. 

Not "Love on the Rocks", smarty-pants.  Think the Neil classic, "America"

Now that you're whipped up in a patriotic frenzy and supporting at least part of the immigration dream, what if I told you the slots usually reserved for the best and brightest from abroad were not being used to help American companies, that the vast majority of H-1B visas were being awarded to companies based in India that specialize in outsourcing.

You'd probably be like me - at first confused, then feeling a little dubious.  You can almost hear the music from the Neil Diamond LP coming to a halt, by dragging the needle across the vinyl.

From the Business Week article on the visa trainwreck:

"The controversy over visas for high-skilled workers from abroad looks like it's about to get even hotter.

The program for what are known as H-1B visas was originally set up to allow companies in the U.S. to import the best and brightest in technology, engineering, and other fields when such workers are in short supply in America. But data just released by the federal government show that offshore outsourcing firms, particularly from India, dominate the list of companies awarded H-1B visas in 2007. Indian outsourcers accounted for nearly 80% of the visa petitions approved last year for the top 10 participants in the program. The new data are sure to fuel criticism of the visa program from detractors such as Senators Chuck Grassley (R-Iowa) and Richard J. Durbin (D-Ill.). "These numbers should send a red flag to every lawmaker that the H-1B visa program is not working as it was intended," said Grassley in an e-mail."

Take a look at the article for the pros and cons - there's a position on both sides of the equation.  Also, take a look at the scoreboard below in terms of the companies that received the most visa approvals in 2007. 

(Hat tip to Jim Stroud 2.0 for the graphic...)

 

If This Were a Division, You'd Shut It Down Tomorrow - The Cost of Health Care to Double By 2017...

Hey dude... The light at the end of the tunnel?  It's a freaking train, and it's coming to run you over....

Seriously, can there be a more desperate situation than the state of US Healthcare?  The population is aging, the mostly good capitalist society creates drug companies that create billion dollar markets out of vapor, and you are in the middle of the fray, trying to be the Daddy Warbucks of healthcare by providing medical and Rx to your workforce.  That's what you're supposed to do as an employer, right?

Sure, that's been part of the employer role.  But, it's getting ready to be very painful.  From the Associated Press:

"By 2017, total health care spending will double to more than $4 trillion a year, accounting for one of every $5 the nation spends, the federal government projects.

The 6.7 percent annual increase in spending — nearly three times the rate of inflation_ will be largely driven by higher prices and an increased demand for care, the Centers for Medicare and Medicaid Services said Monday. Other factors in the mix include a growing and aging population. The first wave of baby boomers become eligible for Medicare beginning in 2011."

That means total health-care spending in the year 2017 will average out to $13,101 per person.  By contrast, that spending in 2006 worked out to an average of $7,026 per person. 

WOW... 6.7% actually sounded OK to me, until I realized that compounding, which is good for my 401k, really hurts when it impacts the expense side of the P&L.

If it were a division, you'd shut it down tomorrow.  But it's not...

Union Membership is Up, But Quality of Jobs Represented is Down...

With the ill-advised Employee Free Choice Act likely making a comeback in 2009, I feel obligated to revisit the topic of Union membership at least once a month to keep it on everyone's radar screen.

One thing you might have seen over the last couple of weeks is the fact that Union membership actually increased last year.  The U.S. Department of Labor's Bureau of Labor Statistics reported that in 2007, the number of workers belonging to a union rose by 311,000 to 15.7 million.

From the Workforce analysis of the report:

"It represents part of the seismic shift in the makeup of America’s unionized workforce. Today, a union worker is more likely to be a low-skilled, low-paid service worker than a skilled, well-paid manufacturing employee.

“The future of the unions is the $8-an-hour home health care worker,” says David Gregory, professor of law at St. John’s University. The unions may have regained membership with lower-wage service workers, but they cannot regain the dues lost along with higher-paid jobs, Gregory says."

Seth Borden at the Union Free Employer took a look at the trend, the union's own organizing site, and came up with the following take:

"If a job cannot be done from Bangalore or Mexico City (outsourced outside of the U.S), it is in a sector likely to become a significant union organizing target in the next few years.  Health care, construction and education are examples.  We would add hospitality, food service and retail to that list; and, we suspect Mr. Hoffa would add transportation."

Solid analysis from Seth.  So the jobs at Ford and GM are out of reach, and organizing efforts at the new age automakers like Mercedes and Toyota have largely failed.  It makes sense that the growth (in quantity, if not in revenue) would come from lower-paid service jobs.  After all, frustration with wages, career pathing, etc. are going to be highest in those sectors.

Of course, if the EFCA comes back in 2009, it's likely that growth would come from sectors much higher up the food chain.

Educate yourself on the EFCA today if you haven't yet....

Valentine's Day Special - The Most Productive Day of the Week According to the Band "Loverboy"...

First up, I'll do anything to fit the band "Loverboy" into a Valentine's Day post.  Count on that...

As for the day Loverboy would find most productive - No doubt - it's Thursday...

And I agree...

I can come in, everyone's at work (unlike Friday), and you can really get things done.

Even the energy's better, since everyone is working for the weekend... which is the main reason the band Loverboy would choose Thursday as their main day to conduct business.

Apparently, the boys from the band and I are in the minority... From AccountTemps:

"Why tackle today what can be put off until Tuesday? In a new survey, 57 percent of executives said Tuesday is the most productive day of the week for employees. Monday was the second most popular answer, although it appears to be losing favor: Only 12 percent of respondents ranked Monday as most productive, compared to 26 percent in a 2002 survey.

The national poll included responses from 150 senior executives -- including those from human resources, finance and marketing departments -- with the nation’s 1,000 largest companies. It was conducted by an independent research firm and developed by Accountemps, the world’s first and largest specialized staffing service for temporary accounting, finance and bookkeeping professionals.

Executives were asked, “In your opinion, on which day of the week are employees generally most productive?” Their responses:

Monday		12%
Tuesday		57%
Wednesday		11%
Thursday		11%
Friday		3%
Don't know		6%

Of course, all these executives would trade it all in for a brief taste of the rock and roll lifestyle of Loverboy....

Check that - maybe they wouldn't - I just did a youtube search for the original "Working for the Weekend" video and and was reminded of style issues that went with the early 80's.  Also saw some videos suggesting they are coming to a County Fair near you.  That would hardly make executives leave their options and turn in their company cars.   

I was in grade school when Loverboy released the album shown above.  I think my sister had the 8-Track.  Good times for the young HR Capitalist...

A free lifetime subscription to this blog for anyone who makes it through the whole video.

Yahoo (the Google of the 90's) Announces 1,000 Layoffs...

Everybody loves Google.  The perks, the options, and yes, the backrubs...

So apply today.  If you can't join 'em, feel free to buy some Google stock at $548 per share, because in the near term, it's probably going up.

Just know that the business cycle is... well, a cycle.  Companies built on 50% growth models ultimately slow down....

Need some proof?  Consider the case of Yahoo, which still is probably a very cool place to work.  It was the Google of the 90's...  And today, it announced plans to layoff 1,000 employees, which is about 7% of it's workforce. 

From the New York Times:

"After announcing a sharp drop in fourth-quarter profits Tuesday, Yahoo issued a disappointing outlook for this year, suggesting that investors would have to wait until 2009 for a turnaround.

Yahoo also said that as part of its plan to revive its fortunes, it would cut 1,000 jobs by mid-February to reduce costs and narrow its focus to its most important businesses.

The company, however, said it planned to invest aggressively in some areas, like advertising technology and selected portions of its Internet portal, as it tries to capture a larger share of online ad dollars. Since some laid-off employees could apply for new jobs at Yahoo, the net effect on the work force, which recently grew to 14,300, was not clear.

Jerry Yang, the chief executive, warned investors of “head winds” this year. Yahoo’s projections for revenue growth and profitability in 2008 were either at the low end of analysts’ expectations or below them."

It's sad when a cool brand ends up looking like a normal business.  Just serves as a reminder that the coolest brands, business models and cultures are susceptible to competition, pressure on margins, and making money...

Ugly Stats on the Impact of Bad Diversity Training...

Want to hear some ugly stats?

A recent study found the impact of most diversity training efforts to be counter-productive, according to a comprehensive analysis of 31 years of data from over 800 medium and large US workplaces.

See a review of the full study results at the Washington Post.

Here are numbers - The kind of diversity training offered by most companies was followed by a 7.5% drop in the number of women in management, a 10% drop in the number of black women in management, and a 12% drop in the number of black men in management.   The study cites Asians and Latinos as suffering similar fates, even while pointing to the good intentions of companies embracing diversity training as a way to make their workplaces more inclusive and to cater to a more diverse workforce and customer base.

The analysis did not find that all diversity training is useless. Rather, it showed that mandatory programs -- often undertaken mainly with an eye to avoiding liability in discrimination lawsuits -- were the problem. When diversity training is voluntary and undertaken to advance a company's business goals, it was associated with increased diversity in management.   That's good to know, but hard to explain to the OFCCP when they want a list of your good faith efforts in conjunction with your Affirmative Action Plan...

So the next time you're doing Diversity training, you might want to roll out the demographics of your customer base as a part of the package...and <gasp> make it voluntary?

When Sticker Price in Medical Insurance Reminds You Of Buying a GM Car...

Bought a new car recently?  If so, you know sticker price is for suckers... Do two things - wait for the juicy rebates always offered by Detroit automakers, then head to the lot and try to dicker the sales people down even further.  That's right, the marketing machine of US automakers has conditioned us not to move until there's a $5K rebate involved off the top. 

Health care is similar in some ways, but different in some critical aspects.  First up, there's a sticker price that hospital facilities quote to the general public related to what different procedures cost. Think of that as their "sticker price".  Here's the big difference - rebates aren't available to everyone, just to the folks with quality health care plans.  The Blue Cross networks (as well as other big insurance providers) are able to extract HUGE discounts from doctors and facilities alike through the power of their network.  If doctors/hospitals want BCBS patients, they've got to be a part of the network, and to be part of the network they've got to agree to the fee schedule touted by BCBS. 

That's where the discounts/rebates come into play.  The rebates can be huge when compared to the sticker prices touted by hospitals.  Here's a new record in my world I just came across.  Employee goes in for a procedure, with the company billed 19K for the entire bill.  Sticker price from the hospital before BCBS got ahold of the claim and went all Tony Soprano on it?  $152K.  That's right - the sticker price was over 7 times the actual cost ultimately allowed by BCBS.

Which makes me think two things.  First, I'm glad we have a good provider that can extract deep discounts off of sticker price.  Second, the common guy out there who's not covered by a plan like ours and is trying to go without insurance is a car wreck away from a lifetime of bills he can't pay and a probable personal bankruptcy.

There's something wrong with health care when sticker price on medical procedures makes buying a car look like a "one price, no haggle" experience...

San Francisco Universal Healthcare - They're Going To Need More Ca$H....

There's been a lot of coverage lately about San Francisco and Universal Heathcare, namely the city's Health Benefits Ordinance, which would provide coverage for 73,000 uninsured adults in the city.    Lately, there's been some volleys back and forth whether the plan is legal.

Not sure if the plan is going to make it or not, but I am assuming it eventually will.   If it does make it and the city implements the plan, my layperson math indicates their best case assumptions will result in a plan that is dramatically underfunded. 

Check out these notes From SF Gate:

"As written, San Francisco’s ordinance would require private employers with at least 20 employees, and nonprofits with at least 50 employees, to provide health coverage at certain minimum levels or to pay a fee to the city. The fee would pay part of the cost of a $200 million-a-year program of care for the 73,000 uninsured adult city residents.

Without the employer fee, city officials say they will limit enrollment to those making no more than three times the federal poverty level, or about $32,000 a year for an individual."

Here's what I don't get.  By math, the city is planning on spending about $2,800 per covered individual annually.  That's great, but there's no way that's going to cut it, right?

Why won't it cover it?  By the very nature of the risk pool, the cost per covered individual is going to skew higher than average.  The uninsured includes people who can't work or are otherwise deemed uninsurable due to heath concerns.

A similar program for universal coverage in Connecticut failed, in part because the legislators were shocked about what the cost was (from Managed Care Matters):

"An effort in Connecticut to implement a single payer, universal coverage program is just about dead, after the state's Office of Fiscal Analysis determined it would cost as much as the entire state budget.

Politicians were shocked by the estimated total cost, which ranged from $12 billion to $18 billion (cost range per covered individual - $4,000 to $6,000).

I'm shocked that they were shocked."

That's why I don't get the plan in San Francisco.  The State of Connecticut runs the entire risk pool for the state and comes up with 4k to 6k per covered individual, and SF handles a risk pool that skews more severe and they're only going to pay $2,800?

When people underestimate things, I also think of that great line in the original "Jaws" - "We're going to need a bigger boat..."  That seems to fit here.... 

"An effort in Connecticut to implement a single payer, universal coverage program is just about dead, after the state's Office of Fiscal Analysis determined it would cost as much as the entire state budget.

Politicians were shocked by the estimated total cost, which ranged from $12 billion to $18 billion (cost range per covered individual - $4,000 to $6,000).

I'm shocked that they were shocked."

Have You Tried to Relocate A Candidate Lately?

Cross one category of candidates off your prospect list - homeowners you have to relocate...

Relocating employees has always had a "haves" and "have-nots" type of feel.  Back in the 90's, most Fortune 500 companies had the "gold-plated" standard of employee relocation - covered physical moves, lump sums to handle all types of misc. costs and the ultimate in closing remote candidates - the home purchase program.   Throw that package at a candidate, and you were closing business regardless of their financial situation..

Flash forward to 2007.  Since the market crash of 2000, Fortune 500 companies have been steadily eliminating relocation packages including a home purchase program.  Eager to slash the expense associated with such programs, big companies first moved to reserve home purchase programs for director-level and above candidates only.  Over time, many Fortune 500s have restricted the availability of these programs even further, and many have eliminated the programs altogether.

That means most of us don't have a home-purchase program in our arsenal as we try and recruit candidates requiring relocation.    So we limp by with these components at our disposal - usually a physical move (perhaps capped at a certain $$ amount to limit the exposure) and a lump sum to handle misc. costs and to provide assistance, to the extent we can, with realtor's fees and the potential costs of having two residences at the same time (which frequently occurs until the candidate gets their house sold on their own).

That package worked OK when the housing market was hot.  Of course, now it's not, which means you won't be relocating many candidates for a while.    Here's data on the drop in home values via the New York Times:

"Prices fell 6.1 percent from October 2006 in 20 large metropolitan areas, according to Standard & Poor’s/Case-Shiller indexes, compared with a 4.9 percent decline in September. On a monthly basis, prices fell 1.4 percent in October, the fastest they have declined in at least the last seven years.

All but three of the 20 regions experienced a fall in real estate values, and even the three areas — Seattle, Portland, Ore., and Charlotte, N.C. — where prices were up from a year ago, had a decline from a month earlier.

Prices have fallen the most in Miami (down 12.4 percent from a year ago), Tampa (11.8 percent) and Detroit (11.2 percent). Prices are also falling in the nation’s two largest metropolitan areas — Los Angeles (8.8 percent) and New York (4.1 percent)."

That data means two things.  Homes will take much longer to sell, and many candidates will find themselves scrambling to cover drops in overall home values.  Many will consider the potential loss unacceptable as they consider selling.

Which means they won't be accepting your limited relocation assistance offer.

Time to add "are you a homeowner" to your initial phone screen when talking to remote candidates, if you haven't already. 

Merry Christmas HR Team!! Here's an Enthralling Book To Say "Thanks"...

I was going to let this list go.  But, try as I might, I can't help but be a cynic regarding the the top-selling books of the year at the SHRM store.

I didn't get the email with the list, but John Hollon blogged about it a few days ago over at The Business of Management.  Here's what John offered up earlier this week:

"Here are the Great 8 books of 2007, which I offer without comment, but would love to hear any thoughts you might have on the underlying message (if any) of this list:

• U.S. Master Human Resources Guide (Ninth Edition), by Donald W. Myers, D.B.A.
• Human Resource Management (12th Edition; textbook), By John H. Jackson and Robert L. Mathis, SPHR.
• Effective Succession Planning: Ensuring Leadership Continuity and Building Talent from Within (Third Edition), by William J. Rothwell.
• Auditing Your Human Resources Department: A Step-By-Step Guide, by John H. McConnell.
• From Sex to Religion (Employee DVD version), G. Neil (publisher).
• 101 Sample Write-Ups for Documenting Employee Performance Problems: A Guide to Progressive Discipline & Termination, by Paul Falcone.
• Performance Appraisal Sourcebook: A Collection of Practical Samples, by Mike Deblieux.
• The Carrot Principle: How the Best Managers Use Recognition to Engage Their People, Retain Talent and Accelerate Performance, by Adrian Gostick and Chester Elton."

The name of my site is the HR Capitalist, so I suppose I should appreciate the fact that these books generated the most sales at the SHRM Bookstore.  But they do seem a little on the mundane side.

Strategic they're not (with the possible exception of the Carrot Principle Book).  If someone gave me one of these books for Christmas, I'd reciprocate in kind in 2008 based on what they did for a living.  Maybe a small calculator or a used version of Quicken for the accountant in my life, or an AM Radio for the IT Pro on my "friends list".

As for my team?  They can expect that catchy "Auditing Your HR Department" title.  I hear you can't put it down and it even has a surprise ending....

I Kid You Not - Wisconsin Bill Would Require Instruction on Unions/Organizing...

From the "truth is stranger than fiction/special interest groups are running amok" file - A Wisconsin state legislative bill, sponsored by Sen. Dave Hansen, D-Green Bay, would require every school board to incorporate the history of organized labor and the collective bargaining process into its curriculum.

I kid you not - it's a real bill.  More from Forbes:

"It's appalling how little high school graduates know about unions and labor history, said David Nack with the Wisconsin Labor History Society. A law is needed because current teaching on the subject isn't sufficient, he said.

"When we're talking about the history of working people, we're talking about the history of the United States," Nack said. "I think there are people out there who do not think that the history of organized labor is that important."

The struggles of working men and women often get left out by teachers trying to cram in other required material, said Mary Bell, president of the 98,000-member Wisconsin Education Association Council. The state teacher's union supports the bill because it would force schools to teach that history, Bell said."

Time for a little balance - I'll report, you decide.  Teaching isn't sufficient on this topic or about 100,000 others, because our schools are swamped trying to teach the basics so our workforce can compete globally.  You know, the basics - reading, math, science, etc.   It's not exactly a shocker that a teacher's UNION would be supportive of the bill - know what I mean?

Based on the reporting, it seems the best thing to do in order to ensure the defeat of this bill is to champion a school system's autonomy in determining curriculum and focus on the conflicts regarding this type of legislative mandate.  More from the Forbes article:

"It makes no sense for the Legislature to dictate to schools what specific subject areas they should teach, said Ryan Murray, spokesman for Senate Minority Leader Scott Fitzgerald, R-Juneau.

"We could do organized labor today and the history of the Republican Party tomorrow. In a time when we're having trouble teaching our kids the basics of history, is this really the time to be putting another mandate on when we're not even doing the current stuff well?"

Yikes.  Please give me patience if my son gets off the school bus a few years from now, and has a sample authorization card from a mock organizing drive at school.    I hope he can be the HR Manager running through the FOE (Facts, Opinions, Experience) methodology... 

Are Leno and Conan Pro-Union or Anti-Union?

Last Friday, NBC laid off the non-writing staff members of its late-night entertainment shows--the "Tonight Show with Jay Leno" and "Late Night with Conan O'Brien." The move had been expected in light of the continuing strike by writers.    Just to be clear - that's an example of employees not currently on strike (regardless of whether they are represented by another union) being laid off due to the striking status of the writers.

Here's where it gets a little weird.  The layoffs happen, then the stars of the shows, Conan and Leno, ante up and decide to pay the non-writing staff members for the next week to keep them tied to the show in the hopes the strike will be settled shortly.  Why?  Because they can (they have the cash) and may be expected to.  From the New York Times:

"Jay Leno, the host of “The Tonight Show,” joined his NBC colleague, Conan O’Brien, in assuring the non-writing staff of his show that he would pay their salaries for this week. The staff was laid off last week by NBC because the shows have been out of production since the strike by the Writers Guild of America.

An NBC spokeswoman, Rebecca Marks, confirmed last night that Mr. Leno had contacted his executive producer, Debbie Vickers, and asked her to tell the staff that he intended to pay their salaries this week.

After NBC announced Friday that it was laying off the non-writing staff of both Mr. Leno’s and Mr. O’Brien’s shows, Mr. O’Brien immediately said that he would pay the staff. Mr. Leno drew criticism because he did not make a similar announcement."

It's a little hard to get your head around this one.  The writers are on strike, and NBC decides to play hardball and lets the strike drag on.  Then, the megastars behind the show (Leno and O'Brien) decide to intervene by paying the wages of those impacted, but not currently on strike.

Does that help or hurt the cause of those currently on strike?  Is NBC happy or sad that Leno and O'Brien are doing that?  I could argue it either way.  My initial instinct was that the more damage there is, the more pressure on the union to come to the table and reach an agreement.  But then I think of the potential for lost talent and think it might be a good thing.  Weird situation...

Hit me in the comments and tell me what you think.  I'm reaching out to the labor blogs for clarity - Mike Moore, Seth Borden, Carter Wood, Connecticut Employment Law Blog, Ohio Employer’s Law Blog and Richard Hankins. 

I bet they don't all agree..

Smoking Discrimination - Truth or Fiction for HR Departments?

If you're like me, one of the things that keeps you up at night is the cost of healthcare.  So much so, I've followed the recent news that companies have begun to penalize smokers and employees with other risk factors (high cholesterol, high blood pressure, etc.) with great interest.  It seems like an eventual fact that those who display voluntary risk factors will pay via higher employee contributions/premiums than employees who don't engage in the same risky behavior.

Of course, smoking's the easy one, since it's safely classified as voluntary.  The other health metrics (blood  pressure, etc) are more problematic, since heredity and other factors are at play.

So, Open Enrollment season is upon us.  I didn't take the leap and consider raising employee contributions for those that smoke, and certainly didn't raise them for poor scores in the health metrics.

The biggest issue for me?  I'm at a startup, and I know all the people who work at our company.  It's one thing to mandate increased premiums for smokers when you are sitting in the Death Star of a Fortune 500, it's another thing all together when you see those that smoke every day.  Much tougher to make the business decision that probably will ultimately be necessary or routine as an early adapter when you are at a place where everybody knows your name...

So, it's no to increased premiums for smokers this year, and yes to finding a toehold for a cessation program sometime soon. 

Then I see the following information - Health Populi puts the true cost of smoking at $222 per pack over a lifetime...

Maybe I'm doing no one a favor by waiting another year to be more aggressive.....

Outsourced Terminations - Let's Go to the Highlights....

Neil Jensen of Knowledge Infusion recently highlighted an article from Inc.com entitled "Meet Rebecca, She's Here to Fire You", which profiled the growing trend of companies to outsource many talent/HR functions, including the termination.  From the Inc.com article:

"Welcome to the final frontier of human resources: the outsourced termination. The popularity of HR outsourcing and consulting, which was in its infancy only a decade ago, has exploded in recent years. Worldwide, the industry now accounts for $88.7 billion in spending, according to IDC (NYSE:IDC), a research firm in Framingham, Massachusetts. Big companies are responsible for much of that spending, but small companies that have traditionally relied on professional employer organizations, or PEOs, to manage payroll are increasingly outsourcing more complex tasks such as recruiting, performance reviews, and, yes, terminations. Rebecca Heyman's boss, TriNet founder Martin Babinec, says that demand for these services is growing so fast that he now does as much revenue in a given quarter as he did in all of 2002, when he booked $22 million."

"In an outsourced firing, a consultant typically meets with a CEO to script and rehearse the big conversation. On the day the ax falls, the consultant sits in on the meeting, taking notes and making sure the manager stays on message. "We're sitting right there," says JP Magill, co-founder of the Achilles Group, a Houston company that provides termination and other HR services. "And our client has exactly what they need to say written out verbatim."

Neil correctly points out in his post at KI that companies outsourcing emotional items like terminations face a potential image hit as they try and attract future talent.   My take?  The process described below is pretty close to what a competent HR person would provide for a business leader.  If the company has a viable HR pro, the role should never be outsourced.  However, if a smaller startup has outsourced their entire HR function, looking for some help is a good idea.  The description above is the way to go in this circumstance, with the business owner taking the lead in the communication of the business decision.

A bigger concern is the quality of the outsourcing firm.  Since many PEOs have their roots in transactional processes, like payroll, they may not have the chops to effectively guide the business leader who needs the consulting.  Poor consulting is the bigger risk in this scenario.

Leave it to Jamie Kennedy to keep us on theme but lighten this up a little bit.  If you aren't aware of Jamie Kennedy, he's an actor/comedian (see his role as B-Rad in Malibu's Most Wanted for a gem) and the creator of a show called the Jamie Kennedy Experiment.   JME is a show similar to Candid Camera - and in the episode below, Jamie poses as a business owner who runs an employment ad, then hires a manager after a minute long interview.  The manager's first task?  Fire five employees because Kennedy doesn't want to.  Enjoy the outsourcing clip and have a great weekend....

Oprah - Union-Free, Working You OT, and Proud of It.....

By now, you've probably heard about the 2007 Writer's Guild of America Strike against the Alliance of Motion Picture and Television Producers. The Guild is made up of two organizations: The Writers Guild of America, East and The Writers Guild of America, West.  These two organizations represent film, television and radio station writers in the United States. The AMPTP represents the interests of the producers and the film industry.

The strike began on Nov. 5. AMPTP and WGA then halted negotiations after WGA began its strike. The two groups had been in negotiations since July.   Get a solid rundown of the primary issues here... 

Me?  I'm interested in the issues, but more interested in the winners and losers during the strike.

Losers - TV viewers like me.  Probably the writers long term, since the network will jam thousands of hours of reality TV down our throats as an alternative and never come to the table.  Think you saw a lot of American Idol last year?  If the strike isn't resolved, you'll get to see Simon berating the parking attendant at Denny's to fill the programming hours.  Notes of interest from the strike from MSNBC:

"Among the picketers was Greg Daniels, executive producer of “The Office,” who said filming stopped on the show after star Steve Carell refused to cross picket lines. Writers and actors from the show used their time on the picket line to make a video and post it on YouTube.

Production of at least seven sitcoms has been halted because of the strike, and the hit ABC drama “Desperate Housewives” was scheduled to finish filming its latest episode because it had run out of scripts."

Winners - As usual, Oprah Winfrey.  I kid you not.  A sidebar on the same MSNBC article notes that "The Oprah Winfrey Show” doesn’t employ union writers and will continue uninterrupted.  I gave Oprah a hard time a few months ago for being a taskmaster and working her PA an average of 87 hours per week one quarter. 

Regardless of the work-life balance at the show, it's good to know Oprah runs a union-free shop.  She'll work you hard, but make sure the hours are reported and you get paid.  That's one way to remain union-free.... 

Facebook Job Advertising - Not Ready For Primetime..

In the rush to find recruiting gold in the "shining city on the hill" that is Facebook, I present some details on Flyers Pro, Facebook's new Google AdWords-like application.  Flyers Pro allows you to create relevant advertisements in Facebook by targeting users based on gender, age, school, location, workplace, and interests. 

Fortunately, I didn't have to create a campaign to get some data on how Flyers Pro performs - Joel Cheesman at Cheezhead reviewed it a while back, and while he liked the flow and functionality, the results of the ads he created were less than stellar.  From Joel:

"Setting up was easy enough: Upload an image (a major difference compared to Google AdWords), write some text and save. Payment is ecommerce driven and my card continuously gets charged each month.

Targeting is impressive - being able to put my ad in front of particular companies is a big plus - but the keyword function is unlike what you’d see in a typical search marketing campaign, driven more by specific subsets on Facebook than on-page content.

Facebook’s poor click-through rates on banner ads is well documented, and my experience was no different. Albeit a very small test for a very short time, I would imagine my results of about 1/2 of a percent would stay consistent."

Here's a breakdown of the specific results Joel's campaign generated:

The results underscore a major problem with web advertising.  While impressions are still easy to generate, clickthroughs are VERY difficult to get - there's just too much noise on the web, including inside Facebook.  Joel's Facebook recruiting campaign got served up to 1,108 candidates inside Facebook, but only 6 clicked through.  How many of those six would take the next step of action?  2?  1?  0?

The take seems to be to give Flyers Pro a try, if you want to try to leverage Facebook and get your inner geek on in the process.  Just don't be adding capacity to your careers site to handle additional traffic.

Of course, the other side of this is that recruiting can be a lot like selling a house.  All it takes is one.  So maybe it's worth the effort... Probably depends on the job and how sharp your copywriting skills are. 

Would Your Company Trade For Kobe Bryant?

Do you like spending a large portion of your comp budget on the best player available, or would you rather have strength at all positions and spread the money around?  You can't have it both ways, so pick already...

The whole Kobe Bryant thing is getting a lot of airtime.  For those of you who aren't aware of Kobe and don't follow pro hoops, here's a primer.  Bear with me, there's a talent nugget related to stars vs. teams somewhere in this:

-Kobe was drafted straight out of high school (1997?), and rapidly ascended into the stratosphere of the NBA, winning 3 NBA titles with the Los Angeles Lakers in the early 2000s and is now widely regarded as the best player on the planet.

-As Kobe matured, he has become widely reported as more selfish, to the extent he forced the trade of an all-star teammate (Shaquille O'Neal).  His desire by most accounts in doing this?  He didn't want to share the limelight with Shaq, and wanted to win a title as the sole franchise player.

-Since running off Shaq, Kobe's image has taken other hits, including sexual assault charges that were ultimately dropped, but not before the details of the case came out and painted him in a very negative light.  In the process, he lost lots of "look at this good guy" endorsements with uber-brands like McDonald's, Sprite and Adidas.

-The latest on Kobe?  Frustrated that the whole "me without Shaq" thing hasn't worked out, Kobe's lashing out at his team (the Lakers) by demanding a trade.... Repeatedly, and loudly...

The trade demands have swirled around for 6-8 months, and are heating up again with the start of the NBA season and the booing of Kobe in the Laker's home opener this season.   With this backdrop in mind, one franchise is rumored to have the means and the desire to do a deal with the Lakers and bring Kobe into their fold - the Chicago Bulls.

Your mission as a talent pro?  Figure out whether you would risk your culture by bringing the most talented, and at times, the most disgruntled player in pro basketball, into your team by comparing and contrasting Kobe and the Bulls.

Here's a rundown of the Bulls:

-Building with Youth - The Bulls have built their team over the last 5 years through the draft, to the extent that they now have a roster of 10-11 solid players, 3-4 with the ability to be All-Stars.  To get Kobe, they'll have to trade 4 of those players, including 2 All-Stars...

-Team-First Approach - The Bulls use a balanced approach, with different players stepping up and leading the team in scoring every night.  Hustle and floor burns are also the norm with the squad.

-Authority Matters - The Bulls have a coach who has actually said "no" to a reasonable (but individualistic) request by a player (Ben Wallace wanted to wear a headband) and was backed by the front office.  To this point, it's been the coach's way or the highway, a rarity in pro hoops.

-Compensation Flexibility - Building with youth means the Bulls have a reasonable payroll, and can make a variety of decisions in the coming years regarding which players warrant contract extensions, etc.  If Kobe comes aboard and has his contract reworked, most of that flexibility is gone...

So what would you do if you were the General Manager for the Chicago Bulls? It's a talent trap, the star vs. the team thing...

It's easy for me - If I were running the Bulls, I would stand pat.  Not because I hate Kobe, because I don't.  While the Bulls haven't won a championship, they are undeniably still in their ascent towards a championship.  Will they win a championship?  Who knows?  One thing is certain - the curtain hasn't begun to close at this point.  Additionally, I like the aspect of where the Bulls are from a payroll perspective.  They can choose when and where they want to put their money in the years to come.  Finally, Kobe's a 3-time cancer to those around him (Shaq, the criminal charges that were dropped, and the recent trade demands), so even if things went well initially, there's a high probability he would poison the current culture eventually. 

I'd do the same thing with a workplace team.  Keep the deep team intact, avoid the attention starved, disruptive forces that drag everyone down...

What about you?

Why Your Employees Don't Care About Company Results...

Of course, they should...

But do they?  If they don't think it impacts them?

As often is the case, sports provides a rare, unfiltered "window to the soul" when it comes to what is going through the minds of employees.  This week, Manny Ramirez, star outfielder for the Boston Red Sox, held court with the press and offered up the following calming words related to the "Sox" being on the verge of elimination, down 3-1 in the American League Championship Series (ALCS):

"Why panic?" Ramirez said. "If we don't do it, we'll come back next year and try again . . . If it doesn't happen, who cares? There's always next year. It's not the end of the world."

Nice... You can almost hear the Red Sox fan who drives a tow truck for 30K a year imploding...  First, the obvious observation - it's one thing to think it, another thing to say it.  But... a closer peek at Manny's situation indicates that apart from being covered 24/7 by the national media, he's similar in many ways to the ordinary employee:

1.  If the employee is getting paid and paid well, all must be OK in the world, right? -  Manny brings home about $20M a year, a reflection of his market value, and a solid indication when he goes to sleep at night that he can find employment elsewhere if this gig doesn't work out... If your employee is doing OK, there's no reason to think the world is ending...

2.  Employees focus on how they are doing first, without much thought to overall results - Ramirez is doing his part. He's batting .429 (9-for-21) with four home runs and 11 RBI in Boston's seven playoff games. He hit the third of the Red Sox's three consecutive homers in the sixth inning of Tuesday's 7-3 loss to the Indians.  If employees consider themselves the best at what they do, most of them sleep fine.

3.  Work/Life Balance means you can't be all hari-cari if you are doing your best - Like your most balanced employees, Manny has perspective on the results.  I'm not saying you should live like Manny - far from it.  But if you have a good family life, good health, etc., can you really be "do or die" every day?

Of course, there are a couple of key ways that Manny's situation is different from what we ordinarily talk about regarding employee engagement on company results:

1.  The series Manny is referring to isn't "do or die" - the Red Sox have great overall results - The ALCS that Manny is being flippant about is more like a RFP your company has out - it's an event in time that will help overall results, but won't likely be "make or break".   When you talk about your employees caring about overall results, you aren't talking about one RFP or project.  You're talking about the overall success of the company, profit/loss etc.

2.  Manny knows he's firmly tied to the bottom line with the Red Sox; your employees don't - All Manny has to do to know he is part of the financial success of the Red Sox is look in the stands and see the "24" jerseys (his number).   How does Fred in Finance know that his work on the 2008 forecast impacts the bottom line? 

Fred in Finance (and all like him) is the key for those of us wishing to make employees care about company results.  How can you link what he does to the overall results of the company and make him care, beyond the normal "will I have a job" and "is there room to be promoted" considerations?

For my money, we can publish financials, talk about trends, etc. in the hopes of engaging employees, but at the end of the day, only one thing matters - the ability of our managers and supervisors to identify and communicate the linkage between individual efforts and results.  Most managers can't do it.  Give it a try and role play the situation - it's ugly...

And that's why it's so hard to do.  And maybe why the Manny's of the world drive us crazy...