Limiting Your Human Capital Risk

After seeing invites to a number of previous events, I finally was able to carve out some time yesterday to get to Argyle’s Human Capital Leadership Forum in New York.

I was especially interested in hearing the first main speaker, Orlando Ashford, senior vice president of human resources at Marsh & McLennan Cos., who opened the conference with a talk on “Managing Human Capital Risk.” Considering MMC is in the risk-management business and the allegations of price-fixing that plagued the firm roughly six years ago (an $850 million settlement was eventually reached), Ashford seemed to select a topic that’s near and dear to MMC on at least a couple of fronts. (Ashford joined MMC in 2008, coming there from Coca-Cola.)

Unfortunately, Ashford didn’t have much to say specifically about MMC, but he did a fine job detailing some ways HR leaders can help businesses mitigate human capital risk, which he summarized as the ability (or inability) to “attract, develop and retain key personnel and to create an organization whose employees are optimized to create value for the business.”

Ashford shared several examples of human capital risk, but not surprisingly cited CEO succession as the most critical. (MCC has had three CEOs in the past six year, with its current CEO, Brian Duperreault, taking the helm in 2008.)

Succession is extremely important across the entire enterprise, he said, but has to start  with CEO succession. “Most boards agree that one of their most important roles is choosing the next CEO,” he said, “but, on average, boards spend less than two hours per year on CEO succession.”

To be sure, this is a process that’s owned and managed by the board. But as Ashford reminded conference attendees, it’s also one that frequently involves HR, beginning with putting in place processes that enable discussions around succession to happen.

Phishing Attackers Focusing on HR

HR, beware: Hackers are using “legitimate-looking e-mails from HR and IT staff of the targeted organization[s]” to send “malicious attachments,” according to the October 2010 Symantech MessageLabs Intelligence Report.

“Of the 516 attacks, only six organizations were the intended targets,” said MessageLabs Inteligence Senior Analyst Paul Wood, who said that two organizations were the main targets — and one of them “was the target of 63 percent” of the attacks.

“The spear phishing attacks [were] launched in three waves each one week apart,” he said.

According to Symantec, each wave was comprised of one or two different e-mail messages using different themes. The first wave of e-mails targeted 50 recipients and spoofed an e-mail address from the firm’s senior HR executive with subjects referring to confidential salary information. The attachment contained a malicious PDF.

The second wave also spoofed an HR executive and targeted 20 recipients with a subject line pertaining to new employment opportunities. The attachment there was an XLS file.

The third wave spoofed one of the organization’s senior IT security executives, targeted 70 employees and requested action with a critical security update. The malicious attachment was a password-protected zip file.

When any of the attachments were clicked on, a backdoor Trojan virus would be installed on the computer, providing access to any sensitive personal or corporate data.

Wood notes that when such e-mails are sent in low volumes, “they are one of the most damaging types of malicious attacks.”

In October, 1 in 1.26 million e-mails comprised a targeted attack, according to Symantec, which reported that the retail sector was hardest hit this month.

It probably wouldn’t hurt to send a message around to staff advising caution — no matter what industry you’re in.

Honoring Veterans by Giving Them the Day Off

Correct me if I’m wrong, but it appears Iowa will be the only state honoring all veterans this Veterans Day — Nov. 11, 2010 — by requiring every one of its employers, public and private, to grant veterans holiday time off if they would otherwise be required to work that day.

Iowa’s Veterans Day law, House File 2197, was signed by Gov. Chet Culver on April 27 and a scan of the Internet and a call to the Veteran’s Administration indicates it’s the only of its kind so far. Under it, the veteran must provide the employer with at least one month’s notice of the intent to take the day off, along with a federally certified proof of honorable release or discharge from active duty.

Culver did another nice thing for Iowan vets and their families by signing House File 2110, the “trailing spouses” bill, on March 16, allowing military spouses to receive unemployment benefits if they have to leave a job to follow a spouse on military assignment. Both bills seem only fair to me, considering what vets have done for us. Especially the former.

I’d even be in favor of making Veterans Day our first true national holiday. I’d be for everyone taking it off, like Memorial Day and Fourth of July — especially if it would inspire us all to do something nice for a vet that day, or at least impress upon our children the importance of their sacrifice.

In my Veterans Day web sojourn, I came across this interesting blog post by Daniel Schwartz, a Connecticut attorney, from a couple years ago. He poses the question: Should more employers and all public schools be closed on Veterans Day? Federal and state laws grant all federal and state workers days off on legal holidays, such as Veterans Day, but not private-sector workers. Legal holidays simply dictate what the government is going to do; “how the rest of the country (i.e., private-sector employers) chooses to follow the holiday is up to them,” he writes. And to date, unlike other countries, the United States has no national holiday.

I don’t know, it just seems wrong to me — especially in a time of war — that a veteran has to clock in on his or her day of honor and a state or federal worker gets to lounge on a couch with popcorn and beer.

Even if your state’s governor isn’t quite ready to go Culver’s route, it’s probably still worth bringing up with your CEO and board of directors. Just a thought.


Halloween will soon be here, and you know what that means: Employees showing up this Friday wearing potentially offensive costumes! Oh the horror … . Now I’ve written my share of news stories about this trend, and if there’s one thing I’ve learned, it’s that there are a whole bunch of legal experts eager to talk about the potential perils of letting employees show up at work dressed as movie stars, pop icons, politicians etc.  The latest is ELT, an ethics and compliance training firm, which has sent out its list of what it predicts will be the “Most Controversial Workplace Halloween Costumes for 2010.”

What’s on this year’s list? Topping it is “Terrorist/Muslim”–perhaps not a big surprise. ELT illustrates this with a picture of a vest comprised of dynamite sticks and a timer. I gotta concur with ELT on this one: Showing up anywhere, let alone the workplace, with a costume like this represents astoundingly bad judgment. Not funny.

Next is “Illegal Aliens.” Again, not a surprise. It’s hard to find anyone who doesn’t have a strong opinion on this issue, and correct me if I’m wrong, but the workplace is hardly the appropriate venue for hashing out disagreements over what to do about illegal immigration. Throw in the racial overtones, and it’s perfectly reasonable to expect companies to be on guard against costumes with this theme.

Number three is Tiger Woods. Now on the one hand, I see ELT’s point: Anytime you have the potential for employees of one race to don a costume depicting someone of a different race,  things can get touchy. On the other hand, it’s well known that Woods is controversial because of his philandering and the resultant marital difficulties. So if an employee shows up in blackface purporting to be Tiger Woods, that’s clearly a no-no. But, if an employee shows up wearing a latex Tiger Woods mask that sports bandages and bleeding (in reference to his wife allegedly attacking him with a golf club), can that really be considered racist?

Number four is Lady Gaga. I’m having some trouble with this one. Yes, some may find Lady Gaga’s music and/or outfits offensively bad. But ELT’s reasoning is that because she wore a dress “made of raw meat” to MTV’s music video awards this year, it may be the wrong time to depict Her Ladyship in the workplace. Personally, I would think an employee who goes to the trouble of re-creating a dress made from raw meat deserves points for hard work and ingenuity. But then again, I’m not a PETA member.

Last on the list is “Chilean Miners.” Obviously, there’s the peril of having non-Latino employees depicting Latino miners. But ELT says such costumes may also “poke fun at workplace safety and blue collar workers.” It seems to me that the story of the Chilean miners showcases courage, ingenuity and persistence in the face of extreme adversity. The entire world was captivated by their rescue. So doesn’t the good far outweigh the potential for bad in this case? I guess I’m  glad I don’t have to make these decisions.

Job Creation on the Ballot

Politicians can get somewhat imaginative during the election year, as an item under the heading “Tax Breaks for Jobs” in today’s New York Times reminds us.

The short piece focuses on Frank Caprio, a Democratic nominee for governor of Rhode Island, who has included in his economic plan a “finder’s fee,” in the form of a $1,000 tax credit, for any company that helped recruit a business to Rhode Island.  If 20 or more jobs are subsequently created, the two businesses would share in a $10,000 tax credit.  (I suspect it’s not going to be enough to get Walmart to pick up and move its headquarters from Bentonville.)

The story cites other job-creating incentives being proposed or implemented around the country, but describes Caprio’s as “one of the more novel proposals from candidates seeking to tilt the tax code toward new jobs or new businesses.”

Of course, Caprio is first going to have to get elected if he has any hopes of fulfilling his campaign promise. (The Rhode Island governor’s race continues to be a close contest between Caprio and Republican-turned-Independent candidate Lincoln Chafee, according to Rasmussen Reports.)

But whatever the outcome, this and the other examples featured in the NYT’s story serves as a reminder of the part job creation, or more to the point the lack of it, is likely to play on Nov. 2.

Disabled Workers Lose Advocate

The New York Times is reporting on the death of Paul S. Miller, a long-time advocate for disabled workers who was also born with achondroplasia, or dwarfism.

The paper reported the cause of death was cancer.

Miller was a graduate of the University of Pennsylvania and Harvard Law School, but was rejected by law firms more than 40 times, according to the piece, because of his physical stature:

One time, he said, he was told the firm feared that clients would see his hiring as a “circus freak show.”

Despite those setbacks, Miller was hired by a law firm, and eventually became a professor at the University of Washington in Seattle, where he was director of the university’s disabilities studies program. According to the NYT:

For 10 years before joining the faculty in 2004, he was a commissioner of the federal Equal Employment Opportunity Commission. At the same time, he was the Clinton administration’s liaison to disability organizations, a role he reprised in the first nine months of the Obama presidency.

We here at the Leader Board salute Miller and his efforts to lead more disabled workers to their rightful places in the working world.

Social-Media Policies Need to Catch Up With Reality

A pretty interesting report came across my computer screen just now — a survey showing a wide disparity between the increased use of social media in the workplace and the dearth of policies to ensure it’s being used properly and effectively.

A top finding of this  Wave VI in the Social Media Index survey is that, despite a 35-percent increase in social-media consumption, more than half of the nearly 3,000 global IT, HR and finance professionals polled either do not have a social-media policy at their company or are unsure if they do. One other interesting note: HR professionals spend an average of six hours per week engaging with social-media content, versus about four with editorial content and about three with vendor content. 

Spun a different way, the survey — by and PJA Advertising + Marketing — finds that, although social-media policies may be hard to come by in many companies, 40 percent of IT and finance respondenets and 46 percent of HR respondents say their workplace now makes it “easy” or “very easy” to use social media on the job.

“As user-generated content continues to make up a greater percentage of a professional’s week,” says George Krautzel, “companies need to accelerate their thinking about two things: how to guide employees on properly representing their company when engaging, and how to make their own IP accessible in social channels.”

Or, in the words of Mike O’Toole, president at PJA, the results of the survey make it “clear that you really need to bring social media and user-generated content into all the ways you communicate with your colleagues and customers to be effective.”

There’s a “clear opportunity cost,” he says, “if you don’t have a simple, clear policy that balances self-monitoring with company regulations. And since marketers are the owners of where social practices are moving for companies, these policies really ought to be coming out of collaboration between marketing and legal, with marketing leading the charge.”

Hadn’t actually thought about who should be leading the social-media-policy charge until I read that. I suppose I could generate some arguments that CEOs, CIOs and CHROs should be in that brainstem. But O’Toole’s right about marketers. They really are leading the corporate social-media parade.

Corporate Fraud Turns a Corner

Corporate fraud appears to be on the decline, according to a report that just came out today from The Network and BDO Consulting. The second-quarter findings from their Quarterly Corporate Fraud Index are, unfortunately, only available in press release form, but they do indicate the percentage declining.

In second-quarter 2010, fraud-incident reporting accounted for 19.6 percent of all compaliance-reporting activity from more than 1,000 organizations worldwide. This percentage has slowly declined during the past three consecutive quarters when reports accounted for 20.2 percent. The peak was in second-quarter 2009, at 20.7 percent.

“Following a surge of in-house fraud reporting last year, fraud reports have now returned to nearly the same levels as second quarter of 2008, ” Luis Ramos, chief executive officer of The Network, says.

Timothy Mohr, a BDO partner, attrubutes the decline “to senior executives more closely examining all aspects of governance, risk and compliance issues … and capturing misconduct from every single source to comply with new regulations.”

Ramos cautions that “fraud reporting only tells part of the story. A leveling, or even declining, of the percentage of fraud reports could be the sign of a rebounding economy, a strong compliance program, or, in contrast, [might] mean that employees are not aware of, or comfortable with, anonymous whistleblower-reporting systems.”

So does this mean that fraud cases are going down? Clearly, hard to say. It could also be a reflection of a recovery that has yet to be realized in fully restaffed companies, I suppose. Fewer employees, fewer reports … though that hardly explains the 2009 spike.

Just another way to keep an eye on the times. And remember, says Ramos, “as compliance guidelines change due to legislation like the Dodd-Frank Act and UK Bribery Act, it is [paramount] for organizations to stay ahead of the curve and proactively manage risk.”

A Sign of Things to Come?

According to People Management, the magazine of the Chartered Institute of Personnel and Development in the UK:

“The BBC’s HR director Lucy Adams is to step down from her executive board position as part of a radical restructure, the corporation has confirmed. … The people division will also cease to be a “stand-alone” department and will join the expanded operations group led by chief operating officer Caroline Thomson.”

Critics — and supporters — of HR have been warning for some time that if HR leaders don’t actually get in front and lead, they will open the function up to more back-office outsourcing  and a second-rate future — if there is a future.

For all of the talk about how HR outsourcing will allow HR executives more time to strategize about how they can positively affect business operations and the bottom line, there has also always been talk about the ongoing and seemingly unchanging inability of many HR leaders to escape the administrivia mind-set.

(Of course, here at HRE, we find and celebrate the best and brightest with our HR Executive of the Year award — with Google’s Laszlo Bock most recently being honored.)

There are still too many HR leaders paying attention to seasonal-event planning, as Sue Meisinger writes in her latest HREOnline™ column, or blindly following orders without prioritizing HR initiatives.

As that latter story notes, a report by the Boston Consulting Group in conjunction with the World Federation of People Management Association states: “High-performing companies focus their efforts on fewer, more carefully chosen HR-related projects in areas such as recruiting and leadership development.”

Or, as Sue puts it in her column: Do Less. And Do it Better.

Or face the possibility that the HR function will be devalued and devoured.

Pay Scales and Weight Scales

Thanks to the good folks at, who ran a very interesting story today about some new research from the University of Florida that finds skinny women and overweight men earn more, on average, than their average-sized colleagues:

According to the study, women who weighed 25 pounds less than the group norm earned about $16,000 more per year. A woman 25 pounds above the group norm earned about $14,000 less. Thinner men, on the other hand, made almost $9,000 less than their average male co-worker. 

Now, I get the idea that women who weigh less than their counterparts would make more than their average-size or overweight colleagues. After all, we all live in a society that praises puny and castigates corpulence.

But I admit I was shocked to learn that men who weighed less than the group norm actually made less money than their average-sized colleagues.

And, as a man who has always weighed in on the lighter side of the scale, I’m now wondering if, instead of working harder, I should just start eating more if I want to get a raise.

Read the University of Florida researchers’ paper, which was published in the journal for the American Psychological Association, here.