Articles from August 2012

According to Bloomberg, Workday just reeled in its big fish with news – that broke just after midnight – it will provide Google with its online tools to manage employee operations, citing to two people familiar with the deal:

Workday, based in Pleasanton, California, would replace parts of Google’s home-grown human resources software for tens of thousands of its employees, said the people, who asked not to be identified because the information isn’t public. The world’s largest Internet search engine has hired Deloitte LLP to help integrate Workday’s software, they said.

The deployment is a coup for Workday, the cloud-computing company that’s been winning deals for its HR and financial management software against market leaders SAP AG (SAP) and Oracle Corp. (ORCL) Workday plans to raise as much as $400 million in a public offering, it said in a regulatory filing yesterday.

That’s some pretty big industry news that’s breaking on a day most folks have taken off in order to enjoy the long Labor Day weekend. But the point is not lost on those of us who are manning our desks today, and Workday certainly has reason to celebrate this weekend.

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Yet more statistics in the ever-conflicting arena of ever-increasing healthcare costs.

The latest, from the 2012 Towers Watson Health Care Changes Ahead Survey, show employers’ annual per-employee healthcare costs increasing 5.3 percent in 2013, to $11,507 – and this amid uncertainty over the November election and what that will do to healthcare reform and the development of insurance exchanges.

Despite the increase, and primarily because of the U.S. Supreme Court’s recent decision upholding the constitutionality of the Patient Protection and Affordable Care Act, 88 percent of the 440 midsize to large employers responding to the survey have affirmed their commitment to offer healthcare benefits to their employees going forward (although that does leave 12 percent not committing).

Though the rate of cost increases has slowed (the expected rate for this year stands at 5.9 percent), a majority of respondents (58 percent) say they’re expecting they will trigger the healthcare-reform excise tax in 2018 if they don’t make some significant cost-cutting moves now; indeed, 83 percent say they’re planning to take steps to control costs to avoid that tax.

As Randall Abbott, senior healthcare-consulting leader at Towers Watson, puts it:

“Affordable healthcare remains a top priority for employers and a key component in employee value propositions. However, due to the increasing costs of medical benefits and the additional burden of       compliance, business leaders need to keep the pressure on to control costs, increase workforce accountability and engage workers to lead a healthier lifestyle.”

Just how high and how fast costs are rising still depends on regional breakdowns and whose numbers you’re looking at. In this July 17 HREOnline.com news analysis, researchers from PricewaterhouseCoopers US predict healthcare spending in the United States will grow at a “historically low” rate of 7.5 percent in 2013.

The same report cites another Towers Watson report, the 2012 Towers Watson Global Medical Trends Survey, showing the global cost of employee medical benefits expected to increase by a much heftier 9.6 percent this year, though down from 9.8 percent in 2011 and 10.2 percent in 2009.

However and wherever you look at it, one constant I see is the numbers are higher than they should be and the cost-cutting parade needs to keep marching on.

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In a move that ups the ante in an increasingly crowded HR software market, IBM has acquired HR, talent acquisition and talent management software provider Kenexa.

For its $1.3 billion, the Armonk, N.Y.-based technology giant gains Kenexa’s range of technology offerings that include recruitment, onboarding, employee assessment, interviewing, performance and compensation management, career development, goal alignment, succession planning and employment branding platforms. IBM will integrate Kenexa’s approximately 2,800 employees and operations from 21 countries into its software and services groups.

According to IBM, the acquisition will help its clients “embrace social business capabilities.”

In a teleconference announcing the purchase, Alistair Rennie, general manager of social business for IBM, described how Kenexa complements IBM’s “strategy of bringing relevant data and expertise into the hands of business leaders within every functional department from HR, sales, marketing to product development.”

“Kenexa has always applied a science-based view to key processes—locating talent, helping it perform better,” he said. “Combined with our expertise, it’s an absolutely perfect fit. Our capabilities combine perfectly to create outcome-driven perspectives for our clients.”

The transaction, which IBM expects to close in the fourth quarter, brings Big Blue into a talent management software market that already includes Oracle and SAP, with those companies having acquired Taleo and SuccessFactors, respectively, earlier this year. This latest acquisition has tremendous potential to shake up an ever-more competitive space, says Jason Averbook, CEO of Minneapolis-based HR consultancy Knowledge Infusion.

“Kenexa is not only an application vendor, but has a tremendous mix of value-added services and expertise that makes its value much more than just an application play, but a pure solution play. Whether an organization wants to leverage applications or create a complete outsourced talent solution, Kenexa provides that capability,” says Averbook.

If you combine Kenexa’s data asset and IBM’s focus on big data, solutions and the combination of knowledge, transactions and the impact that people [have] on the business, IBM has created a leapfrog moment in the true talent management solution space that an application vendor alone cannot provide.”

There’s a need for the HR applications that suppliers such as Oracle, SAP and Cornerstone OnDemand provide, continues Averbook. “But what IBM and Kenexa have done with this acquisition is an attempt to leapfrog others in the industry to create something ‘different’ but possibly more relevant in what human capital management professionals are looking for today,” he says.

The combination of IBM and Kenexa creates a new type of play in the human capital management space that is a combination of transaction, big data and social that, if done correctly, could redefine the next generation of talent management.”

Today’s announcement is more evidence of increasing competition among the marquee names in the HR software market, adds Josh Bersin, CEO and president of Bersin & Associates, an Oakland, Calif.-based advisory services firm. “IBM, if they wanted to, could be the biggest or one of the biggest players in the talent management space, in terms of both software and services. Even though you have Oracle and SAP and Cornerstone out there, no one has the reach of IBM. They’re in a lot of countries where there aren’t many reps selling HR software.

“This market is still growing,” he continues. “The big players are trying to cement their positions in an increasing market. I think that’s what’s happening.”

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Not one to peddle books on this site, but one caught my eye today that ties in enough with issues we’re currently grappling with that I thought I’d share.

Jim Roddy, president of Jameson Publishing in Erie, Pa., just wrote this book, Hire Like You Just Beat Cancer, to drive home his newfound perspective on just how crucial it is to hire the right people — gained through his own bout with colon cancer at age 32.

I was especially taken by this excerpt from the book:

Too often, we hire people whose full potential and ambition are invested in performing the jobs they’re hired for. Then, when we need more from them, they’re not able or willing to go the extra mile. Your goal should be to have at all times (or be working toward) at least one employee with the skills, personality, character, mapping, ambition, and technical competence to take over your position right away.”

So happens we’re currently putting the finishing touches on a Sept. 16 Human Resource Executive^® cover story that reveals just how much work is still needed by chief human resource officers to find and develop their own replacements. One survey the writer cites shows a pretty dismal number of CHROs who were developed and hired from within their organizations last year — a pretty clear indication of how few top HR executives are actually selecting and preparing their top subordinates to take over their jobs — tomorrow, if need be.

Roddy’s book contains many of his lessons learned, as spelled out in this release: guiding principles for hiring, interview best practices (such as behavior-focused techniques), recruiting strategies for finding great performers, even emotional outcomes the interview process should achieve: “candidates feel the company is professional, their quesions are answered, candidates were happy to interview, candidates are told of the job’s difficulties,” the list goes on.

As Roddy writes in the book: “The lessons I learned when cancer knocked me down helped build me up as a hiring manager, and I apply those lessons aggressively every time I interview a potential employee.”

Whether you order a copy of his book or not, perhaps it could serve as a suggestion/reminder that your own succession plan and hiring practices might merit a second look, through the more focused and urgent lens of suddenly not being able to report to work tomorrow.

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How would you get an elephant into a refrigerator?

That’s a strange question to ask in any context. But posing such oddball queries is an old trick used during job interviews to gauge candidates’ ability to think fast and creatively.

Interviewers who like to throw out this type of curveball question aren’t necessarily looking for a specific response. The bigger concern is that the candidate doesn’t swing and miss completely; stumbling and stammering while coming up with nothing at all.

Well, a recent survey suggests that a majority of job seekers actually welcome the chance to knock offbeat interview questions out of the park. The poll, conducted by British recruitment firm Michael Page International, found that 66 percent of more than 1,000 respondents said they would feel confident about their ability to answer questions asking which famous person they’d like to trade places with for a day, or why manhole covers are round and not square, for example.

Jobseekers as well as employers stand to gain by occasionally taking interviews off the predictable path, says Dean Ball, a regional managing director for Michael Page.

Weird interview questions can spark interesting reactions from candidates, but they are also an extremely useful way for businesses to differentiate between candidates who have similar qualifications and experience on paper. They give candidates a chance to step outside the traditional boundaries of the interview process and really demonstrate their creativity, ability to apply logic and how they work under pressure. Such questions can also provide a light-hearted moment in what can be quite a formal situation, giving the employer a real chance to see a candidate’s personality and how they might fit into the company culture, so businesses shouldn’t shy away from them.”

Still, be prepared for job candidates who don’t see the value in “interesting” interview questions. Fifty-four percent of survey respondents indicated they would be surprised by an offbeat line of questioning, and 33 percent said they would struggle with it; either challenging an unexpected question’s relevance or simply saying they don’t know the answer.

The bottom line? Proceed with caution when taking the weird interview question route, Ball advises.

If used correctly, obscure lines of questioning can really help employers to build a clear picture of a candidate’s potential, so it’s worth exploring how they might fit into your assessment processes. They can sometimes take candidates by surprise, though, so make sure you take time to think carefully about the questions and what kind of response you are hoping to achieve.”

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Apparently, gender discrimination can rear its ugly head at any organization, even if its head is a woman.

According to various media outlets, including the New York Times, Janet Napolitano’s Department of Homeland Security is the target of a federal discrimination and retaliation lawsuit after a male official at the Immigration and Customs Enforcement agency says he was passed over for a high-level position in the agency in favor of a less-qualified woman because he was a man.

The official, James T. Hayes Jr., also accuses the agency’s chief of staff, Suzanne Barr, of “sexually offensive behavior” that contributed to a discriminatory work environment for male employees.

Last week, Ms. Barr stepped down from her post and voluntarily left the agency on paid leave pending the outcome of an internal review of the misconduct allegations, a spokesman said.

And, according to a Reuters account, the lawsuit ”is instructive to employers as it not only involves a role reversal of men suing women, but also includes both complaints of verbal sexual harassment and discriminatory treatment.”

Verbal sexual harassment is the much more recognizable violation. An employer can usually spot verbal harassment as as soon as they hear it. In Napolitano’s case, a female manager in the Department allegedly screamed at male employees and used sexually humiliating language against them; including, telling one male worker that she wanted his “c-k in the back of [her] throat,” reports Forbes. If true, it’s pretty clear such language could constitute illegal harassment.

On the other hand, discriminatory treatment can be much harder to recognize. For example, the lawsuit alleges that male staffers were frequently bypassed for top positions. To prove discrimination, a judge would have to look at the intent of the employer — if in fact the employer actually considered sex, and decided to promote based on this characteristic. This is usually much more difficult to prove than simply reviewing foul language.

According to Reuters, Napolitano has denied the harassment complaint, but, nonetheless, employers “should take this case as a reminder to be sensitive to discrimination and harassment by men against women, and women against men.”

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This just in: some good news, some bad news.

According to PwC’s recently released Private Company Trendsetter Barometer of privately held U.S. growth businesses, corporate leaders (CEOs and CFOs) are reporting less optimism about the U.S. economy in the second quarter of 2012 than they did in the first.

The study of 243 CEOs and CFOs shows about half of leading private companies optimistic, 12 percent pessimistic and 38 percent uncertain. The biggest movement between the two quarters, PwC’s release says, is in “the percentage of Trendsetter executives reporting optimism about the U.S. economy, down 10 points. The percentage of Trendsetter executives voicing uncertainty and pessimism, meanwhile, rose slightly, by 6 and 4 points respectively. Says Ken Esch, a partner with PwC’s Private Company Services practice:

Continued fluctuation in private-company optimism is to be expected while the U.S. economic recovery remains slow and the Eurozone unsettled. “This up-and-down movement in Trendsetter confidence has been a consistent pattern over the past several years and signals a prevailing sense of uncertainty. It may take a few consecutive quarters of sustained high confidence before private companies feel they’ve truly turned a corner and are ready to pursue growth more aggressively.”

Meanwhile, though, the majority of private companies responding (54 percent) plan to add to their workforce over the next year. Only 3 percent plan layoffs and 43 percent expect their workforce to stay the same. Overall, responding companies project a 2.4 percent increase in headcount, up from 1.8 percent in the first quarter. Esch again:

Consistent with recent quarters, private businesses are continuing to add to their headcount, but only marginally. Despite investing cautiously in this area, Trendsetter companies recognize the danger of having a talent shortfall when opportunity comes along – roughly one-quarter of them cite lack of qualified workers as a potential barrier to growth.

“Consequently, we don’t expect hiring to wane, yet a significant uptick is unlikely until the economy shifts into a higher gear, which may depend, in part, on some resolution of matters such as the Eurozone debt crisis and the U.S. fiscal cliff that looms at year-end.”

Read these stats however you choose — glass half empty, glass half full. Bottom line: Going forward, nothing’s moving very fast at all.

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Do you find yourself muttering “How unprofessional!” at the workplace more? If so, you’re not alone.

At least, that’s according to the 2012 Professionalism in the Workplace Study,  an annual nationwide survey of 312 managers and supervisors and 309 HR professionals, courtesy of York College of Pennsylvania’s Center for Professional Excellence.

For a sizable percentage of  respondents, the state of professionalism in employees has decreased over the past five years. A third of the HR respondents (33.1%) and a fifth of the   managers (21.2%) feel this way.

The survey notes that more than 50% of HR respondents reported seeing an increase in IT abuses.  In 2010, that figure was 38%, and in 2009 it was 39%,according to the Center.

“The troubling news is that 97.1 percent of HR respondents and 91.7 percent of hiring managers have said IT misuse has either gotten worse or stayed the same,” said Matthew Randall, executive director of the CPE.  “This means that addictions to social media, inappropriate use of text messages and inappropriate use of the Internet may be costing employees their jobs.”

There is good news from the study, however.  Professionalism has increased for 16.0% of the HR respondents and 27.2% of  the managers since the last survey, which could be the one good result of a bad economy, researchers say. When asked why they believe the presence of professionalism has increased, respondents most  often observed that the poor economy and consequent downsizing has increased the pool of applicants from which to choose.

HR professionals are more likely to report problems of professionalism in the workplace than are managers, said Randall.  “However, when managers specified the employee segments that most lack professionalism, they point toward younger employees.”

Researchers compared data from the past three years and found an apparent generation gap between hiring managers and HR professionals and younger, entry-level employees, according the survey.

“Much of the generation gap revolves around professionalism standards,” said David Polk, PhD, whose firm, the Polk-Lepson Research Group, was commissioned to conduct the survey.  “Current business leaders and HR professionals do not believe that the definition of professionalism should change over time.  Business and HR professionals say young employees need to learn to conform to ‘current standards’ of professionalism rather than the standards be modified in response to larger society changes.”

So how are the ‘current standards’ of professionalism at your organization? You may want to find out, but be sure and ask nicely, and in person, of course.

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The clock is already ticking, folks, as 2014 approaches, the deadline for implementing major healthcare-reform provisions, such as the introduction of state-operated insurance exchanges and the requirement to offer essential health benefits as defined by the Patient Protection and Affordable Care Act.

In the meantime, many employees covered through their employers are already receiving letters informing them of the ACA’s requirement that part of the premiums paid by their employers to their insurance providers be rebated if the providers have not spent at least 85 percent of those premiums — as one letter puts it — “on healthcare services, such as doctors and hospital bills, and activities to improve healthcare quality, such as efforts to improve patient safety.”

This so-called “Medical Loss Ratio” requires that no more than 15 percent of premiums “ be spent on administrative costs such as salaries, sales and advertising,” according to one letter.

Health-insurance experts and providers tell me employers have some choices to make in how the rebates (which were due in their hands by Aug. 1, 2012) will, in turn, be provided to or shared with employees or if they have to be provided to or shared with employees.

What this one (hopefully not-too-confusing) aspect of the ACA points to, say employment attorneys and benefits experts, are the vagaries, choices and — in many cases – confusing segments of the legislation that employers need to address now, quickly, to ensure they won’t be caught with their proverbial pants down.

Just how confused are employers about what they need to do to get their houses in order for the ACA? According to this white paper, compellingly titled Employers most impacted by Healthcare Reform taking a ‘wait-and-see approach’ — many seem to be in denial – prepared by Guardian Research and sent to me by the Choate, Hall & Stewart employment law firm (here is Choate’s alert on the topic as well) – employers are pretty confused, indeed, especially smaller and mid-sized ones. As the paper states:

Companies with less knowledge of [ACA] are more likely to feel that they have time to make decisions and feel that they will not have to take action on their group insurance benefits until 2014 draws near. And as of right now, most are under the impression that maintaining the status quo will still be a viable option after the bulk of [ACA] provisions go into effect in 2014.”

The paper goes on to spell out just how much all employers are dead wrong about that.

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It’s fair to say that Google has a reputation as a world-beater in the employee perks department. Free fitness classes, an on-site medical staff, a subsidized massage program, foosball tables and video games, free haircuts and dry cleaning services are just a few of the benefits enjoyed by employees at the corporation’s Mountain View, Calif. headquarters. And, it seems the company’s generosity extends to workers’ families as well, and continues long after Google employees have passed away.

As reported by Forbes, spouses or domestic partners of U.S.-based Google employees who die while under the employ of the company will receive a check for 50 percent of the deceased employee’s salary for 10 years. The surviving spouse or partner also acquires vested stock benefits, and their children receive $1,000 a month until the age of 19; perhaps longer if the child is still a full-time student.

What’s the catch, you may ask? There isn’t one, according to Google. A company spokesperson confirms that there’s no tenure requirement to receive this benefit, which means that most of the Internet search giant’s 34,000 employees are eligible.

One of the things we realized recently was that one of the harshest but most reliable facts of life is that at some point most of us will be confronted with the death of our partners,” Google Chief People Officer Laszlo Bock told Forbes. “And it’s a horrible, difficult time no matter what, and every time we went through this as a company we tried to find ways to help the surviving spouse of the Googler who passed away.”

Death benefits were formally implemented at Google in 2011, according to Bock. While “there’s no benefit” to the organization from an economic or productivity standpoint, “it’s important to the company to help our families through this horrific if inevitable life event,” Bock says.

The newest addition to the long and varied list of Google employee perks is indeed a generous one, and certainly won’t hurt the company’s reputation for offering unique benefits to its people. But will this kick off a trend? Will more large companies begin offering similar benefits to their employees? And should they?

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