CEO Generously Delivers to Workers

Why not end the week with a brief but upbeat story about a CEO who isn’t reluctant to share …

ThinkstockPhotos-480903116Stories appearing on CNN Money and Entrepreneur websites this week reported that Nevzat Aydin, co-founder and CEO of Yemeksepeti, a Turkish food delivery company he helped launch 15 years ago, recently decided to share a huge chunk of the proceeds generated from his company’s $589 million sale to Germany’s Delivery Hero with 114 of his employees. (The firm employs a total 370 employees.)

CNN Money reported the employees received an impressive $237 million from the sale. According to the story, “Aydin’s employees are paid between $1,000 and $2,000 a month. That means the average payout is worth roughly 150 times their monthly wage, and tops the average Wall Street bonus for 2014 by $65,000.”

Aydin told CNN Money that “Yemeksepeti’s success story did not happen overnight and many people participated in this journey with their hard work and talent. I believe in teamwork and I believe success is much more enjoyable and glorious when shared with the rest of the team.”

In deciding how to allocate the bonuses,” the Entreprenuer website reported, “Aydin factored in how long they’d worked for the company (requiring two years, minimum) along with the individual’s job performance and their ‘future potential in the company.’ ”

The story was first reported by Turkish newspaper Hurriet.

CNN Money noted that the bonus plan was decided upon prior to the sale, but that the acquirer, Delivery Hero, supported the move.

 

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Intel Incents Employees to Help It Diversify

Intel has announced it will double its employee referral bonus for employees who help the giant chipmaker diversify its workforce. Employees who refer a woman, underrepresented minority or veteran who is ultimately hired will receive $4,000, the company announced yesterday.

“Of course, we always want you to refer your brilliant friends from all fields and backgrounds, so the standard ERP (employee referral program) bonus will continue,” Intel said in a statement that was reported by OregonLive (Intel has a major presence in Oregon, employing 18,600 people there). “But we also recognize that we need to evolve to keep Intel competitive in the global marketplace and representative of our consumers and communities.”

Intel – along with most other Silicon Valley companies – falls considerably short when it comes to the diversity of its workforce. According to its latest data, three quarters of Intel’s U.S. workforce is male, 55 percent is white, 32 percent is Asian or Pacific Islander, and only 8 percent and 4 percent are, respectively, Hispanic and African-American, reports OregonLive.

Intel’s diversity took a hit earlier this month when its highest-ranking woman,  Renee James, announced her resignation as the company’s president. However, Intel clearly remains committed to its major diversity push, announced at the beginning of this year, in which it will spend $300 million by 2020 to make its workforce at all levels much more representative of the U.S. population.  It appears to be making some progress: 41 percent of Intel’s hires this year have come from underrepresented groups, compared to 32 percent last year, while 17 percent of senior executives hired in the first quarter were from minority groups and 33 percent were women, reports OregonLive.

 

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Out of Sight, Not Out of Mind

When you leave your office at the end of the day, do you mentally leave your work behind?

Probably not.

According to a new CareerBuilder survey, the eight-hour workday may soon become history. More than 1,000 full-time workers nationwide in industries that tend to have more traditional work hours, such as information technology, financial services, sales and professional and business services, participated in the online survey conducted by Harris Poll on behalf of CareerBuilder from May 14 to June 3 to discuss their habits and attitudes toward the traditional nine-to-five work day.

More than half – 63 percent – of workers in these industries believe the established nine-to-five routine is outdated and many also have trouble leaving the office mentally. Almost one-quarter (24 percent) check work emails during personal activities with family and friends and 38 percent work beyond office hours. However, most participants – 62 percent – do so out of choice, not pressure or obligation.

“Workers want more flexibility in their schedules, and with improvements in technology that enable employees to check in at any time, from anywhere, it makes sense to allow employees to work outside the traditional nine-to-five schedule,” states Rosemary Haefner, CHRO at CareerBuilder. “. . . If done right, allowing employees more freedom and flexibility with their schedules can improve morale, boost productivity and increase retention rates.”

Gender may also influence work habits. For example, when compared to female workers, male employees are more likely to work outside of office hours (44 percent versus 32 percent); check or respond to work emails outside of work (59 percent versus 42 percent); and check on work activities when socializing with family and friends (30 percent versus 18 percent). However, women are more likely than men to go to bed thinking about work (23 percent versus 16 percent).

But these differences may be easily explained. Who typically prepares most of the meals in your home? Who does the dishes, the laundry, or dusts the furniture? If I’m allowed to guesstimate, more women complete these chores after work than men and don’t have as much time to spend on work activities. But to be fair, more men  probably take out the garbage.

The survey also broke down participant responses into three different age groups: 18- to 24-year-old workers, 45- to 54-year-old employees and those 55-years-old and above. In the first age group, 31 percent reported working outside of office hours compared to 50 percent of the second group and 38 percent of the latter group.

Seventy percent of older workers – ages 55 and above – stay connected to the office by choice compared to 56 percent of those between the ages of 18 and 24. However, younger workers in this age group are more likely than their older peers to think about work before going to bed (31 percent versus 11 percent of those ages 55 and above) or wake up thinking about it (59 percent versus 31 percent).

So what do all these numbers mean? The line between people’s work and personal lives are more blurred than ever. If you want to attract and retain the very best talent, offering flexible work schedules, whenever and wherever possible, may be among your best recruiting tactics.

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No Confidence Crisis in HR Job Market

If you’re an HR professional seeking new career opportunities, the results of a recent Society for Human Resource Management survey should offer some encouragement.

And, if you’re an HR leader hoping to keep your team intact through the ongoing economic recovery, these same findings may be cause for just a bit of concern.

The Alexandria, Va.-based organization’s recent poll of 423 human resource professionals examined hiring trends in the HR profession as well as HR professionals’ faith in their own job security and ability to find work elsewhere.

Overall, 88 percent of participants expressed some level of confidence that they could land a new position if necessary. This figure represents a 3 percent increase from December 2014, and a 9 percent jump from January 2014, according to SHRM’s Summer 2015 HR Jobs Pulse Survey Report. Of that 88 percent, 59 percent said they were “somewhat” confident, and 29 percent described themselves as “very” confident in their ability to find another job.

That self-assurance was seen at the higher levels as well, where 89 percent of executive-level, senior-level and mid-career level respondents expressed “some degree of faith that they could find work if necessary.”

While many respondents report being content in their current roles, 28 percent of those surveyed said they are already looking for a new job. Among this group, 24 percent indicated they were voluntarily seeking greener pastures. Another 22 percent said they were either “likely” or “very likely” to start a job search within the next 12 months.

And what has this group eyeing the exits? No surprise here: 37 percent of those who are currently looking or plan to be in the next year cited more compensation as the primary reason. Another 33 percent noted better career advancement opportunities, with 32 percent saying they were in search of better overall organizational culture.

The brimming confidence in the HR job market seems well-placed, at least in terms of opportunities with large employers. Just 1 percent of small companies (99 employees or less) are recruiting for HR positions, but 65 percent of organizations with 25,000 or more workers are now hiring for HR jobs, according to the SHRM report.

On the whole, fewer than three in 10 (27 percent) of respondents said their organizations were currently hiring for HR-related positions.

But, it only stands to reason that that number is higher among large companies, where employers and HR job seekers alike figure to benefit from the rebounding job market, said Jen Schramm, SHRM manager of workforce trends, in a statement.

“Hiring for HR positions depends greatly on the size of the company,” noted Schramm. “Larger companies employ more HR professionals, so it makes sense that they are more likely to report that they are trying to fill HR positions, especially during a jobs recovery. Improvements in the job market are also making HR professionals more confident about seeking out new opportunities for themselves.”

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Turnover and the Hourly Workforce

A new  survey of service-industry workforces and operations to determine how organizations are managing their hourly employees finds that turnover continues to be one of the business sector’s biggest challenges, with respondents reporting year-over-year turnover increases of 39 percent for hourly workers and a staggering 314 percent increase in turnover for managers.

That’s according  to the 2014-2015 How Hourly Workforces Work survey — conducted by Charleston, S.C.-based The PeopleMatter Institute — which also reports annual turnover rates for hourly employees to be 49 percent, with an average cost of $4,969 per employee.

Now in its fourth year, the survey was completed by 974 individuals, representing all sectors, business sizes and roles in the service industry.

“With a still-uncertain economy, rising turnover and increased competition, the survey reveals a number of challenges impacting the industry, said Nate DaPore, CEO and President of PeopleMatter.

DaPore also said it also “shows that the companies adopting advanced workforce management technology are best suited to address these challenges head on and to ensure a more effective approach to managing their hourly workforces.”

While triple-digit turnover rates for hourly workers may not be very surprising, the 314-percent increase in turnover for managers should be a clear signal to HR leaders who manage hourly workforces that more attention needs to be paid to both training and retention efforts at the manager level.

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The Incredibly Shrinking Carrier Market

It’s official: Anthem announced this morning plans to purchase Cigna for more than $48 billion.

Word Cloud Merger & Acquisitions

Word Cloud Merger & Acquisitions

Coming on the heels of Aetna’s $37 billion proposed deal to acquire Humana, the Anthem-Cigna proposed merger, were it to be given the green light by regulators, would inevitably reshape the health-insurance landscape and provide employers with one less option to consider. But according to experts I spoke to earlier today, deals like the one announced this morning also have the potential of being a boon to employers and employees.

If the Anthem-Cigna transaction goes through, Anthem will have more than $115 billion in pro forma annual revenues, based on the most recent 2015 outlooks publicly reported by both companies. Anthem President and CEO Joseph Swedish would serve as chairman and CEO of the combined company and Cigna’s President and CEO David Cordani would take on the titles of president and COO.

Here’s Swedish’s take on the proposed merger …

“We believe that this transaction will allow us to enhance our competitive position and be better positioned to apply the insights and access of a broad network and dedicated local presence to the health care challenges of the increasingly diverse markets, membership, and communities we serve. The Cigna team has built a set of capabilities that greatly complement our own offerings and the combined company will have a competitive presence across commercial, government, international and specialty segments. These expanded capabilities will enable us to better serve our customers as their health care needs evolve.”

And Cordani’s take …

“The complementary nature of our businesses will allow us to leverage the deep global health care knowledge, local market talent, and expertise of both organizations to ensure that consumers have access to affordable and personalized solutions across diverse life and health stages and position us for sustained success.”

There’s been three national players for a while, with all three of them trying strengthen their portfolios through mergers, explained Tucker Sharp, global chief broking officer at Aon Hewitt in Somerset, N.J. “Someone can put out a headline that says, ‘Five carriers become three.’ But there really have been three national players and what’s happening here is really about building scale … .”

Sharp also noted that lately there’s a bit of merger one-upmanship going on between the carriers and providers. For some time now, he said, the hospitals and physician groups have quietly been merging to get the upper-hand in negotiating with the carriers. Now, much like “an arms race,” you’re seeing the insurer carriers trying to improve their leverage.

At the end of the day, he said, the operational efficiencies and greater scale gained from these mergers could lead to better deals with health providers and benefit employers.

When I asked Sharp if there’s anything HR leaders should be doing differently in light of the Anthem-Cigna news, he said nothing at the moment, noting it’s going to take time for things to work their way through the regulators. If you’re an HR executive, he added, there’s probably nothing you need to worry about for the rest 2015 and 2016.

I also asked Steve Wojcik, vice president of public policy at National Business Group on Health in Washington, for his assessment of the announcement.

His response: “There are some potential upsides and some potential downsides. In the end, we’re looking for some of the cost savings and pricing to trickle down to the employers and employees. But there also are obviously some concerns, because there are only a few players left standing—so employers that want to put their plan administration out to bid are going to have fewer bidders … .”

Wojcik predicts that the Aetna-Humana deal will probably meet less resistance from regulators than the Anthem-Cigna deal because Humana is a smaller player in the employer market, though a much bigger player in the Medicare market.

In evaluating these deals, he said, regulators need to factor in that the health insurance market is dynamic, not static. They’re going to need to weigh into their thinking, he explained, some of the new entities, such as accountable care organizations, that have emerged in recent years and the impact they’re having on the overall market.

 

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Sharing Economy Hits a Speed Bump

Some call it the sharing economy, others call it peer to peer and some just call it the Uber economy: Whatever one calls it, the startups that are using smartphones and the desire of many people to set their own hours to create new businesses that are disrupting fields such as the taxi economy are drawing a lot of attention these days from investors, consumers … and legal plaintiffs.

Confused Driver

Specifically, some of the workers who perform these services believe they’re actually employees rather than independent contractors. In California, the state labor commission agreed, ruling in June that an Uber driver was actually an employee of the company. Now, two similar startups have decided to proactively address the question but in radically different ways. Homejoy, an on-demand cleaning service, has announced it will shut down in the face of multiple lawsuits from workers alleging employee misclassification. Meanwhile, on-demand grocery delivery service Instacart said it will offer its in-store workers in three cities (Atlanta, Miami and Washington) the opportunity to convert from independent-contractor status to part-time employee.

Instacart says it plans to expand the program to more of the 16 cities in which it operates — a list that includes Los Angeles, New York, Austin and Boulder, according to Entrepreneur.com. About 75 percent of the eligible workers are expected to apply for part-time status, Instacart spokeswoman Andrea Saul told Entrepreneur.com. The company has more than 7,000 contract workers. Saul said workers who convert to part-time status will be paid above whatever the minimum wage is in their respective locality. Workers will continue to be eligible for tips and commissions, she said. As employees, Instacart will also be responsible for their workers compensation and payroll taxes, of course.

The confusion over whether workers who participate in the sharing economy are independent contractors or employees has prompted calls for changes. One approach would be to make things like unemployment compensation, workers compensation and benefits portable, so they would follow workers from job to job instead of being the responsibility of whichever entity employs them. Another would be to create a new classification – the so-called “dependent contractor,” according to Bloomberg View. Countries including Germany, Canada and Sweden already use this classification.

Whatever ends up happening, the controversy over worker classification in the sharing economy – not to mention at long-established companies such as FedEx Ground – won’t be resolved anytime soon, and we’ll continue keeping a close eye on it.

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EEOC Sues UPS Over Religious Discrimination

The U.S. Equal Opportunity Commission recently sued United Parcel Service, Inc., claiming the country’s largest package delivery company violated federal law by discriminating against employees’ religious rights.

The EEOC complaint, which was filed in the U.S. District Court for the Eastern District of New York, alleges that the company has failed to hire applicants and promote employees who wore either long beards or long hair due to their religion. The company’s policy requires supervisors and employees who come in contact with customers to shave their beards and also prohibits male employees in such positions from growing their hair below collar-length.

As an industry giant, UPS supports a sophisticated HR department that oversees roughly 300,000 employees nationwide. What went so wrong?

According to an EEOC statement, there were many examples of religious discrimination over the years. It mentions a Muslim who applied for a driver position in Rochester, NY. The man, who wore a beard as part of his religious observance, was told “he had to shave to get the position,” that “God would understand,” and that “he could apply for a lower-paying job if he wanted to keep his beard.” EEOC also pointed to Muslim and Christian employees at other UPS facilities who were “forced to shave their beards while they waited months or years for UPS to act on their requests for religious accommodation.”

Likewise, a part time load supervisor in Ft. Lauderdale, Fla., who was a Rastafarian, also did not cut his hair because of his religious beliefs. His manager told him that he did not “want any employees looking like women on (his) management team.” Apparently, the 1960s memo about gender equality has not reached everyone yet.

Rastafarians at other UPS facilities around the country were also denied positions. Some waited years for their requests for religious accommodations to be granted before getting positions they wanted.

Seems like we’ve been down this path before – companies blamed for violating Title VII of the Civil Rights Act of 1964. Just last June, for instance, the US Supreme Court accused Abercrombie & Fitch violated a Muslim woman’s religious rights when it refused to hire her for a store sales job because she wore a headscarf.

In this matter, “UPS has persistently enforced its appearance policy even when that policy conflicts with the religious beliefs of it applicants and employees,” states Robert D. Rose, the regional attorney for EEOC’s NY District Office. “No person should be forced to choose between their religion and a paycheck, and EEOC will seek to put an end to that longstanding practice at UPS.”

Not to fast. UPS is defending its employment practices, claiming they are legal and respect and accommodate religious differences. Automated forms for requesting religious accommodations are even posted on it website, www.upsjobs.com, adds Susan Rosenberg, a UPS spokesperson.

“UPS has for many years had protocols for employees to request religious accommodations including variations for appearance and grooming guidelines (i.e., hair length, beard) or work schedule adjustment for prayers,” she explains. “The company will review this case, and defend its practices that demonstrate a proven track record for accommodation.”

Stay tuned. This battle has just begun.

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CDHPs Are Closing the Satisfaction Gap

employee health 1Traditional health insurance plans may still be the most popular option among employees, but consumer-driven plans are beginning to catch on with the workforce.

That seems to be the biggest takeaway from new data coming out of the Employee Benefit Research Institute.

Along with Greenwald & Associates, the Washington-based non-profit research institute recently conducted a survey of nearly 2,000 adults between the ages of 21 and 64, who had health insurance through an employer or purchased health insurance on their own, either directly from a carrier or through a government exchange. According to EBRI’s report on the findings, employees enrolled in traditional health plans are expressing greater satisfaction with their coverage than those in consumer-driven health plans, “but the ‘satisfaction gap’ appears to be narrowing.”

Generally speaking, 61 percent of traditional-plan enrollees described themselves as “extremely” or “very” satisfied with their health plans, compared to 46 percent of those in CDHPs, and 37 percent of employees enrolled in high-deductible health plans.

According to EBRI’s Paul Fronstin, however, overall satisfaction rates have been on the upswing among CDHP enrollees in recent years, while the opposite is true for those participating in traditional health plans.

Cost differences may help explain the emergence of this trend, notes Fronstin, the director of EBRI’s Health Research and Education Program and author of the aforementioned report.

Forty-eight percent of traditional-plan participants said they were “extremely” or “very” satisfied with their out-of-pocket costs when EBRI conducted this same poll in 2014. At that time, 19 percent of high-deductible health plan enrollees said the same, as did 26 percent of CDHP participants. In terms of contentment with what they’re paying out of their own pockets, satisfaction rates for all three groups have been trending upward since 2011, according to EBRI.

In addition, employees in CDHPs or HDHPs were less likely than those in traditional plans to recommend their health plans to friends or co-workers, and were less apt to stay with their current plans if given the option to switch plans—as was the case in past years, according to EBRI.

But, as the survey found on a broader scale, “the percentage of HDHP and CDHP enrollees reporting they would be extremely or very likely to recommend their plan to friends or co-workers has been trending upward,” the report notes, “while it has been flat among individuals with traditional coverage.”

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EEOC’s ‘Historic’ Workplace Discrimination Ruling

In case you missed it late last week, the United States Equal Employment Opportunity Commission ruled workplace discrimination on the basis of sexual orientation is illegal under federal law.

“This historic ruling by the EEOC makes clear they agree workplace discrimination on the basis of sexual orientation, much like gender identity, is illegal,” Chad Griffin, president of the Human Rights Campaign in Washington, told Bloomberg BNA.

“While an important step, it also highlights the need for a comprehensive federal law permanently and clearly banning LGBT discrimination beyond employment to all areas of American life.”

The EEOC’s decision “is going to put an end to the vapid superficial treatment that this legal question has been getting for so long,” Greg Nevins, counsel for Lambda Legal’s southern regional office in Atlanta.

Many employers over the past few years have settled EEOC charges filed by workers alleging sexual orientation discrimination, Nevins said.

“I think there will be some employers that want to fight this, but there are already a lot who have said ‘we’re not going to be the ones arguing that employers can discriminate against gay and lesbian men and women,’ ” he said.

It will be very interesting in the coming weeks and months to see which organizations — if any — decide to challenge the EEOC’s ruling.

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