All posts by Andrew McIlvaine

The End of Telecommuting?

For many IBM employees, telecommuting will soon be a distant memory.

“Disrupt” is a catchy term in business these days, especially in the technology industry. Now one of the nation’s oldest and most prominent technology companies is disrupting what had become a common method of working for many of its employees: Thousands of IBM employees who telecommute are being called back to the office, and those who can’t or are unwilling to will be expected to find employment elsewhere.

Big Blue’s U.S. marketing department is the latest unit at IBM to announce that employees will now be “co-located” in central offices rather than working from home or in remote locations. The department, comprised of 2,600 employees, will now consist of teams working together at one of six offices located in Boston, New York, Raleigh, Atlanta, Austin and San Francisco.

Ironically enough, IBM was a pioneer in the telecommuting revolution, as noted in a story in Quartz. As recently as 2009, writes author Sarah Kessler, 40 percent of the company’s 386,000 global employees worked at home. When IBM acquired start-ups, the employees at those companies were allowed to continue working in their original locations rather than moving to central IBM offices.

Michelle Peluso, IBM’s chief marketing officer, tells Kessler that the benefits of employees working together in the same offices include “speed, agility, creativity and true learning experiences within your team.” “When you’re playing phone tag with someone is quite different than when you’re sitting next to someone and can pop up behind them and ask them a question,” she said.

Kessler cites studies showing a “water cooler effect” that arises from people working together in the same location — informal interactions that can lead to the sharing of ideas and more collaboration. CEOs such as Steve Jobs were big fans of co-location. Jobs, in fact, was so obsessed with the benefits that arise from unplanned meetings between coworkers that he wanted to place the bathrooms at Pixar’s headquarters in just one section of the building to increase the likelihood of those serendipitious interactions, Kessler writes.

IBM is struggling to reinvent itself, she writes, as the rise of cloud computing forces it and other large technology companies to rethink their business strategy. Its leaders believe having employees work together instead of remotely will better enable the sort of collaboration and increased productivity that’s desperately needed.

Of course, coworking has proven not to be a panacea for troubled companies in the past — just look at Yahoo, where CEO Marissa Mayer announced back in 2013 that telecommuting would no longer be allowed. Yahoo recently sold itself to Verizon for a tiny, tiny fraction of what it was once worth. Many IBM employees are distraught by the new arrangement: “Everyone I know is very upset,” one employee tells Kessler.

Other employees think co-location is an improvement over teleworking. “I think that getting everyone in a room, hashing it out, throwing it up on a whiteboard is my preference rather than doing share screens,” an employee tells Kessler. “People pay attention so much less when on the phone.”

That employee, however, is choosing to quit rather than make the move, Kessler writes.

Psychopaths in Silicon Valley

As we’ve written previously in HRE, psychopaths are more likely to be found in the C-suite than in the general population (according to research by psychologists Robert Hare and Paul Babiak, who found that while psychopaths make up 1 percent of the population at large, their numbers in the executive ranks could be as high as 4 percent). This week, a panel at the SXSW festival in Austin, Texas, examined the phenomenon of psychopathic CEOs in Silicon Valley — and why HR may be to blame for not holding them in check.

He’s charming and gregarious … but quite possibly a psychopath.

As reported in yesterday’s Guardian, a panel of psychologists, social scientists and venture capitalists discussed what they consider to be Silicon Valley’s high proportion of psychopathic CEOs. “Psychopath” doesn’t necessarily describe someone like Norman Bates — in fact, most are non-violent. However, their combination of remorselessness, callousness and lack of empathy — along with an uncanny ability to mask these traits with a veneer of charm and gregariousness — allows them to cause serious (non-physical) damage all the same, the experts said.

In fact, many of society’s most-successful people have traits that resemble psychopathy — including many successful presidents, said panelist Michael Woodworth, a forensic and clinical psychologist who’s studied psychopathic murderers in high-security prisons.

Psychopaths are often successful in start-up environments, said venture capitalist Bryan Stolle. “You have to have a tremendous amount of ego [and] self-deception to embark on a journey … you have to make sacrifices and give up things, including sometimes a marriage, family and friends. And you have to convince other people. So they are mostly very charismatic, charming and make you suspend the disbelief that something can’t be done.”

Psychopathic executives are classic manipulators of people, said social scientist Jeff Hancock. But when they don’t get their own way or things suddenly go wrong, their “mask of sanity falls off,” he said.

Often, HR tends to protect a psychopathic CEO, said Stolle, which only furthers the damage. “Because they are the founders and leaders, they tend to get protected by HR … this reinforces the behavior,” he said.

Company investors are also often at fault, because they’re willing to overlook bad behavior in order to protect their stake in the organization, said Stolle.

Having a psychopath in charge can hurt employee retention, said Hancock, citing FBI research which found that departments managed by psychopaths have lower productivity and morale (go figure!).

Hancock has developed software that’s designed to analyze written language for cues associated with psychopathy. Psychopaths tend to write in a way that’s “disfluent” and hard to understand, he said, and — because they’re more interested in themselves than others — tend to refer to other people a lot less than non-psychopaths.

Text-based communications are a good way to detect psychopaths, said Hancock. “Text-based communications improve your chances of not being manipulated, as they are verbally not very skilled. You can smoke them out in an online context.”

Retail Industry is Firing — And Hiring

The transition from brick-and-mortar physical locations to digital is continuing to shake the retail industry, as the February jobs report from Challenger, Gray & Christmas shows.

Overall, the month was a good one for employment, with the total number of layoff announcements (36,957) down 19 percent from January (45,934). Announced job cuts for the first two months of 2017 are down 40 percent from the same period last year, the global outplacement firm notes, while the total number of new-hire announcements for January and February is at an all-time high of 162, 266 workers.

Retail-industry disruptor Amazon announced plans in January to hire 100,000 workers.

Retail workers aren’t sharing in the good news, however: The retail industry leads all sectors in job cuts, with 11,889 announced in February and a total of 34,380 job cuts for the first two months of this year. The workforce at J.C. Penney was among the hardest hit, with the company announcing plans last month to close 140 stores and eliminate 5,500 jobs. The number of slashed positions in retail is 580 percent more than the 5,930 cuts announced last month by the energy sector, the next-highest industry.

“Retailers are experiencing a tremendous transformation from the traditional business model,” says Andrew Challenger, vice president of Challenger, Gray & Christmas. “The cost of digitizing merchandise, moving sales to online, and downsizing physical stores will likely take a toll on employees in this field.”

Of course, not all retailers are performing poorly — just look at Amazon, which announced plans to hire 100,000 workers in January. Indeed, the retail industry seems to be hiring nearly as many workers as it’s letting go, with 33,000 hiring plans announced through February, Challenger notes. Much of these new positions are in technology and customer service, as retail chains beef up their e-commerce platforms to better compete with the likes of Amazon.

“The new retail employee will need considerable tech abilities, in addition to the necessary customer service experience,” says Andrew Challenger.

Meanwhile, higher energy prices and an industry-friendly presidential administration (new Environmental Protection Agency Secretary Scott Pruitt has said carbon dioxide is not a primary contributor to global warming, for example) have led to a sharp decrease in job-cut announcements by the energy industry compared to last year. Energy companies have announced 5,930 job cuts so far this year, compared to 45,154 job cuts during the same period in 2016.

Below is additional information from Challenger’s latest jobs report:

Top Five Industries for Job Cuts

2017   2016
Retail 34,380 23,342
Energy 5,930 45,154
Health Care/Products 4,181 1,699
Computer 4,177 16,006
Automotive 4,008 4,038
MONTH BY MONTH TOTALS
  2017 2016
January 45,934 75,114
February  36,957 61,599
March   44,207
April   64,141
May   30,157
June   38,536
July   45,346
August   32,188
September   44,324
October   30,740
November   26,936
December   33,627
TOTAL  82,891 526,915
Some reductions are identified by employers as workers who will take early retirement offers or other special considerations to leave the company.
LAYOFF LOCATION
Year To Date
Ohio   17,710
Texas   13,124
California   10,395
Pennsylvania   4,632
Michigan   4,151

Source: Challenger, Gray & Christmas

DOL Wants to Delay Fiduciary Rule

The U.S. Dept. of Labor is seeking to delay the implementation of a rule that is intended to protect the best interests of retirement savers but has drawn the ire of many in the financial-services sector. The fiduciary rule, which would apply the “fiduciary standard” to all those who provide retirement investment advice in order to prevent conflicts-of-interest (which the Obama administration’s Council of Economic Advisers said costs retirement savers $17 billion a year), was set to go into effect on April 10. The DOL is seeking a 60-day delay of the rule, to June 9. The proposed delay (which is itself a new rule) will have a 15-day public comment period ending on March 17.

President Donald Trump expressed his concerns about the fiduciary rule in a memo issued on Feb. 3, in which he directed the DOL to examine the rule and “determine whether it may adversely affect the ability of Americans to gain access to retirement information and financial advice.” It directed the DOL to propose a new rule “rescinding or revising” the fiduciary rule if it determines that the regulation is likely to harm investors by limiting their access to certain financial products or services and cause an increase in litigation.

The Financial Services Roundtable, a lobbying group, issued a statement praising the delay. “The fiduciary rule will lead to fewer retirement savings choices for many Americans and we are encouraged the DOL is proposing to delay the rule.”

However, Lisa Donner, executive director of Americans for Financial Reform, told the Los Angeles Times that the delay is merely a preamble to the Trump administration’s plan to ultimately scrap the rule.

“Blocking the common-sense, long-overdue rule, which requires retirement advisors to act in their customers’ best interests, would allow Wall Street to continue to grab more than $17 billion a year —  tens of millions of dollars a day —  from retiree savings,” she said. “This decision is not justified by the facts, and it is a betrayal of the public interest.”

Uber’s Toxic Workplace Culture

A company director shouting a homophobic slur at a subordinate during a meeting. A manager groping female co-workers’ breasts during a company retreat. A manager threatening to beat an underperforming employee’s head in with a baseball bat. All of these incidents — and more — are described in a fascinating front-page story on Uber’s workplace culture by New York Times reporter Mike Isaac, who based his story on interviews with 30 current and former employees of the ride-hailing service and reviews of internal emails, chat logs and tape-recorded meetings.

As you’ve probably heard, Uber found itself thrust into the spotlight after former employee Susan Fowler published a blog post last Sunday about her experiences working for the company. Fowler, an engineer, said she and other women were sexually harassed and discriminated against by her manager and little to nothing was done about it, even when she reported it to HR, because the manager was a “high performer.” (Fowler’s descriptions of her interactions with Uber’s HR department are particularly damning: For example, when she noted to an HR representative how few women were in her engineering department, the rep allegedly told her that she shouldn’t be surprised by the ratio of women in engineering because people of certain genders and ethnic backgrounds were better suited for some jobs than others.)

Fowler and other current and former Uber employees told Isaac that HR would excuse poor behavior by their bosses because the managers in question were top performers who benefited the health of the company. The company’s culture — set by Uber CEO and co-founder Travis Kalanick — emphasizes getting ahead at all costs, the sources told Isaac, even if it means undermining co-workers and supervisors. One group in particular that was shielded from accountability was “the A-Team,” the sources said, a group of executives close to Kalanick.

Since Fowler went public with her accusations, Kalanick has brought in former Attorney General Eric Holder and board member Arianna Huffington to conduct an independent investigation of the issues Fowler raised. He said the company would release a full diversity report shortly and that 15.1 percent of the engineering, product management and scientist roles at Uber were held by women and that that number “has not changed substantively in the last year.”

In a statement to the Times, Uber CHRO Liane Hornsey said “We are totally committed to healing wounds of the past and building a better workplace culture for everyone.”

Hornsey, who joined Uber in January (its former HR chief, Rene Atwood, left in July to join Twitter) and who will assist with the investigation, spent nine years as Google’s vice president of global people operations. Hopefully she’ll be able to put her experience and expertise to good use at a company that appears to sorely need it.

A Bad Day for Puzder and Unions

Andrew Puzder (photo by Gage Skidmore)

He’s outta there — Andrew Puzder is, at any rate, having withdrawn his name from consideration as President Donald Trump’s Secretary of Labor. Trump introduced today Alexander Acosta, dean of Florida International University College of Law and a former member of the National Labor Relations Board, as his new DOL nominee. Puzder’s nomination had been plagued by controversy from the start. Current and former employees of CKE Restaurants, where Puzder serves as CEO, accused him of vastly underpaying workers and denying them benefits at the company’s Hardee’s and Carl’s Jr. fast-food chains and musing aloud that he wished he could replace them with robots. Matters were not helped by an investigation by Capital & Main that uncovered a widespread pattern of abuse, harassment and discrimination of and against CKE employees at the chain-store and corporate level. Six cases were filed against the company by the Equal Employment Opportunity Commission, “far more than any other large burger chain on a per-revenue basis, with the exception of Sonic Drive-In,” the website reported.

Puzder enjoyed strong support from many in the business community, as our story in December reported. However, Democrats were strongly against him. “Puzder’s disdain for the American worker, the very people he would be responsible for protecting, is second to none,” Senate Minority Leader Chuck Schumer, D.-N.Y., told CNN.

What really appeared to sink Puzder’s nomination, however, was the revelation that he’d employed an undocumented immigrant as a housekeeper and the allegations of brutal domestic abuse against his ex-wife (although she’s since denied that the abuse took place) that culminated in the release on Politico of an Oprah Winfrey episode that featured the ex-wife, Lisa Fierstein, in disguise describing details of the abuse she’d said she’d suffered. A number of Republican Senators informed the White House that they would no longer support Puzder, who announced his withdrawal yesterday afternoon.

Labor advocates cheered Puzder’s withdrawal, but they’re probably not happy about the closely-watched vote that took place yesterday at Boeing’s South Carolina plant, in which workers voted overwhelmingly against joining the International Association of Machinists union.  More than 2,000 of the 3,000 workers eligible to vote voted no, while only 700 voted in favor, CNN reports. Had the workers voted in favor of the union, it would have marked a big change in South Carolina, a right-to-work state with the lowest union membership rate of any state in the country, at 1.6 percent, according to the Bureau of Labor Statistics. The union had previously called for a vote at the plant in 2015 but canceled it amid doubts about worker support. Now it will have to wait for a year before calling for another election, per National Labor Relations Board rules.

Boeing had argued strongly against unionization, with management saying the union would call for costly strikes and was not needed. However, the IAM had argued during its campaign that workers at the South Carolina plant were paid wages that are 36 percent lower than their counterparts at Boeing’s heavily unionized plants in Washington state.

Boeing management expressed victory. “We will continue to move forward as one team,” Joan Robinson-Berry, vice president in charge of Boeing South Carolina, said in a statement.

In his own statement, IAM lead organizer Mike Evans said: “We’re disappointed the workers at Boeing South Carolina will not yet have the opportunity to see all the benefits that come with union representation.”

Facebook Boosts Bereavement Leave

In 2015, SurveyMonkey CEO Dave Goldberg died unexpectedly at the age of 47. On Tuesday, his wife — Facebook Chief Operating Officer Sheryl Sandberg — announced that the social networking giant will now give employees up to 20 days of paid bereavement leave in the event of an immediate family member’s death and up to 10 days for the death of an extended family member.

“People should be able both to work and be there for their families. No one should face this trade-off,” Sandberg wrote in a Facebook post announcing the new policy. “Amid the nightmare of Dave’s death when my kids needed me more than ever, I was grateful every day to work for a company that provides bereavement leave and flexibility. I needed both to start my recovery.”

Sandberg also announced that the company will offer up to six weeks of paid leave to care for a sick relative and three paid days for employees to care for a relative with a short-term illness, such as  a child with the flu.

Facebook’s generous bereavement policy puts it far ahead of most — if not all — U.S. employers. Although 80 percent of U.S. companies have bereavement policies, they offer an average of only four paid days of leave for the death of an immediate family member, according to the Society for Human Resource Management’s 2016 Paid Leave in the Workplace survey. There is no federal law requiring employers to give workers paid time off to grieve for the death of a loved one.

Obviously, most companies don’t have the financial resources of Facebook (which is also locked in an arms race with other well-funded Silicon Valley companies for tech talent) and probably won’t be emulating it anytime soon, if ever. But I hope that Sandberg’s announcement gets HR and other company leaders to seriously think about the support they currently offer to grieving employees and consider giving more. Here at HRE, we have several colleagues who’ve suffered the loss of a close family member within the last year and a half.  No amount of time off can make up for such a loss, but simply giving employees the support and the time necessary for attending to the so-called “business of death” — making funeral arrangements, resolving legal and financial issues, comforting other family members — means a lot.  And that often requires more than three or four days.

 

Labor Market Continues to Tighten

The Bureau of Labor Statistics’ latest official employment report shows that businesses added 227,000 workers last month and the unemployment rate rose slightly to 4.8 percent, while the January national employment report from ADP’s Research Institute shows that private-sector employers adding 246, 000 jobs in January. The BLS report beat estimates by economists surveyed prior to its release by Reuters, who’d predicted the report would show a gain of 175,000 jobs.

The BLS and ADP employment reports are based on different methodologies, as CNBC’s Mark Fahey has noted: ADP counts all employees who are listed as active on an employer’s payroll, while the BLS surveys companies to tally employees who are actually paid. The reports differ by 40,000 about half the time, he wrote.

“The U.S. labor market is hitting on all cylinders and we saw small and mid-sized businesses perform exceptionally well,” said ADP Vice President Ahu Yildirmarz, the co-head of the payroll-processing giant’s Research Institute.

That’s not to say everything’s rosy on the employment front: Yesterday, outplacement consultancy Challenger, Gray & Christmas released its monthly jobs-cut report, which shows U.S. companies made nearly 46,000 job cuts in January — up 37 percent from December, when layoffs totaled 33,627.  However, while last month’s tally was the highest since last April (64,141), it’s a year-over-year improvement from January 2016, when employers announced 75,114 job cuts. This January’s job reductions were concentrated  in retail, which accounted for 49 percent of the job cuts, while retail and energy accounted for the much of the cuts in January 2016. Macy’s led the pack last month, announcing plans to close 68 of its stores and reduce its workforce by 10,000 workers.

“Overall, it was a solid holiday shopping season, but several retailers, including Macy’s, were unable to capitalize on stronger consumer confidence and spending,” said John A. Challenger, CEO of Challenger, Gray & Christmas.

ADP’s report, based on payroll data compiled from its 411,000 U.S. clients, shows that mid-sized businesses with between 50 and 499 employees added the most jobs in January (102,000). Large companies with 500 or more employees added 83,000 jobs, while small businesses (those with between 1 and 49 employees) added 62,000 positions.

“2017 got off to a strong start in the job market,” said Mark Zandi, chief economist of Moody’s Analytics, which helps ADP produce the report. “Job growth is solid across most industries and company sizes. Even the energy sector is adding to payrolls again.”

The BLS report finds that January’s robust employment numbers did not lead to increases in workers’ pay, with a year over year increase of 2.5 percent, compared to 2.9 percent in December.  A smaller-scale study,  Glassdoor’s Local Pay Reports — which monitor salaries for approximately 60 job titles across multiple industries — finds that the annual median base pay in the United States grew by 3.2 percent year over year in January to $51,360.

The positive sentiment on jobs is reflected in Gallup’s latest Job Creation Index, which measures U.S. workers’ perceptions of their workplace’s job climate. The JCP’s January score of +34 is the highest in its nine-year history, Gallup reports. That score compares to JCIs of -5 in January and April of 2009, when the country was in the depths of the Great Recession. Gallup bases the JCI on a daily, randomized sample of employed U.S. adults’ perceptions of their workplace’s hiring-and-firing activity.

Discriminatory Dress Codes in the U.K.

Over on the other side of the Atlantic, a storm is brewing over the unequal treatment of women in the workplace. The United Kingdom has a law in place — the Equality Act of 2010 –intended to prevent such treatment. However, that apparently hasn’t stopped U.K. employers from ordering their female employees to wear high heels, dye their hair blonde and dress themselves in revealing outfits. That’s according to a recent report by the British Parliament, undertaken in the wake of a petition signed by more than 150,000 people calling for a law that would ban organizations from requiring women to wear heels at work. The parliamentary investigators received complaints from hundreds of U.K. women who said they were subject to sexist dress codes by their employers.

As reported in yesterday’s New York Times, Nicola Thorp started the petition after she was sent home without pay from her job as a temporary receptionist for refusing to comply with an order that she get herself a pair of shoes with heels that were at least two inches high. Turns out that Portico, the receptionist-services firm that formerly employed Thorp, had quite an extensive employee dress code that covered just about every aspect of a woman’s appearance, including hair (“regularly maintained hair colour — if individual colours hair — with no visible roots”), makeup (“makeup worn at all times and regularly reapplied … “) and footwear (“Heel height normally a minimum of 2 inches and maximum of 4 inches, unless otherwise agreed by the company”). The code even suggested the palette of nail polishes that was acceptable. Portico said it changed its policy after Thorp raised the issue, the Times reports.

Thorp told the Times that part of the reason she started her protest was concern for the health effects of wearing high heels throughout the workday: “The company expected me to do a nine-hour shift on my feet escorting clients to meeting rooms. I told them that I just wouldn’t be able to do that in heels.”

Thorp is hardly alone in her concern about the physical effects from being forced to wear high heels all day: “We heard from hundreds of women who told us about the pain and long-term damage caused by the wearing of high heels for long periods in the workplace, as well as from women who had been required to dye their hair blonde, to wear revealing outfits and to constantly reapply makeup,” the report said. It cited longstanding medical evidence showing that women who wear high heels for long periods of time can suffer physical damage, including stress fractures.

U.K. lawmakers expressed concern that the Equality Act has not been effective in preventing employers from applying sexist dress codes. The report calls for “urgent action” by the government, including increased financial penalties for employers that break the law. However, Thorp said she wasn’t satisfied, telling The Guardian she was “absolutely chuffed to bits” that the report’s recommendations didn’t go further.

“The petition took off and I was very pleased to see the debate over heels grow to one about clothes, and continue moving on to other aspects of how women are treated in a work environment,” she told the paper. “We now need to see the government take these recommendations on board. The law should not just be changed but enforced.”

Under current U.K. law, instructing women to wear high heels at work “isn’t necessarily sex discrimination, ” Julia Wilson, an employment lawyer at Baker McKenzie, told British newspaper The Independent. “If [members of Parliament] want clear rules and fines for companies in relation to dress code practices, that is likely to require a change in the law.”

EEOC Releases Stats on LGBT Bias

The U.S. Equal Employment Opportunity Commission received 91,503 charges of workplace discrimination in in fiscal year 2016 — the second year in a row that the number of charges has increased, the agency reports.  The EEOC says it resolved 97,443 charges of discrimination and secured more than $482 million for victims of discrimination through voluntary resolutions and litigation last year.

That’s according to the EEOC’s just-released annual summary of its enforcement and litigation data for the previous fiscal year, which this year — for the first time ever — includes detailed information about workplace discrimination charges filed by LGBT employees. The agency reports that it resolved 1,650  charges and recovered $4.4 million for LGBT individuals who filed sex discrimination charges with it during fiscal year 2016.  The number of such charges filed by members of the LGBT community has steadily risen since the EEOC began collecting this information in 2013, with 4,000 charges filed between then and 2016.

The agency has been a strong advocate of workplace rights for LGBT employees, arguing that the protections afforded workers under Title VII of the Civil Rights Act extend to sexual orientation. In 2015, it ruled in favor of David Baldwin, a former Federal Aviation Administration employee who charged the FAA with discriminating against him because he is gay. In that case, the EEOC concluded that workplace discrimination on the basis of sexual orientation  is indeed “sex-based” discrimination and therefore falls under the protection of Title VII.

It’s filed supporting briefs in a number of federal lawsuits by members of the LGBT community against their employers, including that of Kimberly Hively. Hively, a former adjunct professor at Ivy Tech Community College in Indiana, claims the college refused to allow her to interview for a full-time position or extend her contract because she is a lesbian. In late November the 7th U.S. Circuit Court of Appeals heard arguments in her case and is expected to issue a ruling later this year. According to reports, the 7th Circuit judges expressed sympathy toward the arguments put forth by Hively’s legal team. Should the court rule in her favor, it would be the first U.S. appellate court to expand Title VII’s protections to LGBT individuals.