All posts by Andrew McIlvaine

A Costly Skills Gap

How much does it cost the average company when open job positions remain unfilled for 12 weeks or longer? Almost $1 million a year, according to a pair of CareerBuilder surveys released today. The surveys, which were conducted for CareerBuilder by Harris Poll late last year and from Feb. 16 to March 9 of this year, found that the average cost HR managers say they incur for having extended job vacancies is more than $800,000 annually. Nearly 60 percent of the employers surveyed report that they have job openings that stay vacant for 12 weeks or longer.

We’re not just talking those hard-to-fill computer science jobs, either. “The gap between the number of jobs posted each month and the number of people hired is growing larger as employers struggle to find candidates to fill positions at all levels within their organizations,” says CareerBuilder CEO Matt Ferguson. “There’s a significant supply and demand imbalance in the marketplace, and it’s becoming nearly a million-dollar problem for companies.”

Indeed, a supply imbalance appears to exist for a variety of occupations, including truck drivers, marketing managers, web developers, industrial engineers, sales managers, HR managers and information security analysts, CareerBuilder finds.

Two in three employers (67 percent) say they’re concerned about the skills gap, and more than half (55 percent) say these extended job vacancies are hurting their organizations. Forty-five percent say they lead to productivity loss, while 40 percent say they cause higher employee turnover, 39 percent cite lower morale, 37 percent mention lower quality work and 29 percent say the vacancies leave them unable to grow their business.

Not everyone agrees the “skills shortage” is real; some economists (and our HREOnline Talent Management columnist and Wharton School professor Peter Cappelli) argue that the real culprit is a reluctance by many employers to pay for the sort of workplace training programs that were commonly offered in the past. Nevertheless, plenty of other surveys also show that employers in a range of industries are contending with hard-to-fill positions, including the manufacturing industry. In fact, given President Trump’s stated desire to “make America great again” by, in part, bringing manufacturing jobs back to this country from overseas by imposing tariffs on foreign-made goods, some manufacturers are trying innovative ways to “grow” their own talent by reaching out to high schools and community colleges to ensure they’ll have talent on hand and won’t be caught short.

Report: HR is ‘Behind the Curve’

New research from the Hackett Group finds that many HR departments are lagging when it comes to helping their organizations deal with talent shortages in key areas, and — due to a lack of resources — sufficient progress likely won’t be made anytime soon.

The report, The CHRO Agenda: An Urgent Need to Close Large Gaps in Talent and Technology Capabilities (registration required), is based on survey results from executives at 180 large U.S. and foreign companies, most with annual revenue of $1 billion or more. It finds that HR at many organizations lacks the ability to fully support key enterprise goals such as adapting talent-management strategies and processes to deal with changing business needs, address talent shortages in critical areas, manage change more effectively and develop agile executives fully capable of leading in a volatile business environment.

HR leaders at these companies don’t suffer from a lack of ambition: The report finds that they’re planning to address issues such as talent-related change and strengthening their organizations’ HR tech and information capabilities and organizational structure and processes. However, their departments are held back by limited resources, with the number of full-time equivalent HR employees expected to decline by 1.4 percent this year on top of a decline of 1.3 percent last year and budgets that are projected to decrease by an average of 1.6 percent, compared to a reduction of 0.3 percent in 2016.

“The consistent finding here is that most HR organizations are simply too busy fighting fires to get out in front on strategic issues,” says Harry Osle, Hackett’s global HR advisory leader. “In many cases, they are in reactive mode, with too much on their plates and an inability to say no to work that does not allow HR to become more strategic.”

HR must change this mindset if it’s ever going to deliver strategic value, he says. “To build a true leadership position within the organization, it is essential that HR find ways to more effectively manage and prioritize its service portfolio, adopt proactive demand management techniques from IT and make headway on transformation and improvement in key talent areas.”

Hackett finds that HR organizations are planning to “dramatically increase” their mainstream adoption efforts in several digital technology areas, including cloud applications and Software-as-a-Service, social media and collaboration technologies and advanced analytics.

Avoid Hiring the ‘Takers’

Are you a giver, a matcher or a taker? I came across a fascinating TED Talk the other day by Adam Grant, a management professor at Penn’s Wharton School and the author of two bestselling books, Originals and Give and Take. The latter book was about how helping others can fuel our own success, and was the focus of Grant’s talk, “Are You a Giver or a Taker?” which he delivered late last year at IBM.  There are three basic types of people in every workplace, he said: givers, takers and matchers.

Grant surveyed more than 30,000 people across industries and throughout the world, and found that most fall somewhere in the middle between givers and takers — he calls them “matchers.”

“If you’re a matcher, you try and keep an even balance of give and take: quid pro quo — ‘I’ll do something for you if you do something for me,'” he said. “And that seems like a safe way to live your life. But is it the most effective and productive way to live your life?”

The answer, said Grant, is ” a very definitive … maybe.”

Interestingly enough, although he found that givers display attributes that would seem to make them ideal employees, in the course of his research Grant found that they actually tended to be the worst performers in the various jobs that he studied. Givers tended to get the least work done, sell the least amount of products and, in medical schools, the students with the lowest grades tended to be the ones who most agreed with statements like “I love helping others.”

The givers are so giving, said Grant, that they tend to neglect their own work.

So, should you avoid hiring givers? Absolutely not, he said. In fact, givers tend to bring tremendous advantages to the organization as a whole, and HR and recruiting leaders should be screening out the takers instead.

“Givers make their organizations better,” said Grant. A huge body of evidence demonstrates that the more often people help others, share their knowledge and serve as mentors, the better organizations do on every success metric, from customer satisfaction to higher profits, he said. Givers spend a lot of time helping others but often end up suffering along the way, from a career perspective, said Grant. Interestingly enough, while many givers are bottom-dwellers in terms of job performance, they’re also disproportionately represented among top performers in terms of productivity, sales results and grades. Organizations should build cultures where givers actually get to succeed, he said.

Takers, by contrast, often rise rapidly within organizations — but they tend to fall rapidly, too, said Grant. Because takers tend to be “kiss-up, kick-down” types — currying favor with the higher-ups while dissing the people below them — they inevitably inspire revenge from the matchers, who make up the majority of most organizations, he said.

Matchers are positively influenced by the behavior of givers, however, and by building a culture in which asking for help from others is encouraged, organizations will not only inspire matchers to emulate givers but also make it easier for the givers themselves to thrive, said Grant. Fostering such an environment will encourage the givers themselves to seek assistance rather than risk burnout by helping everyone else to the detriment of their own well-being, he said.

Meanwhile, avoid the damage that even one taker on a team can wreak by filtering them out during the hiring process, said Grant.

“My favorite way to catch these people in the interview process is to ask them the question, ‘Can you give me the name of four people whose careers you have fundamentally improved?'” he said. “The takers will give you four names, and they will all be more influential than them, because takers are great at kissing up and then kicking down. Givers are more likely to name people who are below them in a hierarchy, who don’t have as much power, who can do them no good. And let’s face it, you all know you can learn a lot about character by watching how someone treats their restaurant server or their Uber driver.”

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.