All posts by David Shadovitz

Lipnic Outlines EEOC Priorities

I’m sure many of you are wondering what the Equal Employment Opportunity Commission might look like under the Trump administration. Well, yesterday, we were given a bit of a glimpse, when newly named Acting Chair of the EEOC Victoria Lipnic offered her first public comments during a discussion and live webinar that took place in the Chicago offices of Seyfarth Shaw. (Lipnic served as counsel for the law firm before arriving at the Commission in 2010 and was named Acting Chair of the agency by President Trump on Jan. 25.)

Seyfarth Shaw Partner Gerald Maatman, author of the recently released 13th Annual Workplace Class Action Litigation Report, joined her for the discussion.

As reported in an article appearing on the Corporate Counsel website, Lipnic suggested that the agency will “focus on cases involving age discrimination and equal pay while exploring ways to foster job growth in companies.”

“Lipnic said she believes more will remain the same than will change,” according to the Corporate Counsel piece. “ ‘We are an enforcement agency … and the EEOC is committed to its core values and mission, to enforce civil rights laws in the workplace.’ ”

She also said she wanted to “re-evaluate the costs and benefits of the modified EEO-1 report, a detailed compliance survey that employers must fill out,” the story reported.

Speaking to that point, Randy Coffey, a partner with Fisher Phillips in Kansas City, commented in a piece posted on HREOnline earlier this month that “Lipnic opposed additions to the current EEO-1 reporting requirements relating to collection of employee pay data, due to the burden of compliance for employers and the lack of usefulness of this type of generalized data.”

I suspect we’ll see, in fairly short order, how this ultimately translates into policy changes.

What to Expect from Gen Zers

As 2016 winds down, I can only guess at the number of surveys I’ve seen that are connected in some fashion to the subject of millennials. Let’s just say, for argument’s sake, the figure has to be in the hundreds.

thinkstockphotos-605751628Well, could we soon be in store for something similar when it comes to Generation Z?

For now, I’ll just leave that question hanging. But we’ve already seen a fair share of Gen Z predictions and reports over past 12 months, with the latest coming from 8×8 Inc., a provider of SaaS-based enterprise communication tools.

That study, titled “Rogue One: How Generation Z is Going to Bring Balance to the (Work)Force,” surveyed 1,000 full- and part-time Gen Z, millennial and Gen X workers, and found that the work preferences of Gen Zers may, in many ways, align more closely with Gen Xers than millennials. More precisely, the findings suggest that Gen Zers are less tech-dependent than millennials and more similar to Gen X when it comes to adopting high-tech devices and apps in their personal lives. Millennials, the study revealed, are more likely to use wearables (39 percent), connected appliances (35 percent) and virtual reality (24 percent) than Gen Z or Gen X.

What’s more, Gen Zers (200 of the respondents were classified as such) value face-to-face communication more than any other generation, with an emphasis on effectiveness over convenience—a major shift from how millennials prefer to work.

As 8×8 Inc. CMO Enzo Signore explains …

“We found that while millennials have encouraged the workplace to become more technologically advanced and remote-work friendly, Gen Z will bring more balance to the workplace through face-to-face communication and tools that will help them communicate more effectively. We believe this will start to have an impact over the next 12 months.”

That conclusion certainly appears to run somewhat counter to the images of teenagers who can’t seem to take their eyes off of their smartphones.

Most of us, of course, are just beginning to ponder the question: What can we expect from this next wave of workers? So to deepen my own understanding (and hopefully yours as well), I figured who better to ask than Bruce Tulgan, founder of consultancy RainmakerThinking Inc. and an expert on generational diversity issues.

Tulgan says he prefers to define Generation Z as those born between 1990 and 2000 and in the “second wave” of the great millennial cohort. As he explains …

“Gen Zers were small children on 9/11/01. They graduated from high school and [maybe] went through college or university during the deepest and most protracted global recession since the Great Depression. They are entering the workforce in a ‘new normal’ of permanently constrained resources, increased requirements placed on workers and fewer promised rewards for nearly everyone.”

As a whole, he adds, millennials embody a continuation—and Gen Z, perhaps the culmination—of the larger historical forces driving the transformation in the workplace and the workforce since the early ’90s: globalization, constantly advancing technology, the painfully slow death of the myth of job security, the accelerating pace of everything and more.

In many ways, Tulgan says, Gen Zers represent a whole new breed of worker. “Advances in information technology have made them the first generation of true ‘digital natives,’ ” he explains. “They learned to think, learn and communicate in an environment defined by wireless Internet ubiquity, wholesale technology integration, infinite content and immediacy. They are totally plugged in—through social media, search engines and instant messaging—to each other as well as anyone and everyone, and an infinite array of answers to any question at any time.

This second-wave millennials, Gen Zers, will usher in the final stages of the great generational shift.

So what can we expect from this second wave when it comes to institutions?

Tuglan predicts that Gen Zers will never see established institutions as their anchors of success and security. Instead, he says, they will be most likely to turn to their most reliable anchors growing up: hand-held super-computers, proximately powerful grown-ups, and the ability to construct a unique identity—a personal brand—that they can wield in public (mostly on social media) and revel in privately.

The latest study’s findings about Gen Zers being more “balanced” than, say, millennials, “certainly [underscores] the case that interpersonal relationships and in-person communication play very important role[s] for [them],” says Tulgan.

Guess we’ll begin to find out soon enough if these predictions come to pass in today’s (and tomorrow’s) workplace.

High Anxiety for Plan Sponsors

It’s still unclear whether the incoming Trump administration will take aim at the Department of Labor’s new fiduciary rules, which are slated to go into effect on April 10.  As Joseph Urwitz, a partner in McDermott Will & Emery’s Boston office, told us late last month: “While it’s not possible to predict the future, the new Congress and president may overhaul, eliminate or at the very least delay implementation of the fiduciary rule. Time will tell whether or not any of these moves will come to pass.”

thinkstockphotos-468426388But what we do know is that litigation continues to be very much on the minds of plan sponsors.

This fact received further support earlier this week, when Cerulli Associates, a global research and consulting firm, released the findings of a study—titled “The Cerulli Report: U.S. Retirement Markets 2016”—that found more than half (57 percent) of more than 800 401(k) plan sponsors questioned are concerned about potential litigation.

While much of the litigation has targeted large plans with deeper pockets, the research found that smaller plan sponsors are also paying attention to today’s litigious environment.  Nearly one-quarter of small plan sponsors—those less than $100 million in 401(k) assets—describe themselves as “very concerned” about potential litigation.

As most of you know (and the Cerulli report points out), fee-related lawsuits, in particular, have been something of a theme in 2016, putting added pressure on plan sponsors to find ways to reduce fees. “Plan-sponsor-survey results show that the top two reasons for which 401(k) plan sponsors choose to offer passive (indexed) options on the plan menu are because of ‘an advisor or consultant recommendation’ or because they ‘believe cost is the most important factor,’ ” according to the Cerulli press release. But there is also no denying that lowering the risk of litigation factors into the decision making as well.

The Cerulli report suggests that the rash of litigation that has occurred in recent times is stifling innovation. Jessica Sclafani, associate director at Cerulli, notes that “plan sponsors feel they have little to gain by appearing ‘different’ from their peers due to the risk of being sued. This mindset can make plan sponsors reluctant to adopt new products … .”

The Zenefits Saga Continues

It appears Zenefits woes are continuing—and if the predictions of one consultant are correct, they aren’t likely to end anytime soon.

Yesterday, Washington State Insurance Commissioner Mike Kreidler ordered Zenefits to “cease free distribution of its employee benefits software, noting the tactic violates Washington state insurance law against inducements,” his office’s statement reads.zenefitslogo

Washington is said to be the first state to take action against the company for violating inducement laws. Under an agreement with Kreidler, Zenefits can challenge the order within 90 days.

The state took issue with the fact that Zenefits required clients to designate it as its broker of record and then collected insurance commissions from the products it sold in order for them to access its free software.

“The inducement law in Washington is clear,” Kreidler said. “Everyone has to play by the same rules.”

Following the announcement, Zenefits’ General Counsel Josh Stein posted the following on the company’s website

“Today, Zenefits has reached a compromise agreement with the Washington Office of the Insurance Commissioner (OIC) on how Zenefits will price its services in Washington State.  Beginning January 1, at the order of OIC, Zenefits may no longer provide free software services in Washington. As a result, Zenefits will charge all Washington state customers $5 per employee per month for our core HR product.”

Stein went on to say …

“The Washington viewpoint is a decidedly minority view. Since its founding, Zenefits has had conversations with regulators about our business model, which includes some free HR apps. Many states have looked into the issue and concluded that free software from Zenefits is not a problem; in fact, it’s in the interest of consumers. Only one state other than Washington has disagreed.  Utah’s department of insurance tried to force Zenefits to raise prices for consumers, and Utah’s state legislature and governor quickly took action, passing a bill to clarify that its rebating statute should not be interpreted to prohibit innovative new business models that deliver value to consumers.”

Earlier today, I spoke with Rhonda Marcucci, partner and consultant in Gruppo Marcucci, a Chicago-based HR and benefits technology consulting firm.

Zenefits has created its own regulatory scrutiny reputation for the rest of its life, Marcucci told me. In this case, she said, “I don’t think it is driven so much by the brokers but by the insurance departments who are extremely angry about the licensing piece—so that now invites more scrutiny in other places. Brokers may have brought it to [the attention of insurance regulators], but the way I look at this, Zenefits is a regulatory penalty box—and they will be, I think, forever.”

Marcucci noted that every state, except for California, has some kind of no rebating or inducement laws for transactions. But that doesn’t necessarily mean that every employer is following the law.

At the end of day, she said, states typically base their decision on enforcing these laws by “who screams the loudest.”

As far as Zenefits is concerned, Marcucci said, it’s realistic to expect that other states might follow Washington’s lead, especially those states with difficult regulatory insurance environments such as New York.

Thriving in a Data-Driven World

It’s impossible to have a conversation about recruiting these days without talking about the role of data.

Magnifying glass and documents with analytics data lying on tablSo, I suppose it’s no surprise then to hear John Sullivan, author and professor at San Francisco State University, focus his opening keynote presentation at Recruiting Trends 2016, at the Hilton in Austin, Texas, on the role of data in the hiring decision-making process. (Recruiting Trends, which was acquired by LRP Conferences last November, is being held this week in conjunction with the Talent Acquisition Tech Conference.)

During his keynote titled “Forget the Hype: Data-Based Recruiting Reveals What Actually Works,” Sullivan told attendees that employers need to be much more data-driven.

If you ask CEOs what the biggest challenge is that they’re facing, human capital turns out to be No. 1, Sullivan said. “What’s not so good is that we’ve been a challenge for four straight years,” he continued. “And if you’ve been a challenge for four straight years, it means something needs to change.”

These same CEOs also said they believe recruiting the right talent has a huge impact on business success, Sullivan added.

So, if the impact is that significant, he said, that begs the question, “How come [recruiters] have no money?”

“I would argue it’s because we don’t make a very good business case,” Sullivan said. “We say we hired 20 people, but we don’t say those people brought in $20 million.”

In a fast-changing world, he explained, data tells you what works and what doesn’t work. But you need to be looking at the right data, he added. Google at one time looked at a candidate’s GPA, but the research found that grades made no difference in the quality of talent it hired—so it stopped paying attention to that metric.

“Stop having opinions about what’s the best source for hiring people,” he said. “Sure, you can have opinions, but if you want to influence hiring managers, you’re going to want to have facts that back your recommendations up.”

Sullivan also pointed out that CEOs care about quality of hire, and you should, too.

Most employers pay close attention to metrics such as the cost of hire, he said, but they should be focusing their attention instead on measuring the impact of their hiring decisions.

When you hire Cleveland Cavaliers basketball star Lebron James, what you should be measuring is the impact he’s going to be having on your organization over the next 10 years, he said.

In other words, employers need to be thinking about the big picture.

Sullivan also pointed out that most companies don’t measure the failure rates of the people they hire, but should. He used the example of birth control, where there’s a 9-percent failure rate. If birth control doesn’t work, he joked, you might end up with 20 years of misery. Well, the same could be said of hiring. If you get it wrong, that bad hire could be in your organization forever.

What’s Driving Engagement

Engagement continues to be a hot topic. So I guess it’s no surprise to find at least two vendors at this year’s HR Tech Conference unveiling research studies on the topic.

thinkstockphotos-460766179For starters, Oracle released its first Global Engagement Study earlier this week.

According to feedback from 5,000 full-time employees at a variety of organizations, 40 percent of the respondents said their employers could do more to leverage technology to better enable them to do their jobs.

Employees as consumers are more plugged into technology than ever—so they expect the same level of accessibility at work that they get in their personal lives, says Gretchen Alarcon, group vice president of HCM product strategy at Oracle.

The research found that the quality of the digital working experience impacts how much employees feel they are empowered to do their job.

As you might expect, the research also revealed leadership can be a huge driver when it comes to engagement.

“One of things we learned is that leadership availability really matters,” says Alarcon. “Do employees have the ability to ask questions? Are they approachable? Do they feel trusted [by their leaders]? All of these can have a direct impact on engagement.”

The study, based on 4,706 interviews conducted earlier this year by Kantar TNS, found that 47 percent of the respondents consider their leaders visible and approachable and 44 percent have confidence in the company’s leadership, suggesting that plenty of room for improvement remains.

Meanwhile, Ultimate Software released the results of its 2016 National Study on Satisfaction at Work survey, a study of 1,000 American workers conducted this summer by The Center for Generational Kinetics. This study found that trust, open communication and development opportunities play an increasingly important role in influencing employee satisfaction and commitment. Indeed, these factors typically had equal or greater importance than compensation or financial motivators.

“What the research showed us was that the No. 1 driver of employee satisfaction is how companies treat their employees,” says Adam Rogers, chief technology officer of Ultimate. (Rogers shared some of the findings in an Ideas & Innovators presentation at the conference earlier today.)

Exactly three-quarters of the employees surveyed said they were more likely to stay with a company longer if their concerns were heard and addressed, and 73 percent said they were more likely feel satisfied with their organization if it were to invest in their development.

Their level of satisfaction especially depended on how they were treated by their direct manager, even more so than how they were treated by the organization’s top leaders.

Often, Rogers notes, companies will devote resources to developing executives, but the research suggests that they might be better served if they focus on developing managers.

Citi’s Search for Innovation

There are plenty of tried and true ways to identify hot new HR technologies for your organization. Of course, you can attend events thinkstockphotos-489083454such as the HR Technology Conference and Expo, where this year more than 400 companies are demonstrating and sharing their solutions. Or you can read HRE, which regularly covers innovative new human resource tools, including its annual Top HR Products Awards.

But as attendees at an HR Tech Conference session titled “The Smarter Worklife Challenge: Transforming Software Selection to Drive Innovation” learned yesterday, HR leaders can also take a less traditional path.

Last fall, New York-based Citi, with the help of PwC, launched its first-ever Smarter Worklife Challenge, a competition aimed at uncovering innovative digital HR solutions, particularly those being developed by smaller entities that might not be on Citi’s radar.

As PwC Global Head of HR Disruptive Technology Bryon Abramowitz explained, Citi cast as wide a net as possible with the goal of identifying eight innovative solutions in eight different HR categories: recruitment, onboarding, real-time feedback and career development, training and mobility, connecting/social, predictive analytics, executive management and undetermined (essentially, anything else that didn’t fall in the other categories).

A total of 231 companies entered the competition by sending in a short three-to-five-minute video that explained the benefits and value of their solution. Judges reviewed the entries and selected 19 they felt deserved to go to the next step, which was to demo their solution at a one-day event held on Feb. 11 in the Tribeca section of Manhattan. All of them were assigned a coach, who helped them prepare their pitch.

“Many of the participants were small vendors,” Jeff Bienstock, global head of HR technology at Citi, pointed out. “But they were very innovative and creative.”

The competition gave these companies the rare opportunity to make their pitch in front of a company the size of Citi. Teams that made the final cut shared a cash award of up to $50,000, but as Abramowitz noted, the real prize was a contract with Citi, along with the feedback and experience they received as a result of going through the process.

To arrive at the final eight, Citi live-streamed the demos to potential users, who, along with those present in the room, rated them in real time.

Each winning vendor was also given an internal executive sponsor to help ensure funding and provide direction.

According to a press release issued by Citi, the Smarter Worklife Challenge award recipients included: Rocketrip (an employee-rewards solution), Infolio (a digital-workplace solution), Cooleaf (an employee-connectivity solution), Agolo (a business-intelligence solution), Butterfly (an employee-feedback solution), Yandiki (a people-management solution), HRIZONS (a career-information-management solution), GamEffective (an employee-gamification solution) and Starmind (an employee-choice award).

Of the final eight, Bienstock said, two decided not to move forward, two are currently in contract and the remainder are at other stages of the process.

Setting Their Sights on Retirement

thinkstockphotos-498426671If you think millennials aren’t concerned about retirement, think again.

On Tuesday, Willis Towers Watson released a survey that found six in 10 millennials are willing to sacrifice pay for more secure retirement benefits. (This compares to roughly four in 10 in 2009.)

“Employees of all generations, including millennials, are feeling vulnerable about their long-term security,” says Steve Nyce, senior economist at Willis Towers Watson. “Employees young and old actually have a strong desire for more retirement security and are willing to give up pay to get more guarantees or a larger retirement benefit. Interestingly, employees seem to be saying they have enough health coverage now and are reluctant to pay more.”

As far as healthcare is concerned, only one-third of millennials (32 percent) surveyed said they are willing to pay a higher amount for lower or more predictable health costs, a decline from 43 percent in 2009.

When asked how they would spend money if their employer provided them with an allowance to spend on a variety of benefits, millennials said they would allocate more than half to healthcare and retirement-plan benefits (27 percent each). Not surprisingly, nearly half of millennials (48 percent) ranked pay and bonuses over all other benefits if given a choice, a clear indication of the financial issues they face and the need for more financial flexibility today.

Slowly but surely, employers are beginning to accept the fact that employees, be they millennials, Gen X or baby boomers, are hungry for support as they strive to tuck more money away for the future.

So I guess it’s no surprise then that we’re beginning to see robo advisers such as Betterment gain some traction in the workplace.

At the 2016 Benefits Forum and Expo in Nashville, Tenn., this week, Betterment General Manager Cynthia Loh shared the value her organization is bringing to the business community. (Loh spoke during a general session on Wednesday.)

Many of you probably will recall Betterment’s announcement last fall of a new 401(k) platform that uses technology to offer personalized investment advice for all participants, along with administrative and fiduciary support for plan sponsors. (It began rolling out the platform earlier this year.)

Betterment CEO and Founder Jon Stein said at the time, “Current 401(k) offerings—and we have examined them all—have poor user experiences, high costs and a clear lack of advice. Not anymore.”

In late July, the company announced that it had signed on more than 200 plan sponsors since the beginning of the year—and, according to Loh, the company is continuing to sign up new clients at a fast clip.

So far, Betterment hasn’t signed up any Fortune 1000-size organizations. The largest plan sponsor to sign on is MVP Anesthesia Associates, a physician group. But down the road, the company certainly hopes to make inroads into even larger employers.

Getting Incivility Under Control

Does incivility take a toll on today’s workplace?

Well, if we’re to believe the findings of a recent study out of Michigan State University, the answer is yes—and maybe more than we’d like to think.

ThinkstockPhotos-579244800To capsulize, the researchers, who have published their work (titled Who Strikes Back? A Daily Investigation of When and Why Incivility Begets Incivility) in a recent issue of the Journal of Applied Psychology, found that experiencing rude behavior reduces employees’ self-control and leads them to act in a similar uncivil manner. (In doing their study, they asked 70 employees to fill out a survey relating to incivility and its effects three times a day for 10 consecutive workdays.)

Of course, this finding is not all that surprising. As human beings, we’re easily influenced by those around us. Right? Probably the more interesting finding is the unintentional nature of so-called “incivility spirals”—i.e., when acts of incivility lead to subsequent acts of incivility.

As Russell Johnson, an associate professor of management at Michigan State University and the study’s lead author, explains …

“When employees are mentally fatigued, it is more difficult for them to keep their negative impulses and emotions in check, which leads them to be condescending and rude to colleagues. This happens even for employees who desire to be agreeable and polite; they simply lack the energy to suppress curt and impatient responses.”

That’s certainly a troubling thought, especially if you work at an organization in which incivility is clearly visible at the highest levels.

The study also found that incivility spirals occurred in workplaces that were perceived as political (i.e., where co-workers “do what is best for them, not what is best for the organization”).

Because the “intentions and motives of others are less clear” at such organizations, the researchers report, employees have a harder time understanding why they were targeted and how best to respond.

You’ve got to think, I might add, that this inevitably would take a serious toll on employee effectiveness and productivity.

In response to what they found, the researchers emphasize the need for managers to provide employees with clearer feedback on “the types of behaviors that are desired,” both informally through day-to-day interactions and formally through the performance-management process.

Certainly great advice. But is it enough to prevent incivility from spiraling out of control?

Changing of the Guard at Google

By now, many of you may have read that Laszlo Bock is stepping down as head of Google’s people operations, passing the baton to Eileen Naughton, who currently is vice president of sales and operations in the United Kingdom and Ireland.

The news was first reported last week by Fortune.

Some of you may recall Bock was HRE’s 2010 HR Executive of the Year—and for good reason. Though only four years at the helm of Google’s HR organization at the time, it was already quite clear that he brought a fresh new way of thinking to the HR world.

As then Google CEO Eric Schmidt pointed out in our October 2010 cover story, “Building a New Breed,” “Innovation and data are at the core of who we are at Google, and Laszlo applies those same principles to HR. He drives cutting-edge people programs and uses rigorous analytics to guide decision-making—all in the name of finding, growing and keeping great Googlers.”

If you’re looking for a single place to go to get at what some of the “cutting-edge people programs” are, I suggest you pick up Bock’s 2015 book: Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead. It’s all there.

Last year, the National Academy of Human Resouces also acknowledged Bock’s extraordinary contribution to the HR profession by naming him a Fellow in the Academy.

Unlike Bock, who held HR posts at General Electric before joining Google, Naughton is the latest example of an “outsider” taking the HR reins of a high-profile business.

Before joining Google, Naughton served as president of the Time Group and vice president of investor relations for Time Warner. She also served as president of Time Inc.

The Fortune story points out that she is one of the highest-rated managers at Google by employees and is “a founding member of Google’s women’s organization, Women@Google, along with former Google exec and current Facebook COO Sheryl Sandberg.”

Like Bock (who is staying on as an adviser to CEO Sundar Pichai), she will report to Alphabet (Google parent company) CFO Ruth Porat and will oversee HR in its entirety, including diversity and inclusion (which, like at many Silicon Valley companies, continues to be a weak spot for the firm, though one it’s making great strides to address).

Only time will tell, of course, how Naughton will build on Bock’s legacy at Google. Will she be able to view HR through a very different lens, much like Bock? Who knows—maybe her lack of HR experience will be an asset in that regard(?) But this much is certain: She has a tough act to follow.