All posts by David Shadovitz

Face-off on HR Outsourcing

No blood was spilled during the Great Service Delivery Debate, as Phil Fersht and Lowell Williams faced off during a Wed. afternoon session at the HR Technology® Conference. But the two experts didn’t pull their punches either when it came to discussing whether or not HR outsourcing has lived up to its promise.

The benefits of HRO haven’t materialized, suggested Phil Fersht, founder and CEO of consultancy Horses for Sources in Boston.

Consequently, he said, a number of deals have ended up going sour.

Fersht cited Convergys as an example. “Convergys had a great run with HR outsourcing, but in the end couldn’t [make a go of it] and ended up selling the business to Northgate Arinso,” Fersht said. “The whole [first] generation of HRO didn’t work and Wall Street didn’t like it. So people started talking about single process.”

Fersht suggested that the industry is basically back to where it was 10 years ago.

Williams, however, was a bit more upbeat about the model, showing a slide listing 23 HR processes that are being outsourced today.

“The fundamental premise that we could take administrative, repetitive steps out of HR and move them into a service center is a very valid one,” said Williams, executive director of global HR services for EquaTerra, a Houston-based advisory firm.

To be sure, Williams said, HR outsourcing hasn’t fully lived up to its promise. But the benefits of HR outsourcing are equally clear.

If there’s an area employers in need to get better at, Williams added, it’s figuring out “how to repurpose the people in the company once administrative tasks have been outsourced.”

States Beat Ivies (No, We’re Not Talking Football)

After reading the front-page story in the Wall Street Journal today entitled “Employers Favor State Schools for Hires,” I called the National Association of Colleges and Employers to get their take on the study’s findings, particularly the bias of recruiters toward state schools.

“After I read the article, my reaction was ‘no duh!’ NACE Director of Strategic and Foundation Research Edwin Koc told me.

Recruiters are going to state schools because of the size of their student populations, Koc says. “You’re going to go to Penn State for accounting candidates because it’s the most efficient way to recruit them, not because of the quality,” he explains.

Of course, employers are paying a price limiting the number of schools they have a presence at. They’re missing some strong candidates.

Despite this, Koc doesn’t believe recruiters are going to change their way anytime soon, even as the economy gets some footing. “Once you incorporate these efficiencies, you’re not going to do things differently until you’re dissatisfied with the candidates you’re finding,” he says.

For those who don’t subscribe to the WSJ, the five schools recruiters favor most are: Penn State, Texas A&M, University of Illinois, Purdue and Arizona State.

Jobs Slow to Return, Even for Tech

Catch today’s front-page New York Times story, entitled “Once a Dynamo, the Tech Sector is Slow to Hire?”

As the nation struggles to put people back to work, the story reports, “even high-tech companies have been slow to hire, a sign of just how difficult it will be to address persistently high joblessness.”

The piece points out that the disappointing hiring trend raises questions about whether the tech industry can help power a recovery and sustain American job growth in the coming years. “Its tentativeness has prompted economists to ask, ‘If high tech isn’t hiring, who will?’ “ the story says.

For areas such as computer systems design and Internet publishing, the story notes, job growth has been slow during the past year. Employment in areas such data processing and software publishing has actually fallen.

Perhaps it’s no coincidence then that I found another story in my mailbox this morning from eweek.com entitled, “H-1B Visa Cap for 2011 Has Not Been Met Yet.”

“With less than one month before fiscal year 2011 begins in October,” the story reports, “there are about 30,100 available visas for technology companies to apply for through the temporary work visa program …”

A few years ago that was unthinkable, thanks to the thirst of high-tech firms for talent.  (In years’ past, these visas used to be gone in a blink of an eye.)  But today, it’s simply further proof of how cautious businesses are these days when it comes to adding jobs, even those in the high-octane sectors like tech.

Pay Gap Favoring Men Isn’t Universal

The gender pay gap, where men typically earn more than women, continues to persist. But according to a story posted on Time’s website today, there’s at least one segment of the workforce where the gap now favors women.

In a just released analysis of data from 2,000 communities, Slingerlands, N.Y.-based market research firm Reach Advisors reports that the median full-time salaries of young women who are unmarried, childless and under 30 are 8 percent higher than men in their peer group in 147 of  the 150 biggest U.S. cities.

Because the research was intended primarily for market-research purposes and not to shed light on HR practices, Reach Advisors’ president James Chung declined to comment for this blog post. But in the Time article, he primarily credits education for the difference.

“For every two guys who graduate from college or get a higher degree, three women do,” the Time article said. “This is almost the exact opposite of the graduation ratio that existed when the baby boomers entered college.”

Chung’s conclusion is certainly in line with other studies that show college degrees result in better wages.

Though the economic advantage sometimes disappears as women age and have families, Chung told Time he believes women may now have enough leverage so their financial gains aren’t completely erased as they get older.

In time, I guess we’ll find out whether Chung is right. But at least for now, it’s nice to see study findings that suggest the pay gap in favor of men isn’t true across the board.

As Jobs Decline, So Do Workplace Fatalities

Some encouraging news from the Department of Labor yesterday: Preliminary data by the agency revealed a double-digit decline in workplace fatalities in 2009.

The Bureau of Labor Statistics reports that “fatal work injuries” in the U.S. fell 17 percent in 2009—or 3.3 per 100,000 workers, down from a final rate of 3.7 in 2008 (though the agency adds that the counts are likely to increase with the release of final numbers in April 2011). 

The 2009 preliminary data follows two years of more modest single-digit declines.

The improvement was visible in most sectors and categories. Even workplace suicides, which had been on the rise, showed some improvement, down 10 percent in 2009 from its high of 263 in 2008. (Look for a story on this topic in HRE in the fall.) Workplace homicides, meanwhile, declined just 1 percent.

While the preliminary data is heartening, however, it’s still premature to say workplaces are becoming significantly safer places. As the BLS approporiately points out in its press release, the economy—and the loss of 4.7 million jobs in 2009—clearly played a “major role” in the betters numbers.

 So how big a role is a “major role?” I’ll leave it to others to speculate?

In Search of Diversity

In April, I wrote a story for HREOnline™  about the efforts of Sen. Robert Menendez, D-NJ, to initiate a survey of Fortune 500 companies to see “if the boardrooms high atop Wall Street look like what we see every day walking down Main Street.”

Well the findings are now in—and aren’t pretty. Though voluntary, the survey reaped an impressive response of 219 Fortune 500 corporations and 71 Fortune 100 corporations. It found that minorities represent a total of 14.5 percent of directors on corporate boards and overall have less representation on executive teams than they do on corporate boards.

Hispanics, the study found, are the least proportionately represented on boards and fared even worse on executive teams. They comprise just over 3 percent of board members and just under 3 percent on executive teams.

Obviously, the findings confirm what everyone pretty much already knows: That employers still have much more work ahead when it comes to diversifying their executive ranks.

In releasing the findings, Menendez didn’t suggest a legislative response. But he did offer the following recommendation: creating a task force with select corporations, executive search firms, board members and other experts to help companies move in this direction.

Sartain Joins Manpower’s Board

It’s hardly a tidal wave, but slowly but surely companies are waking up to the merits of having someone with a solid HR background on their board of directors.

The latest example: Manpower. Yesterday, the Milwaukee, Wisc.-based workforce solutions firm named Libby Sartain, former chief human resources officer of Yahoo! Inc. and Southwest Airlines, to its board. (A story on the Milwaukee Business Journal website notes that five of Manpower’s 11 directors are now women or minorities.)

“Libby’s distinguished 30-year career in human resources will be a great asset to our company as we continue to strengthen our position as a multi-faceted provider of HR services that complement and expand upon our roots in the staffing industry,” said Jeffrey A. Joerres, Manpower Inc.’s chairman and CEO.

As the press release goes on to point out, HRE named Libby one of the 25 most powerful women in HR when it last compiled such a list five years ago.

Considering the business Manpower is in, it’s a no-brainer to add a top-notch former HR leader to its board (or that it has decided to assemble a board that is one of the most diverse around).  But when you contemplate the kinds of HR-related challenges awaiting companies in the coming years, I would think someone with a strong HR background is going bring a valuable perspective to most boardroom discussions—even if they’re not in the business of providing “workforce solutions.”

In Pursuit of Board Diversity

Investors have a bit more information to go on these days as far as evaluating the diversity levels of boards, since the Securities and Exchange Commission approved late last year rules to enhance the information provided to shareholders.

Calvert Asset Management, a mutual-fund company that invests in socially responsible companies, has been leading the charge when it comes to board diversity, with its most recent victory, involving Netflix, announced yesterday. Along with Connecticut Retirement Plans and Trust Funds, Calvert reported the successful resolution of its efforts to promote board diversity at the entertainment distributor. Netflix, headquartered in Los Gatos, Calif., recently named its first female director, Ann Mathers, to its board.

The Securities and Exchange Commission rules are vague when it comes to defining the word “diversity,” but pretty much every proxy now at least mentions it. Yet while everyone agrees race and gender diversity are important, Henry Stoever, a spokesman for the National Association of Corporate Directors in Washington, stresses the importance of the board reflecting the skills that are needed to achieve a business’ strategy.

For now, employers can expect investors such as Calvert to continue to apply pressure. Aditi Mohapatra, sustainability analyst for the Bethesda, Md.-based company, reports that her firm has been issuing a steady stream of shareholder proposals on board diversity, roughly nine or 10 per year, since 2002. “We’ve been targeting the bottom of the bunch, those companies where we see a lack of commitment,” she says.

Nor is it alone in its efforts. “We’ve had seven or eight different firms file proposals with us,” Mohapatra points out.

Some Final Thoughts on SHRM

As the 2010 SHRM conference draws to a close, here are a few final (and random) thoughts about the event (and my first blog post filed from an airplane).

Best news coming out of the conference: 11,000+ attendees! After a couple of years of major belt tightening, companies appear to be spending once again.

Most discouraging observation: On day one, folks stuck around to hear Steve Forbes pretty much until the end, even though he had little to share on the topic of HR strategy. In contrast, on day two, I’m told they left in droves soon after a panel of senior HR executives began to tackle some of the profession’s more pressing challenges. What gives?

Best performance by a ’70s band: Hall and Oates (so what if they were the only ’70s band to perform).

Most popular show giveaway: You guessed it, the iPad. (If you want to know what next year’s big giveaway will be, just check out Apple’s product pipeline.)

Longest line for a  ’70s celebrity on the expo floor: Attendees (mostly women) who were eager to meet and greet Erik Estrada (of CHiPs fame) at the Columbia Southern University booth. (Didn’t personally see, but was told he looks the same.)

Worst part about the venue: Overcast skies pretty much the entire time, with cooler than usual temps for San Diego.

Best part of the venue: It wasn’t 95-degree, 90-percent humidity New Orleans! (Remember last year?)

 

Lessons in HR Transformation

As I prepare for the SHRM conference each year, I often lament that there aren’t more HR executives presenting.  Personally, more often than not, I much rather hear what they have to say about a particular issue or topic, rather than a consultant or vendor.

That’s why I was pleased to see the Tuesday morning program open with a General Session panel featuring senior HR executives. (Hopefully we’ll see more sessions like this in the future.) It’s also why I set aside some time later that morning to catch a Mega Session entitled “HR Transformation: What Comes Next” by one of the opening-session panelists.

Conrad Venter, global head of HR for Deutsche Bank AG, detailed some of the steps taken by the bank to transform its HR function. Deutsche began its HR transformation efforts in 2005, during a period when the firm was facing some formidable global challenges.

In response, Venter said, Deutsche set out to restructure HR, putting “the right work in the right place.” Those efforts included moving much of the transactional work outside of HR.

What were some of the lessons that were learned along the way? First, he said, “we learned that one size doesn’t fit all.” He also noticed the importance of being “fluid” and continuing to “tweak things” long after they’ve been implemented.

“The soft stuff is really the hard stuff,” he said.

Repeating a comment he made during the opening panel, Venter also suggested that HR leaders might want to describe what they do as “people strategy” rather than “HR strategy,” to create more buy-in and less finger pointing.