All posts by Mark McGraw

Googlers Pass on Massive Payouts

Can you have too much of a good thing?

A handful of Googlers working on the company’s self-driving car project seem to think so.

The Mountain View, Calif.-based tech giant’s car unit—which in December 2016 spun off into a standalone business known as Waymo—has seen staffers exiting in noteworthy numbers, and walking away from potentially huge paydays in the process, as Bloomberg reports this week.

The unit “has been a talent sieve” for at least the past year, according to Bloomberg, “thanks to leadership changes, strategy doubts, new start-up dreams and rivals luring self-driving technology experts.”

But the business’s “unusual compensation system that awarded supersized payouts based on the project’s value” has helped contribute to its retention struggles, notes Bloomberg. “By late 2015, the numbers were so big that several veteran members didn’t need the job security anymore, making them more open to other opportunities, according to people familiar with the situation. Two people called it ‘F-you money.’ ”

Indeed, “a large multiplier” was applied to compensation packages toward the end of that year, “resulting in multimillion-dollar payments in some cases,” Bloomberg reports, adding that one member of the team had a multiplier of 16 applied to bonuses and equity amassed over four years, for example.

The same article points out that the system was revamped when the autonomous car unit morphed into Waymo late last year, and replaced with a more uniform pay structure that treats all employees equally. By that time, however, “the original program got so costly that a top executive at parent Alphabet Inc. highlighted it last year to explain a jump in expenses.

“The payouts contributed to a talent exodus at a time when the company was trying to turn the project into a real business,” the article continues, “and emerging rivals were recruiting heavily.”

Part of the issue at Waymo “was that payouts snowballed after key milestones were reached, even though the ultimate goal of the project—fully autonomous vehicles provided to the public through commercial services—remained years away.”

While reports have underscored rumblings within the car division, ranging from questions surrounding the unit’s leadership and strategy to engineers’ designs on starting their own self-driving vehicle companies, “the big payouts exacerbated the [turnover] situation because team members had less financial incentive to stay,” according to Bloomberg.

Ironic, isn’t it, that the company would start losing talent by paying them too much? When was the last time your organization had this problem? If there’s a lesson here for HR and compensation professionals, it might be that over-the-top rewards might end up having unintended consequences, and that massive lumps of cash don’t necessarily guarantee employee loyalty.

Millennials on the Move?

For years, employers have been led to believe that millennial workers are habitual job-hoppers with one eye always on the door.

That perception—if it was ever accurate in the first place—might be increasingly off the mark.

Consider the 2017 Millennial Survey conducted by Deloitte. In a poll of roughly 8,000 millennial-age workers from 30 countries, 38 percent of respondents said they would leave their jobs within two years if given the opportunity. That number stood at 44 percent when Deloitte carried out the same survey last year. Additionally, 31 percent anticipate staying in their present roles beyond five years, compared to the 27 percent who said as much in 2016.

Some of the circumstances driving Generation Y to seek more stability in the workplace, it turns out, have little to do with work. For example, the survey sees the effects of terror attacks in Europe, the United Kingdom’s withdrawal from the European Union and—no surprise—a brutally contentious political climate in the United States leading millennials to cling more closely to the security of their current jobs.

Such matters are the main source of anxiety among millennials in mature markets such as France, Germany and the U.S. Meanwhile, a majority of Gen Y workers (58 percent) in emerging markets like Argentina, Brazil and India see crime and corruption as an even bigger threat, with 50 percent saying the same about hunger/healthcare/inequality.

“Millennials, especially those in mature European economies, have serious concerns about the directions in which their countries are going,” according to an executive summary of the findings. “They are particularly concerned about uncertainty arising from conflict, as well as other issues that include crime, corruption and unemployment.”

Indeed, the specter of unemployment lingers from past surveys, according to Deloitte, as this year’s poll finds 25 percent of millennials fearing the prospect of being out of work.

“Having lived through the ‘economic meltdown’ that began in 2008, and with high levels of youth unemployment continuing to be a feature of many economies, it is natural that millennials will continue to be concerned about the job market,” according to Deloitte.

Taken together, these factors are conspiring to create a real sense of fear among millennials, many of whom fret for their futures. In mature markets, for instance, just 36 percent of millennials predict they will be financially better off than their parents. Only 31 percent feel they’ll ultimately be happier.

“This pessimism is a reflection of how millennials’ personal concerns have shifted,” says Punit Renjen, Deloitte’s global CEO, in a statement. “Four years ago, climate change and resource scarcity were among millennials’ top concerns. This year, crime, corruption, war and political tensions are weighing on the minds of young professionals, which impacts both their personal and professional outlooks.”

Still, while many millennial workers question their ability to affect significant societal change on their own, these same employees feel they can make a difference with their employer’s help. The good news is that the corporate world is helping them do just that, with more than half of the millennials polled saying they are able to contribute to charities and worthwhile causes in their workplaces.

Of course, the organization also wins when employees get involved in such efforts.

“The survey’s findings suggest those given such opportunities show a greater level of loyalty to their employers, which is consistent with the connection we saw last year between loyalty and a company’s sense of purpose,” according to Jim Moffatt, Deloitte global consulting CEO.

“But, we are also seeing that purpose has benefits beyond retention. Those who have a chance to contribute are less pessimistic about their countries’ general social [and] political situations, and have a more positive opinion of business behavior.”

 

No Movement on Maternity Leave

Despite a host of factors that would suggest otherwise, the number of U.S. women taking maternity leave has changed very little in the last two-plus decades.

So says a new study from Ohio State University, which finds that, on average, roughly 273,000 women in the United States took maternity leave each month between the years 1994 and 2015, “with no trend upward or downward,” according to an OSU statement. Fewer than half of those women were paid during their leave, the same statement notes.

Pointing to variables like an economy that has grown 66 percent in that time, and the number of states implementing paid family leave legislation over that 22-year span, study author Jay Zagorsky, a research scientist at OSU’s Center for Human Resource Research, “expected to see an increasing number of women taking maternity leave. It was surprising and troubling that I didn’t.”

Zagorsky did, however, find the number of fathers taking paternity leave tripling between 1994 and 2015, “although the numbers are much smaller than those of women taking time off.”

More specifically, the number of men taking paternity leave rose from 5,800 men per month in ’94 to 22,000 per month in ’15.

In addition, Zagorsky’s study—based on data culled from the Current Population Survey, a monthly poll conducted by the U.S. Census Bureau—found that most women taking maternity leave were not paid. Less than half (48 percent) were compensated for leave in 2015. And, paid maternity leave is increasing, but only at a rate of less than one percentage point per year, according to Zagorsky.

“At that rate, it will take about another decade before even half of U.S. women going on leave will get paid time off,” he says. “This is a very low figure for the nation with the world’s largest annual gross domestic product.”

By comparison, more than 70 percent of men taking paternity leave in 2015 were compensated for their time off, says Zagorsky, who reasons that “one possible reason for this gender gap is that few men are willing to take unpaid leave to care for a newborn.”

Given that the inflation-adjusted gross domestic product went from $9.9 trillion a year in 1994 to $16.4 trillion in 2015, “it would have been reasonable to expect that some of the benefits of this large economic expansion would have gone to working women with newborn children, but that’s not what I found,” says Zagorsky.

He was equally startled by the effect, or lack thereof, that new paid family leave laws in California, New Jersey and Rhode Island have had on maternity leave numbers, noting that those three states comprised 16 percent of the U.S. female labor force in 2015.

“If the laws were effective, some impact should be seen in national data,” says Zagorsky. “These results suggest we have a long way to go to catch up with the rest of the world as far as providing for new mothers and their children.”

 

Commander-in-Chief or CEO?

From Truman to Trump, a handful of U.S. presidents have made their way to the Oval Office via the business sector.

If a recent Korn Ferry Institute survey offers any clues, it might be a while before we see another commander-in-chief who’s taken that route.

In a poll of 1,432 corporate executives, an overwhelming majority of respondents showed no signs of aspiring to the highest political office in the land. Given the choice, 85 percent of executives said they would rather be CEO of their own organization than lead the country, according to Korn Ferry.

While recognizing the similar requirements for both roles—the ability to drive growth, manage crises, think strategically and manage finances, for example—most business leaders allow that the president has even more hats to wear.

Indeed, 81 percent of the executives polled said they think the U.S. president has a more complex job than they do.

“In a way, you could consider the U.S. president [to be] the national CEO,” says Rick Lash, senior partner at Korn Ferry Hay Group, in a press release summarizing the findings. “While serving as a corporate CEO is generally considered a very challenging role, executives acknowledge the U.S. president faces hurdles that are much higher than those faced by a leader in corporate America.”

In addition to complexity, you can put compensation on the list of reasons why your CEO isn’t likely interested in leading the free world.

Seventy-one percent of executives, for example, reported feeling that the U.S. president—at $400,000 annually, as determined by Congress—is underpaid. Nearly half (48 percent) said the president should receive at least $10.4 million per year; the current average compensation for a CEO at an S&P 500 company. And exactly 0 percent cited salary/compensation as the top reason someone would want the job of U.S. president. But money, or a lack thereof, isn’t the only thing deterring executives from someday pursuing a presidential run.

The position of U.S. president “comes with extra scrutiny as well,” according to Korn Ferry.

Donald Trump, for example, “has been president for less than a week and he’s been questioned about his every action, from the serious (the words he used during his inaugural speech and his choice of cabinet members) to the silly (whether the dance with his wife, Melania, at an inaugural ball was ‘awkward’),” notes the aforementioned release.

“A corporate CEO may be questioned on his or her firm’s stock price and business strategy, but usually isn’t scrutinized for dancing ability.”

Language Matters in Job Listings

In the New York Times this week, Claire Cain Miller wonders why more unemployed men aren’t going after jobs in the industries that are growing the most, such as healthcare.

One key reason behind “one of the biggest economic riddles today,” she writes, is that “these so-called pink-collar jobs are mostly done by women, and that turns off some men.”

Seattle-based software provider Textio recently dug a bit deeper into this conundrum, examining the terminology used in listings for the 14 fastest-growing jobs between the years 2014 and 2024. Their analysis found the way the descriptions of these roles are worded has led to an overabundance of unemployed men and plenty of jobs going unfilled at least partly because they’re perceived as being “women’s work.”

I’ll stop here to point out that the software Textio provides is designed to, in the company’s own words, “optimize job listings for more qualified and diverse applicants.” And, I’m not exactly sure how Textio is defining terms used in job listings as being “masculine” or “feminine.”

All that said, they found some interesting evidence to support the idea that language matters in job listings.

In its analysis, Textio found that the descriptions for these quickly-growing positions “used feminine language, which has been statistically shown to attract women and deter men,” according to the Times.

Consider home health aides, the number of which is projected by the Bureau of Labor Statistics to grow by 38 percent by the year 2024.

Currently, females hold 89 percent of these positions, according to the BLS. The job listings for home health aides—which Textio found to be the most “feminine”-sounding—commonly contain key words such as “sympathetic,” “care,” “fosters,” “empathy” and “families,” and are more appealing to female applicants, according to Textio’s analysis. Textio found the job descriptions and requirements for many other predominately female-held roles—nurse practitioner, genetic counselor and physician assistant, for instance—frequently include similar key words and phrases.

On the other hand are cartographers, who find themselves in “one of the few fast-growing jobs that is male-dominated,” according to the Times, noting that cartographer jobs are expected to increase by 29 percent in the next seven years. (Men currently represent 62 percent of the profession.) In evaluating the wording typically used to advertise these jobs, Textio found “masculine” terms like “manage,” “forces,” exceptional,” “proven” and “superior” were often thrown around.

But health aides need to be “exceptional” and “proven” too, writes Cain Miller, adding that the reverse is not automatically true.

“Cartographers don’t necessarily need to be ‘sympathetic’ or ‘focused on families’ to excel,” she says. “That might be one reason that women have historically entered male-dominated professions, like law or management, more than men have entered female-dominated ones, like teaching or nursing.”

As Cain Miller points out, some healthcare employers have tried to use more manly language in an effort to reverse this trend, “like talking about the ‘adrenaline rush’ of being an operating room nurse.” Rather than rewriting “feminine” job descriptions in hopes of appealing to male candidates, or vice versa, Textio suggests using more gender-neutral lingo.

The latter approach is more effective, according to Textio, which says replacing words such as “world-class” and “rock star” with terms like “premier” and “extraordinary” improved the candidate pool for a software developer position, for example. Textio also claims that more gender-neutral wording enables employers to fill jobs 14 days faster in comparison to posts with a gender bias, in addition to attracting a more diverse collection of applicants.

That makes sense. And, while the Textio analysis focuses primarily on the healthcare sector, it’s probably safe to say that taking this kind of tack could deepen the candidate pool in any number of industries—at a time when finding the necessary talent is becoming more and more difficult.

An Extreme Twist on Team-Building

Tired of the same old activities designed to create a spirit of trust and teamwork among your employees? Survival Systems USA has an extreme experience to offer that could literally teach your workers how to sink or swim together.

The Groton, Conn.-based safety and survival education provider has taught underwater egress training and water survival techniques since 1999, delivering instruction to, among others, employees of the Sikorsky Aircraft Corp., the New York Police Department and the National Guard, as the New York Times recently reported.

In imparting survival skills to those who might have to use them on the job, “we’ve seen residual effects along the way: improved morale, self-esteem, capabilities people didn’t know they had,” Survival Systems USA President Maria C. Hanna told the Times. Until recently, she said, “we’ve never stopped long enough to say, ‘You know, this is something that can appeal to a market in a different way, using the tools from aviation to help people develop themselves.’ ”

The company has begun putting those tools to work in hopes of attracting corporate customers searching for drastically different team- and morale-building exercises.

In November, for example, Survival Systems conducted a one-day aquatic survival training program for a group of three university students, four personal trainers and the owner of a paving company, according to the Times.

These individuals—who ostensibly had no work-related reasons to undergo such training—spent the first part of the six-hour program jumping from a 14-foot platform into an indoor pool. With life vests inflated, they were then given a matter of minutes to find a way to stay warm while floating. Another task required those taking part to work together to board an inflated life raft under the direction of one member of the group.

Program participants spent the next part of their Saturday strapped into Survival Systems’ Modular Egress Training Simulator, which the Times describes as “a plastic and metal craft that can be arranged to resemble the cockpit of almost any helicopter or small plane on the market.” Meanwhile, other pieces of equipment duplicated the downwash from rescue helicopters and generated rain, darkness, smoke, fire and winds of up to 120 miles-per-hour.

Once inside the simulator, these brave souls were submerged and flipped into a pool as part of an exercise that includes three rounds. First, participants must reach for the simulator’s window frame, unfasten their seatbelts, pull themselves out and swim to the surface. The second round adds a degree of difficulty to the task, by closing the aforementioned window. In the third scenario, individuals must pretend their window is stuck and escape by holding onto the simulator’s seats and making their way to an adjacent, open window.

An instructor remains nearby at all times, “ready to whisk [participants] to the surface if anything goes wrong,” the Times points out, adding that “though no one has drowned during the training, the primordial fear remains.”

The same article notes that the curriculum for this program is still being fine-tuned, and this particular group was offered the training for free, in exchange for their feedback. The experience, however, will soon retail at roughly $950 per person; a price that Survival Systems says is in line with that of its other one-day programs.

Greg Drab, owner of Advantage Personal Training, has sent multiple employees—including the four trainers taking part in the November session—through the program at no cost, but sees the $950 as a bargain.

“You get to see how people handle stressful situations,” Drab told the Times. “This unifies the team.”

Gaming the Gainsharing System

This is just a guess, but I’m going to say the mood throughout Whole Foods break rooms is less than festive this holiday season.

And if the claims made in a new lawsuit prove to be true, you couldn’t really blame the grocery store chain’s employees for not getting into the spirit this year.

Last week, one current and one former employee from a Whole Foods store in Washington, D.C. filed a federal class-action lawsuit claiming the Austin, Texas-based company “engaged in a nationwide scheme to strip hard-working employees of earned bonuses in order to maximize [its] own profit.”

More specifically, plaintiffs Michael Molock and Randal Kuczor assert that a group of managers gamed Whole Foods’ gainsharing program to avoid paying automatic bonuses to departments that came in under budget for the year, as reported by the Washington Post.

According to the lawsuit, the gainsharing program is intended to enable employees in such departments to share in surpluses. The plaintiffs claim, however, that Whole Foods avoided paying by shifting labor costs to other departments without properly accounting for it, as well as by creating “fast teams” comprised of employees who float from one department to another.

The complaint also alleges that company executives knew of the “illicit practice of shifting costs,” which the suit says has impacted as many as 20,000 past and present Whole Foods employees.

In a statement, Whole Foods acknowledges that some sort of bonus program manipulation took place, while maintaining that it was confined to a relatively small number of its stores. Nevertheless, Whole Foods says it is investigating the matter. And, as the Post reports, the organization has already terminated the nine managers known to have been involved.

The plaintiffs are asking for more than to see a few managers fired. The suit seeks $200 million in punitive damages and triple unpaid wages, among other relief, according to the Post.

“Defendants intentionally manipulated the program and illicitly engaged in a nationwide corporate practice of ‘shifting labor costs’ in order to pad its profits,” the suit claims, alleging that this “unlawful” maneuvering effectively wiped out surpluses in certain departments, “thereby robbing hard-working employees of earned bonuses.”

Mental Health Conditions and the ADA

Mental healthIn many cases, making reasonable accommodations for employees’ physical conditions should seem straightforward enough.

Provide a hearing-impaired worker with the necessary phone equipment, for example. Allow a blind employee to bring his or her service dog to work. Lower the height of a wheelchair user’s desktop.

Addressing the needs of individuals with mental health conditions—which can be difficult to understand or even recognize—is a bit trickier for employers. Recent history gives us examples (like this one) of how organizations can run afoul of the American with Disabilities Act when dealing with mental health issues in the workplace.

This week, the U.S. Equal Employment Opportunity Commission issued a resource document it hopes will explain workplace protections and appropriate accommodations for employees and job applicants with mental health conditions under the ADA.

Judging by recent EEOC data, many employers could use some guidance in this area.

During fiscal year 2016, the organization resolved nearly 5,000 charges of discrimination based on mental health conditions, and obtained roughly $20 million for individuals with mental health conditions who were unlawfully denied employment and reasonable accommodations. And, EEOC charge data show that claims of discrimination based on mental health conditions are on the way up.

Depression, PTSD & Other Mental Health Conditions in the Workplace: Your Legal Rights is geared toward the individual employee, but can also be instructive for businesses. For instance, the document offers examples of possible accommodations to help individuals with mental health conditions perform their jobs, such as altering break and work schedules (scheduling work around therapy appointments, for example), providing quiet office space or devices that create a quiet work environment, making changes in supervisory methods and granting permission to work from home.

It also outlines scenarios in which employees or job applicants are allowed to keep a mental health condition private, and details situations that permit employers to ask medical questions, including queries surrounding mental health.

“Many people with common mental health conditions have important protections under the ADA,” said EEOC Chair Jenny R. Yang, in a statement. “Employers, job applicants and employees should know that mental health conditions are no different than physical health conditions under the law. In our recent outreach to veterans who have returned home with service-connected disabilities, we have seen the need to raise awareness about these issues. This resource document aims to clarify the protections that the ADA affords employees.”

Now THAT’s Honest Feedback

There’s a saying that people want the truth until they get it.

Consider the leadership team at the Pennsylvania Turnpike Commission, who might regret asking interchange manager Michael Stuban to fill out an exit survey on his last day before heading into retirement.

Stuban, who spent 35 years with the organization, offered his two cents and then some.

In a recent interview with The Philadelphia Daily News, Stuban described the “brutal” frankness with which he approached the online questionnaire.

“When they asked for an honest exit interview, I gave them one,” Stuban told the paper, with a bit of a laugh. “I sent it minutes before I officially retired.”

For what it’s worth, the 58-year-old Stuban wrote that he didn’t really want to retire just yet, and that he actually liked his job.

He may have enjoyed his work, but it seems he wasn’t so crazy about the people he worked for.

The “out of touch” executive-level managers at the helm of the “rudderless” agency, for instance, are “only looking out for themselves,” according to Stuban. He characterized the past five years at the commission as “terrible,” with “no morale” among employees.

These same co-workers were asked to take part in classes “where we were told we are not political,” wrote Stuban, who opined that the commission frequently hires incompetent employees “based on political connections,” according to the Daily News.

Stuban didn’t mince words when it came to the idea that corporate politics were not at work within the organization.

“That’s bulls—,” he wrote. “Jobs/promotions are filled by the politicians … it’s who you know, not what you know. Positions [are] created for people who are not qualified.”

And, Stuban apparently felt so strongly about the thoughts he was sharing that he had to disseminate them throughout the organization. Stuban emailed his completed exit survey not just to the HR department from which it came, but to more than 2,000 colleagues as well, according to the Daily News.

At least one of them found some levity in Stuban’s sentiments.

“Want to get away? Southwest is offering great fares … ” replied the employee, in a reference to the airline’s well-known commercial tagline.

Turnpike Commission Chairman Sean Logan didn’t find Stuban’s candor quite so funny.

Logan, a former Pennsylvania State Senator, was equally blunt in his reply, which went out to those same 2,000-plus turnpike employees, the Daily News notes.

“Mr. Stuban … I don’t believe we ever met, and after reading your exit questionnaire, I am grateful that we didn’t.”

According to the paper, Stuban was made aware of Logan’s brusque response, and, perhaps not surprisingly, felt the chairman failed to see the point of his missive.

“If it was an effective company and someone told you there are problems and no morale, you don’t have to believe me, but maybe someone should check into it.”

No one outside this particular organization can really say how accurate Stuban’s depiction of its culture may or may not be. And who knows how the commission has responded, or plans to respond, to the issues that Stuban alleges exist within the agency.

But if morale really is a problem there, then Logan’s reaction to Stuban’s candid, albeit harsh, feedback probably won’t encourage other workers to offer their honest (and invaluable) opinions to those above them. And that’s the organization’s loss.

Undervaluing the Human Element

If you’ve heard it from one CHRO, you’ve heard it from a hundred: Our people are our greatest asset.

A new Korn Ferry Institute study suggests that most CEOs also appreciate the hard-working employees within the organizations they lead—just maybe not quite as much as they value technology.

More specifically, the recent survey saw 63 percent of 800 business leaders from multimillion-dollar global organizations saying that technology will be their greatest source of competitive advantage in five years. In addition, 67 percent said they believe technology will create greater future value than human capital will within their firms, and 44 percent said the prevalence of robotics, automation and artificial intelligence figure to make people “largely irrelevant in the future of work.”

As if that wasn’t hard enough for employees to hear, consider that people didn’t crack the top five in terms of assets that CEOs predict will be most critical half a decade from now. Technology ranked No. 1, followed by research and development, products/services, brand and real estate (offices, factories and land, for example.)

“CEOs have a significant blind spot in the way they perceive people,” according to the Korn Ferry Institute study, “tending to undervalue human capital.”

These “distorted perceptions” demonstrate the extent to which the individual is being pushed to the periphery of tomorrow’s workplace—and the danger in failing to recognize the potential of employees to generate value, the report continues.

In placing a greater emphasis on technology and tangible assets, chief executives “may be demonstrating, in a big way, what experts call tangibility bias. Facing uncertainty, they are putting a priority in their thinking, planning and execution on the tangible—what they can see, touch and measure.”

In the report, Korn Ferry Search Vice Chairman, CEO and Board Services Alan Guarino cautions against taking that approach while overlooking human capital.

“Leaders are placing a high emphasis on technical skills, technological prowess and the ability to drive innovation in their new senior recruits—elements critical for modern organizations,” says Guarino. “However, the financial reality proven by this study—that the value of people outstrips that of machines by a considerable distance—must give CEOs pause for thought.”

The ability to lead and manage culture—”so-called ‘soft skills,’ ” says Guarino—will become “critical factors of success for companies in the future of work, as they seek to maximize their value through their people.”

Who knows the organization’s people better than the HR executive? And, if what Guarino says is true, one could look at this study’s findings as a tremendous opportunity for the HR leader to help the CEO see the tremendous worth of human capital, and to help make the organization’s workers an irreplaceable, invaluable part of tomorrow’s workforce.