Category Archives: HR profession

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.

A Bad-Behavior Hiring Predictor

Assessing job candidates for honesty and integrity is nothing new in hiring and HR. Employers have been concerned about who exactly is 103579486-executive-in-handcuffsworking for them — their moral fiber, if you will — long before the Bernie Madoff and Enron scandals rocked corporate America. A quick rundown of a search on HREOnline for “honesty” proves the topic has been around for quite some time.

But this release about a new tool that can help employers in the financial sector and their hiring managers predict whether a prospective hire might compromise a company’s reputation by engaging in fraud, deceit or some other type of errant behavior seemed new and different enough to catch my eye.

Veris Benchmarks created the tool and claims in its release that, by applying it to all job candidates, a company can “improve its hiring process in 15 minutes and help to protect its image and reputation.”

To develop the test, Veris sent its chief scientist, George Paajanen, an expert in the area of psychometrics, into the American prison system to build a tool that identifies the character traits manifested in currently incarcerated white-collar felons. David Shulman, Veris’ CEO and founder, and a Wall Street veteran who’s spent more than 30 years in the institutional-financial-services industry, describes his motivation behind creating the tool:

“Veris Benchmarks was really inspired by the Madoff scandal. After family members and friends were directly impacted by the corrupt scheme, I became consumed with trying to determine precisely what firms were doing to better understand those being hired to act in a fiduciary capacity.

“Executives now have the responsibility to take advantage of new methods to help protect their companies, their shareholders and, even more importantly, their customers. What are companies doing to better understand how their employee would respond when faced with situations of moral gray?”

Of course, fraud and theft are not isolated to the financial industry. Cheating and moral breakdowns happen everywhere. As the release states, “from embezzlement at the dentist’s office, to the PTA, to the retail space and beyond, employee theft amounts to billions of dollars of losses annually.”

As Shulman muses:

“Issues of impropriety have burdened industries and businesses for centuries. What if companies could detect potential malice and the likelihood of theft before the key players were ever hired?”

“What if,” indeed.

Of course, this is but one tool out there. My hunch is there will be more like this to come — tools specific to predicting bad behavior before it ever enters your doors.

Landmark Ruling on the Horizon?

A new landmark ruling affecting how employers view sexuality when considering applicants could soon be in the offing, according to Reuters.

The 7th U.S. Circuit Court of Appeals will hear arguments tomorrow in Hively v. Ivy Tech Community College, in which a former Ivy Tech adjunct professor, Kimberly Hively, claims the college refused to allow her to interview for a full-time job and ultimately did not renew her contract because she is a lesbian.

The case , Reuters notes, gives the 7th Circuit a historic opportunity to fix what three of its own judges have called “a jumble of inconsistent precedents” and a “confused hodge-podge of cases.” If the full appellate court sides with Hively and her lawyers from the Lambda Legal Defense and Education Fund, gays and lesbians will finally receive protection under federal law from workplace discrimination.

Lambda Legal lawyer Kenneth Upton told Reuters:

“Sexual orientation doesn’t have anything to do with employees’ ability to do their job,” Upton said. “It shouldn’t be a determiner of whether you should continue to be employed.”

The Hively case spotlights a weird legal paradox, according to the Reuters piece.

Title VII of the Civil Rights Act forbids employers from treating workers unequally on the basis of race, color, religion, sex or national origin. A plurality of justices on the U.S. Supreme Court said in 1989’s Price Waterhouse v. Hopkins that employers cannot discriminate against workers who don’t conform to sex stereotypes.

Yet as a three-judge panel at the 7th Circuit explained last summer in its since-vacated Hively opinion, every federal appellate court to have considered the question of whether employers can discriminate based on workers’ sexual orientation has concluded that Title VII’s bar on sex discrimination doesn’t give redress to gays and lesbians.

Upton added that three-judge panels at the 5th and 2nd Circuits are also facing the question, so ultimately, it will probably be up to the Supreme Court to provide an answer.

 

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.

Thanksgiving with Co-workers

In advance of the upcoming feast day known as Thanksgiving, CareerBuilder has released a survey detailing how employees will be spending the holiday.

“Employees appear to be growing closer to those at work, or find it more difficult to break away from the office for Thanksgiving,” according to the press release announcing the annual survey, which was conducted nationally online by Harris Poll from August 11 to September 7, 2016 and included more than 3,300 workers across industries and company sizes.

More than one in four workers (28 percent) say they celebrate Thanksgiving with co-workers either in or out of the office – a substantial increase over 20 percent in 2015 and 19 percent in 2014. (Houston, Dallas and Miami continue to lead other major cities in percentage of workers that spend the holiday with co-workers.)

And more than 1 in 5 employees (22 percent) have to work on Thanksgiving (on par with last year) according the survey.

Below are the demographic breakouts of the survey.

Workers Who Celebrate Thanksgiving with Co-workers By:
 
U.S. Markets with the Largest Economies:

  • Houston: 44 percent
  • Dallas: 36 percent
  • Miami: 35 percent
  • Atlanta: 32 percent
  • New York: 27 percent
  • Los Angeles: 26 percent
  • Washington DC: 22 percent
  • Chicago: 20 percent
  • Boston: 19 percent
  • Philadelphia: 18 percent

Region

  • South: 37 percent
  • West: 27 percent
  • Midwest: 23 percent
  • Northeast: 22 percent

Industry

  • Healthcare: 33 percent
  • Retail: 32 percent
  • Sales: 32 percent
  • Transportation: 30 percent
  • Manufacturing: 26 percent

Diverse Groups

  • Hispanic workers: 35 percent
  • LGBT workers: 35 percent
  • African American workers: 33 percent
  • Asian workers: 31 percent
  • Disabled workers: 27 percent

This compares to 29 percent of non-diverse workers (defined as white, straight, non-disabled male under 50) vs. 19 percent in 2015.

Age 

  • 18-24: 36 percent
  • 25-34: 35 percent
  • 35-44: 27 percent
  • 45-54: 25 percent
  • 55+: 20 percent

If, like many of my colleagues, your holiday weekend begins when today’s work day ends, then I wish you a happy and healthy holiday.

Trump Win Good for Biz Women??

Not one for post-election posting here, but this LinkedIn piece by Sallie Krawcheck caught my eye. As a woman watching and dv496065aweathering the campaign, and now the transition to a Trump presidency, I wanted to make sure as many women — and men — as possible saw it too.

Her premise that “Donald Trump as president of the United States could just be the best thing that has happened to professional women in a long time … huh? what?” is right in Krawcheck’s wheelhouse. She’s the CEO of Ellevest, a digital investment platform for women; chair of Ellevate Network, a global professional women’s network; and author of Own It: The Power of Women at Work, to be released in January. As she puts it,

“We’re awake now. That’s because it’s all out in the open: the Billy Bush conversation, the recent New York Times OpEd on “bro talk on Wall Street,” even the light sentence for Brock Turner.  And while as a mother and an aunt, I hate it, I hate it, I hate it that we haven’t made more progress for younger women, this does represent an odd form of forward motion: We can’t really deal with an issue until we fully understand the issue.”

It’s a compelling piece and worth the read, whatever your gender or persuasion, political or otherwise. This new Trump era, ushered in by stepped-up conversations about the treatment of women, comes with “some proof that we can’t rely on others to fight this battle for us, and so we must redouble our efforts,” Krawcheck says. “… I’m hearing from more and more women that we must ‘put on our big-girl pants’ and do this ourselves..”

And it’s not like women don’t have the resources, she adds. “[W]e control $5 trillion of investable assets, we direct 80 percent of consumer spending, we’re more than half of the workforce. We’ve got a lot of power.”

Krawcheck’s list of what to do to claim and use that power is impressively detailed, and long. Just some of her many suggestions — some we’ve heard and written about, some we haven’t — include mentoring and sponsoring other women, amplifying what other women say in meetings, pointing out to others when they interrupt other women or ignore them in meetings, pointing out when the words they use to compliment men (“aggressive” or “go-getter”) are used to put down women and refusing to work at the company that doesn’t “get it” on making the work environment one in which you can be successful.

She also bangs the political drum some, post-election, suggesting women start donating to female candidates whose views line up with theirs, and start running for office and encourage other women to run for office.

And the financial-independence drum:

“[D]oing all that we can to be in financial control feels more important today than it did [before the election]. It’s important that we break the old gender norms of ‘the man manages the money; I manage the household.’ That leaves us retiring with two-thirds the money of men … but living five-plus years longer than they do. …

“[P]lease get yourself a financial plan and invest.”

All politics and election furor aside, Krawcheck gave me some serious things to think about. If any of this gets you thinking about new approaches to help the women in your organization claim their power and succeed, then all the better.

Don’t Forget the Personal Touch

The 2016 Recruiting Trends Conference and the inaugural Talent Acquisition Technology Conference, held concurrently this Tuesday and Wednesday at the Hilton Austin in Texas, featured an expo hall with more than 50 vendors, many of them displaying the latest tech tools for finding and recruiting the best people. However, as speaker Rodney Smoczyk told the attendees at the Talent Tech session “How McLane Co. Has Navigated Over a Century of Recruitment Challenges with Technology,” technology can’t make up for the importance of actual conversations between recruiters and job seekers.

“When I started out in recruiting, I got a newspaper and a phone book to find my candidates. We had to talk to people. Now, I have to get through 250 applicants just to find the 10 I want to talk to,” said Smoczyk, director of recruitment at Temple, Texas-based McLane Co., one of the largest wholesale food distribution companies in the United States.

“I consider technology to be a tool, not the answer,” he said. “We actually have to talk to people as recruiters. At some point, we lost that human factor. We’re just people recruiting people, and if we’re leaving it all to technology, then we can probably answer our own question when we ask why turnover is so high.”

Job candidates for positions at McLane Co. can speak to a live recruiter if they choose, he said.

Another important point is to “keep [the application process] simple,” he said. McLane Co. has approximately 24,000 employees, many of them truck drivers. Asking truck-driver candidates to fill out lengthy applications simply won’t work when most are spending 14 hours per day on the road. “If you ask truck drivers to spend a lot of time applying for a job, then they’re not going to apply, period,” said Smoczyk.

This is a critical factor in the midst of a driver shortage that has left trucking firms competing fiercely with each other over talent, he said. “Finding truck drivers is one of my biggest challenges.”

Smoczyk urged attendees to try applying for jobs at their own companies to experience for themselves what candidates often go through. “Feel how frustrating it is to have to fill out the same information over and over again if you want to apply to more than one position,” he said. “If you haven’t [done this], then you’re doing yourself a real disservice.”

At McLane, the company has tried to make applying for a job as easy as possible, said Smoczyk. Candidates don’t have to enter information more than once even if they’re applying for multiple positions. The company made its jobs site mobile-friendly after determining that 72 percent of truck-driver candidates apply via their smartphone. Smoczyk’s recruitment-marketing manager “drives our tech staff crazy insisting that no piece of information on our website be more than two clicks away,” he said.

Never forget the importance of using data, especially when determining where it makes sense to advertise job openings, said Smoczyk. “It’s up to you to help hiring managers determine where it makes sense to advertise and where it doesn’t, and if you don’t have the data then you’re just guessing.”

Room to Improve Pay Equity

A new survey from Willis Towers Watson  finds that employers and employees aren’t on the same page when it comes to discussing fair pay.

More than half of U.S. employees believe they’re paid fairly when compared to workers who have similar jobs either at their own or other companies, according to the survey. But at the same time, barely half of U.S. employers have a formal process in place to ensure pay fairness, indicating significant room for improvement.

“Pay equity is rapidly becoming a high priority for employers, especially with base pay continuing to be the most frequently cited reason employees choose to join or leave an organization,” said WorldatWork member Laura Sejen, managing director of talent and rewards at Willis Towers Watson.

“For employers,” she adds, “there is much at stake and also room for improvement. Employees’ perception that they are paid fairly is closely linked to their engagement which, in turn, drives overall productivity and, ultimately financial performance.”

Sejen also says employers will have to address the growing need for more pay transparency, given the increasing expectation of openness regarding pay and pay equity.

“It’s becoming much easier for employees to gather salary information from online sources and learn what people with jobs similar to theirs are earning. But before they can be more transparent about pay, employers will have to make sure their programs are designed, administered and delivered effectively.”

Yet More to Know About Millennials

We’ve certainly seen our share of divergent reports about millennials in the workplace.

483717656-blue-collar-millennialWe’ve all seen and read the ones suggesting they’re a privileged generation with a less-than-stellar work ethic and an eagerness to jump ship on the smallest of provocations.

More recently, we’ve seen research that disputes those reports, such as one study from Project Time Off, mentioned in an HREOnline story on this demographic by Senior Editor Jack Robinson just last month. That study finds many millennials not only want to contribute and stay with their companies, but are putting in extra time — some even being referred to as work martyrs — to prove themselves as committed, loyal employees.

As Katie Denis, a senior director of the U.S. Travel Association, puts it in that story:

“People really do have this deeply ingrained assumption that it is an entitled generation, [but] if you look at the totality of their experience, you see something very different. Millennials do have a desire to grab a job, hold a job, prove themselves.”

Just late last month, an emailed release from the newly launched Levo Institute, a website run by and dedicated to millennials, introduced me to another often-overlooked faction of millennials: blue-collar millennials — more than 80 percent of whom say their employers are not providing them with the tools needed to appropriately scale their careers.

They want very much to work and stay with their companies; they just need help.

“As blue-collar workers make up 20 percent of the U.S. workforce,” the report states, “Levo’s study found that nearly 15 percent of its respondents are actively working as full-time blue-collar employees,” which is significant considering millennials will make up 75 percent of global talent over the next seven years. It goes on:

“Additionally, while nearly 60 percent of the millennial generation graduated from a four-year college, the perception is often that hiring a younger worker means lack of core professional skills, such as [energy and commitment], communicating effectively and working in teams.

“As the economy has continued to add [blue-collar] jobs in construction, manufacturing and transportation over the years, these findings are particularly important, especially as millennials [in these jobs] are not experiencing companies taking a vested interest in their development.”

In many cases, millennials are saying no to four-year college degrees altogether to avoid the miseries of having to pay off huge student loans for a significant chunk of their working lives, according to this story in the New York Post. They’re also pulling down some of the biggest salaries and best benefits while their fellow four-year graduates take up residence in their parents’ basements.

And there are plenty of four-year graduates turning to trades too. According to the Post, there were an estimated 1,000 who got in line in July in New York City for applications as apprentice plumbers.

The ‘Creepiness’ of Data Collection

In my search to read anything — anything! — unrelated to last night’s election, I came across a  new piece by Oracle’s Rob Preston on the Forbes site that takes a look at the “Continuum of Creepiness,” which rates how creepy an organization’s data-collection efforts may be perceived by employees.

New technologies, Preston says, allow employers to have many more ways to gather employee data to do things such as improve  their performance, gauge their sentiment, measure their engagement, monitor their safety and root out misconduct:

“And on the face of it,” he says, “some of those collection methods and data types may seem more ‘creepy’ to employees than others.”

“Data collected from electronic sensing badges, email headers, online calendars, and social media sites? Creepy. Data collected from employee surveys? Not so creepy.”

But before assigning something as “creepy” or not, we must first consider the circumstances before making sweeping judgments because “creepiness is contextual” according to  Dr. Mary Young, principal researcher in the area of human capital management at The Conference Board, who spoke on the topic at a recent HR workshop in New York.

Preston goes on to list the nine factors that influence the “creepiness” of an organization’s data-collection efforts, including: employees’ right to opt in or out of collection efforts, their trust in the employer and the benefit to employees, among others.

The entire post is well-worth a read, especially on a day when you might not want to read anything more about last night’s election. But for those who can’t get enough of such things, HRE Senior Editor Jack Robinson just posted a  piece on our site Wednesday morning that takes a look at how a Trump presidency will affect organizations’ HR policies and regulations.