Category Archives: HR profession

Study: 401(k) Loans at a ‘Record High’


According to a just-released report from Aon Hewitt, about 28 percent of active participants in defined-contribution retirement plans had an outstanding loan in 2010–a record high, according to the firm. The average balance of the outstanding amount was $7,860, which represented 21 percent of these participants’ total plan assets, according to the study, entitled Leakage of Participants’ DC Assets: How Loans, Withdrawals, and Cashouts Are Eroding Retirement Income.

The study, encompassing 1.8 million employees across approximately 110 large plans, found that middle-aged and middle income are most likely to have outstanding loans–participants in their 40s, and those earning between $40k and $60k per year had significantly higher loan prevalence.

Although most plans require employees who are terminated to immediately repay in full any outstanding 401k loans they have, the study found–not surprisingly–that nearly 70 percent of such workers subsequently default on the repayment, with the default percentage jumping to 80 percent among participants in their 20s. However, the study also found that on average, active employees default on their loans less than 3 percent of the time.

However, new legislation just introduced in Congress proposed by Senators Herb Kohl of Wisconsin and Mike Enzi of Wyoming would limit the number of 401k loans employees could take and allow them more time to pay back outstanding balances, penalty-free, should they lose their jobs.



Selling Employees on Wellness

Employee engagement is “the tough part” of having a successful wellness program, said AztraZeneca’s Dr. Joe Henry, who spoke last Thursday at the Innovations in Wellness summit sponsored by GlobalFit in Philadelphia. Henry oversees health and well-being at Wilmington, Del.-based AztraZeneca U.S., a subsidiary of the global pharmaceutical giant.

Getting employee engagement on anything has gotten a lot tougher these days in the pharma industry, which is being squeezed by competition from generic drug manufacturers and a shortage of new so-called “blockbuster” drugs. Morale has taken a beating, Henry said, and it’s upped the ante to be ever-more creative in getting workers to participate. One approach that’s worked well has been in using “celebrities” to draw attention to wellness efforts. Headquarters staff turned out recently to get health tips from an Olympic runner, while local celebrity chefs have given classes on healthy cooking, he said. Of course, it’s easier for HQ employees to attend health events than the staff at AztraZeneca’s manufacturing facilities, where bottlenecks can occur in the production lines if too many employees fail to return on time from “lunch and learn” health seminars. It requires Henry and his staff to carefully coordinate wellness activities with site managers and keep them as short as possible.

It’s also important to “always be trying new things,” Henry said. This summer, the headquarters location will see its first-ever onsite farmers market,  in which employees will be awarded points for purchasing fresh produce from local growers. The points are part of the company’s “Get HIP, too!” health incentive program, in which employees accrue points for engaging in healthy activities and redeem them for gift cards.

Getting employee buy-in was also a challenge at Fox Rothschild, a 104-year old Philadelphia-based law firm with 16 offices spread throughout the country. Attorneys are not the easiest group to pursuade, especially when it comes to making healthier choices, said Felicia Z. Smith, the firm’s CHRO. Having wellness committees at each office proved helpful in obtaining buy-in, as did regularly surveying employees to get their thoughts on what was working and what wasn’t, and “keeping things fresh, not letting programs go stale, and understanding that it’s better to have a few high-quality programs than lots of different programs that don’t resonate with anyone,” said Smith.  She credited the firm’s wellness program with helping it reduce total healthcare costs by 15 percent between 2007 and 2010 (she also credited the firm’s switch to a self-insured health insurance model).

Both AztraZeneca and Fox Rothschild branded their wellness programs with logos. At AztraZeneca, the logo is a penguin on a treadmill. “You can’t tell whether or not he’s thin, and he looks like he’s working hard,” said Henry.  At Fox Rothschild, it’s a white figure against a red background holding his/her arms in the air, signifying health and happiness, said Smith. Of course, the firm’s cynical and jaded lawyers put their own twist on it. “They said it looks like a person suffering from a heart attack or something, ” she said, chuckling.

Wellness, Mediterranean-Style

Dr. Will Clower had fully expected that the two years he and his family would spend in France, where he was to work at the Institute of Cognitive Sciences in Lyon,  would result in all of them gaining weight. After all, the French diet is filled with heavy creams and cheeses. How could one possibly emerge from spending two years there without some extra pounds?

So imagine his surprise when, eight months into their tour, he and his family had actually lost weight, despite fully partaking in the French diet. “The French diet comes from history, culture and tradition,” said Clower, who spoke last Thursday at the Innovations in Wellness summit, an annual event hosted in Philadelphia by GlobalFit, a wellness-services provider also based in the City of Brotherly Love.  “The American diet used to be based on these things as well, but since then we’ve been bombarded with fads and faulty information–‘Eat nothing but fruit,’ ‘Eat nothing but meat’–and we’ve lost our way.”

People in the Mediterranean region, including France, eat a diet that emphasizes lean meats such as fish and chicken, healthy oils like olive oil, whole grains, dairy on a daily basis and very little processed foods, says Clower, who’s authored two books–The Fat Fallacy and The French Don’t Diet Plan–based on his experiences living in that country.  Trained as a neuroscientist, Clower is today founder and president of Mediterranean Wellness Inc., which consults with companies and institutional clients on healthy eating programs that emphasize the principles of the Mediterranean diet. His clients include Westinghouse, Alcoa and Citizens Bank.

A key piece of advice that Clower, an Alabama native, dispenses to clients is: “If it ain’t food, don’t eat it.” A quick glance at the ingredient labels of the processed foods found in the typical American supermarket reveals things that “have never been found anywhere near a kitchen, nothing that’s ever been alive, that’s ever had a momma and a daddy.”

Most of today’s prevalent diseases, including coronary disease, Type 2 diabetes and the majority of strokes can be avoided by adhering to the principles of the Mediterranean diet, he said. A diet rich in vegetables, whole grains, fresh fruits and lean meats is the way to go–along with portion control and taking the time to eat together as a family, said Clower. He urged HR leaders to work closely with the vendors that manage their employee cafeterias to use healthier ingredients and make basic changes to their menus to bring them more closely in line with the Mediterranean diet. He acknowledged that making such changes is rarely easy. But the proof that it works can be found in countries like France. “The French have fewer heart attacks than we do, lower rates of obesity and they live longer.”

The (Wildly) Underpaid Mom

I don’t envy the job my mother once had. With my dad spending long hours at work, raising four strong-willed kids on a farm in deepest rural Pennsylvania while balancing the family checkbook and overseeing the care of our various animals undoubtedly required the combined skills and fortitude of Annie Oakley, IBM’s Lou Gerstner and Boutros Boutros-Ghali. So I read with interest’s latest “Mom Salary Survey,” which this year is based on the input of 6,616 mothers, 1,724 of whom work outside the home. says it based its “Mom Job” on Certified CompensationProfessional benchmarking principles that determine the value of a job. In the case of stay-at-home moms and their counterparts who work outside the home, the job description includes, among others: psychologist, Computer Operator I, facilities manager, CEO, cook, day-care teacher, van driver and laundry machine operator.

Based on the hours they devoted to each of those duties, a stay-at-home mom would’ve earned a base salary of $36,968 plus $78,464 in overtime, for total compensation of $115,432. A mom working outside the home would have earned (in addition to her actual paycheck) a base of $39,968 plus $23,709 in overtime, for a total of $63,472. Funny, but all I remember my mom getting in compensation was random gifts throughout the year plus a (badly prepared) breakfast served to her in bed on Mothers Day. Not to mention: no access to an EAP, paid time off, benefits or job training. Well … thanks Mom! And Happy Mothers Day.

Transforming UHG

Lori Sweere, executive vice president of HR for UnitedHealth Group, opened Bersin & Associates’ IMPACT 2011 conference this morning with a compelling keynote on business transformation.

In late 2007, you may recall, UHG was coming off a well-publicized stock-option scandal that led to the departures of its CEO, COO, CHRO and CFO. At the same time, the company was facing serious integration issues following some recent acquisitions.

“It was apparent that we needed to do something differently,” said Sweere, who was appointed to the top HR post there in May 2007.

To determine what steps needed to be taken, Sweere said she talked to 2,000 managers across the country. “What I found was that the majority of managers had limited faith in human capital,” she said.

In response, Sweere helped to craft a people strategy that focused on four areas: workforce capability, employee engagement, performance culture and human capital effectiveness.

I was particularly interested in hearing what Sweere had to say about how UHG approached the fourth area, human capital effectiveness.

Part of her response pertained to structure and included moving the recruiting function back in house. At the time, 75 percent of all positions were being filled from the outside, not a number Sweere considered acceptable. She also moved talent management and recruiting into a single entity that addressed talent acquisition, talent development and mobility — or what Sweere described as the “entire lifecycle of the employee.”

Further, to elevate the competency level of the company’s HR practitioners, Sweere and her team developed a curriculum and certification for HR generalists, who were required to earn a certification within two years. If they failed to do so, she said, they wouldn’t be able to retain their HR generalist jobs.

The goal, Sweere said, was to get HR generalists to “think strategically everyday … and learn how to effectively use data in a way that influences positive change.” She added that the initiative is now being expanding to centers of expertise, such as recruiting.

STEM Education Must Change to Stem this Tide

It appears we have a long row to hoe before we can see much-needed improvements in U.S. science and technology education — or before we can attain a much-needed and competitive science, technology, engineering and math (STEM) talent pipeline.

A recent report from the Washington-based Institute for a Competitive Workforce suggests we’re further behind the math-and-science eight-ball than we think. The study, The Case for Being Bold: A New Agenda for Business in Improving STEM Education, compared U.S. STEM students with their peers worldwide and found the U.S. students ranked 25th in the world for mathematics and 17th for science literacy. Ouch.

And guess where the top-ranked math and science students hail from? You got it. The Shanghai region of China.

The report echoes concerns I wrote about in February in a news analysis of General Electric CEO Jeffrey Immelt’s appointment by President Obama to the latter’s recently formed jobs council. Most of the HR experts and analysts I spoke to for that piece (posted to HREOnline™), concurred that the council’s commitment to improving technology and science and math education in this country — and recharging businesses’ partnerships with schools in that effort — was a hopeful sign that our nation’s leaders are finally and fully recognizing just how great this need has become. Said another way, our leaders finally understand just how inadequate our STEM education is on a global scale, and what that portends for this country.

The ICW report points out that the business community’s long-standing “nice guy” approach to promoting best practices and providing resources to schools just won’t cut it anymore. It recommends that business leaders from scientific and engineering firms get in there and do some personal instructing, that schools relax some of their certification requirements to get more scientists and engineers into the classrooms as teachers, and that top instructors be asked to take on additional students.

The latter would mean schools would have to relax their current standards of teaching the same material to the same number of students. As for getting more business leaders in front of students to teach science in some kind of partnership arrangement, I’m sure HR would and should have a role in that.

I’m especially passionate about this crying national need. I come from a family of chemists and engineers, including a great grandfather bridge designer, a grandfather chemist who headed research for Sunkist, a chemical oceanographer father and now an engineer son.

My dad, now in his 80s, voluntarily speaks to high-school students as much as he can. His goal, he’s told me more than once, is to “get them excited about this stuff.” Passion and excitement for science has to come from the teachers, and can’t, he says, when the majority haven’t been trained and educated that far. They don’t understand it themselves. How can you get passionate about something you don’t understand?

There’s an overall sense, in the ICW report, that time is running out for us to right this ship. All the more reason to get the people who “get it” in front of our classrooms now and stop assuming we have the luxury of time to evaluate our entire educational system — or figure out how to start emulating China.

Lawson Talks Back

Not everyone is a fan of the just-announced planned acquisition of Lawson Software by Infor and Golden Gate Software Holdings Inc. In a post on her “In Full Bloom” blog, tech consultant Naomi Bloom describes Infor as “an ERP graveyard” where “old software goes to die, to be milked for its installed base’s maintenance revenues, with only modest, ongoing upgrades.” She further writes “I could be very wrong, and I surely hope I am.”

A spokesman for Lawson takes issue with that view. “No disrespect to Naomi, but that’s a dated perception of Infor,” says Terry Blake, Lawson’s vice president for corporate communications, during a brief phone interview earlier today. “The experts in this space really need to understand what Infor is doing these days.”

The company has a new management team in place and a “vision” that involves delivering “even more applications to customers,” he says.

“Infor is in no way an infrastructure vendor, they’re not trying to be a stack provider–they’re focused on applications,” adds Blake.

Infor’s new CEO, Charles Phillips, plans to rebrand Infor as a competitor to SAP and Oracle, says Blake. A number of Lawson customers have expressed support for the acquisition, he adds. “Infor’s track record is to acquire and keep products–they don’t necessarily try, like Oracle, to put someone into some type of Fusion re-do of existing applications.”  

Lawson customers have also expressed concern as to whether their “investments will be protected and whether there is a ‘plan, going forward, for the products I have?’ ” says Blake. “Our response is, Infor has put forward a commitment to continue investing in products and providing customers with a path to future products.”

Although a recent article in the Minneapolis Star-Tribune (Lawson is based in St. Paul, Minn.) speculated that up to 25 percent of Lawson’s 700 or so headquarters staff would be let go as part of the acquisition, Blake says no personnel announcements have been made and most likely won’t be made until after the deal closes, which he anticipates will likely occur in the third quarter of this year

Infor is planning to hire 400 additional software engineers in the near future, according to an Infor press release annoucing the acquisition.  It also plans to ship 60 percent more products and enhancements compared to last year.

Infor and Lawson are a good fit because each will complement the other’s strengths, says Blake. “Lawson has some presence in the gaming industry but Infor is very strong in that industry, while Lawson has a very strong HCM suite that Infor does not have, so there are many opportunities for customers of both companies to benefit.”

… and SuccessFactors Acquires Plateau

Hot on the heels of Infor’s acquisition of Lawson Software, talent-management firm SuccessFactors has announced its acquisition of learning-systems vendor Plateau for $290 million. SuccessFactors will pay for Plateau with an even mix of cash and stock.  SuccessFactors describes the Plateau acquisition as a “symbiotic combination” with another vendor it’s just purchased,  mobile-learning provider Jambok.

Plateau brings more than 350 new customers to its new parent, according to SuccessFactors. Once the deal closes this summer, Plateau’s SaaS-based learning-management system will be integrated directly into SuccessFactors’ BizX talent-management suite.  

The SuccessFactors-Plateau combination drew praise from several HR technology analysts, who are quoted in a SuccessFactors press release announcing the deal. “[The acquisition] brings together the market share leader in talent management with one of the market leaders in learning management to create a global powerhouse in end-to-end talent-management software,” said Josh Bersin, president and CEO of Bersin & Associates.

“This is, in my opinion, a merger of true leaders,” said Lisa Rowan, IDC’s program director for HR, talent and learning strategies.

“SuccessFactors just acquired another big piece of the periodic table of elements,” said Jason Averbook, CEO of Knowledge Infusion.

Infor Acquires Lawson Software

Consolidation in the HR technology arena continues apace with the latest news that Infor and private-equity firm Golden Gate Capital have acquired St. Paul, Minn.-based Lawson Software for $2 billion. Under the terms of the transaction, Infor and GGC Software Holdings will pay $11.25 a share for Lawson, representing a 14-percent premium for Lawson’s shareholders, according to the NY Times’ DealBook blog.

“We are pleased to have entered into a transaction that will offer Lawson stockholders an attractive valuation,” said Lawson president and CEO Harry Debes in a statement.

More to follow …

U.S. Army Streamlines HR function

In a move that could be predictive of future federal budget cuts, the U.S. Army announced it will cut 500 human resource and training jobs at its Fort Knox facility, thereby saving $50 million in budget expenses, according to this report:

“Headquartered in Fort Knox, the U.S. Army Accessions Command will be phased out by the end of the 2012 fiscal year. But the base, which employs approximately 18,600 military and civilian personnel and 2,800 contractors, will continue serving as the national headquarters for human resources and training, [Army spokesman Brian] Lepley said.

By mid-July, there will also be a transfer of 81 additional employees to Fort Knox from Fort Monroe in Hampton, Va., which is shutting down, Lieutenant Colonel Matt Hackathorn said.

The changes will eliminate 195 military and civilian jobs and 290 contracted jobs in Fort Knox.”